PART II AND III

PART II — OFFERING CIRCULAR

An Offering Statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this Preliminary Offering Circular is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time an Offering Circular which is not designated as a Preliminary Offering Circular is delivered and the Offering Statement filed with the Commission becomes qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the laws of any such state. We may elect to satisfy our obligation to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Final Offering Circular or the Offering Statement in which such Final Offering Circular was filed may be obtained.

Preliminary Offering Circular Subject to Completion, Dated March 28, 2019

PROMETHEUM, INC.

$5,000,000 Minimum Offering Amount

$50,000,000 Maximum Offering Amount

of Ember Warrants Exercisable to Purchase Ember Tokens

Prometheum, Inc. a Delaware corporation (the “Company”) is offering (the “Offering”) to investors Ember Warrants (the “Ember Warrants”) exercisable to purchase, when and if issued, blockchain protocol tokens, which we refer to as “Ember Tokens.” Ember Tokens are intended to be used in connection with a blockchain based securities issuance and trading network in creation by the Company (the “Prometheum Network”). The Company is offering a minimum of $5,000,000 of Ember Warrants (the “Minimum Amount”) and a maximum of $50,000,000 Ember Warrants (the “Maximum Amount”) at a price of $1.00 per Ember Warrant. The Ember Warrants will not be exercisable until the date of the creation of the genesis block of Ember Tokens (the “Genesis Block”), which is expected to occur within a year of the date hereof, but which may never occur. If the Genesis Block is issued, each Ember Warrant sold will be exercisable to purchase, without additional consideration, one Ember Token. If the Genesis Block is not created, or is not created prior to the termination date of the Ember Warrants, then the Ember Warrants will not be exercisable. The minimum amount that must be purchased by each investor is 1,000 Ember Warrants. This Offering is being conducted pursuant to Tier 2 of Regulation A.

The Ember Warrants and the underlying Ember Tokens are highly speculative securities, see “Risk Factors” beginning on page 8.

Title of Each Class of Securities to be Qualified	Amount to be Qualified		Offering Price		Proposed Maximum Offering Price
Ember Warrants(1)		50,000,000	$	1.00	$	50,000,000
Ember Tokens underlying Ember Warrants(2)		50,000,000	$	—	$	—
Total		__	$	1.00	$	50,000,000

(1) Please refer to the section entitled “Securities Being Offered” on page 41 for a description of the Ember Warrants.

(2) For each Ember Warrant purchased, the holder shall be entitled to purchase upon exercise, one Ember Token for no additional consideration. Please refer to the section entitled “Securities Being Offered” on page 41 for a description of the Ember Tokens.

The Company has engaged the services of Manorhaven Capital, LLC (“Manorhaven” or the “Administrative Agent”), a registered broker-dealer and FINRA member, to act as its administrative agent to assist us in the administration of this Offering. As compensation for such services, the Company will pay the Administrative Agent an administrative fee equal to 2% of total sales proceeds at each closing of the Offering. The Administrative Agent is not purchasing the securities offered by us and has not been engaged to sell any of the securities in the Offering. Moreover, Manorhaven is not providing any advisory services to the Company or any prospective or actual investors. Manorhaven is not providing the Company any underwriting or placement agent services. For more information regarding the Administrative Agent and compensation to be received by the Administrative Agent in connection with the Offering, see “Plan of Distribution” and the Administrative Agent Agreement which is an exhibit to the Offering Statement filed herewith.

	Price to public		Underwriting discount and commissions(1)		Proceeds to issuer(2)
Per Ember Warrant	$	1.00	$	—	$	1.00
Total Minimum Amount	$	5,000,000	$	—	$	5,000,000
Total Maximum Amount	$	50,000,000	$	—	$	49,500,000	(3)

(1) The Company reserves the right to pay selling agent broker-dealers a commission of 6% for sales introduced to the offering and to allocate agent warrants equal to 10% of the introduced purchases at $1.10 exercise price per agent warrant.

(2) Excludes estimated Offering expenses of approximately $200,000, the 2% Administrative Agent fee, commissions and the costs of informing the public of the opportunity of participating in this Offering. See “Use of Proceeds” and “Plan of Distribution.”

(3) The Company has reserved 500,000 Ember Warrants to be issued to the first 100,000 subscribers to the Company’s Prometheum Ember ATS platform for no consideration as incentives for becoming subscribers. Any Ember Warrants issued to subscribers as incentives will not be counted toward the Minimum Amount but will be counted toward the Maximum Amount.

Generally, no sale may be made to you in this Offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or your net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, the Company encourages you to review Rule 251(d)(2)(i)(C) of Regulation A. For general information on investing, the Company encourages you to refer to www.investor.gov.

The United States Securities and Exchange Commission does not pass upon the merits of or give its approval to any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any Offering Circular or other solicitation materials. These securities are offered pursuant to an exemption from registration with the Commission; however, the Commission has not made an independent determination that the securities offered are exempt from registration.

This Offering Circular follows the disclosure format of Part I of Form S-1 pursuant to the general instructions of Part II(a)(1)(ii) of Form 1-A as it applies to smaller reporting companies as the Company meets the definition of that term in Rule 405.

Prometheum, Inc.

120 Wall Street

New York, NY 10005

(212) 514-8369

www.prometheum.com

The information contained on our website is not incorporated by reference into this Offering Circular, and you should not consider information contained on our website to be part of this Offering Circular or information to be relied upon in determining whether to purchase the securities offered hereby.

We expect to commence sales of the Ember Warrants within two days of the date on which the Offering Statement of which this Offering Circular is a part (the “Offering Statement”) is qualified (the “Qualification Date”) by the United States Securities and Exchange Commission (the “SEC”).

This Offering will terminate on the earlier of (i) one year from the Qualification Date; (ii) the date on which the Maximum Amount is sold, or (iii) the date that the Offering is terminated by us in our sole discretion (collectively, the “Termination Date”). All investor subscription funds shall be held in an escrow account. Cross River Bank (the “Escrow Agent”) will serve as the escrow agent in connection with this Offering.

The date of this Offering Circular is [·], 2019

The Offering will be made on “best-efforts, all-or-none” basis as to the Minimum Amount and on a “best-efforts” basis as to the Maximum Amount as provided by Rule 251(d)(3)(i)(F) of Regulation A. Only after we have received and accepted subscriptions equal to at least the Minimum Amount, will we have the initial closing (the “Initial Closing”). If, on the Initial Closing date, we have sold less than the Maximum Amount, we may hold one or more additional closings (each an “Additional Closing”) on additional sales of Ember Warrants, until the first to occur of: (i) the sale of the Maximum Amount or (ii) the Termination Date. Upon the Initial Closing and each subsequent Additional Closing, the proceeds from the Offering will be disbursed to the Company and the associated Ember Warrants will be issued to investors.

If we have not received and accepted subscriptions equal to at least the Minimum Amount prior to the Termination Date, all subscription funds on deposit in the escrow account will be returned to investors without interest or deduction. A subscriber in the Offering has no right to a return of their funds before the closing of the Offering once a subscriber has executed the subscription documents in connection with this Offering.

We intend to file an application to have the Ember Warrants listed for trading on the over-the-counter market operated by OTC Markets Group Inc. which we refer to herein as the “OTCQB” at such time following the Initial Closing as determined by Company management. Currently, our Ember Warrants are not traded on any exchange or on the over-the-counter market. There is no assurance that the Ember Warrants will ever be approved for listing or quoted on the OTCQB. To be quoted on the OTCQB, a market maker must apply and be approved by FINRA to make a market in such securities. As of the date of this Offering Circular, we have not made any arrangement with any market makers to quote the Ember Warrants of the Company. No assurance can be given that any market maker will agree to make a market in the Ember Warrants. For more information see “Plan of Distribution.”

We are currently in the process of developing the Prometheum Network and the Ember Tokens and currently expect to launch the Prometheum Network and to create the Genesis Block of Ember Tokens within a year of the date hereof. We intend to apply the proceeds of this Offering to further develop, build out and commercialize the Prometheum Network as more specifically set forth in this Offering Circular and the Offering Statement.

TABLE OF CONTENTS

FORWARD LOOKING STATEMENTS	ii
SUMMARY	1
RISK FACTORS	8
PLAN OF DISTRIBUTION	16
USE OF PROCEEDS	20
DESCRIPTION OF BUSINESS	21
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	31
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES	33
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS	36
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS	37
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	38
CONFLICTS OF INTEREST	38
SECURITIES BEING OFFERED	39
LEGAL MATTERS	42
EXPERTS	42
INTERESTS OF NAMED EXPERTS AND COUNSEL	42
CHANGE IN CERTIFYING ACCOUNTANT	43
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES	44
WHERE YOU CAN FIND MORE INFORMATION	44
PART F/S FINANCIAL STATEMENTS	F-1
INDEX TO EXHIBITS
SIGNATURES
ATTACHMENT A – Prometheum, Inc. White Paper

We are offering to sell, and seeking offers to buy, its securities only in jurisdictions where such offers and sales are permitted. You should rely only on the information contained in this Offering Circular. We have not authorized anyone to provide you with any information other than the information contained in this Offering Circular. The information contained in this Offering Circular is accurate only as of its date, regardless of the time of its delivery or of any sale or delivery of Ember Warrants or Ember Tokens. Neither the delivery of this Offering Circular, nor any sale or delivery of Ember Warrants or Ember Tokens shall, under any circumstances, imply that there has been no change in our affairs since the date of this Offering Circular. This Offering Circular will be updated and made available for delivery to the extent required by the Federal Securities Laws.

In this Offering Circular, unless the context indicates otherwise, references to “we,” “us,” “our,” and “Company” refer to Prometheum, Inc. and its subsidiaries.

The Ember Warrants and Ember Tokens underlying the Ember Warrants offered hereby are highly speculative securities. Investing in such securities involves significant risks. You should invest in such securities only if you can afford a complete loss of your investment. See “Risk Factors” beginning on page 8.

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FORWARD LOOKING STATEMENTS

Some of the statements in this Offering Circular constitute forward-looking statements. These statements relate to future events or our future financial performance, plans and objectives. In some cases, you can identify forward-looking statements by terminology such as “proposed,” “yet,” “assuming,” “may,” “should,” “expect,” “intend,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” “will,” and similar words or phrases or the negative or other variations thereof or comparable terminology. All forward-looking statements are predictions or projections and involve known and unknown risks, estimates, assumptions, uncertainties and other factors that may cause our actual transactions, results, performance, achievements and outcomes to differ adversely from those expressed or implied by such forward-looking statements.

You should not place undue reliance on forward-looking statements. The cautionary statements set forth in this Offering Circular, including in “Risk Factors” and elsewhere, identify important factors that you should consider in evaluating the Company’s forward-looking statements. These factors include, among other things:

· The lack of any existing centralized marketplace for blockchain protocol securities;

· Our ability to implement our proposed Prometheum Network business plan;

· Our ability to create the blockchain for our Ember Tokens and to create the genesis block;

· Our ability to create the coding and algorithms for the crypto-securities issuance and trading platforms that will form the basis for our Prometheum Network;

· National, international and local economic and business conditions that could affect our business;

· Markets for our Ember Warrants and the Ember Tokens, if and when the Genesis Block of our Ember Tokens is created;

· Our cash flows or lack thereof;

· Our operating performance;

· Our financing activities;

· General market conditions effecting blockchain protocol based securities;

· Industry developments affecting our business, financial condition and results of operations;

· Our ability to compete effectively;

· Governmental approvals, actions and initiatives and changes in laws and regulations or the interpretation thereof, including without limitation tax laws, regulations and interpretations by the SEC, States and self-regulatory organizations, including without limitation, FINRA; and

· Cybersecurity breaches or attacks.

Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future plans, transactions, results, performance, achievements or outcomes. No assurance can be made to any investor by anyone that the expectations reflected in our forward-looking statements will be attained or that deviations from them will not be material and adverse. We undertake no obligation, other than as may be required by law, to re-issue this Offering Circular or otherwise make public statements in order to update its forward-looking statements beyond the date of this Offering Circular.

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SUMMARY

The following summary highlights selected information contained in this Offering Circular. This summary is not complete and does not contain all the information that you should consider before deciding whether to invest in the Company’s securities. You should carefully read the entire Offering Circular, including the risks associated with an investment in the Company’s securities discussed in the “Risk Factors” section of this Offering Circular beginning on page 8.

The Business of the Company

Overview

Prometheum, Inc., (“Prometheum,” “we,” “us,” “our,” the “Company”) is a Delaware corporation formed in September 2017 for the purpose of developing, building out and commercializing an integrated network for the issuance, trading, clearing, settlement and custody of blockchain protocol securities represented by tokens which we call Smart Security Tokens™ (“SSTs”) or crypto-securities. SSTs are securities and as such their issuance and trading are subject to Federal and State securities laws.

The Company with its strategic partners and joint venturers HashKey Digital Asset Group Limited (“HashKey”) and Shanghai Wanxiang Blockchain Inc. (“Wanxiang”), an affiliate of HashKey, intends to launch blockchain technology-based platforms which we refer to as the “Prometheum Network,” designed to (i) address the regulatory, legal, and liquidity challenges faced by issuers of crypto-securities to conduct their crypto-securities token offerings in compliance with applicable securities laws; and (ii) provide the infrastructure necessary to allow for after-market trading and processing of our SST crypto-securities within the Prometheum Network.

We have not commenced any operations and our activities to date have been devoted to developing the technology and infrastructure necessary to launch our Prometheum Network, which may never occur. Accordingly, investors should be aware that the descriptions in this Offering Circular of our proposed Prometheum Network and our Ember Tokens are speculative and subject to significant risks.

In December 2018, we sold 68,875,000 shares of common stock and 10,150,000 founder ember warrants for $12,000,000 consisting of $3,000,000 cash and $9,000,000 in technology and related services to HashKey.  HashKey also negotiated the right to purchase an additional 10% of our common stock for $12,500,000 exercisable 30 days following Prometheum Ember ATS receiving FINRA and SEC approval to operate as a broker-dealer alternative trading system. In connection therewith, Dr. Feng Xiao, Chairman of HashKey, Vice Chairman and Executive Director of China Wanxiang Holding Co., Ltd., and Chairman and CEO of Wanxiang joined Prometheum’s board of directors. Dr. Xiao was, we believe, the earliest evangelist and promoter of blockchain technology in China and an early sponsor of Ethereum. Dr. Xiao and Wanxiang have incubated and invested in more than 50 leading blockchain projects around the world.

The Company has entered into a Commitment Letter with StockCross Financial Services Inc. (“StockCross”), pursuant to which StockCross will provide settlement, clearing, custody and control services to the Prometheum Network. Using the Company’s platform and HashKey and Wanxiang developed technology, StockCross will serve as the Prometheum’s 21^st century clearing firm. A copy of the Commitment Letter is attached as an Exhibit to the Offering Statement of which this Offering Circular is a part.

The Company, leveraging the technological resources and expertise of HashKey and Wanxiang will be developing the technology and infrastructure necessary to launch the Prometheum Network and when launched will settle, clear and hold crypto-securities, including Ember Tokens at StockCross.

Through the Prometheum Network, issuers of crypto-securities will be enabled to raise various forms of capital in a blockchain empowered ecosystem which complies with applicable securities laws. The SEC’s DAO Report demonstrated a requirement for compliant crypto-securities infrastructure and the Company believes that our Prometheum Network will provide the infrastructure to compliantly service the entire crypto-securities lifecycle.

The Prometheum Network

The Prometheum Network when fully functional will be a “Smart Securities Network^TM” (“SSN”) which will include procedures and algorithms for the following:

· Our platform for initial and follow on distributions of our SST crypto-securities (the “Regulation A Platform”) through which issuers will be able to offer and sell to the public SSTs issued via “Smart Security Offerings^TM” (“SSOs”) controlled by smart contracts.

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· Our alternative trading system for secondary market trading of crypto-securities (the “Broker-Dealer/ATS”) operated by Prometheum Ember ATS, Inc. (“PEATS”). PEATS has filed an application pending with FINRA for membership as a broker-dealer and intends to file an initial operation report on Form ATS with the SEC to operate as an alternative trading system. PEATS intends to operate as the Broker-Dealer/ATS for compliant purchasing, trading, clearing and processing of crypto-securities through the Prometheum Network.

· Our blockchain based digital master wallets (“Wallets”). When a potential customer wants to open an account with Prometheum, they complete the online investor application and submit this information for review. Upon submission, the customer’s data is automatically submitted to IdentityMind, our third-party service provider, for anti-money laundering and know your customer (“AML/KYC”) checks and verifications. Upon passing AML/KYC, a Wallet account will be created for the customer and the customer will be directed to the deposit page. This page allows them to input their banking information in order to wire/ACH money into their Wallet account at PEATS’ clearing firm. Once the Wallet account is funded, customers will be able to either (a) make an investment in a primary issuance on the Broker-Dealer/ATS, or (b) trade on the Broker-Dealer/ATS.

· Our “Digital Clearing Firm” (StockCross) which will utilize blockchain protocol based procedures for (i) clearing and settlement of crypto-securities transactions and (ii) custody of crypto-securities. Prometheum intends to settle crypto-security transactions once daily so the customers’ master wallet will reflect their current crypto asset (crypto-securities and currency). This is similar to how the Depository Trust and Clearing Company holds securities on behalf of its broker dealers and tracks the transfer of ownership through their electronic book-entry system.

· The “Prometheum Blockchain” which will use the Practical Byzantine Fault Tolerance (“PBFT”) consensus algorithm in order to provide a balance between performance and distributed reliability. We believe PBFT provides protection against manipulation and against failure of nodes in a distributed system.

· Our own blockchain protocol crypto-securities tokens engineered for use on the Prometheum Network which we refer to as “Ember Tokens” (which is the first SST) will provide the basis for issuer crypto-securities offered through the facilities of the Prometheum Network. It is intended that the Company’s Ember Token will trade as “MBR^TM”. The Ember Tokens, when and if issued in exchange for the Ember Warrants will function as a utility token, Prometheum’s native currency, and a security. Blockchain functionality is being developed by the Company in consultation with the Company’s strategic partner Wanxiang. The technology architecture and intended processes have been agreed to in principle and development of our blockchain technology with Wanxiang is ongoing. For the last updated description of the development of the Prometheum Network see the Company’s White Paper dated December 2018, attached hereto as Attachment A and incorporated herein by reference (the “White Paper”).

· Prometheum Blockchain miners/validators who will earn Ember Tokens.

Ember Tokens

Creation of the Genesis Block

We intend to use “Ember Tokens” as the fundamental medium of exchange for the Prometheum Network. We expect to create a block of 270,000,000 Ember Tokens (the “Genesis Block”) at or around the time we launch the Prometheum Network. Of that number, 80,000,000 Ember Tokens will be allocated for issuance to holders of Ember Warrants (assuming the sale of all of the Ember Warrants in this Offering and in our current private placement pursuant to Rule 506(c) of Regulation D and Regulation S of the Securities Act (the “Reg D/Reg S Offering”) and 55,000,000 Ember Tokens will be allocated to holders of warrants issued to founders, our seed investor, contributors/advisors and service providers. In the event we do not sell all the Ember Warrants in this Offering and the Reg D/Reg S Offering, or do not issue all allocated Ember Tokens, we reserve the right to conduct an additional offering of Ember Warrants or Ember Tokens or otherwise issue the remaining Ember Tokens so that all Ember Tokens comprising the Genesis Block eventually have been issued.

In order for an SST to be eligible to participate in transactions on the Prometheum Network, it must be based upon our Ember Tokens and written on the Prometheum Blockchain. Although the Genesis Block will be limited to 270,000,000 Ember Tokens, each Ember Token may be broken into at least eight decimal points which allows one Ember Token to be broken into approximately a hundred million parts.

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Delivery of Ember Tokens Upon Exercise of Ember Warrants

Purchasers of Ember Warrants will initially create a brokerage account with our Broker-Dealer/ATS through which they will purchase Ember Warrants. Following the creation of the Genesis Block, Ember Tokens that are issued upon exercise of Ember Warrants, will be held in our Digital Clearing Firm master wallet account (described below)) and will be reflected in the exercising Ember Warrant holder’s brokerage account. Brokerage account balances will tracked in a traditional transactional database, also known as electronic bookkeeping. Account holders will be required to transact through the appropriate federal securities law compliant brokerage infrastructure and will not be able to access their Ember Tokens directly unless they elect to transfer their Ember Tokens to their own personal wallets held outside the Prometheum Network’s brokerage infrastructure.

Ember Token Burn

Subject to Prometheum generating profits, of which no assurance can be given, we intend to allocate 10% of Prometheum’s profits to re-purchase outstanding Ember Tokens in the open market and then cancel their digital keys and “burn” them. See discussion on page 28.

The Prometheum Wallet System

Prometheum has designed a crypto-security “master” Wallet for the purpose of holding Ember Tokens on behalf of customers. Prometheum’s system for creating and managing crypto-securities wallets allows for the management and custody at StockCross, the supporting Digital Clearing Firm, and also provides the required functionality for distributed applications deployed via general purpose smart contracts. It is intended that participants wishing to access the Prometheum Network to invest in crypto-securities will be required to establish an account and create a Prometheum Wallet. Crypto-securities held in customer’s wallet accounts will be settled daily to reflect updated holdings of crypto-securities held at StockCross the Digital Clearing Firm. Additionally, by using a hierarchy of permissioned wallet addresses based on established public/private key cryptography, Prometheum’s wallet system provides the basis for secure communications about crypto-securities between Broker Dealers, the Broker-Dealer ATS and the Digital Clearing Firms.

Timing

We expect that at least until the date that the Offering Statement of which this Offering Circular is a part is qualified, our efforts will be focused upon raising funds in our Reg D/Reg S Offering, continuing development efforts and qualification of the Offering Statement of which this Offering Circular is a part, obtaining “no action” relief on our No Action request seeking recognition of our procedure for the safekeeping of our customer’s crypto-securities in compliance with SEC custody and control rules pending at the SEC, and further development, build out and commercialization of the Prometheum Network. We have and intend to use our resources and the proceeds from our Reg D/Reg S Offering to fund these on-going efforts.

During the one year period following qualification of this Offering (the “Qualification Date”) we expect to conduct this Offering and to continue developing the Prometheum Network, hiring personnel and developing the Ember Token and the Prometheum Blockchain. If our initial development efforts are successful, we hope to commence testing and completion of the elements of the Prometheum Network by the end of the second quarter 2019.

Thereafter, in or around the second half of 2019, we hope to launch the Prometheum Network and to create the Genesis Block of Ember Tokens.

The Wanxiang and HashKey Relationship

On October 25, 2018, we entered into a Binding Term Sheet with HashKey organized under the laws of Hong Kong and thereafter, on December 14, 2018 entered into a definitive Securities Stock Purchase Agreement with HashKey whereby HashKey bought 68,875,000 shares of common stock (29%) of the issued and outstanding common stock of the Company and 10,150,000 warrants for $12,000,000 consisting of cash in the amount of $3,000,000 and $9,000,000 of technology and related services. In such capacity HashKey has been designated as a “Founder” of the Company and will share in Founders’ warrants exercisable to purchase Ember Tokens allocated to Founders, proportionate to Hashkey’s 29% ownership interest of the Company’s common stock. A copy of the Purchase Agreement is attached as an exhibit to the Offering Statement of which this Offering Circular is a part. In connection with such purchase, effective December 14, 2018, the Company and Wanxiang entered into a Strategic Partnership and Joint Development Agreement, the Company, HashKey and Wanxiang entered into a Technology Agreement (the “Technology Agreement”), and the Company, HashKey, Wanxiang and certain other investors entered into an Investor and Founders Rights Agreement. Pursuant to the Investor and Founders Rights Agreement, HashKey was granted the right to purchase shares of our yet to be created Series A Preferred Stock convertible into that number of shares of our common stock equal to 10% of then issued and outstanding common stock, on a fully-diluted basis, for $12,500,000 exercisable for 30 days following FINRA approval of PEATS’ new member application to operate as a broker-dealer alternative trading system and filing an initial operation report on Form ATS.

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Technology and Software

Pursuant to the Technology Agreement HashKey and Wanxiang are providing the Company with [blockchain] technology, development services and resources in order to further develop, build out and commercialize the Prometheum Network, including, but not limited to, blockchain and trading software, relating to the operation of the Broker-Dealer/ATS and the Company’s proposed business and operations (the “Technology”), and certain development services relating to the Technology, its implementation and use.

The scope of the Technology and development services provided by HashKey and Wanxiang pursuant to the Technology Agreement include:

- Complete work on a system designed and developed with the Company and in a manner agreed to with the Company in order to achieve the Company’s goals as set forth in the Company’s system diagrams including, but not limited to, system diagrams provided by the Company to Investor on September 14, 2018, and more generally in the White Paper draft v4.22, dated September 2018 (as advanced by the most recent White Paper).

- Implement blockchain technology to meet the Company’s overall systems design that may include original work, extensions, or modifications to existing systems (e.g. including but not limited to the BCOS blockchain developed by Wanxiang).

- Provide a trading system back-end suitable for the Company’s requirements as set forth in the Company’s system diagrams including, but not limited to, system diagrams provided by the Company on September 14, 2018, and more generally in the White Paper.

- Provide support, documentation, test systems and any relevant tools required for Prometheum to implement a trading front end using HashKey provided and developed trading backend.

- Provide completed work and technologies that are free from licensing or intellectual property limitation or impairments to use.

- Where restrictive open source licenses have been incorporated into the technology provided by Wanxiang, (disclosed to the Company in advance) and where those licenses prevent modification (e.g. GPL) their use is considered as part of the overall system design agreed with the Company.

- Agree to provide access to technology, designs, and systems that are suitable and sufficient in their use and operation for compliance requirements as defined by the Company.

- An agreement that any intellectual property developed by HashKey and the Company will be owned by the Company and that the Company will have the unfettered right to use all updates, changes to systems and software provided by HashKey.

- All licenses and rights to use granted the Company, unless otherwise agreed shall be perpetual.

The Technology Agreement provides for the transfer and assignment to the Company of HashKey’s and its affiliates’ proprietary blockchain technology and ATS trading technology. The Technology Agreement also provides for a one (1) year royalty-free, license to use HashKey’s hot/cold wallet storage software system. The Technology Agreement also provides for the provision of ongoing technology development support from HashKey and its affiliates, including with regard to the ongoing development of the Prometheum Network and the Prometheum Blockchain development, and the ATS trading system code and system development support (including, but not limited to, matching engine and market data components).

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Moreover, HashKey also agreed to:

- Consult the Company in regards to its Ember Token economic model.

- Assist the Company with community building.

- Develop new issuer deal flow for the Company’s business.

- Assist with this Offering including, but not limited to, having the most qualified personnel of HashKey attend and present to potential investors including on road shows and conference calls and assist in the preparation of materials and the presentation thereof.

- Coordinate with the Company’s public relations team/firm to contemporaneously publicize the Wanxiang strategic partnership in Asia and assist the Company’s PR team/firm in securing press regarding the Company, when needed.

- The Company, HashKey and its affiliates have agreed that the valuation of such technology provided to the Company is $9,000,000.

Our Company

We were incorporated in Delaware in September 2017 for the purpose of developing, building out and commercializing the Prometheum Network. Our principal offices are located at 120 Wall Street, New York, New York 10005, and our phone number is (212) 514-8369. Our Internet address is www.prometheum.com.

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THE OFFERING

The following is a summary of the principal terms of this Offering and is not intended to be complete.

Issuer	Prometheum, Inc., a Delaware corporation.
Securities Being Qualified	Ember Warrants and their underlying Ember Tokens.  Each Ember Warrant shall be exercisable to purchase, one Ember Token, when and if the Genesis Block is created, for no additional consideration.
Offering Amount	We are seeking to qualify a minimum of $5,000,000 (the “Minimum Amount”) of Ember Warrants and a maximum of $50,000,000 of Ember Warrants (the “Maximum Amount”), and their underlying Ember Tokens.
Incentive Warrants	We have reserved 500,000 Ember Warrants to be issued to subscribers to the Broker-Dealer/ATS for no consideration as incentives (the “Incentive Ember Warrants”).   The Incentive Ember Warrants will not be counted against the Minimum Amount but will be counted against the Maximum Amount.  Therefore, the gross proceeds from the sale of the Minimum Amount, will be $5,000,000 and the gross proceeds from the sale of the Maximum Amount will be $49,500,000.
Offering Price	$1.00 per Ember Warrant. The minimum amount that must be purchased by each investor is 1,000 Ember Warrants.
Ember Warrant Exercise Period	Each Ember Warrant may be exercised to purchase one Ember Token, for no additional consideration, during the period commencing on the date the Genesis Block is created and ending on the five year anniversary from the issuance date of the Genesis Block.  See “Securities Being Offered” on page 41.
Commencement of the Offering	We expect to commence the sale of the Ember Warrants within two business days following the Qualification Date.
Termination of the Offering	This Offering will terminate on the earlier of (i) one year from the Qualification Date; (ii) the date on which the Maximum Amount is sold, or (iii) the date that the Offering is earlier terminated by us, in our sole discretion.
Escrow Account	All investor funds will be deposited in a non-interest-bearing escrow account (the “Escrow Account”) established by Cross River Bank, as escrow agent, for the benefit of the investors. If we do not sell at least the Minimum Amount by the Termination Date all funds will be promptly returned to investors without interest or deduction.
Warrant Agent and Transfer Agent	We have engaged VStock Transfer, LLC (“VStock”) to act as the warrant agent for the Ember Warrants pursuant to a Warrant Agent Agreement.  We have also engaged VStock to act as our Transfer Agent for the Company’s common stock.
Closings	The Ember Warrants will be issued in one or more closings (the “Closings”).  We must receive and accept subscriptions for the Minimum Amount in order to hold the initial closing (the “Initial Closing”) and release investor funds on deposit in the Escrow Account to the Company.  After the Initial Closing, the Offering will continue and we will have additional Closings on accepted subscriptions until the Termination Date. If we have not held the Initial Closing prior to the Termination Date, we will instruct the Escrow Agent to return all funds to the investors without interest or deduction.
Investor Qualifications	The Ember Warrants will be offered and sold solely to “Qualified Purchasers” (as defined in Rule 256 of Regulation A).

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Administrative Agent; Plan of Distribution	We have engaged Manorhaven, a registered broker dealer, to act as the Administrative Agent for this Offering. As Administrative Agent, Manorhaven, will be responsible for oversight and administration of the subscriptions process, recordkeeping, escrow oversight, review of closing requirements and sending confirmations to investors. Manorhaven shall receive an administrative fee equal to 2% of the gross offering sales proceeds, payable at each Closing of the Offering. Manorhaven will not solicit investments in the Company’s offering nor advise subscribers on suitability or advisability of such investments other than to assure that the terms of the offering are being complied with.
Relationship with Administrative Agent	The Company is the sole Class C Member of Coincross LLC (“Coincross”) and our Chairman and majority shareholder, Martin H. Kaplan, is the managing member of Coincross.  Manorhaven is a subsidiary of Coincross. As a result, we and the Administrative Agent are under common control and are affiliates.  Coincross has the right to purchase up to 1,000,000 Ember Warrants at a price of $
Warrants Outstanding Prior to this Offering	As of March 26, 2019 we have warrants outstanding exercisable to purchase up to 41,740,000 Ember Tokens, when and if the Genesis Block is created. Such warrants generally have substantially the same terms and conditions as the Ember Warrants offered herein.
How to Subscribe	Investors wishing to subscribe for Ember Warrants will first be required to establish an account on the Broker-Dealer/ATS at Prometheum.com. Once an account has been set up, investors will complete and execute the Subscription Agreement accompanying this Offering Circular and deliver it to us and deliver full payment for all Ember Warrants subscribed for to the Escrow Agent in accordance with the instructions provided in the Subscription Agreement.  Subscriptions submitted by investors, subject to acceptance by us, are irrevocable.  We have the right, at any time prior to the issuance of the Ember Warrants, to reject subscriptions in whole or in part in our sole discretion.
Reg D/Reg S Offering:	We are also conducting a Reg D/Reg S Offering, a private offering to accredited investors of up to 30,000,000 Ember Warrants at a price of $0.50 per Ember Warrant in reliance on Rule 506(c) of Regulation D and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”).  The Ember Warrants sold in the Reg D/Reg S Offering have the same rights as those being sold in this Offering and shall be exercisable to purchase up to 30,000,000 Ember Tokens, which will be subject to restrictions on resale.  As of the date of this Offering Circular, we placed $2,370,000 of Ember Warrants in the Reg D/Reg S Offering.  We intend to terminate the Reg D/Reg S Offering once this Offering is qualified.
Use of proceeds	We currently intend to use the net proceeds of this Offering for the development, build out and commercialization of the Prometheum Network including, retaining and hiring necessary personnel, the qualification of the Broker-Dealer/ATS, and for other working capital and corporate purposes. See “Use of Proceeds.”
Reporting Company and OTCQB Application	Within five calendar days of the Qualification Date, we intend to file a Form 8-A with the SEC to become a reporting company under the Securities and Exchange Act of 1934 and thereafter file an application with the OTC Markets to have the Ember Warrants quoted on the “OTCQB.”
Risk factors	Investing in the Ember Warrants and Ember Tokens involves a high degree of risk.  See “Risk Factors”, beginning on page 8.  You should read the Risk Factors section of, and all of the other information set forth in, this Offering Circular to consider carefully before deciding to purchase any Ember Warrants in this Offering.

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RISK FACTORS

The investment described herein is highly speculative and involves a high degree of risk of loss of all or a material portion of an investor’s entire investment. Our proposed Prometheum Network is in the creation stage and the Ember Tokens issuable upon exercise of Ember Warrants and which we propose to be the basis of such network may never be created or issued. You should carefully consider the following risk factors as well as other information contained in this Offering Statement, this Offering Circular and the exhibits to the Offering Statement in which this Offering Circular has been filed with the SEC, before deciding to make an investment in the Company. The risks and conflicts set forth below are not the only risks and conflicts involved in an investment in the Company.

Risks Related to the Company’s Business

We were incorporated in September, 2017 for the purpose of developing the Prometheum Network and have no operating history upon which you can evaluate our prospects, and accordingly, our prospects must be considered in light of the risks that any new company encounters.

We were incorporated under the laws of Delaware in September 2017 and our operations to date have consisted of raising capital, planning, modeling and developing our Prometheum Network, creating the software and preparing necessary documents and filings in order to implement the Prometheum Network as currently conceived to enable the Prometheum Network, and developing relationships with potential service providers. Accordingly, we have limited operating history upon which an evaluation of our prospects and future performance can be made. Our proposed operations are subject to all business risks associated with a new enterprise. The likelihood of our creation of a viable business must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the inception and development of a business operating in a relatively new, highly competitive, and developing industry. We anticipate that our operating expenses will increase for the near future. There can be no assurance that we will ever generate any operating activity or develop and operate the Prometheum Network. You should consider our limited history and our proposed business, operations and prospects in light of the risks, expenses and challenges faced by an early-stage company.

We may not receive necessary regulatory approvals to operate our Prometheum Network.

We believe that prior to launching our Prometheum Network and creating and issuing our Ember Tokens, we will require regulatory approvals, and/or “no action” clearances, from the SEC and possibly State securities regulators. If we are unable to obtain these regulatory approvals or “no action” clearances, we may have to reconfigure our Prometheum Network or Ember Tokens so that they satisfy regulatory requirements. If we cannot obtain the necessary approvals, we may not be able to launch our Ember Tokens, in which case investors could lose all or most of their investments.

No assurance can be given when and if ever the issuance of the Genesis Block of Ember Tokens will occur and if such does not occur the Ember Warrants will not be exercisable and will expire worthless.

The creation of the Genesis Block of Ember Tokens is contingent upon the successful development, build out and commercialization of the Prometheum Network, which is subject to a number of risks and uncertainties, including, but not limited to, the successful registration of the Broker-Dealer/ATS and completion of necessary programming to enable a smart contract based securities issuance and trading system. Accordingly, the Prometheum Network may not ever launch as currently envisioned. If the Prometheum Network is not fully developed, built out and commercialized, then the Genesis Block issuance of the Ember Tokens will not occur and Ember Warrants will most likely expire worthless. As a result, investors in this Offering should be aware of the risk of losing their entire investment.

We intend to use the proceeds of this Offering to develop the Prometheum Network and there is a risk that competitors may develop and launch alternative blockchain based securities networks prior to the completion and launch of the Prometheum Network.

There is a risk that competitors may develop and launch alternative blockchain based securities networks, offering functionality similar to what we are proposing, prior to the development and launch of the initial version of our Prometheum Network. These alternative networks may be based on the same open source code and open source protocol upon which we intend build our technology. The launch of any such networks could make it more difficult for our Prometheum Network to gain market acceptance if and when launched which could have a material adverse effect on our prospects and the prospects of the Prometheum Network.

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Our proposed Prometheum Network and our Ember Tokens are in the development stage and are new untested concepts that may not achieve market acceptance.

Our concept of creating a blockchain based crypto-securities issuance and trading network based on our Prometheum Network and Ember Tokens is new and is currently in the development stages. There can be no assurance that our proposed Prometheum Network will be operational, or if it does become operational, that it will achieve market acceptance. Investors acquiring Ember Warrants will bear the risks of investing in a novel untested type of securities transaction that will trade exclusively on a novel type of trading platform and be subject to a number of unusual restrictions, as well as the risks of investing in our business. Any failure of the Prometheum Network, the Broker-Dealer/ATS or the Ember Tokens to perform as expected will have a material adverse effect on our prospects.

The crypto-securities market in which we intend to compete is subject to rapid innovation and change and there is a risk that changes or innovations in the crypto-securities market may occur while we are developing our Prometheum Network and Ember Tokens which could render our business model and developing technology obsolete.

Since its inception, the distributed ledger technology market in general and the crypto-securities market have been characterized by rapid changes and innovations and are constantly evolving. As a result, there is a risk that during the time that we are developing our Prometheum Network and Ember Tokens, there may occur changes or innovations which may render our proposed business model and technology obsolete. If we are not able to adapt to such changes or innovations, we may not be able to generate sufficient interest in our Prometheum Network or Ember Tokens, if any, which would have a material adverse effect on our prospects.

Our proposed Prometheum Network and Ember Tokens may be vulnerable to hackers and cyber-attacks.

Our proposed Prometheum Network and Ember Tokens are internet-based, which makes us vulnerable to hackers who may access the data of investors in this Offering, purchasers of Ember Tokens and users of the Prometheum Network. Further, any significant disruption in our operations, our Ember Tokens or the Prometheum Network could cause investors and potential users to lose trust and confidence in us and our business, which could result in our having to cease operations. In addition, we intend to rely on third-party technology providers to provide us with the various elements of our proposed Prometheum Network and technology. Any disruptions of services or cyber-attacks on our third party technology providers could harm our reputation and materially and negatively impact our prospects.

Cybersecurity breaches may delay implementation of our business plan and damage our reputation.

As the world becomes more interconnected through the use of the Internet and users rely more extensively on the Internet and the cloud for the transmission and storage of data, such information becomes more susceptible to incursion by hackers and other parties intent on stealing or destroying data on which we rely. We face an evolving landscape of cybersecurity threats in which hackers use a complex array of means to perpetrate cyber-attacks, including, but not limited to, the use of stolen access credentials, malware, ransomware, phishing, structured query language injection attacks, and distributed denial-of-service attacks, among other means. These cybersecurity incidents have increased in number and severity and it is expected that these trends will continue. Should our proposed Prometheum Network be affected by such an incident, we may incur substantial costs and suffer other negative consequences, which may include, but is not limited to:

· remediation costs, such as liability for stolen assets or information;

· increased cybersecurity protection costs;

· litigation and legal risks, including regulatory actions by state and federal regulators; and

· loss of reputation.

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Our proposed Prometheum Network systems and those of third-party service providers we may engage may be vulnerable to cybersecurity risks. If our security measures are breached and unauthorized access is obtained to our Prometheum Network and our electronic trading platform, our business could suffer a material adverse effect.

Our proposed Prometheum Network will involve the processing, storage and transmission of transactions and data. The secure storage and transmission of confidential information over public networks will be a critical element of our operations. Cyber- attacks on our systems could expose us to a risk of misappropriation of this information, leading to litigation, reputational harm and possible liability. Despite the defensive measures we may take, these threats may come from external factors such as governments, organized crime, hackers, and other third parties such as outsource or infrastructure-support providers and application developers, or may originate internally from an employee or service provider to whom we have granted access to our computer systems. If our security measures are breached as a result of third-party action, employee error, malfeasance or otherwise, and, as a result, someone obtains unauthorized access to our confidential information, our reputation could be damaged, our business would suffer and we could incur material liability. Any such breach could compromise our Prometheum Network. Because techniques used to obtain unauthorized access or to sabotage computer systems change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventive measures.

We also face the risk of operational disruption, failure or capacity constraints of any of the third party service providers that facilitate our business activities, including clients, the clearing agent and network or data providers. Such parties could also be the source of a cyber-attack on and/or breach of our operational systems, data or infrastructure.

There have been an increasing number of malicious cyber incidents in recent years in various industries, including ours. Any such cyber incident involving our computer systems and networks, or those of third parties important to our businesses, could have a material adverse effect on our business, financial condition and results of operations. A cyber-attack or security breach on our system or that of a third-party service provider could manifest in different ways and could lead to any number of harmful consequences, including but not limited to:

· misappropriation of financial assets, intellectual property or sensitive information belonging to us, our clients or our third-party service providers;

· corruption of data or causing operational disruption through computer viruses or phishing; and

· denial of service attacks to prevent users from accessing our platform.

Our remediation costs and lost revenues could be significant if we fall victim to a cyber-attack. If an actual, threatened or perceived breach of our security occurs, the market perception of the effectiveness of our security measures could be harmed and could cause our broker-dealer and institutional investor clients to reduce or stop their use of our electronic trading platform. Moreover, prospective clients may be influenced by such events not to use our trading platform. We may be required to expend significant resources to repair system damage, protect against the threat of future security breaches or to alleviate problems, including reputational harm, loss of clients and revenues and litigation, caused by any breaches. We may be found liable to our clients for any stolen financial assets or misappropriated confidential information. Although we intend to continue to implement industry-standard security measures, no assurance can be given that those measures will be sufficient.

Our business model is dependent on continued investment in and development of distributed ledger technologies.

Our business model is dependent on continued investment in and development of distributed ledger technologies. If as a result of regulatory changes, hackers, general market conditions or innovations, investments in distributed ledger technologies become less attractive to investors or innovators and developers, it could have a material adverse impact on our prospects and possibly our ability to continue our developmental operations. It is not possible to accurately predict the potential adverse impacts on us, if any, of current economic conditions on our prospects.

Possible future acquisitions.

We may in the future acquire assets, technologies or companies that have services, products, technologies that extend or complement our proposed business. The process to undertake a potential acquisition is time-consuming and costly. If we were to undertake in the future any potential acquisition, we expect to expend significant resources to undertake due diligence on each potential acquisition, and there is no guarantee that we would be able to complete any such acquisition that we pursue. Moreover, if we were able to effectuate an acquisition, the process of integrating any such acquired assets or business into us could create unforeseen operating difficulties and expenditures and is itself risky.

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We expect to face significant competition.

Through our proposed Prometheum Network and Ember Tokens, we hope to facilitate online capital formation through the issuance and trading of Tokenized Securities. Though we believe that that this is a novel concept, we believe that we will be in competition with a variety of competitors in the market as well as likely new entrants. Some of these new entrants could follow a regulatory model that is different from ours which might provide them with competitive advantages over us. New entrants could include those that may already have a foothold in the securities industry, including some established broker-dealers who could have significantly greater resources than us. Further, we may have to compete with a number of market participants, including, but not limited to, alternative trading systems, traditional venture capitalists, and crowdfunding platforms. Some competitors and future competitors may be better capitalized than us or have greater resources than us which could give them a significant advantage in marketing and operations.

In order for us to implement our plan of operation and to create the Prometheum Network, we must identify, recruit, retain and develop the necessary personnel who have the needed technological background and experience.

While the Company’s strategic Partnership and Joint Development Agreement with Wanxiang has provided the Company with material and significant world recognized resources, never the less in order for us to implement our business plan we need to identify and recruit highly qualified personnel with backgrounds in developing distributed ledger technology applications and who have skills required for developing and managing developmental stage businesses. We believe that we will face intense competition for personnel. If we are not able to identify and recruit the necessary personnel to implement our business and launch the Prometheum Network, we may not have a successful Genesis Block and investors may lose all or most of their investments.

We may be unable to protect our proprietary technology or keep up with that of our competitors.

Our success will depend to a significant degree upon the protection of our software and other proprietary intellectual property rights. We may be unable to deter misappropriation of our proprietary information, detect unauthorized use, or take appropriate steps to enforce our intellectual property rights. In addition, our competitors may now have or may in the future develop technologies that are as good as or better than our technology without violating our proprietary rights. Our failure to protect our software and other proprietary intellectual property rights or to utilize technologies that are as good as our competitors’ could put us at a disadvantage to our competitors.

We may not be able to obtain trademark protection for our marks, which could impede our efforts to build brand identity.

We intend to file trademark applications with the United States Patent and Trademark Office seeking registration of our marks. There can be no assurance that the applications will be filed and if filed, if they will be successful or that we will be able to secure significant protection for our trademarks in the United States or elsewhere. Our competitors or others could adopt product or service marks similar to our marks, or try to prevent us from using our marks, thereby impeding our ability to build brand identity and possibly leading to customer confusion. Any claim by another party against us or customer confusion related to our trademark, or our failure to obtain trademark registration, could harm our business.

We may be accused of infringing intellectual property rights of third parties.

Other parties may claim that we infringe their intellectual property rights. In the future we may be subject to legal claims of alleged infringement of the intellectual property rights of third parties. The ready availability of damages, royalties, and the potential for injunctive relief has increased the defense litigation costs of patent infringement claims, especially those asserted by third parties whose sole or primary business is to assert such claims. Such claims, even if not meritorious, may result in significant expenditure of financial and managerial resources, and the payment of damages or settlement amounts. Additionally, we may become subject to injunctions prohibiting us from using software or business processes we currently use or may need to use in the future, or requiring us to obtain licenses from third parties when such licenses may not be available on financially feasible terms or terms acceptable to us or at all. In addition, we may not be able to obtain on favorable terms, or at all, licenses or other rights with respect to intellectual property we do not own.

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There is little or no guidance regarding the accounting treatment of the proceeds received from the sale of crypto-securities. We intend to classify the proceeds from the sale of the Ember Warrants as contributions to capital, however, there can be no assurance that this treatment will not be rejected and we will be required to restate our financial statements.

Accounting classification of crypto-securities and proceeds from their sales are not clear and we may be required to restate our financials.

As crypto-securities are a new class of securities, financial statement guidance as to the classification of funds raised by the sale of the Ember Warrants as reflected on the Company’s Financial Statements is not clear. There is no official guidance from either accounting or regulatory authorities including the Internal Revenue Service and they have not clearly opined on the financial statement treatment of the funds raised by the Company by the sale of the Company’s Ember Warrants as either being capitalized on the Company’s balance sheet or as set forth on the Company’s income statement as revenue.

The Company intends to treat the sale of its Ember Warrants as a capital formation event and reflecting the funds raised in the sale of Ember Warrants on the Company’s balance sheet as a capital asset.

No assurance can be given that accounting or regulatory authorities, including the IRS, will agree with the Company’s determination to capitalize the sale of its Ember Warrants.

Risks Related to this Offering, the Ember Warrants and the Ember Tokens

The Offering is being conducted on a “best efforts all-or-none” basis with respect to the Minimum Amount and on a “best efforts basis” for the remainder and we may not raise sufficient funds in this Offering for us to fully develop, build out and commercialize the Prometheum Network.

The Ember Warrants are being offered by us on a “best efforts, all-or-none” basis for the Minimum Amount and on a “best efforts” basis for the remainder, meaning that there is no assurance that any or all of the Ember Warrants will be sold. Because there is a Minimum Amount that must be sold to hold the Initial Closing, there is an increased risk to investors who participate in the Offering if less than the Maximum Amount is raised, since the remainder of the funds may not be forthcoming. We are relying upon the proceeds from this Offering, together with our currently available cash to fund our business plan for the next 24 months. If we sell less than the Maximum Amount, we may be required to seek additional funding, which may not be available. If we do not raise sufficient funds in this Offering, or if we are not able to obtain additional funding, we may be required to modify or suspend our business plan, which could result in investors losing all or most of their investments. See “Use of Proceeds.”

Your investment may be held in escrow for up to a year.

The Offering may continue until one year from the Qualification Date. This means that your investment may continue to be held in escrow while the Company attempts to raise the Minimum Amount. Your investment will not be accruing interest during this time and will simply be held until such time as the Offering terminates without the Company receiving the Minimum Amount, at which time it will be returned to you without interest or deduction.

There is no public market for the Ember Warrants or the Ember Tokens underlying the Ember Warrants and a public market may never develop.

Prior to this Offering, there has been no public market for the Ember Warrants or the Ember Tokens (see “Securities Being Offered”). We cannot predict the extent to which a market for the Ember Warrants or Ember Tokens will develop or be sustained after this Offering, or how the development of such a market might affect the market price of such securities. The initial offering price of the Ember Warrants in this Offering was determined by our management based upon factors relating to the estimated pricing of the proposed Ember Tokens and is not in any way indicative of our actual value, the value of the Ember Tokens, if and when issued, following the completion of this Offering. Investors may not be able to resell their Ember Warrants at or above the initial offering price, if at all.

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Currently, the creation of the Genesis Block is expected to occur within 12 months after the date of this Offering Circular. The Ember Tokens may never be created, and if created, a public market for the Ember Tokens may never develop.

The creation of the Genesis Block is expected to occur within 12 months after the date of this Offering Circular, and, if they are created, a public market for the Ember Tokens may never develop. If the Genesis Block is not created, the Ember Warrants may have little or no value. Further, even if the Genesis Block is created and issued, a public market for the Ember Tokens may never develop, which in turn would cause the Ember Warrants to have little or no value. Moreover, even if such a market forms, no assurances can be given that it will be sustained.

We may not qualify for listing on the OTCQB, and therefore you may be unable to sell the Ember Warrants into a public market.

We intend to file an application to have the Ember Warrants quoted on the OTCQB within 60 days after we hold the final Closing. No assurances can be given, however, that the application will be approved. OTCQB eligible securities include securities not listed on a registered national securities exchange in the U.S. and that are also required to file reports pursuant to Section 13 or 15(d) of the Securities Act, and require that we be current in its periodic securities reporting obligations.

Among other matters, in order for our Ember Warrants to become OTCQB eligible, a broker-dealer member of FINRA, must file a Form 211 with FINRA and commit to make a market in our securities once the Form 211 is approved by FINRA. As of the date of this offering memorandum, a Form 211 has not been filed with FINRA by any broker-dealer. If for any reason our Ember Warrants do not become eligible for quotation on the OTCQB or a public trading market does not develop, purchasers of our Ember Warrants may have difficulty selling their Ember Warrants should they desire to do so. If we are unable to satisfy the requirements for quotation on the OTCQB, any quotation of our Ember Warrants would be conducted in the “pink” sheets market. As a result, a purchaser of our Ember Warrants may find it more difficult to dispose of, or to obtain accurate quotations as to the price of their Ember Warrants.

There is no assurance that investors in this Offering will receive a return on their investment.

There is no assurance that investors will realize a return on their investments or that their entire investments will not be lost. For this reason, each investor should carefully read our Offering Statement, this Offering Circular and the exhibits to the Offering Statement in which this Offering Circular has been filed with the SEC, and should consult with their own advisors prior to making any investment decision with respect to the Ember Tokens and the Ember Warrants.

Our management will have broad discretion over the use of the net proceeds from this Offering.

Our management intends to use the net proceeds from this Offering to continue the creation and development of the Prometheum Network, to fund general operations, and for operating capital and reserves. Our management will have broad discretion in the application of the net proceeds and you will have to rely upon their judgment with respect to the use of the net proceeds. Our management may utilize the net proceeds in a manner in which you disagree. The failure by our management to apply these funds effectively could have a material adverse effect on our ability to launch our Prometheum Network and the Ember Tokens. See “Use of Proceeds” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.”

Once issued, secondary purchases and sales of Ember Warrants and Ember Tokens, when and if created and issued, may be limited by State Blue Sky laws, which may limit or prevent the formation of an active secondary market.

Since we do not currently intend to list the Ember Warrants or the Ember Tokens, when and if created and issued, on a national securities exchange, we will be required to comply with the Blue Sky laws for each State in which secondary trading is to occur. The State Blue Sky filing process can be time consuming and there can be no assurance that we will be able to successfully obtain Blue Sky clearance in all the States where investors reside. Investors residing in States where we have not received Blue Sky clearance will have limited ability to resell their Ember Warrants and Ember Tokens, when and if created and issued, in or from those States.

Holders of Ember Tokens could lose access to their Wallet Account or could lose access to their Ember Tokens.

Ember Warrant holders that acquire yet to be created Ember Tokens will be subject to the risk of unauthorized third parties gaining access to their Wallet Account through security breaches which could enable such third party to download the wallet account and potentially access the wallet account by deciphering or cracking the holder’s password. In such event, the holder may lose access to any Ember Tokens held in the wallet account and lose their entire investment. In addition, and an Ember Token holder may mistakenly send their Ember Tokens out of their Wallet Account in such a manner that they cannot recover their Ember Tokens. Further, Ember Token holders could lose their Ember Tokens through misplacing their private key/password. Further, if a holder does not maintain an accurate record of the holder’s password and loses the password to the wallet account, the holder will lose access to the Ember Tokens held in the wallet account, and, as a result, lose his or her investment.

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If we are able to create the Genesis Block and issue Ember Tokens, Ember Tokens sent to an incorrect wallet address may be difficult, if not impossible, to recover and may be permanently lost.

Ember Tokens sent to the wrong wallet address in some circumstances are unlikely to be recoverable and will likely be lost. It is unlikely Prometheum will have the ability to recover lost tokens, and investors in Ember Tokens must also accept the risk of permanently losing Ember Tokens sent to wrong wallet addresses. The occurrence of any such loss could have a material adverse effect on any affected holder of Ember Tokens and could reduce investor confidence in our network which would have a material adverse effect on our business.

If we are able to effect the issue of the Genesis Block of Ember Tokens, we intend to have trading data for Ember Tokens written to the blockchain which may make it difficult, if not impossible to correct trading errors in the Ember Tokens.

Since transactions executed through the Broker-Dealer/ATS will be recorded to the Prometheum Blockchain, it may be difficult or impossible to correct trading errors that might have been corrected prior to settlement under a typical T+3 system. Consequently, if the Genesis Block is issued, persons acquiring Ember Tokens must accept the risk that correction of any trading errors may be impossible. The occurrence of any such trading error could have a material adverse effect on any affected holder of Ember Tokens and could reduce investor confidence in our Prometheum Network which would have a material adverse effect on our business.

Risks Related to Blockchain

We may not be successful in developing clearance and settling mechanisms and procedures necessary for public trading of blockchain based Token Securities.

In order for securities to trade publicly, either through national exchanges, over-the-counter, or through other mechanisms, the intermediaries involved in executing such trades must have in place procedures and mechanisms for the prompt clearance and settlement of transactions. We are in the process of development clearance and settlement algorithms for Prometheum Blockchain based Token Securities and we cannot assure you that we will be successful in developing the necessary procedures and mechanisms or that the procedures and mechanisms we create will be deemed to meet the standards of the Federal Securities Laws including Exchange Act Rule 15c3-3.

We do not believe that there are any alternative trading systems approved by the SEC and FINRA for Token Securities and we cannot assure you that we will be successful in developing our Broker-Dealer/ATS.

We believe that our proposed Broker-Dealer/ATS dedicated to trading Token Securities is a new concept in that we are not currently aware of any similar alternative trading systems that have been approved by the SEC and FINRA. Since our Broker-Dealer/ATS is a new concept that will require the continued development and testing of new trading procedures, we expect the SEC approval process to be lengthy. Further, we cannot assure you that we will be successful in developing the Broker-Dealer/ATS or that the SEC will approve its alternative trading system application. If we are not able to develop our Broker-Dealer/ATS and implement systems to allow for trading of our Ember Tokens, when and if issued, and other Prometheum Blockchain based securities, then we will not be able to launch the Prometheum Network.

Distributed ledger technology is relatively new and we believe that the application of distributed ledger technology to securities clearing and settlement is novel to our proposed Prometheum Network, therefore, we have no experience operating such a securities platform.

We have limited experience applying distributed ledger technology to securities clearing and settlement. The creation and operation of a digital system for the public trading of Ember Token based securities utilizing a distributed ledger to enable members of the public to confirm that the blockchain underlying these securities has not been altered is subject to potential technical, legal and regulatory constraints. Any problems we, or the Broker-Dealer/ATS we have created, encounters with the operation of the Broker-Dealer/ATS platform, including technical, legal and regulatory problems, could have a material adverse effect on our business and plan of operations.

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Blockchains, including the Ember Token blockchain, are vulnerable to a variety of mining and network attacks.

As with other distributed ledger technologies, we believe that the Ember Token blockchain will be susceptible to mining attacks, including but not limited to double-spend attacks, majority mining power attacks, selfish-mining attacks, and race condition attacks. Any successful attacks present a risk to our blockchain, expected proper execution and sequencing of Ember Token transactions, and expected proper execution and sequencing of contract computations, which could have an adverse effect on the value of our Ember Tokens. Although we intend to limit the risk of mining attacks by creating an appropriate consensus mechanism that could reduce the risk of mining attacks, there can be no assurance that such measures, if implemented, will successfully defend against known or novel mining attacks.

Conventional trading systems have established processes and systems to identify securities and process trades. If we are not able to adapt these systems for use on our Broker-Dealer/ATS, then the Prometheum Network will not launch.

We believe that for crypto-securities to trade publicly, at least initially, they may be required to meet the same requirements as conventional securities. For example, securities that a publicly traded are identified by their CUSIP numbers which is a unique identifier for a security, and trading systems generally require the activities of transfer agents to process securities transactions. We cannot assure you that current trading systems will adapt to accommodate trading of crypto-securities or that crypto-securities can be designed to be functional on current trading systems.

The Prometheum Network involves new, unproven concepts and procedures for processing transactions on a blockchain and may ultimately prove to be unworkable.

As originally conceived, distributed ledger technologies were intended to publicly record all transactions on the blockchain. Conventional securities transactions however, are private in nature, particular if those securities being traded are held in street name. We are designing our Prometheum Network to include both private and public functionality. The public portion will have transactions in Token Securities validated on the Prometheum Blockchain and the private portion will provide Token Security holders with the ability to hold their securities privately, similar to street name securities. No assurance can be given that we will be successful completing the development of the Prometheum Network to allow public and private transactions.

Certain of our officers and directors may have a conflict of interest.

Martin H. Kaplan, our Chairman and one of our directors is the Managing Member of Gusrae Kaplan Nusbaum PLLC (“GKN”), our counsel. Aaron L. Kaplan and Benjamin S. Kaplan are Co-CEOs, and directors, and are Martin H. Kaplan’s sons who are both of counsel to GKN. Accordingly, there may be multiple conflicts of interest between us, GKN and our officers and directors.

We are under common control with the Administrative Agent.

The Administrative Agent is a wholly owned subsidiary of Coincross, LLC (“Coincross”). Our Chairman and majority shareholder, Martin H. Kaplan is the managing member of Coincross and a holder of a majority of the voting member interests of Coincross. Accordingly, we and the Administrative Agent are under common control and are affiliates.

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PLAN OF DISTRIBUTION

This is a Regulation A, Tier 2 offering which we will conduct on a “best efforts, all-or-none” basis with respect to the Minimum Amount and a “best efforts” basis with respect to the Maximum Amount. The Ember Warrants will be offered and sold solely to “Qualified Purchasers” (as defined in Rule 256 of Regulation A). The minimum investment amount for investors is $1,000 (1,000 Ember Warrants).

Our directors, officers, employees and affiliates (as defined in the Securities Act) may, but have no obligation to, purchase Ember Warrants in this Offering and all such Ember Warrants so purchased shall be counted toward the Minimum Amount and the Maximum Amount. Issuances of Incentive Ember Warrants, if any, shall not be counted toward the Minimum Amount but will be counted toward the Maximum Amount.

Determination of Offering Price

The Offering price and exercise price of the Ember Warrants have been determined by the Company’s management based upon perceived valuations and token economics to build a viable token ecosystem in a way which complies with the Federal Securities Laws.

Administrative Agent

We have entered into an Administrative Services Agreement with Manorhaven, a registered broker dealer, pursuant to which Manorhaven have agreed to act as the Administrative Agent for this Offering. As Administrative Agent, Manorhaven, will be responsible for oversight and administration of the subscription process, recordkeeping, escrow oversight, review of closing requirements and sending confirmations to investors.

Pursuant to the Administrative Services Agreement, Manorhaven shall receive an administrative fee equal to 2% of the gross proceeds of the Offering for such services, payable at each Closing of the Offering. Manorhaven will not solicit investments in the Company’s offering nor advise subscribers on suitability or advisability of such investments other than to assure that the terms of the Offering are complied with.

We have agreed to indemnify the Administrative Agent against liabilities under the Securities Act. We have also agreed to contribute to payments the Administrative Agent may be required to make in respect of such liabilities.

Escrow of Funds

We have executed an Escrow Agreement with Cross River Bank (the “Escrow Agreement”) pursuant to which Cross River Bank shall serve as the escrow agent (the “Escrow Agent”) in connection with this Offering. All monies collected from prospective purchasers of Ember Warrants will be held in a separate escrowed non-interest bearing bank account at the Escrow Agent (the “Escrow Account”) for the benefit of the investors in accordance with Rule 15c2-4 under the Exchange Act. All checks delivered to the Escrow Agent shall be made payable to “Prometheum, Inc., Cross River Bank, as Escrow Agent.” The Administrative Agent will instruct purchasers to transfer funds either directly to the Escrow Agent by wire transfer or by check payable to “Prometheum, Inc., Cross River Bank, as Escrow Agent.” The Administrative Agent shall deliver any funds it receives from prospective purchasers to the Escrow Agent by noon of the next business day. Funds will not be released to the Company until the Minimum Amount is raised. Once the Minimum Amount is raised, the Company may have an initial Closing and direct that the Escrow Agent disburse the funds in the Escrow Account. Thereafter, the Company may have additional Closings from time to time on any further amounts delivered to the Escrow Agent until the Termination Date.

The purpose of the Escrow Account is for (i) the deposit of all subscription monies (checks or wire transfers) which are received from prospective purchasers of our offered Ember Warrants and are delivered to the Escrow Agent, (ii) the holding of amounts of subscription monies which are collected through the banking system, and (iii) the disbursement of collected funds.

Simultaneously with each deposit to the Escrow Account, the Administrative Agent shall inform the Escrow Agent about the subscription information for each prospective purchaser. Upon the Escrow Agent’s receipt of such monies, they shall be credited to and deposited into the Escrow Account. The Escrow Agent shall not be required to accept for credit to the Escrow Account or for deposit into the Escrow Account checks which are not accompanied by the appropriate subscription information. Wire transfers representing payments by prospective purchasers shall not be deemed deposited in the Escrow Account until the Escrow Agent has received in writing the subscription information required with respect to such payments.

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Proceeds deposited in escrow with the Escrow Agent may not be withdrawn by investors prior to the Termination Date. If the Offering is withdrawn or canceled or terminated by us on or prior to the Termination Date, all such proceeds will be promptly returned by the Escrow Agent without interest or deduction to the persons from which they are received (within one business day) in accordance with applicable securities laws. All such proceeds will be placed in a non-interest-bearing account pending such time.

We have the right to accept or reject subscriptions in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will be returned promptly by the Escrow Agent to the subscriber, without interest or deductions. Generally, subscriptions for Ember Warrants will be accepted or rejected within three (3) business days after we receive them.

We have agreed to pay the Escrow Agent a fee for acting as Escrow Agent. The amount of the fee will vary depending on the number of investors that acquire Ember Warrants.

Offering Period

We expect to commence sales of the Ember Warrants within two trading days following the date on which the Offering Statement of which this Offering Circular is a part is qualified by the SEC (the “Qualification Date”). This Offering will terminate on the earlier of (i) one year from the Qualification Date; (ii) the date on which the Maximum Amount is sold, or (iii) the date that the Offering is earlier terminated by us in our sole discretion (collectively, the “Termination Date”).

The Ember Warrants will be issued in one or more closings (the “Closings”). We must receive and accept subscriptions for the Minimum Amount in order to hold the initial Closing (the “Initial Closing”) and release investor funds on deposit in the Escrow Account to the Company and deliver Ember Warrants to the investors account as described below. If we have not sold the Maximum Amount in the Initial Closing, the Offering will continue and we will have additional Closings on accepted subscriptions until the Termination Date. If we have not held the Initial Closing prior to the Termination Date, we will instruct the Escrow Agent to return all funds to the investors without interest or deduction.

Offering Documents

This Offering Circular and the offering documents specific to this Offering will be available to prospective investors for viewing 24 hours per day, 7 days per week on our website at www.prometheum.com. Before committing to purchase Ember Warrants, each potential investor must consent to receive the final Offering Circular and all other offering documents electronically. Prospective investors must read and rely on the information provided in this Offering Circular in connection with any decision to invest in the Ember Warrants.

Subscription Procedure

Following qualification of this Offering, Prospective investors who submitted non-binding indications of interest during the “test the waters” period, will receive an automated message from us indicating that the offering is open for investment.

In order to purchase Ember Warrants, a prospective investor must set up an account with the Administrative Agent and submit the information required for the Administrative Agent to perform AML, KYC and other due diligence. Once an investor clears the process, the investor will then be invited to complete the Subscription Agreement on our website. A form of the Subscription Agreement has been filed as an exhibit to the Offering Statement of which this Offering Circular is a part.

Subscription Agreements must be completed and electronically signed and delivered to us through our website and funds for the subscribed amount must be delivered in accordance with the instructions stated in the subscription agreement. Investors will specify whether they will provide the funds for their purchase of Ember Warrants via wire or ACH transfer.

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All payments for subscriptions will be delivered to the Escrow Agent as described in the Subscription Agreement. Prospective investors must answer certain questions to determine compliance with the investment limitation set forth in Rule 251(d)(2)(i)(C) of Regulation A under the Securities Act, which is described more fully below. This investment limitation does not apply to “accredited investors,” as that term is defined in Rule 501 of Regulation D under the Securities Act. The Subscription Agreement contains representations that the investor is either an “accredited investor” or that the amount being invested does not exceed the greater of 10% of your annual income or 10% of your net worth (excluding your principal residence).

The Subscription Agreements will be reviewed for completeness by the Administrative Agent.

Limitations on Your Investment Amount

Generally, no sale may be made to you in this Offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or your net worth. Different rules apply to accredited investors and to non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A, which states:

“In a Tier 2 offering of securities that are not listed on a registered national securities exchange upon qualification, unless the purchaser is either an accredited investor (as defined in Rule 501 (§230.501)) or the aggregate purchase price to be paid by the purchaser for the securities (including the actual or maximum estimated conversion, exercise, or exchange price for any underlying securities that have been qualified) is no more than ten percent (10%) of the greater of such purchaser’s:

(1) Annual income or net worth if a natural person (with annual income and net worth for such natural person purchasers determined as provided in Rule 501 (§230.501)); or

(2) Revenue or net assets for such purchaser’s most recently completed fiscal year end if a non-natural person.”

For general information on investing, we encourage you to refer to www.investor.gov.

Application for Listing

We intend to file an application to have the Ember Warrants quoted on the OTCQB within sixty (60) days after we hold the final closing. No assurance can be given that the Company will be able to identify a broker dealer to commence a market in the Company’s Ember Warrants and or successfully file a Form-211 and such inability would prevent the Ember Warrants from trading on the OTCQB.

If and when issued, we do not expect to apply to list the Ember Tokens for trading on any securities exchange or quoted on the automated quotation system of any national securities association. We believe that, when and if issued, the Ember Tokens will trade on our Broker-Dealer/ATS.

You should be prepared to retain the Ember Warrants and, if issued, the Ember Tokens indefinitely and should not expect to benefit from or rely on any price appreciation.

It is intended that Ember Tokens held by our custodial broker-dealer StockCross on behalf of account holders will be traded solely within our Broker-Dealer/ATS. The account holders will do so by placing buy/sell orders on the ATS electronic auction and match opposing orders using traditional order matching logic (price, time priority) via the matching engine. Prometheum intends to allow other ATS platforms to trade Ember Tokens, but they will have to open an account as a broker dealer with our Broker-Dealer ATS and use an external gateway (i.e. FIX and/or other API) to enter trades on behalf of their accounts.

No assurance can be given that Ember Tokens will trade on any ATS or market.

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State Blue Sky Information

The holders of our Ember Warrants and the underlying Ember Tokens should be aware that there may be significant State Blue Sky law restrictions upon the ability of investors to resell their Ember Warrants and the underlying Ember Tokens. We intend to apply to have the Ember Warrants listed for trading on the OTCQB, we do not intend to have the Ember Tokens listed for trading. However, even if we are successful in obtaining a listing on the OTCQB for our Ember Warrants, State Blue Sky laws may cause any secondary market for the Company’s Ember Warrants to be a limited one.

The Company intends to apply to have its Ember Warrants and the underlying Ember Tokens qualify for secondary trading in various States, however, there can be no assurance that secondary trading will be allowed in all States in which investors reside.

Within five calendar days of the completion of this Offering, the Company intends to file a Form 8-A with the SEC to have its Ember Warrants registered under Section 12 of the Exchange Act and to be subject to the ongoing reporting requirements of the Exchange Act. Until such time as the Company becomes subject to the reporting requirements of the Exchange Act, we intend to comply with the ongoing reporting requirements of Regulation A and file annual reports on Form 1–K, semiannual reports on Form 1–SA, and current event reports on Form 1–U. We intend to submit filings to qualify the Ember Warrants for secondary trading in such States as determined by our management.

Foreign Restrictions on Distribution of this Offering Circular

We have not taken any action to permit the possession or distribution of this Offering Circular outside the United States. Our securities may not be offered or sold, directly or indirectly, nor may this Offering Circular or any other offering material or advertisements in connection with the offer and sale of the Ember Warrants be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons outside the United States who come into possession of this Offering Circular must inform themselves about and observe any restrictions relating to this Offering and the distribution of this Offering Circular in the relevant jurisdictions.

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USE OF PROCEEDS

We intend to use the net proceeds for the following purposes in the following order: (a) first towards the fees and expenses associated with qualification of this Offering under Regulation A, including legal, auditing, accounting, escrow agent, transfer agent, printing and other professional fees; (b) second towards the implementation of our business plan, including but not limited to, (i) development, build out and commercialization of the Prometheum Network, (ii) obtaining the requisite brokerage licenses in our Broker-Dealer ATS, (iii) ongoing legal and regulatory interaction and relations (iv) community building/development and (v) a national marketing campaign, and (c) the balance towards working capital and other corporate purposes. In the event that we sell less than the Maximum Amount, our first priority is to pay fees associated with the qualification of this Offering under Regulation A. No proceeds will be used to compensate or otherwise make payments to officers except for ordinary payments under employment, personnel sharing, consulting or retainer agreements. We reserve the right to use a portion of the proceeds to pay director fees.

Below is a table summarizing how we anticipate using the net proceeds of this Offering, after payment of the Administrative Agent fees and other estimated expenses of this Offering. As set forth in the table, if the Minimum Amount of Ember Warrants offered hereby are purchased, we expect to receive net proceeds of approximately $4,400,000 after deducting the Administrative Agent fees in the amount of $90,000 (2% of the amount sold in the Offering) and estimated fees for qualification of this Offering and other ongoing costs estimated to be $500,000 (the “Offering Costs”). If the Maximum Amount of Ember Warrants offered hereunder are purchased, we expect to receive net proceeds from this Offering of approximately $48,010,000, assuming issuance of 500,000 Incentive Ember Warrants for no consideration and deducting the Administrative Agent fee of $990,000 (2% of the amount sold in the Offering) and the Offering Costs. However, we cannot guarantee that we will sell any or all of the Ember Warrants being offered by us.

	If the Minimum Amount of Ember Warrants are Sold			If the Maximum Amount of Ember Warrants are Sold
Gross Proceeds	$	5,000,000	(1)	$	49,500,000	(2)
Administrative Costs	$	100,000		$	990,000
Fees for Qualification of Offering under Regulation A and other related ongoing costs (includes legal, auditing, accounting, escrow agent, transfer agent, financial printer and other professional fees)	$	(500,000	)	$	(500,000	)
Net Proceeds(3)	$	4,400,000		$	48,010,000
Prometheum’s intended use of the net proceeds is as follows:
Network Creation/Development	$	1,000,000		$	2,000,000
Brokerage Licenses/Entities	$	500,000		$	500,000
Legal/Regulatory Matters	$	1,000,000		$	3,000,000
Promotion/Marketing	$	1,000,000		$	5,000,000
Legislative/Regulatory Effort	$	—		$	5,000,000
Market/Investor Education/Information Companies		$		$	5,000,000
International Inclusion		$		$	7,500,000
Working Capital and General Corporate Purposes(4)	$	900,000		$	20,010,000
Total Use of Net Proceeds	$	4,400,000		$	48,010,000

(1) Gross proceeds from the sale of the Minimum Amount of Ember Warrants.

(2) Gross proceeds from the sale of the Maximum Amount of Ember warrants not including the 500,000 Ember Warrants reserved for issuance to the first 100,000 subscribers to the Broker-Dealer/ATS.

(3) Assumes no cash commissions payable to selling agents.

(4) Any unused funds will be added to Working Capital and General Corporate Purposes.

We believe that if we sell the Maximum Amount of Ember Warrants in this Offering, the net proceeds together with our current resources will allow us to operate for at least the next 24 months.

We also reserve the right to change the use of the proceeds if our business plans change in response to market, financing and/or regulatory conditions. Accordingly, our management will have significant flexibility in allocating the net proceeds of this Offering.

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DESCRIPTION OF BUSINESS

Our Company

We were incorporated in Delaware in September 2017 for the purpose of creating the Prometheum Network, which we are constructing within the framework of Federal and State securities laws through which (i) issuers desiring to issue Prometheum Blockchain based crypto-securities will have access to and a platform for investors desiring to purchase such Prometheum Blockchain based crypto-securities and (ii) investors owning Prometheum Blockchain based crypto-securities issued on the Prometheum Network may sell or trade such crypto-securities.

Our wholly owned subsidiary, Prometheum Ember ATS, Inc. (PEATS or Broker-Dealer/ATS), is a New York corporation which filed its Form BD to register as a broker-dealer with the SEC and is in the process of applying for membership in FINRA. PEATS intends to file an initial operation report on Form ATS with the SEC to operate as an alternative trading system. PEATS is intended to become if and when fully registered and authorized the Broker-Dealer/ATS for the Prometheum Network.

We have not commenced any operations and our activities to date have been devoted to developing the technology and infrastructure necessary to launch our Prometheum Network, which may never occur. Accordingly, investors should be aware that the descriptions in this Offering Circular of our proposed Prometheum Network and our Ember Tokens are speculative and subject to significant risks.

Our principal offices are located at 120 Wall Street, New York, New York 10005, and our phone number is (212) 514-8369. Our Internet address is www.prometheum.com. You may obtain copies of our SEC filings through our website free of charge.

Overview

Our founders believe that blockchain protocol tokens are securities and as such their issuance and trading are subject to Federal and State securities laws.

On July 25, 2017, the SEC issued an investigative report that found that tokens offered and sold by a virtual organization known as The DAO were securities and therefore subject to the Federal Securities Laws. The SEC’s report confirmed that issuers of distributed ledger or blockchain technology-based securities, therein referred to as Initial Coin Offerings or ICO’s, must register public distributions, offers and sales of such securities under the Federal Securities Laws unless a valid exemption to registration applies. The report also stated that those participating in unregistered offerings may also be liable for violations of the securities laws, unless they are exempt, and that securities exchanges providing for trading in crypto-securities must register.

Our business plan consists of developing and launching a blockchain technology-based differentiated platforms designed to address the regulatory, legal, and liquidity challenges faced by others in the crypto-securities market, which we refer to as the “Prometheum Network,” that will (i) allow issuers seeking to raise capital through the creation and distribution of crypto-securities to conduct their offering in a securities law compliant way; and (ii) provide the infrastructure necessary to allow for secondary-market trading and processing of Prometheum Blockchain based crypto-securities, which we are developing with our strategic partner Wanxiang.

The contemplated Prometheum Network vision consists of the following:

· Our platform for initial and follow on distributions of our SST crypto-securities (the “Regulation A Platform”) through which issuers will be able to offer and sell to the public SSTs issued via “Smart Security Offerings^TM” (“SSOs”) controlled by smart contracts.

· Our alternative trading system for secondary market trading of crypto-securities (the “Broker-Dealer/ATS”) operated by Prometheum Ember ATS, Inc. (“PEATS”). PEATS has filed an application pending with FINRA for membership as a broker-dealer and intends to file an initial operation report on Form ATS with the SEC to operate as an alternative trading system. PEATS intends to operate as the Broker-Dealer/ATS for compliant purchasing, trading, clearing and processing of crypto-securities through the Prometheum Network.

· Our blockchain based digital master wallets (“Wallets”). When a potential customer wants to open an account with Prometheum, they complete the online investor application and submit this information for review. Upon submission, the customer’s data is automatically submitted to IdentityMind, our third-party service provider, for anti-money laundering and know your customer (“AML/KYC”) checks and verifications. Upon passing AML/KYC, a Wallet account will be created for the customer and the customer will be directed to the deposit page. This page allows them to input their banking information in order to wire/ACH money into their Wallet account at PEATS’ clearing firm. Once the Wallet account is funded, customers will be able to either (a) make an investment in a primary issuance on the Broker-Dealer/ATS, or (b) trade on the Broker-Dealer/ATS.

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· Our “Digital Clearing Firm” (StockCross) which will utilize blockchain protocol based procedures for (i) clearing and settlement of crypto-securities transactions and (ii) custody of crypto-securities. Prometheum intends to settle crypto-security transactions once daily so the customers’ master wallet will reflect their current crypto asset (crypto-securities and currency). This is similar to how the Depository Trust and Clearing Company holds securities on behalf of its broker dealers and tracks the transfer of ownership through their electronic book-entry system.

· The “Prometheum Blockchain” which will use the Practical Byzantine Fault Tolerance (“PBFT”) consensus algorithm in order to provide a balance between performance and distributed reliability. We believe PBFT provides protection against manipulation and against failure of nodes in a distributed system.

· Our own blockchain protocol crypto-securities tokens engineered for use on the Prometheum Network which we refer to as “Ember Tokens” (which is the first SST) will provide the basis for issuer crypto-securities offered through the facilities of the Prometheum Network. It is intended that the Company’s Ember Token will trade as “MBR^TM”. The Ember Tokens, when and if issued in exchange for the Ember Warrants will function as a utility token, Prometheum’s native currency, and a security. Blockchain functionality is being developed by the Company in consultation with the Company’s strategic partner Wanxiang. The technology architecture and intended processes have been agreed to in principle and development of our blockchain technology with Wanxiang is ongoing. For the last updated description of the development of the Prometheum Network see the Company’s White Paper.

· Prometheum Blockchain miners/validators who will earn Ember Tokens.

Timing

Proceeds from this Offering, our sale of securities to HashKey and from a concurrent Reg D/Reg S Offering that we are conducting, has been and will be used to fund the ongoing creation, development, testing and completion of all of the elements of the Prometheum Network. As of the date of this Offering Circular, we have sold $2,370,000 of Ember Warrants in our Reg D/Reg S Offering. We expect that the full development process of the Prometheum Network will take up to 12 months from the date of this offering.

We expect that at least until the date that the Offering Statement, of which this Offering Circular is a part, is qualified, our efforts will be focused upon raising funds in the Reg D/Reg S Offering, continued development of our blockchain structure with our strategic partners and joint venturers HashKey and Wanxiang and qualification of the Offering Statement of which this Offering Circular is a part. Thereafter, during the one year period, if and assuming the Offering Statement is qualified, we expect to;

· conduct this Offering;

· continue development of the Prometheum Network;

· hire personnel;

· develop the Prometheum Blockchain pursuant to our Technology Agreement with HashKey and Wanxiang and its affiliates;

· finalize procedures for processing, mining and/or validation of Ember Tokens, which are intended to be the basis of the Prometheum Network and through which issuers will create their Prometheum Blockchain based crypto-securities;

· complete the qualification of the Broker-Dealer/ATS;

· develop clearing and custody mechanisms with our clearing firm StockCross to effectuate the Prometheum Network; and

· create the Genesis Block.

During the ensuing one year period following the Qualification Date, we expect to conduct this Regulation A Offering and to continue developing the Prometheum Network, hiring personnel and developing the Ember Token blockchain. If our initial development efforts are successful, we will commence testing and completion of the elements of the Prometheum Network.

Thereafter, in the later part of the second half of 2019, we hope to launch the Prometheum Network and to create the Genesis Block and initiate the Ember Token activities. After the Genesis Block is created, Ember Warrant holders may exercise their Ember Warrants for Ember Tokens.

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Technology and Software Development

The Company entered into a Technology Agreement with HashKey and Wanxiang whereby they have agreed to provide the Company with certain (i) technology including, but not limited to, blockchain and trading software, relating to the operation of the Company’s Broker-Dealer ATS and the Company’s proposed business and operations (the “Technology”), and (ii) certain development services relating to the technology, its implementation and use.

The scope of the Technology and development services provided by HashKey and Wanxiang include:

- Complete work on a system designed and developed with the Company and in a manner agreed to with the Company in order to achieve the Company’s goals as set forth in the Company’s system diagrams including, but not limited to systems diagrams provided by the Company to HashKey and Wanxiang on September 14, 2018, and more generally in the White Paper.

- Implement blockchain technology to meet the Company’s overall systems design that may include original work, extensions, or modifications to existing (e.g. including but not limited to BCOS) systems.

- Provide a trading system backend suitable for the Company’s requirements as set forth in the company’s system diagrams including, but not limited to, system diagrams provided by the Company on September 14, 2018, and more generally in the White Paper.

- Provide support, documentation, test systems and any relevant tools required for Prometheum to implement a trading front end using HashKey and Wanxiang provided and developed trading backend.

- Provide completed work and technologies that are free from licensing or intellectual property limitation or impairments to use.

- Where restrictive open source licenses have been incorporated into the technology provided by HashKey and Wanxiang, (disclosed to the Company in advance) and where those licenses prevent modification (e.g. GPL) their use is considered as part of the overall system design agreed with the Company.

- Agree to provide access to technology, designs, and systems that are suitable and sufficient in their use and operation for compliance requirements as defined by the Company.

- Agree that any intellectual property developed by HashKey and the Company will be owned by the Company and that the Company will have the unfettered right to use all updates, changes to systems and software provided by HashKey.

- All licenses and rights to use granted the Company, unless otherwise agreed shall be perpetual.

The Technology Agreement provides for the transfer and assignment to the Company of HashKey’s proprietary blockchain technology and other ATS trading technology. The Technology Agreement also provides for a one (1) year royalty-free, license to use HashKey’s company’s hot/cold wallet storage software system. The Technology Agreement also provides for the provision of ongoing technology development support from HashKey, including the Company’s network blockchain development, ATS trading system code and system development support (including, but not limited to, matching engine and market data components), and Ember token economic model design support.

Prometheum Network Overview

As currently envisioned, the Prometheum Network will provide a structure for a compliant means of creating, issuing, purchasing, trading, clearing and processing of crypto-securities. The proposed Prometheum Network will consist of participants in a distributed ledger technology-based securities network to create individualized wallet accounts for holding crypto-securities for use on a smart contract enabled Prometheum Blockchain at StockCross as introduced by Prometheum’s broker-dealer(s).

The Prometheum Network will be engineered in cooperation with HashKey and its affiliates’ network of blockchain technology and building resources. In order to comply with regulatory requirements, the Prometheum Blockchain is a permissioned blockchain network. A permissioned blockchain requires an invitation that must be validated by a set of rules put in place by the network and/or by a network administrator in order to become a unique electronic participant on the network. Permissions restrict who is allowed to participate in our network, and what type of transactions they are allowed to do. These permissions are controlled by using a combination of traditional database mapping/entitlements, and smart contracts. A unique electronic identity is used within every transaction on the Prometheum Blockchain for every Prometheum account holder. This electronic identity (account number) is assigned when they open an account with Prometheum’s broker-dealer after they have successfully completed the online registration and review process for introduction to our clearing firm StockCross, on a fully disclosed basis.

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Through the Prometheum Network, issuers will have the ability to conduct offerings of crypto-securities, and to issue their crypto-securities as a separate token on top of the Prometheum Blockchain through our Broker-Dealer/ATS. We expect that trades will be written to the Prometheum Blockchain and transaction costs will be paid by both sides of the transaction with bits of Ember Tokens and/or fiat currency. We intend for the Broker-Dealer/ATS to provide issuers with the ability to conduct their Prometheum Blockchain based crypto-securities offerings either pursuant to Regulation A, Regulation D (or a combination thereof), or in an offering registered under the Securities Act.

See the Prometheum, Inc. White Paper.

Below is a schematic diagram describing our proposed Prometheum Network.

We have developed a technical solution to allow for customers to create individualized smart contract master wallet accounts for holding crypto-securities at a digital clearing firm while maintaining confidentiality of customer account details.

Customer master wallets will ensure that smart contract functionality is operative in relation to the specific account.

Prior to the issuance of the Genesis Block, Prometheum will seek SEC permission for Prometheum’s Blockchain to serve as the custodian for transfer records of the Ember Tokens. In the event that the Commission does not grant such authority it may be necessary for Prometheum and or a new subsidiary to file to become a transfer agent with the SEC or alternatively to contract with a third party provider.

Broker-Dealer/ATS

PEATS, which intends to operate the Broker-Dealer/ATS, has filed an application pending with FINRA for membership as a broker-dealer alternative trading system and intends to file an initial operation report on Form ATS with the SEC. The Broker-Dealer/ATS is intended to function as an alternative trading system for compliant purchasing, trading, clearing and processing of crypto-securities through the Prometheum Network introduced to its clearing firm StockCross.

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The Broker-Dealer/ATS will introduce those who open accounts for the purchase and sale of Ember Tokens or other Prometheum Network issued crypto-securities and facilitate other broker-dealers who introduce their customers to engage in secondary transactions of our Ember Tokens or other Prometheum Network issued crypto-securities through the Broker-Dealer/ATS to StockCross its Digital Clearing Firm on a fully disclosed basis.

The Broker-Dealer/ATS, is intended to provide (i) account creation services, for issuers and investors, (ii) a platform through which issuers can raise capital through the issuance of crypto-securities, (iii) distribution services, (iv) a facility for secondary market trading of crypto-securities issued on our platform, and (v) clearing and settlement services for such transactions in crypto-securities through our introduced digital clearing firm StockCross.

We also intend to develop software that will allow qualified third-party broker dealers to tie into the Broker-Dealer/ATS and offer their clients access to crypto-securities investments.

The Broker-Dealer/ATS is intended to provide the following functions and services to participants using the Prometheum Network.

Opening of Crypto-Security Wallet/Account Creation

It is intended that participants wishing to access the Prometheum Network to invest in crypto-securities will be required to establish an account and create a crypto-security wallet account with StockCross. Each wallet account will be created via a smart contract through which Prometheum intends to accomplish certain compliance functions, including KYC compliance and AML compliance. Further, it intends other traditional brokerage back-office functions to be performed through smart contract applications. Additional information can be associated with each participants wallet account and that information can be used by smart contracts on the Prometheum Blockchain to limit the permissions of that particular participant. For example, if an investor qualifies as an accredited investor residing in the State of New York, such investor will not be subject to investment limits and will be limited to investing in offerings qualified in New York State. All wallet accounts are intended to be held for 15c-3-3 custody and control purposes by StockCross.

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We anticipate that the costs associated with the creation and management of participant wallet accounts will be paid for with Ember Tokens and written to the Prometheum Blockchain. More user accounts and related activity on the network requires more data to be written to the Prometheum Blockchain.

A general purpose smart contract allows network participants to interact with each other via an abstract interface (a smart contract) for a specific purpose. General purpose smart contracts deployed to the Prometheum Blockchain and can interact with SSTs (including Ember Tokens) held in personal wallets. SSTs held in personal wallets are the equivalent of certificated securities. By implementing a transfer system for SSTs between master and personal wallets we are able to provide functionality for Ember Tokens in general purpose smart contracts when the Ember Token is stored in a personal wallet. By moving tokens from a master wallet to a personal wallet, individuals can interact with general purpose smart contracts. Both the general purpose smart contracts and the base Ember Token functionality understand the same system (e.g. ledger) of token balances, though only the latter can perform crypto-securities transactions (and relies on tokens being held in a regulated master wallet).

A smart contract is not created for each wallet account. Any Smart Contracts used for securities transactions on the Prometheum Network are internal to the implementation of confidential transactions involving master wallets. Should general purpose smart contracts be available they would only allow interactions with personal wallets (and as such not relate to transactions occurring on the Broker-Dealer/ATS or held for custody and control purposes at StockCross, the clearing firm), not held within the brokerage firm nor subject to safekeeping and custodial securities rules. Master wallets are issued by the StockCross clearing firm based on instructions from the Broker-Dealer/ATS and cannot directly be controlled by customers. Customer’s personal wallets are in the customer’s total custody and control and are not subject to any broker-dealer responsibility.

Whether or not an investor meets the requirements to be an accredited investor is intended to be manifest in a user’s Master Wallet, the available functions of which are ultimately controlled by the introduction of accounts to StockCross. Changes to an individual’s accredited investor status would result in a restriction to what transactions their Master Wallet will be qualified to transact.

Creation and Issuance of Crypto-Securities through the Prometheum Network

Issuers seeking to raise capital through a crypto-securities offering will be required to establish accounts and set up a Wallet Account. We intend to set up the Prometheum Network so that issuers seeking to raise capital through a crypto-securities offering will create their crypto-securities using the Ember-X protocol with tools provided by Prometheum. We believe that Ember Tokens will be the first security token based on the Ember-X protocol. New issuer’s will not need to own Ember Tokens in order to create their security token.

Issuers will make disclosure documents available on the new issue platform of the Prometheum Network (a central place where issuers complete due diligence, build their token and provide information to prospective investors).

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Secondary Market

Prometheum’s Broker-Dealer/ATS is intended to create a marketplace for secondary market trading of issuer Prometheum Blockchain based crypto-securities. Furthermore, we intend for third party issuers that have compliantly issued crypto-securities on another blockchain to be able to list their tokens through the use of derivative issuances on our Broker-Dealer/ATS through smart contracts tied with the third party blockchain that will be integrated into Prometheum’s back end. All crypto-securities are intended to be traded over the Prometheum Blockchain and held in electronic wallets. All trades on the Prometheum Network are intended to be validated and written to the Prometheum Blockchain and transaction costs are intended to be paid with bits of Ember Tokens. Prometheum believes that secondary market trading of Ember-based issuer crypto-securities as well as the introduction of third-party service providers (BDs, investment banks, etc.) will significantly increase network activity on its blockchain, thus creating a flourishing ecosystem for all securities related crypto-securities activities on the Prometheum Network.

The Prometheum Network will in a later phase enable broker-dealers to tie into the Broker-Dealer/ATS to offer their respective clients, through their existing brokerage accounts, access to secondary market trading of Prometheum Network issued crypto-securities. Some of these third parties are anticipated to share in token and/or fiat currency earnings.

The Broker-Dealer/ATS will use a maker/taker model for its charging/paying those providing or taking liquidity. To incentivize initial trading activity on the Prometheum Network, the Broker-Dealer/ATS may waive any fees or increase payments to increase liquidity.

Clearing & Settling

Processing of secondary market trades of crypto-securities through the Prometheum Network will be conducted by our Broker-Dealer/ATS introducing its business on a fully disclosed basis to its digital clearing firm StockCross. StockCross will segregate customer funds and crypto-securities, in compliance with SEC Rule 15c3-3. Prometheum has submitted to the SEC a “No Action Request” with respect to the treatment of custody and segregation of customer crypto-securities pursuant to Exchange Act Rule 15c3-3 (the “Customer Protection Rule”). All transactions in crypto-securities occurring at the Broker-Dealer/ATS will be introduced to the Digital Clearing Firm on a fully disclosed basis. A record of all transactions and activity conducted on the Broker-Dealer/ATS will be written to the Prometheum Blockchain to ensure compliant record keeping and processing. The clearing of Ember Tokens through the Prometheum Network’s ecosystem will allow for same day settlement as the trades effectuated on Prometheum’s Broker-Dealer/ATS will settle through Prometheum’s introduction to its clearing firm StockCross which will only allow accounts to trade on the Broker-Dealer/ATS who have an approved account with StockCross. Further, Prometheum believes that as transactions are written to the Prometheum Blockchain, activity on the Prometheum Network will increase.

The Ember Tokens

Overview

We are creating our Ember Tokens to function as the fungible value source for the Prometheum Network. We believe, of which no assurance can be given, that the operation of the Prometheum Network will function as the value driver of the Ember Tokens (or derivative securities exercisable or exchangeable for Ember Tokens) by creating supply and demand avenues as set forth in the following schematic:

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We believe that the value of Ember Tokens will primarily be a function of supply and demand, therefore more activity on the Prometheum Network should result in increased demand for Ember Tokens.

Supply of Ember Tokens

The overall supply of Ember Tokens available to the Prometheum Network is 270,000,000 tokens, all created in the Genesis Block and thereafter, through mining/validation, rewards and attrition, additional issuances to contributors/advisors, and Ember Token supply policies designed to control deflationary pressure and stability.

The Ember Token Genesis Block

We intend to create the Genesis Block, consisting of 270,000,000 Ember Tokens, contemporaneously with the launch of the Prometheum Network. The Genesis Block will be reserved for issuance to Ember Warrant holders and to various contributors, advisors, service providers, and network participants in the incentive pool. Assuming the Maximum Amount of Ember Warrants is sold in this Offering, and in the Reg D/Reg S Offering, we expect the Genesis Block to be allocated as follows:

· 80,000,000 Ember Tokens (representing approximately 29.6% of the Genesis Block) will be reserved for issuance upon exercise of Ember Warrants issued in this Offering and the Reg D/Reg S Offering.

· 35,000,000 Ember Tokens (representing approximately 13% of the Genesis Block) will be reserved for issuance upon exercise of Ember Warrants issued to founders/promoters, which we refer to as “Founders” who have made significant contributions, financial and technological, to Prometheum, Inc. and its efforts to create the Prometheum Network.

· 2,000,000 Ember Tokens (representing approximately 0.7% of the Genesis Block) will be reserved for issuance upon exercise of Seed Ember Warrants issued to Martin H. Kaplan, our initial CEO and now Chairman, for his initial contributions.

· 10,000,000 Ember Tokens (representing approximately 3% of the Genesis Block) will be reserved for contributors/advisors.

· 135,000,000 Ember Tokens (representing approximately 50% of the Genesis Block) reserved for distribution to network participants in an incentive pool.

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In the event that the total amount of Ember Warrants offered in this Offering and the Reg D/Reg S Offering are not sold or if selling agents are not engaged, or contributors/advisors not rewarded, then we intend to conduct additional offerings of Ember Warrants so that the Genesis Block of 270,000,000 Ember Tokens will be ultimately issued and outstanding.

Restrictions on Ember Tokens issued to Founders

All Ember Tokens allocated to Founders will contain vesting provisions with an anticipated minimum of 2 years to a maximum of 5 years to be determined by the Board of Directors.

Future Ember Token Supply

Following the launch of the Prometheum Network and the creation of the Genesis Block, the number of issued and outstanding Ember Tokens will generally be increased through incentives, additional distributions to contributors/advisors, and through other Prometheum Network activity. The number of circulating Ember Tokens may be decreased through holders losing Ember Tokens, or Wallet Accounts and other forms of attrition.

Ember Token Incentive Model

135,000,000 Ember Tokens created in the Genesis Block will be reserved in an incentive pool to promote growth and activity on the Prometheum Network. The Ember Token incentive pool allocation will be distributed as commercial and network incentives. Commercial incentives will be used to incentivize users to participate in financial services related activity (ex. issuance, trading, clearing). Network incentives will reward validators/stakers with additional Ember Tokens (in addition to the transaction fees) to promote network adoption and staker validation of executed trades and other Prometheum Blockchain activities.

Ember Token Supply Mechanisms

We believe that the two primary drivers behind the creation and distribution of additional Ember Tokens will be (a) distributions to contributors and advisors and (b) incentive pool distributions to network participants. Following the creation of the Genesis Block we intend to optimize network adoption through incentive token distributions to validators and other network participants.

Ember Token Burn Program

The Company’s Board of Directors intends to establish a plan pursuant to which 10% of its annual profits, if any, will be allocated to purchase in the open market and over time remove from circulation up to a maximum of 135,000,000 of its issued and outstanding Ember Tokens (the “Burn Program”).

The Company intends to conduct the Burn Program in accordance with Rule 10b-18 of the Exchange Act, and accordingly, will engage Manorhaven, a registered broker dealer, to manage the Burn Program. In addition, the Company will adopt a 10b5-1 Plan under which Ember Token purchases will be made. Under the terms of the 10b5-1 Plan, effective on the date that the Company publicly reports an annual profit, in an annual report on Form 10-K or if applicable Form 1-K, or through a press release if they Company is not subject to the reporting requirements of the Exchange Act or Regulation A, 10% of the reported profits will be used to effect open market purchases under the Burn Program during the following 12 months on a monthly basis.

There is no set number of Ember Tokens that must be purchased in any given fiscal year and, for years that the Company does not report a profit, there will be no Ember Tokens purchased under the Burn Program. The Burn Program will terminate once the total number of Ember Tokens purchased and burned equals 135,000,000 Ember Tokens.

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Description of Property

The Company owns no real property. It currently leases office space from Gusrae Kaplan Nusbaum PLLC at 120 Wall Street, New York, NY 10005 pursuant to an oral lease of $5,000 a month which is subject to periodic review and change.

Legal Proceedings

There are no legal proceedings material to our business or financial condition pending and, to the best of our knowledge, there are no such legal proceedings contemplated or threatened.

Employees

As of March 26, 2019 we have four full time employees and two independent contractors.

Recent Events

During October 2018, the Company bought the domain name Prometheum.com for a total cost of $71,842.

On October 25, 2018, we entered into a Binding Term Sheet with HashKey and thereafter, on December 14, 2018 entered into a definitive Stock Purchase Agreement with HashKey whereby Hashkey bought 68,875,000 shares of common stock (29%) of the issued and outstanding common stock of the Company and 10,150,000 warrants for $12,000,000 consisting of cash in the amount of $3,000,000 and $9,000,000 of technology and related services. In such capacity HashKey has been designated as a “Founder” of the Company and will share in Founders’ warrants exercisable to purchase Ember Tokens allocated to Founders, proportionate to Hashkey’s 29% ownership interest of the Company’s common stock. A copy of the Purchase Agreement is attached as an exhibit to the Offering Statement of which this Offering Circular is a part. In connection with such purchase, effective December 14, 2018, the Company and Wanxiang entered into a Strategic Partnership and Joint Development Agreement, the Company, HashKey and Wanxiang entered into a Technology Agreement, and the Company, HashKey and certain other investors entered into an Investor and Founders Rights Agreement. Pursuant to the Investor and Founders Rights Agreement, HashKey was granted the right to purchase shares of our yet to be created Series A Preferred Stock convertible into that number of shares of our common stock equal to 10% of then issued and outstanding common stock, on a fully-diluted basis, for $12,500,000 exercisable for 30 days following FINRA approval of PEATS’ new member application to operate as a broker-dealer alternative trading system and filing an initial operation report on Form ATS.

On January 25, 2019, the Company entered into a Commitment Letter with StockCross for StockCross to provide our Broker-Dealer/ATS with settlement, clearance, custody and control services as the Company’s digital clearing firm.

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

You should read the following discussion and analysis of our financial condition and results of our operations together with our financial statements and the notes thereto appearing elsewhere in this Offering Circular. This discussion contains forward-looking statements reflecting our current expectations, whose actual outcomes involve risks and uncertainties. Actual results and the timing of events may differ materially from those stated in or implied by these forward-looking statements due to a number of factors, including those discussed in the sections entitled “Risk Factors” starting on page 8, “Forward-Looking Statements” starting on page ii, and elsewhere in this Offering Circular. Please see the notes to our financial statements for information about our significant accounting policies.

Plan of Operations

We were incorporated in September 2017 and since such time our operations have consisted solely of capital, raising and related activity and developing and building out the Prometheum Network. We have received no revenues from operations since our inception.

As of March 26, 2019, we have raised $2,370,000 in our Reg D/Reg S Offering. In addition, our Chairman and founder, Martin H. Kaplan contributed $10,000 in cash to us and advanced funds to pay various costs incurred by us. Mr. Kaplan also provided administrative services and support without cost to us. Commencing October 1, 2018, Prometheum entered into an oral month to month sublease with GKN at a rate of $2,500 per month, which commencing in January 2019, such monthly lease payment was increased to $5,000. GKN has also been paid certain legal fees and reimbursed for payroll costs of Aaron L. Kaplan, our Co-CEO who continues to devote his full time to the affairs of the Company (see Certain Relationships and Related Party Transactions on page 38).

In December 2018, we sold 68,875,000 shares of common stock and 10,150,000 founder ember warrants for $12,000,000 consisting of $3,000,000 cash and $9,000,000 in technology and related services to HashKey.

Following the qualification of this Offering, assuming we sell at least the Minimum Amount, our plan is to utilize the net proceeds of this Offering to structure the Prometheum Network components we have and to acquire and/or create the various other necessary components of the Prometheum Network, including the Broker-Dealer/ATS and to continue the development, build-out and, thereafter, the commercialization of the Prometheum Network. We currently believe that assuming we sell the Maximum Amount, the net proceeds thereof together with the remaining proceeds received from the sale of our Warrants in our Reg D/Reg S Offering, will be sufficient to fund our developmental operations for an estimated 24 months (12 months if we sell the Minimum Amount).

Results of Operations

During the nine month period ended September 30, 2018, we generated no revenue and incurred operating a net loss of $514,420. For the period from September 18, 2017 (inception) through December 21, 2017, we generated no revenue and incurred a net loss of $55,787.

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Liquidity and Capital Resources

To date, we have had no revenue and generated negative cash flows from operating activities.

Our future expenditures and capital requirements will depend on numerous factors, including, but not limited to: the success of this Offering, the progress of our development efforts with Hashkey and its affiliates and the time it takes for the Prometheum Network to be up and running.

As of September 30, 2018, we had cash of $1,734,463 and an accumulated deficit of $570,209. As of December 31, 2017, we had assets, consisting of cash of $9,994 and an accumulated deficit of $55,787. Our cash balances as of September 30, 2018 and December 31, 2017 were derived from investing activities.

Our business does not presently generate any cash. We believe that if we raise the Maximum Amount in this Offering, we will have sufficient capital to finance our operations for the next 24 months, however, if we do not sell the Maximum Amount or if our operating and development costs are higher than expected, we will need to obtain additional financing prior to that time. Further, we expect that after such 24 month period, we may be required to raise additional funds to finance our operations until such time that we can conduct profitable revenue-generating activities.

Subsequent Event

In December 2018 we sold 68,875,000 shares of Common Stock and 10,150,000 Ember Warrants for $3,000,000 in cash and technology and related services valued at $9,000,000. In January 2019, we engaged BDO USA, LLP to review the technology and services that we received and to provide us with a third party valuation.

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DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES

Name	Position	Age	Term of Office(1)	Approximate hours per week for part-time employees
Executive Officers:
Martin H. Kaplan	Chairman and Director	68	September 2019	As needed
Aaron L. Kaplan	Co-Chief Executive Officer, Chief Financial Officer, President, Secretary, Director	35	September 2019	N/A
Benjamin S. Kaplan	Co-Chief Executive Officer,  Chief Regulatory Officer, Director	30	September 2019	N/A
Alex Shapiro	Chief Strategy Officer			N/A
Gareth Jenkins	Chief Technology Officer			N/A
Directors:
Dr. Xiao Feng	Director	57	September 2019	As needed
Jerry Schneider	Director	73	September 2019	As needed

(1) Our directors each serve until the next annual meeting of our shareholders.

Martin H. Kaplan

Martin H. Kaplan (“Marty”) is the Managing Partner of Gusrae Kaplan Nusbaum PLLC, a law firm he co-founded in 1975, and is recognized as one of the premier securities and regulatory attorneys in the United States. Marty brings over four decades of experience litigating highly sophisticated securities matters before federal and state courts, and regulatory bodies. Marty represents a broad range of participants in the financial services industry in regulatory and enforcement matters, internal and law enforcement investigations, negotiating complex settlements with FINRA and the SEC. Since 2014 Marty has served as the Managing Member of Coincross LLC, the parent company of Manorhaven Capital, LLC. From 2008 to 2016, Marty served on the board of directors of P2W, Ltd., an Israeli corporation specializing in water remediation. Marty earned his law degree from New York Law School and his BA from the City College of New York.

Aaron L. Kaplan

Aaron L. Kaplan (“Aaron”) was an attorney with and currently is of counsel to Gusrae Kaplan Nusbaum PLLC, where he focused his practice on the applications of distributed ledger technology in the securities industry, and the related regulatory issues. He is now full-time co-CEO of the Company. Since 2016, Aaron has served as the Managing Member of EquityArcade Services LLC, a technology provider focused on online capital formation solutions. Prior thereto, he served as Managing Member of EquityArcade LLC, a Title III equity crowdfunding platform. In 2015, Aaron was a co-founder of Deckbound LLC, a blockchain video gaming and digital asset technology company. From 2007-2008 Aaron was an associated person with StockCross Financial Services, Inc., a broker-dealer, where he held Series 7, 63, 55, 4, 24, 27 and 53 securities licenses. In August 2018, Aaron was a keynote speaker at a blockchain symposium held in Hong Kong and in September 2018 in Shanghai. Aaron received a BA from the University of Wisconsin and a JD degree from Thomas Jefferson School of Law. Aaron is a member of the New York State Bar.

Benjamin S. Kaplan

Benjamin S. Kaplan (“Benjamin”) was a Partner and is now of counsel to Gusrae Kaplan Nusbaum PLLC. At Gusrae Kaplan, Benjamin practiced securities, corporate and commercial law, with a specific concentration on FINRA and enforcement and regulatory matters. Benjamin gained experience in broker-dealer and clearing firm regulatory compliance, building and operating broker-dealers, corporate structuring, guiding foreign owned U.S. broker-dealers and other broker-dealer related areas. Benjamin is also a member of the Board of Directors of Driver Partners, an automated platform for drivers in the ridesharing industry. Benjamin previously sat on the Board of Directors of Set the Set, a data collection company specializing in the music industry. Benjamin received a B.A. from the University of Hartford in 2010 and a J.D. from Thomas Jefferson School of Law in 2013. Benjamin is a member of the Bar of the State of New York.

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Gareth Jenkins 

Gareth Jenkins (“Gareth”) is an expert systems developer and blockchain technologist. Gareth has created some of the earliest examples of blockchain game applications and associated technologies. His Bitbind protocol (2014) addressed and solved the problem of digital asset creation on a transactional blockchain. The Deckbound card system (2015) demonstrated one of the first uses of blockchain for a video game. Gareth’s background is as a systems architect, developer/designer, studio lead, consultant and adviser for various platforms, video games and technologies. Gareth is a self-taught expert in systems design, software engineering and operations infrastructure. He studied UK A-A* standard GCSEs, as well as A-levels at Sandbach School in Cheshire, UK (1992-1997). He has also independently studied mathematics computer science and artificial intelligence at a degree and post-degree level at the Open University in the UK. From 1998 to 2006, Gareth served as Systems Director, BSS UK where he designed, developed and managed a web-based application for risk assessment and management for the UK commercial insurance sector. From 2006 to 2014, Gareth was the Founder, Managing Director of Productivity Balloon Ltd. running a software development studio specializing in cross-platform video games development and multiplayer of infrastructure. From 2012 to 2013, Gareth was CTO of Beluga Learning Ltd. where he designed and developed technologies for cognitive learning of mathematics through games and multi-user applications with big-data analytics. From 2015 to present, Gareth is the founder & CEO of Deckbound LLC where he created and built blockchain technology for digital items and their use in skills-based video games.

Dr. Xiao Feng

Dr. Xiao Feng (“Dr. Xiao”) is the Chairman of HashKey, Vice Chairman and Executive Director of China Wanxiang Holding Co., Ltd., and the Chairman and CEO of Shanghai Wanxiang Blockchain Inc. Dr. Xiao received his bachelors degree from Jiangxi Normal University and his PhD in economics from Nanhai University. Dr. Xiao has over 25 years experience in China’s securities and asset management industry. Dr. Xiao was one of the earliest evangelists and promoters of blockchain technology in China. Dr. Xiao is a worldwide recognized ideologist and blockchain community leader worldwide and developer of blockchain businesses throughout the world. Dr. Xiao was an early participant and sponsor of the Ethereum project. Under Dr. Xiao’s direction various affiliates have been funded and incubated in more than 50 blockchain projects throughout the world.

Jerry Schneider

Jerry Schneider (“Jerry”) is a certified public accountant and has over 40 years of relevant accounting experience. Jerry is licensed to practice public accounting in New York and Florida and is a member of the American Institute of Certified Public Accountants, the New York State Society of Certified Public Accountants and the Florida Institute of Certified Public Accountants. Jerry was the Managing Partner of Schneider & Associates LLP, a CPA firm with approximately 20 professional staff and was the driving force in that firm’s growth and development until it merged with Marks Paneth LLP in 2008. From January 2011 to November 2017, Jerry was a Partner, Partner Emeritus and Senior Consultant at Marks Paneth LLP. Jerry has now retired from Marks Paneth LLP. Jerry’s practice was concentrated in the areas of business planning, high net worth individuals, manufacturing, retailing, securities broker-dealers, the hospitality industry and private educational institutions. Jerry is a board member and is Chairman of the Audit Committee for Siebert Financial Corp., a NASDAQ listed securities brokerage Company which pioneered discount brokerage approximately fifty years ago. Jerry also is a board member of the Fiduciary Trust International South, Inc., and serves as a member of its audit committee.

Alexander Shapiro

Alexander Shapiro (“Alex”) is currently the Chief Strategy Officer at Prometheum. Prior to Prometheum, Alex spent the last 12 years working in the financial technology space where he created and oversaw multiple projects related to high frequency trading, platform design, algo/SOR design and automated trading. He is also the founder and CEO of Rain River Inc., a consulting company specializing in management, technology, and strategy related advisory services for small to mid-tier financial services firms. Rain River has led consulting projects for numerous companies. Alex was also the founder and former Chief Strategy Officer at VeePiO, a social mobile app. Alex was the managing director at Singularity Technology Solutions (“STS”), an HFT software company. Prior to joining STS, Alex spent six years as a licensed representative and was a managing director at a high frequency trading and technology focused FINRA registered broker dealer. Alex was born in Leningrad, Russia and grew up in NYC. Alex attended The New York University Stern School of Business undergraduate program.

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Certain Relationships

Martin H. Kaplan is the father of Aaron L. Kaplan and Benjamin S. Kaplan.

Involvement in Certain Legal Proceedings

None of our directors or executive officers have been involved in any of the following events during the past ten years:

· any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

· any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

· being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; or

· being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Board Leadership Structure and Risk Oversight

The Board oversees our business and considers the risks associated with our business strategy and decisions. The Board currently implements its risk oversight function as a whole. At such time as the Board determines to establish committees, then each board committee, will also provide risk oversight in respect of its areas of concentration and reports material risks to the Board for further consideration.

Term of Office

Officers hold office until his or her successor is elected and qualified. Directors are appointed to serve for one year until the meeting of the Board following the annual meeting of stockholders and until their successors have been elected and qualified.

Board Committees

Our Board of Directors has not established any committees, including an Audit Committee, a Compensation Committee or a Nominating Committee, or any committee performing a similar function. The functions of those committees are being undertaken by the entire board as a whole. Our board of directors does not believe that it is necessary to have such committees at this time because it believes the functions of such committees can be adequately performed by our Board of Directors as a whole. Further, since our securities are not listed on an exchange, we are not subject to any qualitative requirements mandating the establishment of any particular committees.

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COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

Name	Capacities in which compensation was received	Cash Compensation ($)		Other Compensation ($)			Total Compensation ($)
Martin H. Kaplan	Chairman and Director	$	0	$	49,672	(1)	$	49,672
Aaron L. Kaplan	Co-Chief Executive Officer, Director	$	240,000	$	0		$	240,000
Benjamin S. Kaplan	Co-Chief Executive Officer, Director	$	240,000	$	0		$	240,000
Alex Shapiro	Chief Strategy Officer	$	240,000	$	0		$	240,000
Gareth Jenkins	Chief Technology Officer	$	240,000	$	0		$	240,000
Jerry Schneider	Director	$	0	$	0		$	0
Dr. Fang Xiao	Director	$	0	$	0		$	0

(1) In October 2017, the Company issued 2,000,000 Seed Ember Warrants to its Chairman of the Board. The Seed Ember Warrants issued to the Chairman of the Board were valued at $3,700. In January 2018, the Company issued 24,850,000 Founder Ember Warrants to its Chairman of the Board. The Founder Ember Warrants issued to the Chairman of the Board were valued at $45,972. The value of the Seed Ember Warrants and Founder Ember Warrants were determined by management. The Chairman of the Board subsequently transferred 10,057,894 Founder Ember Warrants, by gift, to certain officers, directors and greater than 5% shareholders. See the section entitled “Security Ownership of Management and Certain Securityholders” below.

We have not established any employee benefit plans but intend to do so in the future.

Employment Agreements

We do not currently have employment agreements with any of our executive officers.

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SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS

The following table sets forth the numbers and percentages of our outstanding voting securities as of March 26, 2019 (as qualified in the footnotes thereto) by:

· each person known to the Company to be the beneficial owner of more than 10% of any class of the Company’s outstanding voting securities;

· each of the Company directors;

· each of the Company’s executive officers; and

· all of the Company’s directors and executive officers as a group.

The Company’s outstanding voting securities consist of Common Stock. Beneficial ownership is determined in accordance with SEC rules and generally includes sole or shared voting or investment power with respect to voting securities. For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any voting securities that such person or any member of such group has the right to acquire within 60 days of the date of this Offering Circular. For purposes of computing the percentage of the Company’s outstanding voting securities held by each person or group of persons named above, any securities that such person or persons has the right to acquire within 60 days of the date of this Offering Circular are deemed to be outstanding for such person, but not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. Beneficial ownership as determined under SEC rules is not necessarily indicative of beneficial or other ownership for any other purpose. The inclusion herein of any securities listed as beneficially owned does not constitute an admission of beneficial ownership by any person.

Unless otherwise indicated below, the business address of each person or entity listed is c/o Prometheum, Inc., 120 Wall Street, New York, NY 10005.

As a term of the Investor and Founders Rights Agreement all of the Company’s shareholders have agreed to vote their shares for four directors designated by the Founders and one director designated by HashKey. HashKey has designated Dr. Xiao Feng as its Board of Directors designee. Percent of shares beneficially owned before and after Offering based upon 237,500,000 shares issued and outstanding as of March 26, 2019.

Name of Beneficial Owner	Number of Shares Beneficially Owned Before Offering		Percent of Shares Beneficially Owned Before Offering			Number of Shares Beneficially Owned After Offering (1)(2)		Percent of Shares Beneficially Owned After Offering (1)(2)
Officers and Directors
Martin H. Kaplan(1)		100,375,000		42.3	%		100,375,000		42.3	%
Aaron L. Kaplan(2)		23,750,000		10.0	%		23,750,000		10.0	%
Benjamin S. Kaplan(3)		23,750,000		10.0	%		23,740,000		10.0	%
Alex Shapiro(4)		4,437,500		1.9	%		4,437,500		1.9	%
Gareth Jenkins		—		*	%		—		*	%
Jerry Schneider(5)		887,500		*	%		887,500		*	%
Dr. Xiao Feng(6)		68,875,000		29.0	%		68,875,000		29.0	%
Executive officers and directors as a group (7 persons)		222,075,000		93.5	%		222,075,000		93.5	%
5% or Greater Shareholders
HashKey Digital Asset Group(6)		68,875,000		29.0	%		68,875,000		29.0	%
Lawrence G. Nusbaum		11,875,000		5.0	%		11,875,000		5.0	%

* Less than 1%.

** Subject to contractual limitations.

(1) Does not include 11,875,000 shares held by a member of GKN who has given Mr. Kaplan voting rights thereto. Does not include 2,000,000 Seed Funding Ember Warrants exercisable for up to 2,000,000 Ember Tokens, when and if issued. The Seed Funding Ember Warrants were issued to Mr. Kaplan in exchange for capital contributions and services provided to us. Does not include 14,792,106 Founder Ember Warrants exercisable for up to 14,792,106 Ember Tokens, when and if issued.

37

(2) Does not include 3,500,000 Founder Ember Warrants exercisable for up to 3,500,000 Ember Tokens, when and if issued.

(3) Does not include 3,500,000 Founder Ember Warrants exercisable for up to 3,500,000 Ember Tokens, when and if issued.

(4) Does not include 653,947 Founder Ember Warrants exercisable for up to 653,947 Ember Tokens, when and if issued.

(5) Does not include 130,789 Founder Ember Warrants exercisable for up to 130,789 Ember Tokens, when and if issued.

(6) These shares are held by HashKey Digital Asset Group Limited, an entity affiliated with Dr. Xiao. Does not include 10,150,000 Founder Ember Warrants exercisable for up to 10,150,000 Ember Tokens, when and if issued.

The Founder Ember Warrants were issued to each of the forgoing as partial compensation for services provided to the Company that have had a profound impact on the creation and initial development of the Prometheum Network.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Martin H. Kaplan, our Chairman of the Board, Benjamin S. Kaplan, a member of our Board of Directors and Co-Chief Executive Officer, and Lawrence G. Nusbaum, a 5% shareholder, are attorneys associated with GKN, which serves as our outside counsel, and counsel to the Administrative Agent. During 2017 we paid GKN approximately $55,781 for legal services and for the nine months ended September 30, 2018 we paid GKN approximately 76,019 for legal services.

We have entered into an Administrative Services Agreement with Manorhaven. Manorhaven is a subsidiary of Coincross and Chairman of the Board and majority shareholder, Martin H. Kaplan, is the managing member of Coincross.

Indemnification Arrangements

We have entered into indemnification agreements and employment agreements with our directors and certain of our executive officers, respectively, pursuant to which we have agreed to indemnify such persons against any liability, damage, cost or expense incurred in connection with the defense of any action, suit or proceeding to which such persons are a party to the extent permitted by applicable law, subject to certain exceptions.

Policies and Procedures for Approving Related Party Transactions

Our Board of Directors has not adopted a written policy with respect to Related Party Transactions (as defined below), however, it is the policy of the Board of Directors to review and approve all Related Party Transactions by our Board of Directors. In determining whether to approve, recommend or ratify a Related Party Transaction. Factors considered in connection with such review may include; (i) whether the terms of the Related Party Transaction are fair to us, (ii) whether there are business reasons for us to enter into the Related Party Transaction, and (iii) whether the Related Party Transaction would present an improper conflict of interest for any of our directors or executive officers.

A “Related Party Transaction” means a transaction (including any series of related transactions or a material amendment or modification to an existing Related Party Transaction) directly or indirectly involving any Related Party that would need to be disclosed under Item 404(a) of Regulation S-K. Generally, under Item 404(a) of Regulation S-K, we are required to disclose any transaction occurring since the beginning of the last two fiscal years, or any currently proposed transaction, involving us or our subsidiary where the amount involved exceeds $120,000, and in which any Related Party had or will have a direct or indirect material interest.

A “Related Party” means any of the following: (i) any of our directors of the Company or Director Nominees; (ii) any of our executive officers; (iii) a person known by us to be the beneficial owner of more than 5% of our common stock or (iv) an immediate family member of any of the foregoing.

CONFLICTS OF INTEREST

Martin H. Kaplan, our Chairman and one of our directors is the Managing Member of Gusrae Kaplan Nusbaum PLLC (“GKN”), our counsel. Martin H. Kaplan is also our controlling shareholder and the holder of the Company’s Seed Investor Ember Warrants and Founders Ember Warrants. Aaron L. Kaplan, our Co-CEO, Chief Financial Officer and a director is Martin H. Kaplan’s son and is of counsel to GKN. Benjamin S. Kaplan, Co-CEO is also Mr. Kaplan’s son and is of counsel to GKN. Jerry Schneider, one of our directors is also a director of Siebert Financial Corp., which has been represented in a number of matters, some of which are ongoing, by GKN. Accordingly, there may be multiple conflicts of interest between us, GKN and our officers and directors.

38

SECURITIES BEING OFFERED

Ember Warrants Offered Hereby

The Company is offering up to 50,000,000 of Ember Warrants (“Ember Warrants”), 49,500,000 of which will be offered to the public at an offering price of $1.00 per Ember Warrant, 500,000 of which will be issued as incentives to subscribers to the Broker-Dealer/ATS for no consideration. Each Ember Warrant is exercisable to purchase one Ember Token, for no additional consideration, at any time commencing on the date that the Genesis Block has been created and terminating at 5:00 p.m., New York City time, on the fifth (5th) anniversary of the date of issuance of the Genesis Block.

The Ember Warrants will be issued in registered form under a warrant agent agreement (the “Warrant Agent Agreement”) between us and our warrant agent, VStock Transfer, LLC (the “Warrant Agent”). The material provisions of the Warrants are set forth herein and a copy of the Warrant Agent Agreement has been filed as an exhibit to the Offering Statement of which this Offering Circular forms a part. The Company and the Warrant Agent may amend or supplement the Warrant Agent Agreement without the consent of any holder for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained therein or adding or changing any other provisions with respect to matters or questions arising under the Warrant Agent Agreement as the parties thereto may deem necessary or desirable and that the parties determine, in good faith, shall not adversely affect the interest of the holders.

The Ember Warrants may be exercised upon delivery of an exercise notice at the offices of the Warrant Agent. The Ember Warrant holders do not have the rights or privileges of holders of Common Stock and no voting rights.

No Ember Warrants will be exercisable unless at or prior to the time of the exercise, the Genesis Block has been created. If we are unable to successfully create the Genesis Block, and therefore are unable to deliver Ember Tokens, the Ember Warrants may become worthless.

Restrictions on Transfer

Generally, securities sold pursuant to Regulation A are not considered “restricted securities” under Securities Act Rule 144 and therefore, sales of Ember Warrants by persons who are not considered affiliates of the Company would not be subject to any transfer restrictions under Rule 144. Affiliates of ours that purchase Ember Warrants will be subject to the limitations of Rule 144, other than the holding period requirement. In addition, various State Blue Sky laws may restrict transfer of Ember Warrants until such time we have qualified the Ember Warrants for secondary trading. The market for the Ember Warrants may be limited if such Ember Warrants are not qualified or registered or exempt from qualification or registration in the jurisdictions in which the holders of such Ember Warrants reside.

The price of the Ember Warrants has been arbitrarily established by us after giving consideration to numerous factors, including but not limited to perceived valuations and token economics to build a viable ecosystem in a way which complies with the Federal Securities Laws. No particular weighting was given to any one aspect of those factors considered. We have not performed any method of valuation of the Ember Warrants.

Ability to Void a Sale of Ember Warrants

We have the right to void a sale of Ember Warrants in the Offering and compel an investor to return them to us, if we have reason to believe that such investor acquired the Ember Warrants as a result of a misrepresentation, including with respect to such shareholder’s representation that it is a “qualified purchaser” or an “accredited investor” as defined pursuant to Regulation A or Regulation D promulgated under the Securities Act, respectively, or if the investor or the sale to the investor is otherwise in breach of the requirements set forth in our certificate of incorporation, as amended, or bylaws, copies of which are exhibits to the Offering Statement in which this Offering Circular has been filed with the SEC.

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Fundamental Transactions

Pursuant to the terms of the Warrant Agreement, if during such time as the Ember Warrants are outstanding, the Company (a) enters into a merger, consolidation or other similar transaction or series of transactions to which the Company is a party and pursuant to which (i) the Company is not the surviving entity in such transaction or (ii) if the Company is the surviving entity, the holders of shares of common stock immediately prior to such transaction represent less than 50% of the shares of common stock outstanding immediately following such transaction, or (b) effect any sale of all or substantially all of the Company’s assets in one transaction or a series of related transactions (each a “Fundamental Transaction”), then the Company shall make appropriate arrangements to ensure the Registered Holders will thereafter receive upon the exercise of their Ember Warrants at any time after the consummation of a Fundamental Transaction but before the Termination Date, in lieu of the Ember Tokens issuable upon the exercise of an Ember Warrant immediately prior to such Fundamental Transaction, such cash, stock, assets, securities, warrants, options, subscription rights or other property having substantially the same or greater value than the Ember Tokens that the Registered Holders would have been entitled to receive upon the happening of such Fundamental Transaction had there Ember Warrants been exercised immediately before such Fundamental Transaction.

Incentive Ember Warrants

Each of the first 100,000 subscribers that successfully subscribe to our Broker-Dealer/ATS will be issued 5 Ember Tokens being qualified hereunder (a total of 500,000 Ember Tokens). The “Incentive Ember Tokens” will be issued for no consideration as an incentive for subscribers. Further, Incentive Ember Tokens will only be issued by us during the period following the Qualification Date up to the Termination Date of this Offering.

Governing Law

The Ember Warrants are governed by and construed in accordance with the laws of the State of New York.

The foregoing is a brief summary of certain terms and conditions of the Ember Warrants to be issued in connection with this Offering and are subject in all respects to the provisions contained in the Ember Warrant Agreement. We have reserved the right to engage selling agent broker-dealers to participate in this Offering and to issue such agents, if any, agent warrants. The form of Agent Ember Warrant and the Ember Warrant Agreement are attached as Exhibits to our Offering Statement of which this Offering Circular forms a part thereof.

Ember Tokens Offered Hereby

Ember Warrants cannot be exercised to purchase Ember Tokens unless and until we have created the Genesis Block, which we intend will occur upon the launch of the Prometheum Network. Accordingly, the following, description of the Ember Tokens assumes the successful creation of the Genesis Block.

Ember Tokens will be designed as blockchain protocol crypto-securities tokens engineered for use on the Prometheum Network, what we refer to as SST’s, that will provide the basis for issuer crypto-securities offered through the facilities of the Prometheum Network. The Ember Tokens, when and if issued in exchange for the Ember Warrants, will function as a utility token, Prometheum’s native currency, and a crypto-security.

Ember Tokens will be created using a protocol designed for the Prometheum Network referred to as “Ember-X.” Ember-X will be the protocol that underpins the functionality of the Prometheum Blockchain, including network design (e.g. blockchain peer model, consensus mechanism, smart contract layer, address and wallet model), different wallet types, embedded master wallet smart contracts, smart contract layer and other functionality. See the description of Ember-X in the White Paper.

Voting Rights

Holders of Ember Tokens will not have any voting rights, dividend rights, ownership rights to any of the assets of the Company or any rights upon liquidation of the Company. The Ember Tokens will not be part of our authorized common stock.

The Ember Tokens are intended to be tradeable through our yet to be fully authorized Broker-Dealer/ATS. It is intended that the Company’s Ember Token will trade as “MBR”.

Other Features of Ember Tokens

· Ember Tokens will function as the medium of exchange on the Prometheum Network. Payment for services on the Prometheum Network will occur with bits of Ember Tokens.

· Ember Tokens will be the basis upon which issuers may create new crypto-securities for issuance through the Prometheum Network.

For a further discussion of Ember Tokens and how they are intended to function, see the White Paper.

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Ember Token Wallet

Participants wishing to access the Prometheum Network to purchase or sell crypto-securities, including Ember Tokens, will be required to establish a brokerage account and create a crypto-securities wallet (a “Master Wallet”) to be introduced and held by StockCross, the Prometheum Network’s digital clearing firm. Ultimate blockchain functionality will require additional development and effort. Many of the facets of use of the Prometheum Blockchain as contemplated by the Prometheum Network are being developed under our Strategic Partnership and Joint Development Agreement and Technology Agreement with HashKey and its affiliates.

Each participant on the Prometheum Network, including, issuers, investors and service providers will be required to set up accounts thus creating their own unique Master Wallet through our Broker-Dealer/ATS to StockCross on a fully disclosed basis.

We anticipate that the costs associated with the creation and management of each participant’s Wallet Accounts will be paid for with Ember Tokens and intend for all account activity to be written to the Prometheum Blockchain. User accounts and related activity on the Prometheum Network will require more data to be written to the Prometheum Blockchain.

Authorized Capital Stock

The following is a summary of the rights and limitations of our capital stock as provided in our certificate of incorporation, and bylaws. For more detailed information, please see our certificate of incorporation and bylaws which have been filed as exhibits to the Offering Statement of which this Offering Circular is a part.

General

Our authorized capital stock consists of 500,000,000 shares of Common Stock, par value $0.00001 per share, and 100,000 shares of blank check preferred stock, par value $0.00001 per share (the “Preferred Stock”). Our board of directors is authorized by our certificate of incorporation to establish such classes or series of Preferred Stock, issue shares of each such class or series and fix the powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations and restrictions, applicable to each such class or series, without any vote or other action by any holders of any Common Stock. Each such class or series will have the terms set forth in a certificate of designations relating to such class or series filed with the state of Delaware or otherwise made a part of our certificate of incorporation, as it may be amended and restated from time to time.

As of March 26, 2019, we had 237,500,000 shares of Common Stock issued and outstanding.

Common Stock

Voting Rights

Holders of Common Stock will have one vote per share and may vote to elect our board of directors and on matters of corporate policy.

Dividend Rights

Holders of Common Stock will share equally in any dividend declared by our board of directors, if any, subject to the rights of the holders of any Preferred Stock. We have not issued any dividends in the past and we have no plans to issue any dividends in the future.

Liquidation Rights

Subject to and qualified by the rights of the holders of shares of any other class or series of our Preferred Stock, in the event of a voluntary or involuntary liquidation, dissolution, distribution of assets or winding up of the Company, after payment or provision for payment of the debts and other liabilities of the Company, and after the holders of shares of any other class or series of our Preferred Stock have received the amounts owed and available for distribution to them on a preferential basis, if any, the holders of shares of Common Stock shall be entitled to receive all the remaining assets of the Company available for distribution to shareholders, ratably in proportion to the number of shares of Common Stock held by them.

The foregoing is a summary of the rights and limitations of the Common Stock provided for in the Company’s certificate of incorporation, as amended and restated from time to time. For more detailed information, please see the Company’s certificate of incorporation, as amended, and bylaws, copies of which are exhibits to the Offering Statement of which this Offering Circular forms a part, which Offering Statement has been filed with the SEC.

41

Other Ember Token Warrants

Seed Funding Warrants

As of March 26, 2019, we have 2,000,000 Seed Funding Warrants outstanding exercisable to purchase up to 2,000,000 Ember Tokens, for no consideration, at any time commencing on the date that the Genesis Block has been issued and terminating at 5:00 p.m., New York City time, on the fifth (5th) anniversary of the date of the Genesis Block. The Seed Funding Warrants were issued to Martin H. Kaplan in exchange for capital contributions, support, facilities and services provided to us. The Seed Funding Warrants were issued pursuant to the exemption from registration provided under Section 4(a)(2) of the Securities Act.

Founders Warrants

As of March 26, 2019, we have 35,000,000 Founders Warrants outstanding exercisable to purchase up to 35,000,000 Ember Tokens, for no consideration, at any time commencing on the date that the Genesis Block has been issued and terminating at 5:00 p.m., New York City time, on the fifth (5th) anniversary of the date of the Genesis Block. The Founders Warrants were issued for nominal consideration and services provided to the Company. Founders are persons/entities that have had a profound impact on the creation and initial development of the Prometheum Network. The Founder Warrants were issued pursuant to the exemption from registration provided under Section 4(a)(2) and/or Regulation D of the Securities Act.

Regulation D/Regulation S Warrants

As of March 26, 2019, we have sold approximately 4,740,000 Ember Warrants to purchase Ember Tokens (“Reg D/Reg S Warrants”) at a price of $.50 per Reg D/Reg S Warrant. The Reg D/Reg S Warrants are exercisable to purchase up to 4,740,000 Ember Tokens, for no consideration, at any time commencing on the date that the Genesis Block has been issued and terminating at 5:00 p.m., New York City time, on the fifth (5th) anniversary of the date of the Genesis Block. The Regulation D Warrants were issued and sold in the Company’s private offering pursuant to Rule 506(c) of Regulation D and the Regulation S Warrants were issued and sold to non “US Persons” (as defined in Regulation S of the Securities Act).

LEGAL MATTERS

Certain legal matters with respect to the securities offered hereby will be passed upon by Gusrae Kaplan Nusbaum PLLC, New York, New York. Martin H. Kaplan, our Chairman, director and controlling shareholder is the Managing Member of Gusrae Kaplan Nusbaum PLLC. See “Conflicts of Interest” on page 39.

EXPERTS

The financial statements of Prometheum, Inc. as of December 31, 2017, which includes the consolidated balance sheet as of December 31, 2017 and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the period from September 18, 2017 (inception) to December 31, 2017 included in this preliminary Offering Circular have been audited by Fruci & Associates II, PLLC, an independent registered accounting firm, as stated in their report appearing herein. Such financial statements are included herein in reliance upon such report and upon the authority of such firm as experts in accounting and auditing. The unaudited consolidated interim financial statements of Prometheum, Inc. as of and for the period ending September 30, 2018 have not been reviewed by an independent auditor.

INTERESTS OF NAMED EXPERTS AND COUNSEL

We issued to Martin H. Kaplan, our Chairman, a director and the Managing Member of our legal counsel, Gusrae Kaplan Nusbaum PLLC (“GKN”), 14,792,106 Founder Warrants and 2,000,000 Seed Warrants which are exercisable for Ember Tokens following the Genesis Block. Further, we issued to Aaron L. Kaplan, our Co-Chief Executive Officer, Chief Financial Officer, director and Benjamin S. Kaplan, our Co-Chief Executive Officer, director and Mr. Kaplan’s sons each 3,500,000 Founder Warrants. Martin H. Kaplan is the owner of 100,375,000 shares of our Common Stock and Aaron L. Kaplan and Benjamin S. Kaplan each own 23,750,000 shares of our Common Stock.

42

CHANGE IN CERTIFYING ACCOUNTANT

During the last quarter of 2018, the Company dismissed Lipner, Sofferman & Co., LLP (“Lipner”) as its independent auditor. The decision to change independent registered public accounting firms was approved by the Company’s Board of Directors.

The audit report of Lipner on the balance sheet of the Company for the period October 23, 2017 did not contain any adverse opinion or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope, or accounting principles.

During the period from the Company’s inception on September 18, 2017 through the first quarter of 2018, there were no: (1) disagreements with Lipner on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements if not resolved to their satisfaction would have caused them to make reference in connection with their opinion to the subject matter of the disagreement, or (2) reportable events (as defined in Item 304(a)(1)(v) of Regulation S-K).

The Company provided Lipner with a copy of this disclosure, and requested that Lipner furnish it with a letter addressed to the SEC stating whether it agrees with the statements made by the Company regarding the change in certifying accountants, and, if not, stating the respects in which it does not agree. Lipner’s letter addressed to the SEC is attached hereto as Exhibit No. 9.1.

During the first quarter of 2018, the Company engaged Fruci & Associates II, PLLC (“Fruci”) as the Company’s certifying accountant for the fiscal year ended December 31, 2017. During the period from the Company’s inception, September 18, 2017 through the date of this Offering Circular, neither the Company nor anyone acting on its behalf consulted with Fruci regarding (i) the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report or oral advice was provided to the Company that Fruci concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue; (ii) any matter that was the subject of a disagreement within the meaning of Item 304(a)(1)(iv) of Regulation S-K; or (iii) any reportable event within the meaning of Item 304(a)(1)(v) of Regulation S-K.

In March of 2019, the Company’s Board of Directors determined not to re-engage Fruci as its independent registered accounting firm for the 2018 fiscal year.

The audit report of Fruci on the balance sheet of the Company for the period ended December 31, 2017 did not contain any adverse opinion or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope, or accounting principles.

During the period from the Company’s retention of Fruci on February 6, 2018, through March 20, 2019, there were no: (1) disagreements with Fruci on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements if not resolved to their satisfaction would have caused them to make reference in connection with their opinion to the subject matter of the disagreement, or (2) reportable events (as defined in Item 304(a)(1)(v) of Regulation S-K).

In March of 2019, the Company engaged Friedman, LLP, Certified Public Accountants (“Friedman”) as the Company’s independent auditors for the fiscal year ended December 31, 2018. During the period from the Company’s inception, September 18, 2017 through the date of this Offering Circular, neither the Company nor anyone acting on its behalf consulted with Friedman regarding (i) the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report or oral advice was provided to the Company that Friedman concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue; (ii) any matter that was the subject of a disagreement within the meaning of Item 304(a)(1)(iv) of Regulation S-K; or (iii) any reportable event within the meaning of Item 304(a)(1)(v) of Regulation S-K.

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DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES LIABILITIES

Our amended Certificate of Incorporation and our bylaws, subject to the provisions of Delaware law, contain provisions which allow the corporation to indemnify any person against liabilities and other expenses incurred as the result of defending or administering any pending or anticipated legal issue in connection with service to us if it is determined that person acted in good faith and in a manner which he reasonably believed was in the best interest of the corporation. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

WHERE YOU CAN FIND MORE INFORMATION

The Company has filed with the SEC a Regulation A Offering Statement on Form 1-A under the Securities Act with respect to the securities offered hereby. This Offering Circular, which constitutes a part of the Offering Statement, does not contain all of the information set forth in the Offering Statement or the exhibits and schedules filed therewith. For further information about the Company and the securities offered hereby, the Company refers you to the Offering Statement and the exhibits and schedules filed therewith. Statements contained in this Offering Circular regarding the contents of any contract or other document that is filed as an exhibit to the Offering Statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the Offering Statement. Upon the completion of this Offering, the Company will be required to file periodic reports, and other information with the SEC pursuant to Regulation A. You may read and copy this information at the SEC’s Public Reference Room, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website that contains reports, proxy statements and other information about issuers, including the Company, that file electronically with the SEC. The address of this site is www.sec.gov.

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Part F/S Financial Statements

Interim Financial Statements (Unaudited):
Consolidated Balance Sheet as of September 30, 2018 (Unaudited)	F-2
Condensed Consolidated Statement of Operations for the Nine Months Ended September 30, 2018 (Unaudited)	F-3
Consolidated Statement of Changes in Stockholders’ Equity for the Nine Months Ended September 30, 2018 (Unaudited)	F-4
Consolidated Statement of Cash Flows for the Nine Months Ended September 30, 2018  (Unaudited)	F-5
Notes to Condensed Consolidated Financial Statements (Unaudited)	F-6

F-1

PROMETHEUM, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET (UNAUDITED)

SEPTEMBER 30, 2018

ASSETS

Assets:
Cash			$	1,734,463
Investments:
Coincross LLC	$	10,000
Platform Development Costs		125,000		135,000
Total Assets			$	1,869,463
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses			$	10,000
Stockholders’ equity:
Preferred stock, $0.00001 par value, 100,000 shares authorized, 0 issued and outstanding				—
Common stock, $0.00001 par value, 500,000,000 shares authorized, 168,625,000  shares issued and outstanding				1,686
Additional paid-in capital				8,314
Ember warrants 31,590,000 warrants issued and outstanding				2,419,672
Accumulated deficit				(570,209	)
Total stockholders’ equity				1,859,463
Total liabilities and stockholders’ equity			$	1,869,463

F-2

PROMETHEUM, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018

Revenue	$	—
Expenses:
Professional and Consulting Fees		254,794
Legal Fees		76,019
Travel and Entertainment Expense		77,062
Communication and Computer Expenses		42,892
Warrant based compensation		49,672
Regulatory Expense		10,416
Administrative expense		3,565
Total Expenses		514,420
Net loss	$	(514,420	)
Loss per share, basic and diluted	$	(0.0031	)
Weighted average shares outstanding, basic and diluted		168,625,000

See notes to consolidated financial statements.

F-3

PROMETHEUM, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018

	Common Shares		Common Stock (Par)		Additional Paid-in Capital		Warrant Subscriptions		Accumulated (Deficit)
Balance, January 1, 2018 – as adjusted, see notes		168,625,000	$	1,686	$	8,314		—	$	(55,789	)
Issuance of warrants for cash				—		—	$	2,370,000		—
Issuance of warrants for services								49,672
Net loss		—		—		—		—		(514,420	)
Balance, September 30, 2018		168,625,000	$	1,686	$	8,314	$	2,419,672	$	(570,209	)

See notes to consolidated financial statements.

F-4

PROMETHEUM, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018

Cash flows used in operating activities:
Net loss	$	(514,420	)
Adjustments to reconcile net income to net cash (used) in operating activities:
Warrant based compensation		49,672
Decrease in accounts payable and accrued expenses		(45,783	)
Net cash used in operating activities		(510,531	)
Cash flows used in investing activities:
Investment in Coincross LLC		(10,000	)
Platform development costs		(125,000	)
Net cash used in investing activities		(135,000	)
Cash flows from financing activities:
Issuance of Warrant subscriptions		2,370,000
Net cash provided by financing activities		2,370,000
Net increase in cash and cash equivalents		1,724,469
Cash and cash equivalents, January 1, 2018		9,994
Cash and cash equivalents, September 30, 2018	$	1,734,463
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Income taxes paid during year	$	—
Interest paid during year	$	—

See notes to consolidated financial statements.

F-5

PROMETHEUM, INC. AND SUBSIDIARY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2018

1. Statement of Significant Accounting Policies:

Organization:

Prometheum, Inc. (“Prometheum”,” we”, ”us”, the “Company”), is a Delaware corporation formed on September 18, 2017 for the purpose of planning, creating and operating an integrated network for the issuance and trading of blockchain based and other digital tokens.

Prometheum Ember ATS, Inc. (f/k/a Prometheum Services, Inc.) (“PEATS”), a wholly owned subsidiary, was formed on February 27, 2018 as a New York corporation. In 2018 it has commenced its registration process to be a registered securities broker/dealer. After PEATS’ registration as a broker/dealer, it intends to register as an alternative trading system with the SEC and will introduce those who open accounts for the purchase and sale of ember tokens or other tokenized securities and facilitate other broker/dealers who introduce their customers to engage in secondary transactions of Ember tokens or other tokenized securities through the broker/dealer.

Basis of Accounting and Principles of Consolidation:

The accompanying consolidated financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of Prometheum and its wholly-owned subsidiary, Prometheum Ember ATS, Inc. Upon consolidation, all intercompany accounts and transactions are eliminated.

The Company is in the development stage and is devoting substantially all of its efforts to developing technologies, raising capital, establishing customer, vendor relationships, and recruiting new employees.

Concentration of Risk:

The Company maintains cash in bank accounts which, at times, may exceed federally insured limits or where no insurance is provided. The Company has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk on cash and cash equivalents.

Cash and Cash Equivalents:

Cash and cash equivalents are all cash balances. The Company has defined cash equivalents as highly liquid investments, with original maturities of less than 90 days that are not held for sale in the ordinary course of business. As of September 30, 2018, the Company did not hold any cash equivalents.

Use of Estimates:

The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States. This requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

F-6

PROMETHEUM, INC. AND SUBSIDIARY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2018

1. Statement of Significant Accounting Policies (continued):

Recent Accounting Pronouncements (continued):

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 completes the joint effort by the FASB and International Accounting Standards Board (IASB) to improve financial reporting by creating common revenue recognition guidance for GAAP and International Financial Reporting Standards (IFRS). In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.” ASU 2016-10 clarifies the implementation guidance on identifying performance obligations. These ASUs apply to all companies that enter into contracts with customers to transfer goods or services. These ASUs are effective for non-public entities for interim and annual reporting periods beginning after December 15, 2018. The Company expects to adopt this guidance starting with the first quarter of fiscal year 2019. Entities have the choice to apply these ASUs either retrospectively to each reporting period presented or by recognizing the cumulative effect of applying these standards at the date of initial application and not adjusting comparative information. We are currently still evaluating the impact this pronouncement will have.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases (Topic 842) effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The ASU is to be applied using a modified retrospective approach with optional practical expedients and other special transition provisions. Early adoption is permitted. The ASU supersedes FASB ASC 840, Leases, and adds FASB ASC 842. It also amends and supersedes a number of other paragraphs throughout the FASB ASC. Management on an ongoing basis reviews the impact the adoption of ASU 2016-02 will have on the Company’s financial statements. We are currently still evaluating the impact this pronouncement will have.

The Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

F-7

PROMETHEUM, INC. AND SUBSIDIARY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2018

1. Statement of Significant Accounting Policies (continued):

Income Taxes:

The Company accounts for income taxes in accordance with generally accepted accounting principles which require an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between financial statement and income tax bases of assets and liabilities that will result in taxable income or deductible expenses in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets and liabilities to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period adjusted for the change during the period in deferred tax assets and liabilities.

The Company follows the accounting requirements associated with uncertainty in income taxes using the provisions of Financial Accounting Standards Board (FASB) ASC 740, Income Taxes. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the positions will be sustained upon examination by the tax authorities. It also provides guidance for derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As of December 31, 2017, the Company has no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. There are presently no ongoing income tax examinations.

The Company is treated as a C corporation under the provisions of the Internal Revenue Code and New York State tax regulations. No provision for federal and state income taxes is made in these financial statements.

F-8

PROMETHEUM, INC. AND SUBSIDIARY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2018

1. Statement of Significant Accounting Policies (continued):

Accounting for Stock-Based Compensation

The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Stock Compensation (“FASB ASC Topic 718”), which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the consolidated financial statements based on their fair values. The Company accounts for non-employee stock-based compensation in accordance with the guidance of FASB ASC Topic 505, Equity (“FASB ASC Topic 505”), which requires that companies recognize compensation expense based on the estimated fair value of options granted to non-employees over their vesting period, which is generally the period during which services are rendered by such non-employees.

The determination of the fair value of share-based payment awards utilizing the management best estimate model is affected by the fair value of the common stock and a number of other assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. The Company does not have a history of market prices of the common stock, and as such volatility is estimated in accordance with ASC 718-10-S99 Staff Accounting Bulletin (“SAB”) No. 107, Share-Based Payment (“SAB No. 107”), using historical volatilities of similar entities.

2. Investment in Coincross LLC

On May 15, 2018, the Company entered into an agreement with Coincross LLC, (“Coincross”). The Company acquired a class C Membership interest in Coincross for $10,000, it also allows Coincross to purchase 1,000,000 Ember Warrants in accordance with the terms of the agreement.

3. Loss Per Share:

The Company applies ASC 260 “Earnings per Share” to calculate loss per share. In accordance with ASC 260, basic and fully diluted net loss per share has been computed based on the weighted average of common shares outstanding during the year. The dilutive effects of convertible notes and the options outstanding are not included in the calculation of loss per share since their inclusion would be anti-dilutive.

F-9

PROMETHEUM, INC. AND SUBSIDIARY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2018

3. Loss Per Share (Continued):

Net loss per share for the period ended September 30, 2018 is computed as follows:

Net loss	$	(514,420	)
Weighted average shares outstanding		168,625,000
Basic and fully diluted net loss per common share	$	(0.0031	)

4. Related Party Transactions:

Martin H. Kaplan, our Chairman of the Board and one of our directors is the Managing Member of Gusrae Kaplan Nusbaum PLLC (“GKN”), our counsel. Aaron L. Kaplan and Benjamin S. Kaplan, our Co-Chief Executive Officers, and directors are Martin H. Kaplan’s sons. Both are of counsel to GKN. Jerry Schneider, one of our directors is also a director of Siebert Financial Corp., which is also represented by GKN. Accordingly, there may be multiple conflicts of interests between us, GKN and our officers and directors.

5. Common Stock Issuances:

In October 2017, the Company issued 1,000 shares of common stock to the Chairman of the Board for proceeds of $10,000.

In November of 2017, the Company amended its Certificate of Incorporation to increase its authorized shares to 500,000,000 shares of common stock, par value $0.00001 per share and 100,000 shares of preferred stock, par value $0.00001 per share.

In January 2018, the Chairman of the Board and sole stockholder exchanged his 1,000 shares of common stock for 168,625,000 shares of common stock, par value $0.00001 per share, issued out of the Company’s authorized common stock under its amended Certificate of Incorporation.

6. Warrants:

In October 2017, the Company issued 2,000,000 Seed Ember Warrants to its Chairman of the Board.

In January 2018, the Company issued 24,850,000 Founder Ember Warrants to its Chairman of the Board.

Each Seed Ember Warrant and Founder Ember Warrant is exercisable for one Ember Token for no additional consideration upon the creation of the Genesis Block of Ember Tokens. The term of the Seed Ember Warrants and Founder Ember Warrants is five years from issuance. The Seed Ember Warrants issued to the Chairman of the Board were valued at $3,700. The Founder Ember Warrants issued to the Chairman of the Board were valued at $45,972. The value of the Seed Ember Warrants and Founder Ember Warrants were determined by management.

F-10

PROMETHEUM, INC. AND SUBSIDIARY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2018

6. Warrants (Continued):

In April 2018, the Company issued 4,700,000 ember warrants, at a face value of $0.0001, the sale price was for a $.50 per warrant, for total proceeds of $2,350,000.

In September 2018, the Company issued 40,000 ember warrants at a price of $.50 per ember warrant for total proceeds of $20,000.

The proceeds are included in the stockholders’ equity section of the Balance Sheet. The warrants are exercisable for Ember Tokens for no additional consideration. The value of the warrants was determined by management.

Number of Warrants
Outstanding at December 31, 2017	2,000,000
Issued	29,590,000
Exercised	—
Forfeited/Cancelled	—
Outstanding at September 30, 2018	31,590,000

7. Income Taxes:

At September 30, 2018, the Company had net operating loss carry forwards of approximately $570,000 that may be offset against future taxable income for the years 2018 through 2037. No tax benefit has been reported in the September 30, 2018 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

8. Market Risks:

As with other distributed ledger technologies, we believe that the Prometheum Network is susceptible to mining attacks, including but not limited to double-spend attacks, majority mining power attacks, “selfish-mining” attacks, and race condition attacks. Any successful attacks present a risk to our blockchain, expected proper execution and sequencing of Ember transactions, and expected proper execution and sequencing of contract computations, which could have an adverse effect on the value of our Ember Tokens. Although we intend to limit the risk of mining attacks by creating a blockchain proof-of-work security algorithm using a unique implementation of a GHOST-like protocol and possibly an implementation of hybrid proof-of-stake that could reduce the risk of mining attacks, there can be no assurance that such measures, if implemented, will successfully defend against known or novel mining attacks.

F-11

PROMETHEUM, INC. AND SUBSIDIARY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2018

9. Subsequent events:

During October 2018, the Company bought the domain name Prometheum.com for a total cost of $71,842.

On October 25, 2018, the Company entered into a Binding Term Sheet with HashKey Digital Asset Group Limited (“HashKey”) and a Strategic Partnership and Joint Development Agreement with Shanghai Wanxiang Blockchain, Inc. (“Wanxiang”) and thereafter on December 14, 2018 signed a definitive Stock Purchase Agreement whereby HashKey purchased 68,875,000 shares of Common Stock and 10,150,000 Ember Warrants for $12,000,000 consisting of cash in the amount of $3,000,000 and $9,000,000 of technology and related services. The Ember Warrants acquired by HashKey have been designated Founder Ember Warrants. The Comman Stock and Founder Ember Warrants acquired by HashKey represent 29% of all issued and outstanding Common Stock and Founder Ember Warrants, respectively. In connection with such purchase the Company, HashKey and the founders of the Company entered into an Investor and Founders Rights Agreement, dated December 14, 2018 and the Company, Wanxiang and HashKey entered into a Technology Agreement, dated December 14, 2018.

F-12

Annual Financial Statements:
Report of Independent Registered Public Accounting Firm	F-14
Consolidated Balance Sheet as of December 31, 2017	F-15
Consolidated Statement of Operations for the Years Ended December 31, 2017	F-16
Consolidated Statement of Changes in Stockholders’ Equity for the Years Ended December 31, 2017	F-17
Consolidated Statement of Cash Flows for the Years Ended December 31, 2017	F-18
Notes to Consolidated Financial Statements	F-19

F-13

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Prometheum, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Prometheum, Inc. (“the Company”) as of December 31, 2017, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows from September 18, 2017 (inception) through December 31, 2017, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017, and the results of its operations and its cash flows for the period from inception to December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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

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

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

 

We have served as the Company’s auditor since 2018.

Spokane, Washington
May 10, 2018 

F-14

PROMETHEUM, INC.

CONSOLIDATED BALANCE SHEET

DECEMBER 31, 2017

ASSETS

Current assets:
Cash	$	9,994
Total current assets		9,994
Total assets	$	9,994
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses – related party	$	55,781
Total current liabilities		55,781
Commitments and contingencies		—
Stockholders’ equity:
Preferred stock, $0.00001 par value, 100,000 shares authorized, 0 issued and outstanding	$	—
Common stock, $0.00001 par value, 500,000,000 shares authorized, 1,000 shares issued and outstanding		—
Additional paid-in capital		10,000
Accumulated (deficit)		(55,787	)
Total stockholders’ equity		(45,787	)
Total liabilities and stockholders’ equity	$	9,994

See accompanying notes to the consolidated financial statements.

F-15

PROMETHEUM, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE PERIOD SEPTEMBER 18, 2017 (INCEPTION) THROUGH DECEMBER 31, 2017

Revenue	$	—
Expenses:
Professional fees		55,781
Bank fees		6
		55,787
Net income (loss)	$	(55,787	)
Loss per share, basic & diluted	$	(79.16	)
Weighted average shares outstanding, basic & diluted		705

See accompanying notes to the consolidated financial statements.

F-16

PROMETHEUM, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE PERIOD SEPTEMBER 18, 2017 (INCEPTION) THROUGH DECEMBER 31, 2017

	Common Shares		Common Stock (Par)		Additional Paid-in Capital		Accumulated (Deficit)			Total
Balance, September 18, 2017		—	$	—	$	—	$	—		$	—
Issuance of common stock for cash		1,000		—		10,000		—			10,000
Net (loss)		—		—		—		(55,787	)		(55,787	)
Balance, December 31, 2017		1,000	$	—	$	10,000	$	(55,787	)	$	(45,787	)

See accompanying notes to the consolidated financial statements.

F-17

PROMETHEUM, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD SEPTEMBER 18, 2017 (INCEPTION) THROUGH DECEMBER 31, 2017

Cash flows from operating activities:
Net (loss)	$	(55,787	)
Adjustments to reconcile net income to net cash (used) in operating activities:
Increase in accounts payable and accrued expenses – related party		55,781
Total adjustments		55,781
Net cash (used) in operating activities		(6	)
Cash flows from financing activities:
Issuance of common shares		10,000
Net cash provided by financing activities		10,000
Net increase in cash and cash equivalents		9,994
Cash and cash equivalents, beginning		—
Cash and cash equivalents, ending	$	9,994
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Income taxes paid during year	$	—
Interest paid during year	$	—

See accompanying notes to the consolidated financial statements.

F-18

PROMETHEUM, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2017

1. Statement of Significant Accounting Policies:

Organization:

Prometheum, Inc. (“Prometheum”, ”we”, ”us”, the “Company”), is a Delaware corporation formed on September 18, 2017 for the purpose of planning, creating and operating an integrated network for the issuance and trading of blockchain based and other digital tokens.

Prometheum Financial Services, Inc., a wholly owned subsidiary, was formed in 2017 as a New York corporation. It will be filing a registration as a broker/dealer in 2018. The Company after its registration as a broker/dealer will hold and/or introduce those who open accounts for the purchase and sale of ember tokens or other tokenized securities and facilitate other broker/dealers who introduce their customers to engage in secondary transaction of ember tokens or other tokenized securities through the broker/dealer. There was no activity or intercompany transactions for the period ended December 31, 2017.

Basis of Accounting:

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Concentration of Risk:

The Company maintains cash in bank accounts which, at times, may exceed federally insured limits or where no insurance is provided. The Company has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk on cash and cash equivalents.

Cash and Cash Equivalents:

Cash equivalents are limited to short term, highly liquid investments that are both readily convertible to known amounts of cash and of an original maturity of three months or less.

Use of Estimates:

Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing the financial statements.

Recent Accounting Pronouncements:

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

F-19

PROMETHEUM, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2017

1. Statement of Significant Accounting Policies (continued):

Fair Value Measurements:

The Company measures and discloses the estimated fair value of financial assets and liabilities using the fair value hierarchy prescribed by US generally accepted accounting principles. The fair value hierarchy has three levels, which are based on reliable available inputs of observable data. The hierarchy requires the use of observable market data when available. The three-level hierarchy is defined as follows:

Level 1 – quoted prices for identical instruments in active markets.

Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which significant inputs and significant value drivers are observable in active markets; and. Level 3 – fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Financial instruments consist principally of cash and cash equivalents and accounts payable. The fair value of warrants are determined based on “Level 3” inputs, which are significant and unobservable and have the lowest priority. There were no transfers into or out of “Level 3” during the period ended December 31, 2017. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations. Fair value estimates are made at a specific point in time based on relevant market information. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Income Taxes:

The Company accounts for income taxes in accordance with generally accepted accounting principles which require an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between financial statement and income tax bases of assets and liabilities that will result in taxable income or deductible expenses in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets and liabilities to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period adjusted for the change during the period in deferred tax assets and liabilities.

The Company follows the accounting requirements associated with uncertainty in income taxes using the provisions of Financial Accounting Standards Board (FASB) ASC 740, Income Taxes. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the positions will be sustained upon examination by the tax authorities. It also provides guidance for derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As of December 31, 2017, the Company has no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. There are presently no ongoing income tax examinations.

The Company has elected to be treated as a C corporation under the provisions of the Internal Revenue Code and New York State tax regulations. No provision for federal and state income taxes is made in these financial statements.

F-20

PROMETHEUM, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2017

2. Going Concern:

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The going concern basis assumes that assets are realized and liabilities are extinguished in the ordinary course of business at amounts disclosed in the consolidated financial statements. Although the Company sustained a loss of $55,787 in 2017, the Company raised capital in excess of $2,000,000 through the date of issuance which exceeds anticipated operating costs for one year; as a result, management has considered whether substantial doubt exists regarding the Company’s ability to continue as a going concern and determined subsequent issuances were sufficient to alleviate doubt.

3. Loss Per Share:

The Company applies ASC 260 “Earnings per Share” to calculate loss per share. In accordance with ASC 260, basic and fully diluted net loss per share has been computed based on the weighted average of common shares outstanding during the year. The dilutive effects of convertible notes and the options outstanding are not included in the calculation of loss per share since their inclusion would be anti-dilutive.

Net loss per share for the period ended December 31, 2017 is computed as follows:

Net loss	$	(55,787	)
Weighted average shares outstanding		705
Basic & fully diluted net loss per common share	$	(79.16	)

4. Related Party Transactions:

Martin H. Kaplan, our Chief Executive Officer and one of our directors is the Managing Member of Gusrae Kaplan Nusbaum PLLC (“GKN”), our counsel. Aaron L. Kaplan, our Chief Operating Officer, Chief Financial Officer and a director, is Martin H. Kaplan’s son and is an attorney with GKN. Aaron L. Kaplan is the Managing Member of Equity Arcade Services, LLC, a potential service provider and licensor of software to us. Jerry Schneider, one of our directors is also a director of Siebert Financial Corp., which has been represented in a number of matters, some of which are ongoing, by GKN. Accordingly, there may be multiple conflict of interests between us, GKN and our officers and directors.

Included in the accrued expenses are legal fees and reimbursement of salary costs incurred by GKN of $55,781, which included $2,500 paid by GKN for accounting fees. The entire balance was due to GKN as of December 31, 2017.

5. Common Stock Issuances:

During 2017, the Company issued 100 shares of common stock to the Chief Executive Officer for proceeds of $10,000. On October 18, 2017, the Company declared a 10-1 positive stock split. The consolidated financial statements have been retrospectively adjusted to reflect the stock split.

F-21

PROMETHEUM, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2017

6. Warrants:

During 2017, two million seed warrants were issued and the warrant converts into one Ember Token upon future equity issuances. The term of the warrants is five years from issuance. The seed warrants were issued at a cost of $0.0001 per warrant to Martin H. Kaplan for a total cost of $200, the proceeds are included in additional paid-in capital and were paid with the initial capital investment of $10,000. The value of the warrants determined by management was based on the par value of common and preferred shares and the technique for valuation qualifies as level 3 of the fair value hierarchy.

7. Preferred Stock:

The Company has 100,000 shares of preferred stock at $0.00001 par value authorized, none of which were issued or outstanding as of December 31, 2017.

8. Income Taxes:

At December 31, 2017, the Company had net operating loss carry forwards of approximately $55,787 that may be offset against future taxable income for the years 2018 through 2037. No tax benefit has been reported in the December 31, 2017 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

9. Market Risks:

As with other distributed ledger technologies, we believe that the Prometheum Network is susceptible to mining attacks, including but not limited to double-spend attacks, majority mining power attacks, “selfish-mining” attacks, and race condition attacks. Any successful attacks present a risk to our blockchain, expected proper execution and sequencing of Ember transactions, and expected proper execution and sequencing of contract computations, which could have an adverse effect on the value of our Ember Tokens. Although we intend to limit the risk of mining attacks by creating a blockchain proof-of-work security algorithm using a unique implementation of a GHOST-like protocol and possibly an implementation of hybrid proof-of-stake that could reduce the risk of mining attacks, there can be no assurance that such measures, if implemented, will successfully defend against known or novel mining attacks.

10. Subsequent Events:

Management has evaluated subsequent events through April 1, 2018, the date the financial statements were available to be issued. In 2018, the Company issued 4,000,000 warrants to two individuals and received in excess of $2,000,000 in 2018.

The Company entered into a letter agreement and (the “Letter Agreement”), dated January 29, 2018 with TradeZero, Inc. (“TradeZero”) and Dan Pipitone, TradeZero’s CEO, pursuant to which we engaged TradeZero to create and implement the technology and software necessary to create and empower the Prometheum Network.  Pursuant to the terms of the Letter Agreement, TradeZero agreed to deliver to us a minimal viable product (“MPV”) no later than June 15, 2018 in exchange for five percent (5%) of the equity in the Company and a cash payment of one hundred fifty thousand dollars ($150,000) payable in four installments.  We have made three payments in the aggregate amount of $100,000 and the final payment of $50,000 will be due upon delivery of the MPV.  In addition, the founders agreed to transfer ten percent (10%) of the warrants exchangeable for Ember Tokens issued to them as founders to TradeZero.

F-22

PART III – EXHIBITS

Index to Exhibits

Exhibit No.	Description of Exhibit
2.1	Certificate of Incorporation of Prometheum, Inc.*
2.1(a)	Amendment to Certificate of Incorporation of Prometheum, Inc.*
2.2	Amended and Restated Bylaws of Prometheum, Inc.
3.1	Form of Warrant Agent Agreement by and between Prometheum, Inc., a Delaware corporation and VStock Transfer, LLC, a California limited liability company.
3.2	Form of Agent Ember Warrant*
4.1	Form of Subscription Agreement**
6.1	Class C Membership Agreement dated as of May 15, 2018 by and between Coincross LLC, a Delaware limited liability company and Prometheum, Inc.
6.2	Securities Purchase Agreement, dated as of December 14, 2018 by and between Prometheum, Inc. and HashKey Digital Asset Group Limited, a Hong Kong corporation.+
6.3	Strategic Partnership and Joint Development Agreement made and entered into as of the 14th Day of December, 2018 by and between Prometheum, Inc. and Shanghai Wanxiang Blockchain Inc., a People’s Republic of China corporation.
6.4	Technology Agreement made and entered into as of the 14th Day of December, 2018 by and among Prometheum, Inc., HashKey Digital Asset Group Limited, a Hong Kong corporation and Shanghai Wanxiang Blockchain Inc., a People’s Republic of China corporation.+
6.5	Investors and Founders Rights Agreement, effective as of December 14, 2018, by and among Prometheum, Inc., HashKey Digital Asset Group Limited, a company organized under the laws of Hong Kong and all holders of shares of Common Stock and Ember Tokens who are founders of the Company.+
6.6	Commitment Letter, dated January 25, 2019, between StockCross Financial Services, Inc. and Prometheum, Inc.
6.7	Transfer Agent and Registrar Agreement, dated as of January 29, 2019 by and between Prometheum, Inc. a corporation duly organized and existing under the laws of the State of Delaware and VStock Transfer, LLC, a California limited liability company.+
6.8	Administrative Services Agreement made and entered into as of March 20, 2019 by and between Prometheum, Inc., a Delaware corporation and Manorhaven Capital, LLC, a Delaware limited liability company.
8.1	Escrow Agreement dated as of January 4, 2019 by and between Prometheum, Inc. and Cross River Bank.+
9.1	Letter re change in certifying accountant
9.2	Letter re change in certifying accountant
11.1	Consent of Fruci & Associates II, PLLC
12.1	Form of Opinion of Gusrae Kaplan Nusbaum PLLC
13.1	Testing the Waters Materials*

* Previously filed.

** To be filed by amendment.

+ Certain schedules, appendices and exhibits to this agreement have been omitted in accordance with Item 17, section 6(a) of Form 1-A. A copy of any omitted schedule and/or exhibit will be furnished supplementally to the Securities and Exchange Commission upon request.

Exhibits

SIGNATURES

Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this Offering Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on March 28, 2019.

PROMETHEUM, INC.
By:	/s/ Martin H. Kaplan
	Martin H. Kaplan
	Chairman, Director
	(Principal Executive Officer)

By:	/s/ Aaron L. Kaplan
	Aaron L. Kaplan
	Co-Chief Executive Officer, Chief Financial Officer, Director
	(Principal Financial Officer and Principal Accounting Officer)

Pursuant to the requirements of the Securities Act of 1933, this Form 1-A has been signed by the following persons in the capacities and on the dates indicated.

Name	Positions	Date
/s/ Martin H. Kaplan	Chairman and Director	March 28, 2019
Martin H. Kaplan
/s/ Aaron L. Kaplan	Co-Chief Executive Officer, Chief Financial Officer and Director	March 28, 2019
Aaron L. Kaplan
/s/ Benjamin S. Kaplan	Co-Chief Executive Officer, Director	March 28, 2019
Benjamin S. Kaplan
/s/ Jerry Schneider	Director	March 28, 2019
Jerry Schneider
/s/ Dr. Xiao Feng	Director	March 28, 2019
Dr. Xiao Feng

Signatures

Attachment A

Prometheum White Paper
December 2018

Abstract

Prometheum is building a securities token ecosystem to meet the requirements of 21^st century business models. Our Smart Security Token (SST) provides infrastructure for distributed internet of value businesses, critically supporting both their regulatory and functional requirements.

The advent of distributed ledger technologies and subsequent token-based incentive mechanisms, as evidenced by the recent ICO craze, has demonstrated the appetite for compliant financial assets that allow for participants to be rewarded for their contribution to network growth. However, the requirements of regulators, as highlighted by the SEC’s DAO report and subsequent guidance, must be integrated at a fundamental level in order for distributed business models to become viable.

Neither existing securities infrastructure or current blockchain technology platforms provide ready solutions.

By building out a vertically integrated ecosystem of licensed financial entities and technologies, Prometheum is delivering a compliance-first approach to meeting the demands for a fully-functional security token and the regulatory and technology infrastructure to build upon.

Our SST provides the fundamental basis for the Prometheum ecosystem and is first manifested in our native Ember SST. Ember provides the fuel for the Prometheum Network and demonstrates the versatility and value provided by a modern approach to using securities to transfer value in a decentralized, blockchain-led environment.

Prometheum White Paper - December 2018
Prometheum, Inc. © 2018

IMPORTANT INFORMATION

Prometheum is in the process of registering a Broker-Dealer (“BD”) and Alternative Trading System (“ATS”) as part of and for use by the Prometheum Network. These resources will be developed and implemented going forward pending regulatory approvals which Prometheum cannot predict or guarantee.

All information contained in this White Paper is subject to change. A copy of Prometheum’s Offering Statement may be obtained by visiting:

https://www.sec.gov/cgi-bin/browse-edgar?company=Prometheum&owner=exclude&action=getcompany

Cautionary Statement Regarding Forward-Looking Statements-This White Paper contains forward-looking statements, including statements relating to the Company’s proposed operations, financial results, business and products. Other statements in this White Paper, including words such as “anticipate,” “may,” “believe,” “could,” “should,” “estimate,” expect,” “intend,” “plan,” “predict,” potential,” “forecasts,” “project,” and other similar expressions, also are forward-looking statements. Forward-looking statements are made based upon management’s current expectations and beliefs concerning future developments and their potential effects on the Company. Such forward-looking statements are not guarantees of future performance. All forward-looking statements in this White Paper speak only as the date hereof. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in its expectation with regard thereto or any change in events, conditions, or circumstances on which any such statement is based.

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Table of Contents

Abstract	1
Table of Contents	3
Background	4
Recent Developments	4
What is a Security Token?	5
Existing Securities Infrastructure	5
Existing Blockchain Technology	6
Introducing Prometheum	7
Introducing the Smart Security Token	7
Introducing Prometheum’s Vertical Approach	7
Introducing Prometheum’s Smart Securities Ecosystem	8
Leveraging the Internet of Value	11
Traditionally Centralized vs. Distributed Peer to Peer Business Models	11
Introducing Ember	12
The Ember Token Economy	14
The Prometheum Network	15
Prometheum’s Technology Stack	15
The Prometheum Blockchain	16
The Maker/Staker Model	18
SSTs in Context	20
SSTs and the Regulatory Environment	20
SSTs and Improving Financial Infrastructure	20
SSTs and Distributed Ledger Technology	21
SSTs: Key Terminology	22
Positioning Prometheum	23
Prometheum’s Evolution and Foundation	24

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Background

The 20^th century internet of information business model where users trust a centralized intermediary to protect data and ensure the integrity of value transfer transactions no longer meets the needs of a modern user base. In the internet of information era, online commerce required one way, service-based value flow ecosystems, where value for services provided flowed from user participants to trusted centralized intermediaries.

The introduction of the blockchain and related distributed ledger technologies allow for network participants to verifiably transfer value and information in a decentralized environment. Integration of blockchain technology in regular commerce permits the creation of new business models that will allow the internet of value to move from a fringe concept into the mainstream. Internet of value based distributed businesses require dynamic mediums through which value can be transferred by and amongst network participants and intermediaries.

Recent Developments

The ICO craze (2014-2017) demonstrated the appetite for a new type of asset (ultimately tokens) that met the needs of internet of value based business models. Businesses conducting token offerings realized the need for a new asset that allowed for multi-directional value flow whose integrity could be verified and exist natively on a blockchain. Distributed businesses (those who conduct token offerings) were able to incentivize and reward contributors for their contribution to network growth through cryptographic tokens representing verifiable stores of value.

With the introduction of the JOBS Act in 2012, the SEC democratized investment related securities regulations by permitting all types of investors to participate in crowd based online investment products. This created the conditions for the new distributed internet of value business paradigm to take hold. Traditionally, the barriers to entry to capital formation prevented smaller issuers from taking advantage of the capital markets, and limited investments to accredited investors and institutions. The JOBS Act, and related subsequent regulations, changed market dynamics by allowing issuers to use the internet to advertise securities offerings and, depending on the specific JOBS Act regulation, permitted the general public (i.e. all investors) to participate in such offerings.

The transition to a democratized financial ecosystem was bumpy, and general perception was that there was a regulatory void. This resulted in a plethora of token-related federal securities law violations. In the DAO Report, published by the SEC in July 2017, the SEC concluded that offers and sales of digital assets by “virtual” organizations are subject to the requirements of the federal securities laws and that, depending on facts and circumstances, offers and sales, of cryptographic tokens involves the offer or sale of a security. While the SEC’s conclusion that tokens could qualify as securities provided the regulatory clarity that will allow for the the eventual mainstream acceptance of SSTs, it also presented a clear issue: the infrastructure for cryptographic securities does not currently exist. There is no secondary trading venue for SSTs, nor are there accepted regulatorily-compliant mechanisms for clearing and settling customer transactions or monitoring custody of customer’s cryptographic assets.

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The introduction of innovative new technologies (the blockchain) as a means of capital formation, as highlighted by the prevalent use of the ERC-20 tokens, together with the JOBS Act regulations created a new paradigm where distributed internet of value issuers could raise capital via a token issuance in a trustless blockchain environment.

What is a Security Token?

Security tokens are a new asset class that serve the needs of internet of value based businesses. Securities tokens are the means through which the democratization of finance can occur compliantly under the federal securities laws in the United States.

Finance is being democratized by distributed internet of value based businesses that use tokens to allow for multi-directional value flow to incentivize and reward contributors for their participation in growing underlying networks.

Securities tokens issued and existing on a blockchain allow for verifiable value transfer amongst network participants but must meet regulatory requirements established by traditional models and processes. Using multi-directional value transfer instruments allows for distributed internet of value-based businesses to properly incentivize their user base to grow the network while benefiting from the financial rewards associated with such growth.

Existing Securities Infrastructure

Historically, financial services have relied on a series of centralized intermediaries who have layered additional processes on top of the securities markets in response to technological and societal changes in order to continue to service and ensure the integrity of the financial system.

All of these securities industry systems (e.g. capital formation, trading, custody, clearing and settlement) and their interaction with regulatory requirements are therefore a patchwork of ongoing changes and modifications to old systems. These systems are reaching the end of their useful life cycles.

When comparing what we have today in the securities markets to renovating an old house, how much can be replaced? What parts of the old pipes and heating system should be used to save the sculptured plastic wall? How much of the original woodwork should be preserved in the kitchen?

As a result, the 20^th century model:

· requires layers of inefficient information within a centralized system of control (e.g. transfer agents),

· is labor and cost intensive,

· results in old self-perpetuating bureaucratic systems,

· uses inefficient and costly methods of communication (snail mail, priority, etc.)

…and has been relativity unchallenged for over fifty years.

The archaic systems of centralized processing to deliver to beneficial owners shareholder information and maintain books and records of trading information and customer data are cost-inefficient. Using distributed ledger technology, the existing infrastructure of securities activities can be streamlined and appropriately protected.

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The centralized nature of current securities infrastructure limits interactivity between participants of distributed businesses and hampers the growth of innovative new technologies that take advantage of the internet of value. Removing centralized control points reduces costs, broadens functionality and improves security.

Existing Blockchain Technology

Existing blockchains and related technologies appear split between mature (e.g. Bitcoin, Ethereum) infrastructure and experimental/untested innovations. Generally, these innovative projects have either established technologies with no network stability or networks with stability but a lack of tested technologies.

It is difficult to achieve stability from immature and experimental technologies when a broad set of requirements are competing for attention. Each blockchain project varies, and where long-term stability over a set of core interactions is key, a very specific set of architectural requirements must be met. Though the fundamental technologies required to provide a modern security token infrastructure on a blockchain exist, they haven’t been combined in a manner that meets the needs of regulators, investors and token users.

Furthermore, the typical approach to meeting common requirements (scale, resilience, compatibility) is to add and change features on existing networks (e.g. Ethereum’s EIPs and ERCs). While this allows for networks to grow based on demand, it doesn’t provide for the level of stability and functional guarantees required by a system made up of licensed, regulated entities.

The open and effectively distributed development of, for example, smart contract standards (e.g. ERC-20, ERC-1400) to support user demand for features, has proven to be a valuable and engaging way of identifying feature requirements but doesn’t provide assurances needed for compliant security tokens.

In order to provide a security token that can interact with existing financial systems, facilitate regulatory compliance and work with evolving technologies, a comprehensive approach to infrastructure, protocols and usage is required.

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Introducing Prometheum

Introducing the Smart Security Token

Prometheum’s Smart Security Token (SST) is the basis upon which Prometheum can deliver an ecosystem that is both U.S. federal securities law compliant and offers the features of a functional token. The SST is a compliance-first approach to meeting the demand for a security token.

Though existing approaches to securitizing tokens and tokenizing securities are interesting, they fail to address the fundamental, underlying problem: tokens on general purpose blockchains cannot easily (if at all) meet regulatory requirements for securities, and; securities issued on legacy systems cannot integrate fluidly with modern technology and distributed systems.

By leveraging a unique design that allows for SSTs to exist as both securities and tokens (with anticipated use managed by different wallet types), Prometheum has established a protocol (Ember-X), a token standard (the SST), a means of payment (the Ember SST) and a blockchain (the Prometheum Blockchain) to support all of the above.

Prometheum users are able to leverage a set of base (Ember-X) standards that make different SSTs compatible with one another for the purpose of both securities and functional token interactions. There are limits to how securities transactions can take place (e.g. SSTs used for secondary trading must be held in a clearing firm-managed wallet), but they can also be used freely (once moved to a personal wallet) in general purpose smart contracts published by any user of the network.

Introducing Prometheum’s Vertical Approach

By creating the blockchain infrastructure, the token standard and the licensed entities required to issue, trade and operate security tokens, Prometheum is in a position to service the entire securities life cycle. Our vertical integration of SSTs, from issuance, to trading through clearing and settling is underpinned by our blockchain infrastructure and Ember-X protocol. Using a blockchain to store and transfer value in a federal-securities-law-compliant ecosystem allows Prometheum to meet the diverse needs of both traditional and distributed business models.

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Introducing Prometheum’s Smart Securities Ecosystem

Prometheum is creating an SEC-overseen and regulated market for compliant security tokens which will provide for the primary issuance of registered or exempt securities, a venue for secondary trading, mechanisms for clearing and settling transactions and monitoring custody of a customer’s security token assets. All these activities occur on Prometheum’s blockchain ecosystem made up of issuers, customers, validators, application developers and partners that serves as the smart securities infrastructure where all security token processes will occur.

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In order for tokens to be transacted compliantly in the United States, the proper infrastructure for handling securities represented by cryptographic tokens needs to be created. This infrastructure requires a complete ecosystem for SSTs which allows for multiple processes over the entire cryptographic security lifecycle.

Prometheum’s vertically integrated regulatory stack consists of three core licensed components:

· an issuance platform for SSTs to issue FSL compliant tokens that are free trading and available to the general public,

· a secondary trading facility for cryptographic securities registered as an ATS with the SEC, and

· clearing and settling facilities for processing customer cryptographic securities transactions and monitoring custody of customers cryptographic assets.

These three licensed entities (BD, ATS, Clearing Firm) form the basis for a completely integrated regulatory infrastructure for SSTs.

Prometheum’s SST design and technology stack underpins the fundamentals of the Prometheum business and SST ecosystem. The Prometheum Blockchain provides the underlying infrastructure for the SST ecosystem via the Ember-X protocol. The Ember SST fuels all SST transactions.

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The Prometheum Ember ATS is a first party user of the Prometheum Blockchain, writing executed trades to Prometheum’s blockchain via Ember-X smart contracts. Settlement transactions and transfers between master and personal wallets are written to the Prometheum Blockchain by the clearing firm. Investors and users can interact directly with the Prometheum Blockchain using Ember-X smart contracts as well as other general purpose smart contracts deployed by other SST issuers or network users. Investors in Ember can stake validating nodes on the Prometheum Blockchain to support and facilitate its growth and earn Ember for their services.

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Leveraging the Internet of Value

Traditionally Centralized vs. Distributed Peer to Peer Business Models

 

Traditional centralized business models require a service for value exchange in order to introduce trust into online transactions. As a result, value transfers and network growth benefits are one-directional and only benefit and reward the intermediary providing the service.

Distributed business models allow for multi-directional value transfers in order to reward participants for their contribution to network growth.

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Centralized business models where users who fuel a network’s growth are treated as non-beneficiary participants in the actual growth they are fueling, no longer fit the needs or expectations of a dynamic and interactive user base. The era of traditionally centralized business models is being replaced by distributed, peer to peer based businesses that allow for multi-directional flow of benefits between and amongst users and intermediaries through leveraging the internet of value (blockchains).

Using blockchains, new age peer to peer businesses can incentivize early network participation and allow for distribution of benefits between and amongst users, network participants and intermediaries. By properly incentivizing network participants and participation, peer to peer blockchain based businesses and early network participants in those businesses benefit as the ecosystem grows and the value of the token based economy increases.

The internet of information has shown that centralized data is not capable of being reliably protected. As society transitions to the internet of value, blockchains eliminate the need for a trusted centralized party who must be relied upon to act in good faith. Value stored on a blockchain of independently run nodes ensures the integrity of digital assets/securities. The inherent cryptographic nature of the blockchain and the different levels of decentralization eliminate many of the security issues related to data in centralized business models.

Introducing Ember

The use of multi-directional value transfer instruments issued over a blockchain has increased rapidly since the first token offering in 2013. The ICO craze from 2014-2017 has shown the need for regulated multi-directional value transfer instruments that allow internet of value based businesses to flourish. SSTs are the instruments that allow for compliant multi-directional value transfer instruments to meet the needs of 21^stcentury peer based internet of value businesses.

Ember (MBR) is the first SST created on the Prometheum ecosystem. It’s a fully compliant, free-trading security token, and the first SST created with the Ember-X protocol. Ember provides the transaction-based fuel for the entire ecosystem (all Prometheum Blockchain transactions are paid for in Ember).

The Prometheum Network incentivizes participation through the Ember token in order to help achieve network stability. Incentivization through multi-directional value transfer instruments (tokens) allow early participants to benefit from the network’s growth.

Prometheum’s validation model relies on multiple stakers running validating nodes on the network. Stakers place an amount of Ember in bond in order to run a validating node. Stakers are paid in Ember for running a validating node for a staking cycle (e.g. 2 weeks). Our auction/bid system ensures that there is a rotation and variety of staking participants.

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The value of Ember is associated with growth of the overall ecosystem, which is a product of all the SSTs that have been issued and the related blockchain activity. Users purchasing or selling SSTs on Prometheum’s Ember ATS are paying for those transactions in Ember, which is furthering growth of the network. As more issuers launch SSOs on the Prometheum ecosystem, external demand for their SST results in secondary trading, which is paid for in Ember. As more transactions occur, the amount of value available for processing those transactions drives further staking speculation by validators who will be willing to stake more to participate in providing network infrastructure.

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The Ember Token Economy

Interest in the Ember token economy is driven by numerous factors:

· Ember exists as the progenitor of other SSTs and essential to all network activity

· Ember is the first SST that will be issued and trade over the Prometheum Network

· Ember is core to all transactions that occur on the Prometheum Blockchain

· Ember is the fuel that keeps the Prometheum Network running

· Ember will serve as the regulatory precedent by which other compliant issuer tokens are created on the Prometheum Network

· Ember is a fundamental component to growth of the Prometheum ecosystem

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The Prometheum Network

Prometheum has identified, designed and extended technologies to provide a foundation for its network. Prometheum’s fit-for-purpose vertical approach benefits its users by:

· integrating compliant smart contracts (building blocks for issuers),

· automating compliance via integrated contracts,

· providing reliable and scalable performance for securities and general purpose token transactions,

· creating a wallet structure that allows for general purpose token use in smart contracts, and

· integrating Ember tokens for payment of transaction fees.

Prometheum’s Technology Stack

Prometheum’s Blockchain, Ember-X protocol and SST model have been designed to provide benefits to all parties in the security token ecosystem.

· The SST issuer has access to capital via a registered or qualified security and functionality via a token.

· The Issuer can participate in the use of the SST (e.g. in applications or services that integrate it as a means of payment) whilst also using it as a means to raise capital (e.g. a security).

· The SST issuer can meet their Transfer Agent requirements via integrated Transfer Agent services in the Ember-X protocol and the tools provided to the broker-dealer, ATS and clearing firm.

· The process of issuing an SST is streamlined compared to a traditional security using legacy systems and allows the issuer to build their SST from compliant Ember-X building blocks (which provide a variety of security and token functions).

· The Prometheum Ember ATS, broker-dealer and clearing firm can reconcile trades and settlements without revealing private or proprietary information.

· The SST issuer can also reconcile SST distributions (all SSTs are always accountable on the Prometheum Blockchain)

· Regulators have greater visibility over network participants and activity.

· Due diligence and AML requirements are met due to the full visibility of SST transactions (all movements of SSTs between personal wallets happen on the blockchain).

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· The Ember-X protocol provides a standard set of SST smart contracts for application providers to extend, customize and meet their specific requirements.

· Other parties (including SST issuers) can integrate SST functionality via public smart contracts, instead of having to establish separate legal and technical relationships.

· Network users can be sure of smart contract compatibility due to the built in Ember-X listed smart contracts and wallet types.

The Prometheum Blockchain

The Prometheum Blockchain is the core of the Prometheum Network and the basis of Prometheum’s securities innovations. By leveraging distributed ledger technology to meet the specific requirements of our SST design, we’re able to provide:

· a high-throughput, distributed and resilient base layer,

· a scalable consensus and network design to support a large volume of SST transactions and related smart contracts,

· an integrated master/personal wallet classification system that ensures compliance for securities transactions and flexibility for applications and other SST utilities, and

· a compatible smart contract layer (Solidity + EVM) for integrating with other technologies.

Ember-X is combination of a set of core smart contracts, a smart contract registry and the integration of the Ember SST as a means of payment for transactions on the Prometheum Blockchain.

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New SST issuers can create SSTs using the core SST composition tools (integrated into the Prometheum issuance platform). By using building blocks provided by Prometheum, SST issuers can ensure regulatory compliance and token compatibility on the Prometheum Blockchain and ecosystem.

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The Maker/Staker Model

The inherent value of any token is its utility on the underlying network. A financial services ecosystem that intends to have millions of transactions written to its underlying blockchain is an obvious use case for a utility token.

There are few examples of tokens that have proven their utility, but as a critical part of Prometheum’s network and an underlying factor in all SST transactions, Ember’s utility is determined by the overall function provided by all Prometheum based SSTs.

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Historically, trading forums attracted flow through operating maker/taker models. Maker/taker models attract traders and liquidity through rebates to makers of liquidity and charges to takers of liquidity. The maker/taker model therefore incentivizes liquidity providers while charging liquidity takers.

Prometheum, through the use of its Ember SST, intends to incentivize makers of liquidity with Ember rebates, while not initially charging liquidity takers, in order to incentivize user participation on the Prometheum Network. Furthermore, stakers (the validators of transactions written to Prometheum’s Blockchain) will also receive network incentives in Ember Tokens to ensure timely processing of all transactions until Ember-X reaches critical mass.

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SSTs in Context

SSTs and the Regulatory Environment

Prometheum has embraced regulation from inception and believes that the federal securities laws provide compliant methods through which to issue, trade, clear and settle SSTs. By taking advantage of the proven benefits of distributed ledger technologies, embracing regulation and working with regulators in the United States, Prometheum believes that it will set the precedent for SST issuers in the United States.

Prometheum’s Ember token offering will act as the precedent and model that other issuers will follow in order to compliantly issue free trading tokens available to all investors in the United States.

In November 2017, Prometheum filed an offering statement under a Reg A+ that allows for federal securities law compliant issuance of tokens to any type or investor in the United States. Previously, token issuers either disregarded federal securities laws or issued tokens via an exempt offering that limited participation to the wealthy (accredited investors and institutions), and can’t trade freely on a secondary market.

By embracing regulation and operating compliantly under the federal securities laws, Prometheum believes that it will usher in a new era for SSTs that will allow issuers to operate distributed internet of values businesses compliantly in the United States.

SSTs and Improving Financial Infrastructure

The legacy financial infrastructure:

· was constructed to meet the needs of traditional securities issuers and lacks the ability to service distributed business models, and

· depends on centralized intermediaries in order to protect data and confirm the integrity of transactions.

Securities represented by cryptographic tokens (SSTs) allow for financial products to meet the needs of businesses looking to increase the likelihood of success through community based distributed incentive models. Therefore, SSTs meet the needs of different distributed business models seeking to grow dynamic user bases.

Historically, securities represented a traditional investment in a company where the appreciation of the underlying asset was tied to the P&L performance of the company issuing the security. Conversely, SSTs are financial instruments tied to usage rights whose appreciation is related to user interest in an underlying network. SSTs provide a medium through which network participants can participate in the value creation associated with such participation. The multi-purpose nature of SSTs allow their owners to realize financial gain (a security), while also having a use/purpose (a utility) on an underlying network.

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The activities that are proposed for the Prometheum ecosystem, (the creation, distribution, trading, selling and custody of security tokens done in compliance with the federal securities laws) will allow broker-dealers and issuers to take advantage of multi-directional value transfers and maintain readily accessible, indelible and unalterable books and records.

In each phase of Prometheum’s ecosystem, new methods of satisfying securities regulations are present:

· At “distribution” of an issuer’s SST the issuer will have a complete record, stored on Prometheum’s blockchain, setting forth details of actual ownership of the securities. Such a record when integrated into Prometheum’s ATS will allow for a readily accessible record of both custodial and beneficial ownership.

· By using the enhanced information provided by smart contracts in the Ember-X protocol, the issuer will be able, in a seamless environment, to distribute periodic information (e.g. 10K, 10Q, 8Ks annual reports etc.) to beneficial owners eliminating the current expensive and inefficient means of distributing information to shareholders.

· The process of maintaining transfer records as currently maintained for 20^th century securities (whether certified or book entry) will no longer be necessary, as the ultimate and indelible record of the location and beneficial owners of the security tokens are immediately set forth on Prometheum’s blockchain.

· Broker-dealer books and records requirements both on a client and or a proprietary trading basis (as principal or agent) will be readily available for broker-dealer participants in the Prometheum ecosystem. This immediate and transparent record will be maintained and verifiable from the first day of activity going forward.

· Trading records, size of book, all orders and all transactions placed on Prometheum’s Ember ATS will be available for review and recapture.

· Using Prometheum’s blockchain all SSTs managed by the clearing firm will be held in cold storage, their provenance established by the blockchain confirmation process.

SSTs issued on the Prometheum Blockchain introduce flexibility into the capital markets thus allowing for distributed systems where market information and integrity is assured through a network of decentralized validators and participants.

SSTs and Distributed Ledger Technology

Prometheum is leveraging blockchain and distributed ledger technology to meet the specific requirements of its SST design, addressing security token implementation problems head on. Our SST design and supporting ecosystem provide:

· a fundamentally compliant blockchain infrastructure for security tokens,

· a reference design and toolset in the Ember-X SST smart contracts,

· a wallet structure that allows users and issuers to move SSTs between master and personal wallets as required for different uses,

· a first-party means of payment on the Prometheum Blockchain that itself is based on the Ember-X SST standard,

· integrated compliance functions for all SST transactions,

· massively improved efficiency for typical securities processes, and

· compatibility with other blockchain technologies and systems.

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SSTs: Key Terminology

Term	Description
Smart Security Token (SST)	SSTs are both FSL compliant securities and cryptographic tokens. SSTs can be used as securities and tokens on the Prometheum Blockchain.
Smart Security Offering (SSO)	A sale of SSTs, run under one or more regulatory frameworks
Staker	An entity (person or corporation) who runs nodes on the Prometheum Blockchain. Will at least require a brokerage account and to have completed some form of Staker due diligence inquiry.
Prometheum Blockchain	A hybrid public/private blockchain that runs the Ember-X protocol for master wallet embedded smart contracts and allows for general purpose smart contracts that can interface with Personal Wallets.
Transaction	A transaction on the Prometheum Blockchain. All transactions will be smart contract method calls and are paid for with Ember.
Wallet	A wallet (blockchain wallet, e.g. private/public key pair) to hold SSTs (including Ember). Wallets come in different types and with different features for different parts of the Prometheum ecosystem, all built on the same base technology.
Ember	The name of and the whole tradable unit of the Ember SST. Ember is the 1st party token of the Prometheum Blockchain and its first issued SST. Each unit of Ember is divided into “Spark” base units.
Ember-X	The protocol that underpins the functionality of the Prometheum Blockchain, including network design (e.g. blockchain peer model, consensus mechanism, smart contract layer, address and wallet model), different wallet types, embedded master wallet smart contracts, smart contract layer and other functionality.

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Positioning Prometheum

The 21^st century financial ecosystem combines the cost savings of traditional vertical integration with the proven benefits of distributed ledger technology to create a modern, regulated, financial ecosystem for digital assets (securities). The benefits of this model include reduced transaction costs, safety of data, verification and immutability of transfers, and verifiable value owned by users who are also able to benefit from their contribution to the network/ecosystem.

A decentralized vertically integrated, self-contained regulatory full stack sitting on top of our own proprietary blockchain will allow Prometheum to eliminate significant inefficiencies and reduce traditional transaction costs associated with traditional financial services.

Prometheum’s SST ecosystem allows for the issuance of SSTs (value) via cryptographic tokens that trade on Prometheum’s purpose built blockchain. The self-contained regulatory full stack consists of multiple parts: an introducing broker-dealer, the Prometheum Ember ATS (application pending), and a clearing arm that together allow for the streamlining of processes, and reduced costs when compared to traditional financial services. Tokens issued via a Reg A+ offering conducted will be listed on Proemtehum’s Ember ATS that writes executed trades to Prometheum’s blockchain and settles token transactions in virtual wallets (brokerage accounts) held at the clearing firm.

The Prometheum Network is the medium through which distributed network participants will be able to compliantly issue, trade, custody and settle value transfer instruments. The integrity of users’ value transfers (SST trades on Prometheum’s ATS) governed by smart contract and transacted via Prometheum’s Blockchain represents a 21^st century financial ecosystem that can service the needs of 21^stcentury peer based distributed businesses.

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Prometheum’s Evolution and Foundation

Prometheum’s goal is to use proven blockchain technologies to achieve securities innovation. Leveraging our team’s core expertise, we believe we can use distributed ledger technology to eliminate many of the the inefficiencies of the 20^th century financial system and allow the securities industry to embrace the internet of value.

Prometheum was initially incubated out of Gusrae Kaplan Nusbaum, a Wall Street based securities law firm. Since its inception, Prometheum has focused on embracing regulation and leveraged its roots and securities regulation expertise to develop an ecosystem that advances compliant capital formation.

Prometheum’s team has been actively involved in digital asset and related regulatory issues since 2013. In April 2014, Prometheum’s founders filed a no-action request with the SEC requesting permission to transact virtual currency in a brokerage account compliantly under the federal securities laws. In January 2015, team members participated in the initial crypto-security MIT/Harvard legal conference and were credited as contributors to the first regulatory framework for distributed organizations. From January 2015 on, team members have been actively involved in pioneering the use of digital assets in the consumer space. In October 2017, Prometheum filed a no-action letter with the SEC describing how SSTs can be custodied in a clearing firm under the Customer Protection Rule 15c3-3 (LINK). Finally, in November 2017, Prometheum was the first company to publicly file a Regulation A+ SST with the SEC.

The multidisciplinary nature of the regulated cryptographic token universe requires genuine knowledge and expertise in offering, trading, clearing, settling and custodying securities SSTs, a 21^st century asset class, and how each element within the securities life cycle interacts with an underlying blockchain.

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Given its securities provenance and blockchain experience, Prometheum is uniquely positioned to usher in the 21^st century of distributed finance.

Prometheum, Inc. Disclaimer

No money or consideration is being solicited by the information in this Whitepaper or any other communication and, if sent, money will not be accepted and will be promptly returned. No offer by a potential investor to buy our securities can be accepted and, if made, any such offer can be withdrawn before qualification of Prometheum’s Reg A+ Offering by the SEC. A potential investor’s indication of interest does not create a commitment to purchase the securities Prometheum is offering. Any such indication of interest may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance is given and all other requirements to accept an investment from a potential investor are met after the offering qualification date.

The Company’s Reg A+ Offering, after qualification by the SEC, will be made only by means of the Offering Circular. Any information in this White Paper or any other communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification for sale as provided in Regulation A+ in any such state or jurisdiction.

You may obtain a copy of the Preliminary Offering Circular and the Offering Statement in which such Preliminary Offering Circular was filed with the SEC by visiting:

https://www.sec.gov/cgi-bin/browse-edgar?company=Prometheum&owner=exclude&action=getcompany

All information contained in this White Paper is subject to change.

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Prometheum, Inc. © 2018

EX1A-2B BYLAWS

Exhibit 2.2

AMENDED AND RESTATED BYLAWS

OF

PROMETHEUM, INC.

(a Delaware Corporation)

Prometheum, Inc. (the “ Corporation ”), pursuant to the provisions of Section 109 of the Delaware General Corporation Law (the “DGCL”), hereby adopts these Amended and Restated Bylaws, which restate, amend and supersede the bylaws of the Corporation in their entirety as described below:

ARTICLE I
CORPORATE OFFICES

Section 1.1        Registered Office. The registered office and registered agent of the Corporation shall be as set forth in the Corporation’s Certificate of Incorporation.

Section 1.2        Other Offices. The Corporation may also have offices at such other place or places, both within and without the State of New York, as the board of directors may from time to time determine or the business of the Corporation may require.

ARTICLE II
STOCKHOLDERS’ MEETINGS

Section 2.1        Place of Meetings. All meetings of the stockholders for the election of directors shall be held at such place, within or without the State of New York, as may be fixed from time to time by the board of directors. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of New York, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.2        Annual Meeting. An annual meeting of the stockholders shall be held at such time as may be determined by the board of directors, 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. A complete list of the stockholders as of the record date, arranged in alphabetical order, with the address of and the number of voting shares registered in the name of each, certified by the corporate officer responsible for its preparation or by a transfer agent shall be produced at any meeting of stockholders upon the request thereat or prior thereto by any stockholder. Such list shall be produced and kept open at the time and place of the meeting during the whole time thereof, and shall be subject to the inspection of any stockholder who may be present.

Section 2.4        Special Meetings. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by the DGCL, by the Certificate of Incorporation or by these Bylaws, may be called by the Chairman of the Board or by unanimous resolution of the board of directors of the Corporation. Business transacted at all special meetings shall be confined to the purposes stated in the notice of the meeting unless all stockholders entitled to vote are present and consent.

Section 2.5        Notice. Written notice stating the place, day and hour of any meeting of the stockholders and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten nor more than sixty days before the date of the meeting, either personally or by mail, by or at the direction of the Chairman of the Board or the board of directors, to each stockholder of record entitled to vote at the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the mail, addressed to the stockholder at his address as it appears on the stock transfer books and records of the Corporation or its transfer agent, with postage thereon prepaid.

Section 2.6        Quorum. At all meetings of the stockholders, the presence in person or by proxy of the holders of a majority of the shares issued and outstanding and entitled to vote shall be necessary and sufficient to constitute a quorum for the transaction of business except as otherwise provided by the DGCL, by the Certificate of Incorporation or by these Bylaws. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. If the adjournment is for more than 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. 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.

Section 2.7        Voting. When a quorum is present at any meeting of the Corporation’s stockholders, the vote of the holders of a majority of the shares having voting power present in person or represented by proxy at such meeting shall decide any questions brought before such meeting, unless the question is one upon which, by express provision of the DGCL, the Certificate of Incorporation or these Bylaws, a different vote is required, in which case such express provision shall govern and control the decision of such question. The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

Section 2.8        Method of Voting. Each outstanding share of the Corporation’s capital stock shall be entitled to one vote on each matter submitted to a vote at a meeting of stockholders, except to the extent that the voting rights of the shares of any class or classes are otherwise provided by the DGCL or the Certificate of Incorporation, as amended from time to time. At any meeting of the stockholders, every stockholder having the right to vote shall be entitled to vote in person or by proxy appointed by an instrument in writing subscribed by such stockholder or by his duly authorized attorney-in-fact and bearing a date not more than 6 months prior to such meeting, unless such instrument provides for a longer period. Each proxy shall be revocable unless expressly provided therein to be irrevocable and if, and only so long as, it is coupled with an interest sufficient in law to support an irrevocable power. Such proxy shall be filed with the Secretary of the Corporation prior to or at the time of the meeting. Voting for directors shall be in accordance with Article III of these Bylaws. Voting on any question or in any election may be by voice vote or show of hands unless the presiding officer shall order or any stockholder shall demand that voting be by written ballot.

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Section 2.9        Record Date; Closing Transfer Books. The board of directors may fix in advance a record date for the purpose of determining stockholders entitled to notice of or to vote at a meeting of stockholders, such record date to be not less than ten nor more than sixty days prior to such meeting, or the board of directors may close the stock transfer books for such purpose for a period of not less than ten nor more than sixty days prior to such meeting. In the absence of any action by the board of directors, the date upon which the notice of the meeting is mailed shall be the record date.

Section 2.10      Action By Written Consent. Any action required or permitted by the DGCL, the Certificate of Incorporation, or these Bylaws to be taken at a meeting of the stockholders of the Corporation may be taken without a meeting if a consent or consents in writing, setting forth the action so taken, shall be signed by stockholders holding at least a majority of the voting power; provided that if a different proportion of voting power is required for such an action at a meeting, then that proportion of written consents is required. Such signed consent shall be delivered to the Secretary for inclusion in the Minute Book of the Corporation.

Section 2.11      Remote Participation in Meetings. The board of directors may, in its sole discretion and subject to such guidelines and procedures as the board of directors may adopt for any stockholders’ meeting, permit stockholders and proxy holders not present at such meeting to: (i) participate in such meeting of stockholders by means of remote communication; and (ii) be deemed present in person and vote at such meeting of stockholders, provided that: (A) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxy holder; (B) the Corporation shall implement reasonable measures to provide stockholders and proxy holders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders; and (C) if any stockholder or proxy holder votes or takes other action at the meeting by means of remote communication, the Corporation shall maintain a record of such vote or other action.

ARTICLE III
BOARD OF DIRECTORS

Section 3.1        Powers. The business and affairs of the Corporation shall be managed by or under the direction of the board of directors, who may exercise all such powers of the Corporation and do all such lawful acts and things as are not by the DGCL, the Certificate of Incorporation, a stockholders’ agreement or these Bylaws directed or required to be exercised or done by the stockholders. The board of directors shall appoint from their number a Chairman of the Board who will be an officer of the Corporation (as described in Section 5.1 below) as well as a director. The powers and duties of the Chairman of the Board will be determined by the board of directors from time to time (in addition to those specified elsewhere in these Bylaws).

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Section 3.2        Qualification; Election; Term. None of the directors need be a stockholder of the Corporation. The directors shall be elected by plurality vote at the annual meeting of the stockholders, except as hereinafter provided, and each director elected shall hold office until his successor shall be elected and qualified.

Section 3.3        Number. The number of directors constituting the entire board of directors of the Corporation shall be determined from time to time by resolution of the board of directors, provided that the number of directors shall consist of not less than one (1) director. No decrease in the number of directors shall have the effect of shortening the term of any incumbent director.

Section 3.4        Removal. Any director may be removed either for or without cause at any special meeting of stockholders by the affirmative vote of at least two-thirds of the voting power of the issued and outstanding stock entitled to vote; provided, however, that notice of intention to act upon such matter shall have been given in the notice calling such meeting.

Section 3.5        Vacancies. Any vacancy occurring in the board of directors by death, resignation, removal or otherwise may be filled by an affirmative vote of at least a majority of the remaining directors though less than a quorum of the board of directors. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office. A directorship to be filled by reason of an increase in the number of directors may be filled by the board of directors for a term of office only until the next election of one or more directors by the stockholders.

Section 3.6        Place of Meetings. Meetings of the board of directors, regular or special, may be held at such place within or without the State of New York as may be fixed from time to time by the board of directors.

Section 3.7        Annual Meeting. The first meeting of each newly elected board of directors shall be held without further notice immediately following the annual meeting of stockholders and at the same place, unless by unanimous consent or unless the directors then elected and serving shall change such time or place.

Section 3.8        Regular Meetings. Regular meetings of the board of directors may be held without notice at such time and place as shall from time to time be determined by resolution of the board of directors.

Section 3.9        Special Meetings. Special meetings of the board of directors may be called by the Chairman of the Board on oral or written notice to each director, given either personally, by telephone, by telegram or by mail, given at least forty-eight hours prior to the time of the meeting. Special meetings shall be called by the Co-Chief Executive Officers, President or the Secretary in like manner and on like notice on the unanimous written request of directors. Except as may be otherwise expressly provided by the DGCL, the Certificate of Incorporation or these Bylaws, neither the business to be transacted at, nor the purpose of, any special meeting need to be specified in a notice or waiver of notice.

Section 3.10      Quorum. At all meetings of the board of directors the presence of a majority of the number of directors shall be necessary and sufficient to constitute a quorum for the transaction of business, and the affirmative vote of at least 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 DGCL, the Certificate of Incorporation or these Bylaws. If a quorum shall not be present at any meeting 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.

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Section 3.11      Interested Directors. No contract or 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 its directors or officers are directors or officers or have a financial interest, shall be void or voidable solely for this reason, solely because the director or officer is present at or participates in the meeting of the board of directors or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if: (1) the fact as to his relationship or interest and as to the contract or transaction is known to the board of directors or the committee, and the board of directors or committee in good faith authorizes the contract or transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (2) the fact as to his relationship or interest and as to the contract or transaction is 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 (3) 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. 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.

Section 3.12      Committees. The board of directors may, by resolution passed by a majority of the whole board of directors, designate committees, each committee to consist of two or more directors of the Corporation, which committees shall have such power and authority and shall perform such functions as may be provided in such resolution. Such committee or committees shall have such name or names as may be designated by the board of directors and shall keep regular minutes of their proceedings and report the same to the board of directors when required.

Section 3.13      Action by Written Consent. Any action required or permitted to be taken at any meeting of the board of directors or any committee of the board of directors may be taken without such a meeting if a consent or consents in writing, setting forth the action so taken, is signed by all the members of the board of directors or such other committee, as the case may be.

Section 3.14     Compensation of Directors. Directors shall receive such compensation for their services, and reimbursement for their expenses as the board of directors, by resolution, shall establish; provided that nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

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ARTICLE IV
NOTICE

Section 4.1        Form of Notice. Whenever required by the DGCL, the Certificate of Incorporation or these Bylaws, notice is to be given to any director or stockholder, and no provision is made as to how such notice shall be given, such notice may be given: (a) in writing, by mail, postage prepaid, addressed to such director or stockholder at such address as appears on the books and records of the Corporation or its transfer agent; or (b) in any other method permitted by the DGCL. Any notice required or permitted to be given by mail shall be deemed to be given at the time when the same shall be deposited in the United States mail.

Section 4.2       Waiver. Whenever any notice is required to be given to any stockholder or director of the Corporation as required by the DGCL, the Certificate of Incorporation or these Bylaws, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a stockholder or director at a meeting shall constitute a waiver of notice of such meeting, except where such stockholder or director attends for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

ARTICLE V
OFFICERS AND AGENTS

Section 5.1        In General. The officers of the Corporation shall be elected by the board of directors and shall consist of the Chairman of the Board (who shall be designated an officer), a Chief Executive Officer (or two Co-Chief Executive Officers), a President, a Treasurer, and a Secretary and may consist of such other officers, including, without limitation, a Chief Operating Officer, a Chief Financial Officer, a Chief Regulatory Officer, a Chief Strategy Officer, a Chief Technology Officer and one or more Vice Presidents, Assistant Vice Presidents, Assistant Secretaries and Assistant Treasurers as may be elected or appointed by the board of directors. Any two or more offices may be held by the same person.

Section 5.2        Election. The board of directors, at its first meeting after each annual meeting of stockholders, shall elect the officers, none of whom need be a member of the board of directors.

Section 5.3        Other Officers and Agents. The board of directors may also elect and appoint such other officers and agents as it shall deem necessary, who shall be elected and appointed 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.

Section 5.4        Salaries. The salaries of all officers and agents of the Corporation shall be fixed by the board of directors or any committee of the board of directors, if so authorized by the board of directors.

Section 5.5        Term of Office and Removal. Each officer of the Corporation shall hold office until his death, or his resignation or removal from office, or the election and qualification of his successor, whichever shall first occur. Any officer or agent elected or appointed by the board of directors may be removed at any time, for or without cause, by the affirmative vote of a majority of the whole board of directors, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the board of directors.

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Section 5.6        Employment and Other Contracts. The board of directors may authorize any officer or officers or agent or agents to enter into any contract or execute and deliver any instrument in the name or on behalf of the Corporation, and such authority may be general or confined to specific instances. The board of directors may, when it believes the interest of the Corporation will best be served thereby, authorize executive employment contracts which will contain such terms and conditions as the board of directors deems appropriate.

Section 5.7        Duties. The duties and powers of the officers of the Corporation shall be as follows:

(a)       Chairman of the Board - The Chairman of the Board shall (i) be designated the principal executive officer of the Corporation, (ii) be primarily responsible for the general management of the business affairs of the Corporation and for implementing the policies and directives of the board of directors, (iii) preside at all meetings of stockholders and the board of directors, (iv) have authority to make contracts on behalf of the Corporation and (v) perform such other duties as from time to time may be assigned by the board of directors.

(b)       Chief Executive Officer or Co-Chief Executive Officers - The Chief Executive Officer or Co-Chief Executive Officers shall (i) be primarily responsible for the general management of the business affairs of the Corporation and for implementing the policies and directives of the Chairman of the Board and the board of directors, (ii) preside at all meetings of stockholders and the board of directors, during the absence or disability of the Chairman of the Board (iv) have authority to make contracts on behalf of the Corporation in the ordinary course of the Corporation’s business and (v) perform such other duties as from time to time may be assigned by the Chairman of the Board and the board of directors.

(c)       President - The President shall (i) preside at all meetings of the stockholders and the board of directors during the absence or disability of the Chairman of the Board and the Chief Executive Officer (or both Co-Chief Executive Officers), (ii) be primarily responsible for the general management of the business of the Corporation and for implementing the policies and directives of the board of directors during the absence or disability of the Chairman of the Board, (iii) have authority to make contracts on behalf of the Corporation in the ordinary course of the Corporation’s business and (iv) perform such other duties as from time to time may be assigned by the Chairman of the Board or the board of directors.

(d)       Chief Operating Officer - The Chief Operating Officer shall be subject to the direction of the Chairman of the Board or the board of directors and shall have day-to-day managerial responsibility for the operation of the Corporation.

(e)       Chief Financial Officer - The Chief Financial Officer shall be subject to the direction of the Chairman of the Board or the board of directors and shall have day-to-day managerial responsibility for the finances of the Corporation.

(f)        Chief Regulatory Officer - The Chief Regulatory Officer shall be subject to the direction of the Chairman of the Board or the board of directors and shall have day-to-day managerial responsibility for the regulatory matters of the Corporation.

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(g)       Chief Strategy Officer - The Chief Strategy Officer shall be subject to the direction of the Chairman of the Board or the board of directors and shall have day-to-day managerial responsibility for strategic planning for the Corporation.

(h)       Chief Technology Officer - The Chief Technology Officer shall be subject to the direction of the Chairman of the Board or the board of directors and shall have day-to-day managerial responsibility for the technology of the Corporation.

(i)        Vice Presidents - The Vice Presidents in the order designated by the board of directors, shall exercise the functions of the President during the absence or disability of the President and shall perform such other duties as may be assigned by the Chairman of the Board, the President or the board of directors.

(j)        Treasurer - The treasurer shall (i) have general supervision over the funds of the Corporation and the investment or deposit thereof, (ii) advise the officers and, if requested, the board of directors regarding the financial condition of the Corporation and (iii) perform such other duties as may be assigned by the Chairman of the Board or the board of directors.

(k)       Assistant Treasurers - Each Assistant Treasurer shall have such powers and perform such duties as may be assigned by the Chairman of the Board or the board of directors.

(l)        Secretary - The Secretary shall (i) attend the meetings of the stockholders, the board of directors and committees of the board of directors and prepare minutes of all such meetings in a book to be kept for that purpose, (ii) give, or cause to be given, such notice as may be required of all meetings of the stockholders, board of directors and committees of the board of directors, (iii) authenticate records of the Corporation and (iv) perform such other duties as may be assigned by the Chairman of the Board or the board of directors.

(m)      Assistant Secretaries. Each Assistant Secretary shall have such powers and perform such duties as may be assigned by the Chairman of the Board or the board of directors.

ARTICLE VI
CERTIFICATES OF SHARES

Section 6.1        Form of Certificates. The Corporation may, but is not required to, deliver to each stockholder a certificate or certificates, in such form as may be determined by the board of directors, representing shares to which the stockholder is entitled. Such certificates shall be consecutively numbered and shall be registered on the books and records the Corporation or its transfer agent as they are issued. Each certificate shall state on the face thereof the holder’s name, the number, class of shares, and the par value of such shares or a statement that such shares are without par value.

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Section 6.2        Shares without Certificates. The board of directors may authorize the issuance of uncertificated shares of some or all of the shares of any or all of its classes or series. The issuance of uncertificated shares has no effect on existing certificates for shares until surrendered to the Corporation, or on the respective rights and obligations of the stockholders. Unless otherwise provided by the DGCL, the rights and obligations of stockholders are identical whether or not their shares of stock are represented by certificates. Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall send the stockholder a written statement containing the information required on the certificates pursuant to Section 6.1.

Section 6.3       Lost Certificates. The board of directors may direct that a new certificate be issued, or that uncertificated shares be issued, in place of any certificate theretofore issued by the Corporation alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate to be lost or destroyed. When authorizing such issue of a new certificate or uncertificated shares, the board of directors, in its discretion and as a condition precedent to the issuance thereof, may require the owner of such lost or destroyed certificate, or his legal representative, to advertise the same in such manner as it shall require and/or to give the Corporation a bond, in such form, in such sum, and with such surety or sureties 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 or destroyed. When a certificate has been lost, apparently destroyed or wrongfully taken, and the holder of record fails to notify the Corporation within a reasonable time after he has notice of it, and the Corporation registers a transfer of the shares represented by the certificate before receiving such notification, the holder of record is precluded from making any claim against the Corporation for the transfer or a new certificate or uncertificated shares.

Section 6.4        Transfer of Shares. Shares of stock shall be transferable only on the books of the Corporation or its transfer agent by the holder thereof in person or by his duly authorized attorney. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate representing shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation or the transfer agent of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

Section 6.5        Registered Stockholders. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and, accordingly, 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 DGCL.

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ARTICLE VII
DIRECTOR INDEMNIFICATION

To the maximum extent permitted by the DGCL, subject to the limitations contained in this Article 7, the Corporation shall indemnify an individual who is a party to a proceeding because such individual is or was a director against any liability incurred in the proceeding and, prior to the disposition thereof, advance the reasonable expenses incurred by such director in connection with the proceeding, except that the Corporation shall not be required to indemnify or advance expenses to any director for liability or expenses incurred in a proceeding initiated by or on behalf of such director or to which such director voluntarily becomes a party, other than a suit to enforce indemnification rights. A director’s rights to advancement of expenses are conditioned upon the director’s furnishing the Corporation: (a) a written affirmation, personally signed by or on behalf of the director, of the good faith belief that he is not liable for (i) a breach of his duty of loyalty to the Corporation or its stockholders, (ii) any acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or (iii) any unlawful distributions under the DGCL and (b) a written opinion of counsel for the director in the proceeding to the effect that, based on the facts known to such counsel, it is reasonably possible that the director will not be found liable contrary to his affirmation and (c) a written undertaking (in the form of an unlimited general obligation of the director, which need not be secured) personally signed by or on behalf of the director to repay any advances, if a judgment or other final adjudication adverse to the director establishes his liability contrary to his affirmation. A director’s rights to indemnification and advancement of expenses as provided in this Article 7 are intended to be greater than those which are otherwise provided for in the DGCL notwithstanding a failure to meet the standard of conduct required for permissive indemnification under the DGCL, are contractual in nature between the Corporation and the director, and are mandatory. No indemnification under this Article 7 may be made in advance of a final disposition of such proceeding or if a judgment or other final adjudication adverse to the director establishes his liability for (i) a breach of the duty of loyalty to the Corporation or its stockholders, (ii) any acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) any unlawful distributions under the DGCL or (iv) profits made from the purchase or sale by the director of securities of the Corporation pursuant to the provisions of Section 16(b) of the Securities and Exchange Act of 1934, as amended, or any similar provisions of any federal or state statutes or regulations. A settlement without the Corporation’s prior written consent shall not be deemed a final disposition, and no indemnification for any amount paid in such a settlement may be made under this Article 7. A director’s rights to indemnification and advancement of expenses under this bylaw shall not be exclusive of other rights to which a director may be entitled under an insurance policy, the DGCL, the Certificate of Incorporation, a resolution of stockholders or directors or an agreement providing for indemnification.

ARTICLE VIII
OFFICER INDEMNIFICATION

This Corporation may, to the extent permitted by the DGCL and approved by specific action of the board of directors, indemnify and advance expenses to an officer, employee, or agent of the Corporation to the same extent as to a director, and may also indemnify and advance expenses to an officer, employee or agent to the extent, consistent with public policy, determined by specific action of the board of directors.

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ARTICLE IX
RIGHT OF FIRST REFUSAL

Section 9.1        No stockholder shall sell, assign, pledge, or in any manner transfer any of the shares of stock of the corporation or any right or interest therein, whether voluntarily or by operation of law, or by gift or otherwise, except by a transfer which meets the requirements hereinafter set forth in this bylaw:

(a)       If the stockholder desires to sell or otherwise transfer any of his shares of stock, then the stockholder shall first give written notice thereof to the corporation. The notice shall name the proposed transferee and state the number of shares to be transferred, the proposed consideration, and all other terms and conditions of the proposed transfer.

(b)       For thirty (30) days following receipt of such notice, the corporation shall have the option to purchase all (but not less than all) of the shares specified in the notice at the price and upon the terms set forth in such notice; provided, however, that, with the consent of the stockholder, the corporation shall have the option to purchase a lesser portion of the shares specified in said notice at the price and upon the terms set forth therein. In the event of a gift, property settlement or other transfer in which the proposed transferee is not paying the full price for the shares, and that is not otherwise exempted from the provisions of this Section 46, the price shall be deemed to be the fair market value of the stock at such time as determined in good faith by the Board of Directors. In the event the corporation elects to purchase all of the shares or, with consent of the stockholder, a lesser portion of the shares, it shall give written notice to the transferring stockholder of its election and settlement for said shares shall be made as provided below in paragraph (d).

(c)       The corporation may assign its rights hereunder.

(d)       In the event the corporation and/or its assignee(s) elect to acquire any of the shares of the transferring stockholder as specified in said transferring stockholder’s notice, the Secretary of the corporation shall so notify the transferring stockholder and settlement thereof shall be made in cash within thirty (30) days after the Secretary of the corporation receives said transferring stockholder’s notice; provided that if the terms of payment set forth in said transferring stockholder’s notice were other than cash against delivery, the corporation and/or its assignee(s) shall pay for said shares on the same terms and conditions set forth in said transferring stockholder’s notice.

(e)       In the event the corporation and/or its assignees(s) do not elect to acquire all of the shares specified in the transferring stockholder’s notice, said transferring stockholder may, within the sixty-day period following the expiration of the option rights granted to the corporation and/or its assignees(s) herein, transfer the shares specified in said transferring stockholder’s notice which were not acquired by the corporation and/or its assignees(s) as specified in said transferring stockholder’s notice. All shares so sold by said transferring stockholder shall continue to be subject to the provisions of this bylaw in the same manner as before said transfer.

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Section 9.2        Anything to the contrary contained herein notwithstanding, the following transactions shall be exempt from the provisions of this bylaw:

(a)       A stockholder’s transfer of any or all shares held either during such stockholder’s lifetime or on death by will or intestacy to such stockholder’s immediate family or to any custodian or trustee for the account of such stockholder or such stockholder’s immediate family or to any limited partnership of which the stockholder, members of such stockholder’s immediate family or any trust for the account of such stockholder or such stockholder’s immediate family will be the general of limited partner(s) of such partnership. “Immediate family” as used herein shall mean spouse, lineal descendant, father, mother, brother, or sister of the stockholder making such transfer.

(b)       A stockholder’s bona fide pledge or mortgage of any shares with a commercial lending institution, provided that any subsequent transfer of said shares by said institution shall be conducted in the manner set forth in this bylaw.

(c)       A stockholder’s transfer of any or all of such stockholder’s shares to the corporation or to any other stockholder of the corporation.

(d)       A stockholder’s transfer of any or all of such stockholder’s shares to a person who, at the time of such transfer, is an officer or director of the corporation.

(e)       A corporate stockholder’s transfer of any or all of its shares pursuant to and in accordance with the terms of any merger, consolidation, reclassification of shares or capital reorganization of the corporate stockholder, or pursuant to a sale of all or substantially all of the stock or assets of a corporate stockholder.

(f)        A corporate stockholder’s transfer of any or all of its shares to any or all of its stockholders.

(g)       A transfer by a stockholder which is a limited or general partnership to any or all of its partners or former partners.

In any such case, the transferee, assignee, or other recipient shall receive and hold such stock subject to the provisions of this bylaw, and there shall be no further transfer of such stock except in accord with this bylaw.

Section 9.3        The provisions of this bylaw may be waived with respect to any transfer either by the corporation, upon duly authorized action of its Board of Directors, or by the stockholders, upon the express written consent of the owners of a majority of the voting power of the corporation (excluding the votes represented by those shares to be transferred by the transferring stockholder). This bylaw may be amended or repealed either by a duly authorized action of the Board of Directors or by the stockholders, upon the express written consent of the owners of a majority of the voting power of the corporation.

Section 9.4        Any sale or transfer, or purported sale or transfer, of securities of the corporation shall be null and void unless the terms, conditions, and provisions of this bylaw are strictly observed and followed.

Section 9.5        The foregoing right of first refusal shall terminate on the date securities of the corporation are first offered to the public pursuant to a registration statement filed with, and declared effective by, the United States Securities and Exchange Commission under the Securities Act of 1933, as amended.

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Section 9.6        The certificates representing shares of stock of the corporation shall bear on their face the following legend so long as the foregoing right of first refusal remains in effect:

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST REFUSAL OPTION IN FAVOR OF THE CORPORATION AND/OR ITS ASSIGNEE(S), AS PROVIDED IN THE BYLAWS OF THE CORPORATION.”

ARTICLE X
MARKET STAND-OFF.

Section 10.1      By acceptance of the Corporation’s capital stock, whether directly upon issuance by the Corporation or upon transfer from another stockholder, each stockholder agrees that for a period of not less 180 days following the effective date of the first registration statement of the Corporation covering the Corporation’s capital stock (or other securities) to be sold on the Corporation’s behalf in an underwritten public offering, such stockholder will not sell, hedge or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) any shares of the Corporation’s capital stock, or other securities of the Corporation held thereby, except securities specifically included in such registration. In order to enforce the foregoing covenant, the Corporation may impose stop-transfer instructions with respect to securities of the Corporation held by such stockholder until the end of such period.

ARTICLE XI
EMERGENCY BYLAW

In the event that a quorum of directors cannot be readily assembled because of a catastrophic event or because one or more directors cannot be readily contacted, the board of directors may take action by the affirmative vote of a majority of those directors present at a meeting and may exercise any emergency power granted to a board of directors under the DGCL not inconsistent with this bylaw. If less than two regularly elected directors are present, the director present may appoint one or more persons (not to exceed the number most recently fixed by the board of directors) from among the officers or other executive employees of the Corporation to serve as substitute directors. If no regularly elected director is present, the officer present having the greatest seniority as an officer shall serve as a substitute director, shall appoint up to two additional persons from among the officers or other executive employees of the Corporation to serve as substitute directors. Special meetings of the board of directors may be called in an emergency by any director or, if no director is present at the Corporation’s principal offices, by the officer present having the greatest seniority as an officer.

ARTICLE VII

GENERAL PROVISIONS

Section 7.1.       Dividends. Dividends upon the outstanding shares 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 declared and paid in cash, in property, or in shares of the Corporation, subject to the provisions of the DGCL and the Certificate of Incorporation. The board of directors may fix in advance a record date for the purpose of determining stockholders entitled to receive payment of any dividend, such record date to be not more than sixty days prior to the payment date of such dividend, or the board of directors may close the stock transfer books for such purpose for a period of not more than sixty days prior to the payment date of such dividend. In the absence of any action by the board of directors, the date upon which the board of directors adopts the resolution declaring such dividend shall be the record date.

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Section 7.2.       Reserves. There may be created by resolution of the board of directors out of the surplus of the Corporation such reserve or reserves as the directors from time to time, in their discretion, think proper to provide for contingencies, or to equalize dividends, or to repair or maintain any property of the Corporation, or for such other purpose as the directors shall think beneficial to the Corporation, and the directors may modify or abolish any such reserve in the manner in which it was created. Surplus of the Corporation to the extent so reserved shall not be available for the payment of dividends or other distributions by the Corporation.

Section 7.3.       Telephone and Similar Meetings. Stockholders, directors and committee members may participate in and hold a meeting by means of conference telephone or similar communications equipment by which all persons participating in the meeting can hear each other. Participation in such a meeting shall constitute presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

Section 7.4.       Books and Records. The Corporation shall keep correct and complete books and records of account and minutes of the proceedings of its stockholders and board of directors, and shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its stockholders, giving the names and addresses of all stockholders and the number and class of the shares held by each.

Section 7.5.       Checks and Notes. 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 7.6.       Loans. No loans shall be contracted on behalf of the Corporation and no evidence of indebtedness shall be issued in its name unless authorized by a resolution of the board of directors. Such authority may be general or confined to specific instances.

Section 7.7.       Fiscal Year. The fiscal year of the Corporation shall be fixed, and shall be subject to change, by the board of directors.

Section 7.8.        Seal. The Corporation may have a seal, and such seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. Any officer of the Corporation shall have authority to affix the seal to any document requiring it.

Section 7.10.     Insurance. The Corporation may at the discretion of the board of directors purchase and maintain insurance on behalf of any person who holds or who has held any position identified in Section 5.7 against any and all liability incurred by such person in any such position or arising out of his status as such.

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Section 7.11.     Resignation. Any director, officer or agent may resign by giving written notice to the Chairman of the Board. Such resignation shall take effect at the time specified therein or immediately if no time is specified therein. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 7.12.     Amendment of Bylaws. The Bylaws of the Corporation may be altered, amended or repealed at any meeting of the board of directors at which a quorum is present, by the affirmative vote of a majority of the directors present at such meeting. The stockholders also will have power to adopt, amend or repeal the Bylaws of the Corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the Corporation required by law or by the Certificate of Incorporation, such action by stockholders will require the affirmative vote of the holders of a majority of the voting power of all of the then-outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class.

Section 7.13.     Invalid Provisions. If any part of these Bylaws shall be held invalid or inoperative for any reason, the remaining parts, so far as possible and reasonable, shall be valid and operative.

Section 7.14.     Relation to Certificate of Incorporation. These Bylaws are subject to, and governed by, the Certificate of Incorporation.

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EX1A-3 HLDRS RTS

Exhibit 3.1

FORM OF ARRANT AGENT AGREEMENT

               This Warrant Agent Agreement (this “Warrant Agreement”), made as of March __, 2019, by and between Prometheum, Inc., a Delaware corporation, with offices at 120 Wall Street, New York, NY 10005 (the “Company”), and VStock Transfer, LLC, a California limited liability company, with offices at 18 Lafayette Place, Woodmere, New York (the “Warrant Agent”).

RECITALS

               WHEREAS, the Company has determined to offer and sell to investors a minimum of 5,000,000 warrants up to a maximum of 50,000,000 warrants (the “Ember Warrants”), each Ember Warrant exercisable by the holder thereof to purchase one Ember Token (defined below), when and if issued, subject to adjustment as described herein, at an offering price of $1.00 per Ember Warrant (the “Offering”);

               WHEREAS, the Company has filed with the Securities and Exchange Commission an offering statement (No. 024-10760), as the same may be amended from time to time (the “Offering Statement”) pursuant to Tier 2 of Regulation A promulgated under the Securities Act of 1933, as amended (the “Securities Act”) for the qualification of the Ember Warrants and the underlying Ember Tokens;

               WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in accordance with the terms set forth in this Warrant Agreement, in connection with the issuance, registration, transfer, and exercise of the Ember Warrants;

               WHEREAS, the Company desires to provide for the provisions of the Ember Warrants, the terms upon which they shall be issued and exercised for Ember Tokens, and the respective rights, limitation of rights and immunities of the Company, the Warrant Agent and the holders of the Ember Warrants; and

               WHEREAS, all acts and things have been done and performed which are necessary to make the Ember Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent, as provided herein, the legally valid and binding obligations of the Company, and to authorize the execution and delivery of this Warrant Agreement;

               NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:

               1.             Definitions. In addition to the terms defined elsewhere in this Warrant Agreement, the following terms shall have the following meanings:

                                1.1             “Business Day” is defined in Section 4.3.1(b).

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                                1.2             “Ember Tokens” means the blockchain technology based digital securities tokens created in the Genesis Block.

                                1.3             “Genesis Block” means the initial block of 270,000,000 Ember Tokens to be created substantially simultaneously with the launch of the Prometheum Network which shall include 50,000,000 Ember Tokens allocated to Registered Holders who may acquire such Ember Tokens in exercise for their Ember Warrants.

                                1.4             “Issuance Date” means the date that the Company issues the Ember Warrants.

                                1.5             “Qualification Date” means the date the Company’s Offering Statement under Regulation A is qualified by the Securities and Exchange Commission.

                                1.6             “Wallet Account” means a digital account set up for a Registered Holder configured using blockchain technology for the delivery and storage of Ember Tokens.

               2.             Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company with respect to the Ember Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the express terms and conditions set forth in this Warrant Agreement.

               3.             Ember Warrants.

                                3.1             Form of Ember Warrants. The Ember Warrants shall be registered securities and shall be evidenced by a global certificate (“Global Certificate”) in the form of Exhibit A to this Warrant Agreement, which shall be deposited on behalf of the Company with a custodian for The Depository Trust Company (“DTC”) and registered in the name of Cede & Co., a nominee of DTC. If DTC subsequently ceases to make its book-entry settlement system available for the Ember Warrants, the Company may instruct the Warrant Agent regarding making other arrangements for book-entry settlement. In the event that the Ember Warrants are not eligible for, or it is no longer necessary to have the Ember Warrants available in, book-entry form, the Company may instruct the Warrant Agent to provide written instructions to DTC to deliver to the Warrant Agent for cancellation the Global Certificate, and the Company shall instruct the Warrant Agent to deliver to DTC separate certificates evidencing Ember Warrants (“Definitive Certificates” and, together with the Global Certificate, “Warrant Certificates”) registered as requested through the DTC system.

                                3.2             Issuance and Registration of Ember Warrants.

                                                  3.2.1             Warrant Register. The Warrant Agent shall maintain books (“Warrant Register”) for the registration of original issuance and the registration of transfer of the Ember Warrants.

                                                  3.2.2             Issuance of Ember Warrants. Upon the initial issuance of the Ember Warrants, the Warrant Agent shall issue the Global Certificate and deliver the Ember Warrants in the DTC book-entry settlement system in accordance with written instructions delivered to the Warrant Agent by the Company. Ownership of security entitlements in the Ember Warrants shall be shown on, and the transfer of such ownership shall be effected through, records maintained (i) by DTC and (ii) by institutions that have accounts with DTC (each, a “Participant”).

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                                                  3.2.3             Beneficial Owner; Holder. Prior to due presentment for registration of transfer of any Ember Warrant, the Company and the Warrant Agent may deem and treat the person in whose name that Ember Warrant shall be registered on the Warrant Register (the “Holder”) as the absolute owner of such Ember Warrant for purposes of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Warrant Agent or any agent of the Company or the Warrant Agent from giving effect to any written certification, proxy or other authorization furnished by DTC governing the exercise of the rights of a holder of a beneficial interest in any Ember Warrant. The rights of beneficial owners in an Ember Warrant evidenced by the Global Certificate shall be exercised by the Holder or a Participant through the DTC system, except to the extent set forth herein or in the Global Certificate.

                                                  3.2.4             Execution. The Warrant Certificates shall be executed on behalf of the Company by any authorized officer of the Company (an “Authorized Officer”), which need not be the same authorized signatory for all of the Warrant Certificates, either manually or by facsimile signature. The Warrant Certificates shall be countersigned by an authorized signatory of the Warrant Agent, which need not be the same signatory for all of the Warrant Certificates, and no Warrant Certificate shall be valid for any purpose unless so countersigned. In case any Authorized Officer of the Company that signed any of the Warrant Certificates ceases to be an Authorized Officer of the Company before countersignature by the Warrant Agent and issuance and delivery by the Company, such Warrant Certificates, nevertheless, may be countersigned by the Warrant Agent, issued and delivered with the same force and effect as though the person who signed such Warrant Certificates had not ceased to be such officer of the Company; and any Warrant Certificate may be signed on behalf of the Company by any person who, at the actual date of the execution of such Warrant Certificate, shall be an Authorized Officer of the Company authorized to sign such Warrant Certificate, although at the date of the execution of this Warrant Agreement any such person was not such an Authorized Officer.

                                                  3.2.5             Registration of Transfer. At any time at or prior to the Expiration Date (as defined below), a transfer of any Ember Warrants may be registered and any Warrant Certificate or Warrant Certificates may be split up, combined or exchanged for another Warrant Certificate or Warrant Certificates evidencing the same number of Ember Warrants as the Warrant Certificate or Warrant Certificates surrendered. Any Holder desiring to register the transfer of Ember Warrants or to split up, combine or exchange any Warrant Certificate shall make such request in writing delivered to the Warrant Agent, and shall surrender to the Warrant Agent the Warrant Certificate or Warrant Certificates evidencing the Ember Warrants the transfer of which is to be registered or that is or are to be split up, combined or exchanged and, in the case of registration of transfer, shall provide a signature guarantee. Thereupon, the Warrant Agent shall countersign and deliver to the person entitled thereto a Warrant Certificate or Warrant Certificates, as the case may be, as so requested. The Company and the Warrant Agent may require payment, by the Holder requesting a registration of transfer of Ember Warrants or a split-up, combination or exchange of a Warrant Certificate (but, for purposes of clarity, not upon the exercise of the Ember Warrants and issuance of Ember Tokens to the Holder), of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with such registration of transfer, split-up, combination or exchange, together with reimbursement to the Company and the Warrant Agent of all reasonable expenses incidental thereto.

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                                                  3.2.6             Loss, Theft and Mutilation of Warrant Certificates. Upon receipt by the Company and the Warrant Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Warrant Certificate, and, in case of loss, theft or destruction, of indemnity or security in customary form and amount, and reimbursement to the Company and the Warrant Agent of all reasonable expenses incidental thereto, and upon surrender to the Warrant Agent and cancellation of the Warrant Certificate if mutilated, the Warrant Agent shall, on behalf of the Company, countersign and deliver a new Warrant Certificate of like tenor to the Holder in lieu of the Warrant Certificate so lost, stolen, destroyed or mutilated. The Warrant Agent may charge the Holder an administrative fee for processing the replacement of lost Warrant Certificates, which shall be charged only once in instances where a single surety bond obtained covers multiple certificates. The Warrant Agent may receive compensation from the surety companies or surety agents for administrative services provided to them.

                                                  3.2.7             Proxies. The Holder of an Ember Warrant may grant proxies or otherwise authorize any person, including the Participants and beneficial holders that may own interests through the Participants, to take any action that a Holder is entitled to take under this Agreement or the Ember Warrants; provided, however, that at all times that Ember Warrants are evidenced by a Global Certificate, exercise of those Ember Warrants shall be effected on their behalf by Participants through DTC in accordance the procedures administered by DTC.

               4.             Terms and Exercise of Ember Warrants.

                                4.1             Exercise Price. Each Ember Warrant shall entitle the Holder, subject to the provisions of the applicable Warrant Certificate and of this Warrant Agreement, to purchase that number of Ember Tokens stated therein, at the price of $0.00 per Ember Token.

                                4.2             Duration of Ember Warrants. An Ember Warrant may be exercised only during the period (“Exercise Period”) commencing on the date that the Genesis Block is created and terminating at 5:00 p.m., New York City time, on the date that is the five year anniversary of the date that the Genesis Block was created, (“Expiration Date”). Each Ember Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Warrant Agreement shall cease at the close of business on the Expiration Date.

                                4.3             Exercise of Ember Warrants.

                                                  4.3.1             Exercise and Payment.

                                                                       (a)             Subject to the provisions of this Warrant Agreement, a Holder (or a Participant or a designee of a Participant acting on behalf of a Holder) may exercise Ember Warrants by delivering to the Warrant Agent, not later than 5:00 P.M., Eastern Standard Time, on any business day during the Exercise Period an election to purchase the Ember Tokens underlying the Ember Warrants to be exercised (i) in the form included in Exhibit B to this Warrant Agreement or (ii) via an electronic warrant exercise through the DTC system (each, an “Election to Purchase”). No later than one (1) Trading Day following delivery of an Election to Purchase, the Holder (or a Participant acting on behalf of a Holder in accordance with DTC procedures) shall deliver the Ember Warrants to an account of the Warrant Agent at DTC designated for such purpose in writing by the Warrant Agent to DTC from time to time. A Holder (or a Participant or designee of a Participant on behalf of a Holder) that has delivered an Election To Purchase Ember Tokens shall be deemed to have become holder of record of such Ember Tokens as of the time that an appropriately completed and duly signed Election to Purchase has been delivered to the Warrant Agent, provided that the Holder (or Participant on behalf of the Holder) makes delivery of the deliverables referenced in the immediately preceding sentence by the date that is one (1) Trading Day after the delivery of the Election to Purchase. If the Holder (or Participant on behalf of the Holder) fails to make delivery of such deliverables on or prior to the Trading Day following delivery of the Election to Purchase, such Election to Purchase shall be void ab initio. 

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                                                                       (b)             If any of (i) the Ember Warrants, or (ii) the Election to Purchase, is received by the Warrant Agent on any date after 5:00 P.M., Eastern Standard Time, or on a date that is not a Trading Day, the Ember Warrants with respect thereto will be deemed to have been received and exercised on the Trading Day next succeeding such date. “Business Day” means a day other than a Saturday or Sunday on which commercial Banks in New York City are open for the general conduct of banking business. The “Exercise Date” will be the date on which the materials in the foregoing sentence are received by the Warrant Agent (if by 5:00 P.M., New York City time), or the following Trading Day (if after 5:00 P.M., New York City time), regardless of any earlier date written on the materials. If the Ember Warrants are received or deemed to be received after the Expiration Date, the exercise thereof will be null and void.

                                                                       (c)             If less than all the Ember Warrants evidenced by a surrendered Warrant Certificate are exercised, the Warrant Agent shall split up the surrendered Warrant Certificate and return to the Holder a Warrant Certificate evidencing the Ember Warrants that were not exercised.

                                                  4.3.2             Issuance of Ember Tokens.

                                                                       (a)             The Warrant Agent shall, by 11:00 a.m., New York City time, on the Trading Day following the Exercise Date of any Ember Warrant, advise the Company, the transfer agent and registrar for the Ember Tokens (the “Ember Token Transfer Agent”), in respect of (i) the number of Ember Tokens indicated on the Election to Purchase as issuable upon such exercise with respect to such exercised Ember Warrants, (ii) the instructions of the Holder or Participant, as the case may be, provided to the Warrant Agent with respect to the delivery of the Ember Tokens and the number of Ember Warrants that remain outstanding after such exercise and (iii) such other information as the Company or such Ember Token Transfer Agent.

                                                                       (b)             The Company shall, by no later than 5:00 P.M., Eastern Standard Time, on the third Trading Day following the Exercise Date of any Ember Warrant (such date and time, the “Delivery Time”), cause its Ember Token Transfer Agent to electronically transmit the Ember Tokens issuable upon that exercise to the Holder’s Wallet Account.

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                                                  4.3.3             Valid Issuance. All Ember Tokens issued by the Company upon the proper exercise of an Ember Warrant in conformity with this Warrant Agreement shall be validly issued, fully paid and non-assessable.

                                                  4.3.4             No Fractional Exercise. No fractional Ember Tokens will be issued upon the exercise of the Ember Warrant.

                                                  4.3.5             Restrictive Legend Events. (a) The Company shall use it reasonable best efforts to maintain the qualification of the Offering Statement and the current status of the offering circular included therein or to file and maintain the qualification of another offering statement or to file a registration statement and another current offering circular or prospectus covering the Ember Warrants and the Ember Tokens at any time during the period commencing on the Issuance Date and ending on the Expiration Date. The Company shall provide to the Warrant Agent and each Holder prompt written notice of any time that the Company is unable to deliver the Ember Warrants or Ember Tokens via DTC transfer or otherwise without restrictive legend because (i) the Commission has issued a stop order with respect to the Offering Statement, (ii) the Commission otherwise has suspended or withdrawn the qualification of the Offering Statement, either temporarily or permanently, (iii) the Company has suspended or withdrawn the qualification of the Offering Statement, either temporarily or permanently, (iv) the offering circular contained in the Offering Statement is not available for the issuance of the Ember Warrants or Ember Tokens to the Holder or (iv) otherwise (each a “Restrictive Legend Event”). To the extent that the Ember Warrants cannot be exercised as a result of a Restrictive Legend Event or a Restrictive Legend Event occurs after a Holder has exercised Ember Warrants in accordance with the terms of the Ember Warrants but prior to the delivery of the Ember Tokens, the Company shall, at the election of the Holder, which shall be given within five (5) days of receipt of such notice of the Restrictive Legend Event, rescind the previously submitted Election to Purchase.

               5.             Other Provisions Relating to Rights of Holders of Ember Warrants.

                                5.1             No Rights as Stockholder. An Ember Warrant does not entitle the Registered Holder thereof to any of the rights of a stockholder of the Company, including, without limitation, any right to vote, give or withhold consent to any corporate action (including, without limitation, any reorganization, issue of stock, reclassification of share capital, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights or rights to participate in new issues of shares, or any other matter.

                                5.2             Allocation of Ember Tokens Following Issuance of the Genesis Block. The Company shall at all times following the Genesis Block, allocate and keep available in the Genesis Block, that number of Ember Tokens that will be sufficient to permit the exercise in full of all outstanding Ember Warrants issued pursuant to this Warrant Agreement.

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                                5.3             Fundamental Transactions. During such time as the Ember Warrants are outstanding, if the Company shall (a) enter into a merger, consolidation or other similar transaction or series of transactions to which the Company is a party and pursuant to which (i) the Company is not the surviving entity in such transaction or (ii) if the Company is the surviving entity, the holders of shares of common stock immediately prior to such transaction represent less than 50% of the shares of common stock outstanding immediately following such transaction, or (b) effect any sale of all or substantially all of the Company’s assets in one transaction or a series of related transactions (each a “Fundamental Transaction”), then the Company shall make appropriate arrangements to ensure the Holders will thereafter receive upon the exercise of their Ember Warrants at any time after the consummation of a Fundamental Transaction but before the Termination Date, in lieu of the Ember Tokens issuable upon the exercise of their Ember Warrants immediately prior to such Fundamental Transaction, such cash, stock, assets, securities, warrants, options, subscription rights or other property having substantially the same or greater value than the Ember Tokens that the Holders would have been entitled to receive upon the happening of such Fundamental Transaction had their Ember Warrants been exercised immediately before such Fundamental Transaction (the “Alternate Consideration”).

The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant Agreement in accordance with the provisions of this Section 5.3 pursuant to written agreements and shall deliver to such Holder in exchange for the applicable Warrants created by this Warrant Agreement a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to the Warrants which are exercisable for the Alternate Consideration receivable as a result of such Fundamental Transaction by a Holder. Upon the occurrence of any such Fundamental Transaction the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant Agreement and the Warrants referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant Agreement and the Warrants with the same effect as if such Successor Entity had been named as the Company herein and therein. The Company shall instruct the Warrant Agent in writing to mail by first class mail, postage prepaid, to each Holder, written notice of the execution of any such amendment, supplement or agreement with the Successor Entity. Any supplemented or amended agreement entered into by the successor corporation or transferee shall provide for adjustments, which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5.3. The Warrant Agent shall have no duty, responsibility or obligation to determine the correctness of any provisions contained in such agreement or such notice, including but not limited to any provisions relating either to the kind or amount of securities or other property receivable upon exercise of warrants or with respect to the method employed and provided therein for any adjustments, and shall be entitled to rely conclusively for all purposes upon the provisions contained in any such agreement. The provisions of this Section 5.3 shall similarly apply to successive reclassifications, changes, consolidations, mergers, sales and conveyances of the kind described above.

                                5.4             Notice of Fundamental Transaction. Upon the occurrence of a Fundamental Transaction, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Successor Entity and Alternative Consideration. The Warrant Agent shall be entitled to rely conclusively on, and shall be fully protected in relying on, any certificate, notice or instructions provided by the Company with respect to any Fundamental Transaction or any related matter, and the Warrant Agent shall not be liable for any action taken, suffered or omitted to be taken by it in accordance with any such certificate, notice or instructions or pursuant to this Warrant Agreement. The Warrant Agent shall not be deemed to have knowledge of any such Fundamental Transaction unless and until it shall have received written notice thereof from the Company.

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               6.             Concerning the Warrant Agent and Other Matters.

                                6.1             Instructions. Any instructions given to the Warrant Agent orally, as permitted by any provision of this Warrant Agreement, shall be confirmed in writing by the Company as soon as practicable. The Warrant Agent shall not be liable or responsible and shall be fully authorized and protected for acting, or failing to act, in accordance with any oral instructions which do not conform with the written confirmation received in accordance with this Section 6.1.

                                6.2             Fees and Expenses of Warrant Agent. (a) Whether or not any Ember Warrants are exercised, for the Warrant Agent’s services as agent for the Company hereunder, the Company shall pay to the Warrant Agent such fees as may be separately agreed between the Company and Warrant Agent and the Warrant Agent’s out of pocket expenses in connection with this Warrant Agreement, including, without limitation, the fees and expenses of the Warrant Agent’s counsel. While the Warrant Agent endeavors to maintain out-of-pocket charges (both internal and external) at competitive rates, these charges may not reflect actual out-of-pocket costs, and may include handling charges to cover internal processing and use of the Warrant Agent’s billing systems. (b) All amounts owed by the Company to the Warrant Agent under this Warrant Agreement are due within 30 days of the invoice date. Delinquent payments are subject to a late payment charge of one and one-half percent (1.5%) per month commencing 45 days from the invoice date. The Company agrees to reimburse the Warrant Agent for any attorney’s fees and any other costs associated with collecting delinquent payments. (c) No provision of this Warrant Agreement shall require Warrant Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties under this Warrant Agreement or in the exercise of its rights.

                                6.3             Duties of Warrant Agent. As agent for the Company hereunder the Warrant Agent: (a) shall have no duties or obligations other than those specifically set forth herein or as may subsequently be agreed to in writing by the Warrant Agent and the Company; (b) shall be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value, or genuineness of the Ember Warrants or any Ember Tokens; (c) shall not be obligated to take any legal action hereunder; if, however, the Warrant Agent determines to take any legal action hereunder, and where the taking of such action might, in its judgment, subject or expose it to any expense or liability it shall not be required to act unless it has been furnished with an indemnity reasonably satisfactory to it; (e) may rely on and shall be fully authorized and protected in acting or failing to act upon any certificate, instrument, opinion, notice, letter, telegram, telex, facsimile transmission or other document or security delivered to the Warrant Agent and believed by it to be genuine and to have been signed by the proper party or parties; (f) shall not be liable or responsible for any recital or statement contained in the Registration Statement or any other documents relating thereto; (g) shall not be liable or responsible for any failure on the part of the Company to comply with any of its covenants and obligations relating to the Ember Warrants, including without limitation obligations under applicable securities laws; (h) may rely on and shall be fully authorized and protected in acting or failing to act upon the written, telephonic or oral instructions with respect to any matter relating to its duties as Warrant Agent covered by this Warrant Agreement (or supplementing or qualifying any such actions) of officers of the Company, and is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from the Company or counsel to the Company, and may apply to the Company, for advice or instructions in connection with the Warrant Agent’s duties hereunder, and the Warrant Agent shall not be liable for any delay in acting while waiting for those instructions; any applications by the Warrant Agent for written instructions from the Company may, at the option of the Agent, set forth in writing any action proposed to be taken or omitted by the Warrant Agent under this Warrant Agreement and the date on or after which such action shall be taken or such omission shall be effective; the Warrant Agent shall not be liable for any action taken by, or omission of, the Warrant Agent in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than five business days after the date such application is sent to the Company, unless the Company shall have consented in writing to any earlier date) unless prior to taking any such action, the Warrant Agent shall have received written instructions in response to such application specifying the action to be taken or omitted; (i) may consult with counsel satisfactory to the Warrant Agent, including its in-house counsel, and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered, or omitted by it hereunder in good faith and in accordance with the advice of such counsel; (j) may perform any of its duties hereunder either directly or by or through nominees, correspondents, designees, or subagents, and it shall not be liable or responsible for any misconduct or negligence on the part of any nominee, correspondent, designee, or subagent appointed with reasonable care by it in connection with this Warrant Agreement; (k) is not authorized, and shall have no obligation, to pay any brokers, dealers, or soliciting fees to any person; and (l) shall not be required hereunder to comply with the laws or regulations of any country other than the United States of America or any political subdivision thereof.

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                                6.4             Limitation of Liability. (a) In the absence of gross negligence or willful or illegal misconduct on its part, the Warrant Agent shall not be liable for any action taken, suffered, or omitted by it or for any error of judgment made by it in the performance of its duties under this Warrant Agreement. Anything in this Warrant Agreement to the contrary notwithstanding, in no event shall Warrant Agent be liable for special, indirect, incidental, consequential or punitive losses or damages of any kind whatsoever (including but not limited to lost profits), even if the Warrant Agent has been advised of the possibility of such losses or damages and regardless of the form of action. Any liability of the Warrant Agent will be limited in the aggregate to the amount of fees paid by the Company hereunder. The Warrant Agent shall not be liable for any failures, delays or losses, arising directly or indirectly out of conditions beyond its reasonable control including, but not limited to, acts of government, exchange or market ruling, suspension of trading, work stoppages or labor disputes, fires, civil disobedience, riots, rebellions, storms, electrical or mechanical failure, computer hardware or software failure, communications facilities failures including telephone failure, war, terrorism, insurrection, earthquakes, floods, acts of God or similar occurrences. (b) In the event any question or dispute arises with respect to the proper interpretation of the Ember Warrants or the Warrant Agent’s duties under this Warrant Agreement or the rights of the Company or of any Holder, the Warrant Agent shall not be required to act and shall not be held liable or responsible for its refusal to act until the question or dispute has been judicially settled (and, if appropriate, it may file a suit in interpleader or for a declaratory judgment for such purpose) by final judgment rendered by a court of competent jurisdiction, binding on all persons interested in the matter which is no longer subject to review or appeal, or settled by a written document in form and substance satisfactory to Warrant Agent and executed by the Company and each such Holder. In addition, the Warrant Agent may require for such purpose, but shall not be obligated to require, the execution of such written settlement by all the Holders and all other persons that may have an interest in the settlement.

                                6.5             Indemnification. The Company covenants to indemnify the Warrant Agent and hold it harmless from and against any loss, liability, claim or expense (“Loss”) arising out of or in connection with the Warrant Agent’s duties under this Warrant Agreement, including the costs and expenses of defending itself against any Loss, unless such Loss shall have been determined by a court of competent jurisdiction to be a result of the Warrant Agent’s gross negligence or willful misconduct.

                                6.6             Termination. Unless terminated earlier by the parties hereto, this Agreement shall terminate 90 days after the earlier of the Expiration Date and the date on which no Ember Warrants remain outstanding (the “Termination Date”). On the business day following the Termination Date, the Agent shall deliver to the Company any entitlements, if any, held by the Warrant Agent under this Warrant Agreement. The Agent’s right to be reimbursed for fees, charges and out-of-pocket expenses as provided in this Section 8 shall survive the termination of this Warrant Agreement.

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                                6.7             Company Representations and Warranties. The Company represents and warrants that: (a) it is duly incorporated and validly existing under the laws of its jurisdiction of incorporation; (b) the offer and sale of the Ember Warrants and the execution, delivery and performance of all transactions contemplated thereby (including this Warrant Agreement) have been duly authorized by all necessary corporate action and will not result in a breach of or constitute a default under the articles of association, bylaws or any similar document of the Company or any indenture, agreement or instrument to which it is a party or is bound; (c) this Warrant Agreement has been duly executed and delivered by the Company and constitutes the legal, valid, binding and enforceable obligation of the Company; (d) the Ember Warrants will comply in all material respects with all applicable requirements of law; and (e) to the best of its knowledge, there is no litigation pending or threatened as of the date hereof in connection with the offering of the Ember Warrants.

                                6.8             Payment of Taxes. The Company will, from time to time, promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the delivery of Ember Tokens upon the exchange of Ember Warrants, but the Company shall not be obligated to pay any transfer taxes in respect of the Ember Warrants or such Ember Tokens.

                                6.9             Resignation, Consolidation, or Merger of Warrant Agent.

                                                  6.9.1             Appointment of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint, in writing, a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of the Ember Warrant (who shall, with such notice, submit his, her or its Warrant Certificate for inspection by the Company), then the holder of any Warrant Certificate may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation organized and existing under the laws of the State of New York, or having authority to do business in New York and shall be in good standing, and be authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authorities. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but, if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and, upon request of any successor Warrant Agent, the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties and obligations.

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                                                  6.9.2             Notice of Successor Warrant Agent. In the event that a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the transfer agent for the Common Stock not later than the effective date of any such appointment.

                                                  6.9.3             Merger or Consolidation of Warrant Agent. Any corporation into which the Warrant Agent may be merged or with which it may be consolidated or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Warrant Agreement without any further act on the part of the Company or the Warrant Agent.

                                                  6.9.4             Confidentiality. The Warrant Agent and the Company agree that all books, records, information and data pertaining to the business of the other party, including inter alia, personal, non-public Holder information, which are exchanged or received pursuant to the negotiation or the carrying out of this Warrant Agreement shall remain confidential, and shall not be voluntarily disclosed to any other person, except as may be required by law, including, without limitation, pursuant to subpoenas from state or federal government authorities.

                                                  6.9.5             Further Assurances. The Company agrees to perform, execute, acknowledge and deliver, or cause to be performed, executed, acknowledged and delivered, all such further and other acts, instruments and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Warrant Agreement.

               7.              Miscellaneous Provisions.

                                7.1             Successors. All the covenants and provisions of this Warrant Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.

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                                7.2             Inconsistencies. In the event of inconsistency between this Warrant Agreement and the descriptions in the Offering Statement, as they may from time to time be amended, the terms of this Warrant Agreement shall control.

                                7.3             Authorized Representatives. Set forth in Exhibit C hereto is a list of the names and specimen signatures of the persons authorized to act for the Company under this Warrant Agreement (the “Authorized Representatives”). The Company shall, from time to time, certify to you the names and signatures of any other persons authorized to act for the Company under this Warrant Agreement.

                                7.4             Notices. Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the Warrant Agent or by the holder of any Warrant Certificate to or on the Company shall be delivered by hand or sent by registered or certified mail or overnight courier service, addressed (until another address is filed in writing by the Company with the Warrant Agent) as follows:

Prometheum, Inc.

120 Wall Street, 25^th Floor

New York, NY 10005

Email: Contact@prometheum.info

Attention:  Aaron L. Kaplan, Co-Chief Executive Officer

Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the holder of any Ember Warrant or by the Company to or on the Warrant Agent shall be delivered by hand or sent by registered or certified mail or overnight courier service, addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows:

VStock Transfer, LLC

18 Lafayette Place

Woodmere, NY 11598

Attn: Warrant Department

Any notice, sent pursuant to this Warrant Agreement shall be effective, if delivered by hand, upon receipt thereof by the party to whom it is addressed, if sent by overnight courier, on the next business day of the delivery to the courier, and if sent by registered or certified mail on the third day after registration or certification thereof.

                                7.5             Governing Law. (a) This Warrant Agreement shall be governed by and construed in accordance with the laws of the State of New York. All actions and proceedings relating to or arising from, directly or indirectly, this Warrant Agreement may be litigated in courts located within the Borough of Manhattan in the City and State of New York. The Company hereby submits to the personal jurisdiction of such courts and consents that any service of process may be made by certified or registered mail, return receipt requested, directed to the Company at its address last specified for notices hereunder. Each of the parties hereto hereby waives the right to a trial by jury in any action or proceeding arising out of or relating to this Warrant Agreement. (b) This Warrant Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties hereto. This Warrant Agreement may not be assigned, or otherwise transferred, in whole or in part, by either party without the prior written consent of the other party, which the other party will not unreasonably withhold, condition or delay; except that (i) consent is not required for an assignment or delegation of duties by Warrant Agent to any affiliate of Warrant Agent and (ii) any reorganization, merger, consolidation, sale of assets or other form of business combination by Warrant Agent or the Company shall not be deemed to constitute an assignment of this Warrant Agreement. (c) No provision of this Warrant Agreement may be amended, modified or waived, except in a written document signed by both parties. The Company and the Warrant Agent may amend or supplement this Warrant Agreement without the consent of any Holder for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties determine, in good faith, shall not adversely affect the interest of the Holders.  All other amendments and supplements shall require the vote or written consent of Holders of at least 50.1% of the then outstanding Ember Warrants.

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                                7.6             Amendments. This Warrant Agreement may be amended by the parties hereto without the consent of any Registered Holder for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions with respect to matters or questions arising under this Warrant Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely affect the interest of the Registered Holders.

                                7.7             Severability. This Warrant Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Warrant Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Warrant Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

                                7.8             Persons Having Rights under this Warrant Agreement. Nothing in this Warrant Agreement shall be construed to confer upon, or give to, any person or corporation other than the parties hereto and the Registered Holders of the Ember Warrants any right, remedy, or claim under or by reason of this Warrant Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Warrant Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the Registered Holders of the Ember Warrants.

                                7.9             Examination of the Warrant Agreement. A copy of this Warrant Agreement shall be available at all reasonable times at the office of the Company for inspection by the Registered Holder of any Ember Warrant. The Company may require any such holder to submit a countersigned Warrant Certificate prior to allowing inspection of this Warrant Agreement.

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                                7.10             Counterparts. This Warrant Agreement may be executed in any number of original, facsimile or pdf counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. Facsimile or .pdf copies of fully-executed counterparts of this Warrant Agreement shall be given the same effect as originals.

                                7.11             Effect of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof.

                                7.12             No Strict Construction. This Warrant Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. 

[Signature Page Follows]

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               IN WITNESS WHEREOF, this Warrant Agreement has been duly executed by the parties hereto as of the day and year first above written.

PROMETHEUM, INC.
By:
	Name: Aaron L. Kaplan
	Title: Co-Chief Executive Officer
By:
	Name: Benjamin S. Kaplan
	Title: Co-Chief Executive Officer
VSTOCK TRANSFER, LLC
By:
	Name:
	Title:

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EXHIBIT A

[TO BE INCLUDED IN THE GLOBAL CERTIFICATE]

[Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to issuer or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.]

EMBER WARRANT CERTIFICATE

PROMETHEUM, INC.
Ember Warrant Certificate Number:              
Issue Date: [·]
Exercisable for [·] Ember Tokens
NOT EXERCISABLE AFTER ____________________

               This certifies that the person whose name and address appears below, or registered assigns, is the registered owner of the number of Ember Warrants set forth below. Each Ember Warrant entitles its registered holder to purchase from Prometheum, Inc., a company incorporated under the laws of the State of Delaware (the “Company”), at any time after the issuance of the Genesis Block of Ember Tokens and prior to 5:00 P.M. (Eastern Standard Time) on [the five year anniversary date of the Genesis Block issuance date, one Ember Token (each, an “Ember Token and collectively, the “Ember Tokens”), at an exercise price of $0.00 per Ember Token.

               This Warrant Certificate, with or without other Warrant Certificates, upon surrender at the designated office of the Warrant Agent, may be exchanged for another Warrant Certificate or Warrant Certificates evidencing the same number of Warrants as the Warrant Certificate or Warrant Certificates surrendered. A transfer of the Warrants evidenced hereby may be registered upon surrender of this Warrant Certificate at the designated office of the Warrant Agent by the registered holder in person or by a duly authorized attorney, properly endorsed or accompanied by proper instruments of transfer, a signature guarantee, and such other and further documentation as the Warrant Agent may reasonably request and duly stamped as may be required by the laws of the State of New York and of the United States of America.

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               The terms and conditions of the Warrants and the rights and obligations of the holder of this Warrant Certificate are set forth in the Warrant Agent Agreement dated as of [·], 2019 (the “Warrant Agreement”) between the Company and VStock Transfer, LLC (the “Warrant Agent”). A copy of the Warrant Agreement is available for inspection during business hours at the office of the Warrant Agent.

               This Warrant Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by an authorized signatory of the Warrant Agent.

               WITNESS the facsimile signature of a proper officer of the Company.

	PROMETHEUM, INC
	By:
	Name:	Aaron L. Kaplan
	Title:	Co-Chief Executive Officer
	By:
	Name:	Benjamin S. Kaplan
	Title:	Co-Chief Executive Officer
Dated:

Countersigned:

VSTOCK TRANSFER, LLC

By:

Name:

Title:

_{PLEASE DETACH HERE}
——————————————————————————————————————

Certificate No.:_________ Number of Ember Warrants:__________

EMBER WARRANT CUSIP NO.: ___________

PROMETHEUM, INC.

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EXHIBIT B

[Form of Election to Purchase]

               (To Be Executed Upon Exercise of Ember Warrants Not Evidenced by a Global Certificate)

               The undersigned hereby irrevocably elects to exercise the right, represented by Ember Warrants evidenced by this Warrant Certificate, to purchase the [·] Ember Tokens issuable upon exercise of such Ember Warrants and requests that such Ember Tokens be delivered to the Wallet Account in the name of:

Name
	(please typewrite or print in block letters)
Address
Tax Identification Number

Wallet Account Information:

Digital Wallet Account Name

Digital Wallet Account Number

and, if such number of Ember Warrants shall not be all the Warrants evidenced by this Warrant Certificate, that a new Warrant Certificate for the balance of such Warrants be registered in the name of, and delivered to, the registered holder at the address stated below:

Dated:	Signature
	Address
	[Signature Guarantee]

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Warrant Agent, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Warrant Agent in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended

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EXHIBIT C

AUTHORIZED REPRESENTATIVES

Name Title Signature

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EX1A-6 MAT CTRCT

Exhibit 6.1

CLASS C MEMBERSHIP AGREEMENT

THIS CLASS C MEMBERSHIP AGREEMENT (this “Class C Agreement”) is made as of the 15^th day of May 2018, by and between, Coincross LLC, a Delaware limited liability company (the “Company”) and Prometheum, Inc., a Delaware corporation (the “Class C Member”).

WHEREAS, the Company was organized on December 6, 2013, as a limited liability company under the name GlobalCoin, LLC in accordance with and pursuant to the Delaware Limited Liability Company Act; and

WHEREAS, the Company changed its name to Coincross LLC on December 31, 2013; and

WHEREAS, the terms of the Company’s original operating agreement, dated December 17, 2013 were amended and restated pursuant to the first amended and restated operating agreement, dated January 8, 2014 (the “First Amended and Restated Agreement”); and

WHEREAS, the terms of the Company’s First Amended and Restated Agreement were further amended and restated pursuant to the second amended and restated operating agreement, dated as of April 16, 2015 (the “Second Amended and Restated Operating Agreement”); and

WHEREAS, the terms of the Second Amended and Restated Agreement were further amended effective May 15, 2018 (the “Amended Agreement”); and

WHEREAS, the Company and the Class C Member desire to set forth certain terms, rights and obligations of the Company’s Class C Interests;

NOW, THEREFORE, in consideration of the foregoing premises, which are hereby incorporated into the terms hereof, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Persons signing this Agreement agree to operate a limited liability company in accordance with the terms and subject to the conditions set forth in this Class C Agreement.

ARTICLE I
DEFINED TERMS

The following terms shall have the following respective meanings. Other terms are defined in the text of this Class C Agreement and the Company’s Operating Agreement and those terms shall have the meanings respectively ascribed to them.

1.1.          “Class C Member Interests” means the non-voting Member Interests of the Company issued to the Class C Member.

1.2.          “Class C Distributable Cash” as of any date, shall mean, except as otherwise determined by the Managing Member and the Class C Member, all distributions received by the Company through its ownership of class C member interests in Manorhaven Partners, LLC (“Manorhaven”).

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1.3.          “Class C Percentage Interest” means 100%.

ARTICLE II
MEMBER; CAPITAL ACCOUNT; INVESTMENT

2.1.          Members. The name and Percentage Interest of the Class C Member is as set forth on Schedule A. The Class C Member shall have such relative rights, powers, preferences and limitations, as are set forth in this Agreement and the Amended Agreement. The Managing Member shall cause Schedule A to be amended from time-to-time to include Additional and Substitute Class C Members and to delete Class C Members that have withdrawn or been removed as members from the Company, in each case, as permitted by the Amended Agreement.

2.2.          Membership in the Company. The undersigned Class C Member, acknowledges and agrees that by executing and delivering this Agreement to the Company the undersigned hereby agrees to become a party to, be bound by and comply with the provisions of the Amended Agreement.

2.3.          Initial Capital Contributions. The Class C Member made the initial Capital Contribution set forth on Schedule A.

2.4.          Investment. The Company hereby agrees to purchase, and the Class C Member hereby agrees to sell and deliver to the Company an aggregate of 1,000,000 ember warrants (the “Ember Warrants”). The purchase price for the Ember Warrants shall be such amount as shall be agreed to by the Company and the Class C Member.

ARTICLE III
DISTRIBUTIONS

3.1.          Distributions. Subject to the provisions of the Amended Agreement, Class C Distributable Cash shall be distributed only to the Class C Interest Holders who, according to the books and records of the Company, are the holders of record of vested Class C Member Interests or Economic Interests in respect of which such distributions are made on the actual date of distribution. Neither the Company nor the Managing Member shall incur any liability for making distributions in accordance with the provisions of the preceding sentence. Subject to the provisions of Section 4.2 and Section 4.3 of the Amended Agreement, and further subject to any applicable provisions of this Agreement or any other agreements between a Class C Interest Holder and the Company, distributions shall be made to the Class C Interest Holders pro-rata based upon their respective Class C Percentage Interests at such times as the Company receives a distribution through its interests in Manorhaven.

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ARTICLE IV
ALLOCATIONS

4.1.          Allocation of Net Profits and Net Losses.

(a)          All Net Profits and Net Losses shall be allocated among the Interest Holders so as to reduce, proportionately, the difference between their respective Target Capital Accounts and Adjusted Capital Accounts as of the end of each Fiscal Year.

(b)          If, upon the liquidation of the Company, notwithstanding any other provision of this Agreement, the balance of any Interest Holder’s Adjusted Capital Account differs from the balance of its Target Capital Account, then the Interest Holder with an excess or deficit balance, as the case may be, shall be specially allocated items of income, gain, loss or deduction, for such Fiscal Year, equal to the difference between its Adjusted Capital Account and its Target Capital Account.

4.2.          Residual Allocations. Except as otherwise provided in this Agreement, all items of income, gain, loss, deduction, and any other allocations not otherwise provided for shall be divided among the Interest Holders in the same proportions as they share Net Profits or Net Losses, as the case may be, for the Fiscal Year. Upon any change in the relative Interests of the Interest Holders, whether by reason of the admission or withdrawal of an Interest Holder, the Transfer by any Interest Holder of all or any part of its Interests, or otherwise, the Interest Holders’ shares of all items shall be determined by reference to any method acceptable under the Treasury Regulations under Code Section 706, as determined by the Managing Member.

ARTICLE V
RELATIONSHIP TO OPERATING AGREEMENT

5.1.          General. This Agreement supplements and amends the Company’s Amended Agreement with respect to the Company’s Class C Member Interests. The Class C Member is entitled to all of the rights provided in the Amended Agreement as if such provisions were expressly incorporated herein. This Agreement is entered into pursuant to Section 3.2(a) of the Company’s Amended Agreement.

5.2.          Joinder. By executing and delivering this Agreement the undersigned Class C Member hereby agrees to become a party to, be bound by and comply with the provisions of the Company’s Amended Agreement, as a Member thereof.

5.3.          Conflicts. If there is a conflict between or among the terms, covenants, conditions or provisions of this Agreement and the Amended Agreement, then the terms of the Amended Agreement shall control.

ARTICLE VI
MISCELLANEOUS

6.1.          Article and Section Titles. The headings herein are inserted as a matter of convenience only and do not define, limit, or describe the scope of this Agreement or the intent of the provisions hereof.

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6.2.          Binding Provisions. This Agreement is binding upon, and inures to the benefit of, the parties hereto and their respective heirs, executors, administrators, personal and legal representatives, successors, and permitted assigns.

6.3.          Exclusive Jurisdiction and Venue. Any suit involving any dispute or matter arising under this Agreement or relating to the organization or operation of the Company may only be brought in a United States District Court located in the State of New York or any New York State Court having jurisdiction over the subject matter of the dispute or matter. All Members hereby consent to the exercise of personal jurisdiction by any such court with respect to any such proceeding and waive any objection to venue or inconvenient forum.

6.4.          Terms. Common nouns and pronouns shall be deemed to refer to the masculine, feminine, neuter, singular, and plural, as the identity of the Person may in the context require.

6.5.          Separability of Provisions. Each provision of this Agreement shall be considered separable; and if, for any reason, any provision or provisions herein are determined to be invalid and contrary to any existing or future law, such invalidity shall not impair the operation of or effect those portions of this Agreement which are valid.

6.6.          Counterparts. This Agreement may be executed contemporaneously in two or more counterparts, each of which shall be deemed an original and all of which, when taken together, constitute one and the same document. The signature of any party to any counterpart shall be deemed a signature to, and may be appended to, any other counterpart.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the parties have executed, or caused this Agreement to be executed, as of the date set forth hereinabove.

COINCROSS LLC
By:	/s/ Martin H. Kaplan
	Name: Martin H. Kaplan
	Title:   Managing Member
PROMETHEUM, INC.
By:	/s/ Aaron L. Kaplan
	Name: Aaron L. Kaplan
	Title:   Chief Operating Officer

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Schedule A

Class C Members

Member Name	Number of Class C Member Interests	Percentage Interest	Capital Contribution
Prometheum, Inc.	1	100%	$10,000

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EX1A-6 MAT CTRCT

Exhibit 6.2

SECURITIES PURCHASE AGREEMENT

by and between

PROMETHEUM, INC.

(a Delaware corporation)

and

HASHKEY DIGITAL ASSET GROUP LIMITED

(a Hong Kong corporation)

December ___, 2018

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”) is dated as of December 14, 2018, by and among PROMETHEUM, INC., a Delaware corporation (the “Company”), and HASHKEY DIGITAL ASSET GROUP LIMITED, a Hong Kong corporation (the “Investor”).

WHEREAS, the Company through itself and certain of its Affiliates (as defined hereinunder), is in the business of, among other related items, developing and offering an SEC registered and regulated market for securities and compliant cryptographic securities, which will provide a blockchain based venue for the issuance of registered and/or exempt securities (e.g. initial token offerings (“ITO”) of companies, projects and organizations), secondary trading of ITOs, clearing and settling ITO transactions, and maintaining custody and control of customer’s assets.

WHEREAS, the Investor through itself and certain of its Affiliates, is in the business of, among other items, developing, integrating and deploying technology in connection with the blockchain, crypto securities, financial technology and other items relevant to the Company’s business.

WHEREAS, the Investor, the Company and certain of their respective Affiliates are substantially simultaneously with and as a condition to entering into this Agreement, entering into the Technology Agreement (as defined below), the Partnership Agreement (as defined below) and the Rights Agreement (as defined below).

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), Rule 506 of Regulation D (“Rule 506”), promulgated thereunder and/or Regulation S of the Securities Act (“Regulation S”), the Company desires to sell, and the Investor desires to purchase from the Company (i) 68,875,000 shares (each a “Share”) of common stock, par value $0.0001 per share (the “Common Stock”), which Shares equal twenty-nine (29%) percent of the issued and outstanding Common Stock, and (ii) 10,150,000 warrants, substantially in the form annexed hereto as Exhibit A (each a “Warrant”), each of which Warrant is, subject to the terms thereof, exercisable into one (1) Founder Token of the Company (10,150,000 Founder Tokens in the aggregate if all Warrants are exercised), which on the Closing Date shall equal twenty-nine (29%) percent of the Founder Tokens, on the terms and conditions set forth herein.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Investor agree as follows:

SECTION I.

Purchase and Sale of Securities

1.1          Agreement to Sell and Purchase.  Subject to the terms and conditions set forth in this Agreement, at the Closing (as defined below), the Company will issue and sell to the Investor, and the Investor will purchase from the Company (i) the 68,875,000 Shares, and (ii) 10,150,000 Warrants, for an aggregate purchase price of US $12,000,000 (the “Purchase Price”). The Shares and the Founder Tokens shall collectively be referred to herein as the “Securities.”

1.2          Purchase Price. The US $12,000,000 Purchase Price shall be paid as follows: (i) US $3,000,000 in cash paid at the Closing (as defined below), and (ii) $9,000,000 by providing technology and technology related services pursuant and in accordance with the Technology Agreement, dated as of the date hereof, by and between the Investor and the Company (including all exhibits and schedules, as amended or supplemented following the date thereof, the “Technology Agreement”).

1.3          Closing; Closing Date.  The consummation of the purchase and sale of the Securities (the “Closing”) shall be held as soon as reasonably practicable following the satisfaction (or waiver) of the conditions set forth in Section 1.5(a) and Section 1.5(b), but in no event later than December __, 2018 (the “Closing Date”). The Closing shall be effectuated remotely by facsimile or other electronic transmission of documents.

1.4          Deliveries.

(a)          Deliveries of the Company. On or prior to the Closing, the Company shall deliver or cause to be delivered to the Investor the following:

(i)          a stock certificate representing the Shares registered;

(ii)         the Warrants in the name of the Investor executed by the Company;

(iii)        this Agreement executed by the Company;

(iv)        a unanimous written consent of the Board or Directors of the Company approving this Agreement, the other Transaction Documents, the transactions contemplated hereby and thereby including the issuance and sale of the Securities and related items;

(v)         the Investor and Founders Rights Agreement, dated the date hereof, by and between the Company, the Investor and the Founders (as defined therein), a form of which is annexed hereto as Exhibit B (the “Rights Agreement”), executed by the Company and the Founders;

(vi)        the Technology Agreement, dated the date hereof, by and among, the Company and Shanghai Wanxiang Blockchain Inc., a PRC corporation and a Partner (as defined in the Technology Agreement) of the Investor (“WB Inc.”) (the “Technology Agreement”), executed by the Company;

(vii)       the Strategic Partnership and Development Agreement, dated on or about the date hereof, by and between the Company and WB Inc. (the “Partnership Agreement”), executed by the Company;

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(viii)      Restated Articles. The Restated Articles shall have been duly adopted by the Company and shall remain in full force and effect; and

(ix)         Legal Opinion. The Company shall have delivered to the Investor an opinion of the Company’s outside legal counsel, dated the date of the Closing, relating to the Company’s incorporation and the due authorization of the Company to enter into the Transaction Documents and to issue the Shares.

(b)          Deliveries of the Investor. On or prior to the Closing, the Investor shall deliver or cause to be delivered to the Company the following:

(i)          this Agreement executed by the Investor;

(ii)          the Rights Agreement executed by the Investor;

(iii)        the Purchase Price in cash in immediately available funds by wire transfer to the Company’s designated bank account;

(iv)        the Technology Agreement executed by the Investor and WB Inc.; and

(v)         the Partnership Agreement executed by WB Inc.

1.5          Conditions Precedent to Closing.

(a)          Conditions Precedent to Obligations of the Company. The obligation of the Company hereunder to issue and sell to the Investor the Securities at the Closing is subject to the satisfaction, at or before the Closing, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion by providing the Investor with prior written notice thereof:

(i)          the accuracy in all material respects as of the date hereof and on the Closing of the representations and warranties of the Investor contained herein;

(ii)         all obligations, covenants and agreements of the Investors required to be performed at or prior to the Closing Date shall have been performed; and

(iii)        the delivery by the Investor of the items set forth in Section 1.5(b) of this Agreement.

(b)          Conditions Precedent to the Obligations of the Investor. The obligation of the Investor hereunder to purchase the Securities from the Company at the Closing is subject to the satisfaction, at or before the Closing, of each of the following conditions, provided that these conditions are for the Investor’s sole benefit and may be waived by the Investor at any time in its sole discretion by providing the Company with prior written notice thereof:

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(i)          the accuracy in all material respects as of the date hereof and on the Closing Date of the representations and warranties of the Company contained herein;

(ii)         all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing shall have been performed; and

(iii)        the delivery by the Company of the items set forth in Section 1.5(a) of this Agreement.

SECTION 2

Representations and Warranties of the Company

The Company hereby represents and warrants the following as of each Closing Date:

2.1          Organization, Good Standing, Qualifications, Etc. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as presently being conducted and to enter into this Agreement. The Company is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted or property owned or leased by it makes such qualification necessary, other than those in which the failure so to qualify or be in good standing would not have a Material Adverse Effect. For purposes of this Agreement the term (i) “Material Adverse Effect” means any material adverse effect on the business, assets (including intangible assets), liabilities, results of operations and/or financial condition of the Company and its Subsidiaries, taken as a whole, provided none of the following shall constitute a Material Adverse Effect: (a) the effects of conditions or events that are generally applicable to the capital, financial, banking or currency markets and/or industries that the Company and its Subsidiaries (taken as a whole) operate in or intend to operate in including, but not limited to, the securities industry including the crypto securities industry and the blockchain and technology industry, including financial technology and/or changes in applicable laws, rules and regulations including US GAAP, (b) changes in the market price for crypto securities, and (c) effects resulting from the announcement and/or occurrence of the Closing; (ii) “Subsidiary” means any Person in which the Company, directly or indirectly, (a) owns 51% or more of the outstanding capital stock or holds any equity or similar interest of such Person, or (b) controls or operates all or any part of the business, operations or administration of such Person; (iii) “Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed in this “(iii),” (iv) “Affiliate” or “affiliate” means any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with a Person, and as used in this “(iv),” the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and/or policies of a Person, whether through ownership of voting securities or other ownership interest by contract, or otherwise, and (v) “knowledge” or “Knowledge” of a Person means as to a natural Person, the actual knowledge of such Person and as to an entity Person, the knowledge of the officers of such entity Person.

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2.2          Subsidiaries. Other than Prometheum Ember ATS, Inc. and the Company’s ownership of the Class C membership interest of Coincross LLC, the Company does not presently own or control, directly or indirectly, any interest in any other corporation, association, or other business entity. The Company is not a participant in any joint venture, partnership, or similar arrangement.

2.3          Authorization. (i) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents (as defined below); (ii) the execution and delivery of this Agreement and the other Transaction Documents by the Company and the performance of the Company’s obligations hereunder including the issuance, sale and delivery of the Securities and thereunder has been duly authorized by all necessary corporate action and no further consent or authorization of the Company, its Board of Directors (the “Board”) or stockholders is required; and (iii) this Agreement and the other Transaction Documents have been duly executed and delivered and constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, securities, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies, or indemnification or by other equitable principles of general application. For purposes of this Agreement, the term “Transaction Documents” means this Agreement, the Technology Agreement, the Rights Agreement and the Partnership Agreement and all schedules, exhibits and supplements and amendments to any of such agreements.

2.4          Valid Issuance of Securities. When issued, sold and delivered in accordance with the terms of this Agreement, the Securities will be duly and validly issued, fully paid, and nonassessable, and free of restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws, this Agreement, the Rights Agreement and/or any other Transaction Document and liens and/or encumbrances created or imposed by the Investor.

2.5          No Disqualification Events. If the Securities are offered and sold to the Investor in reliance on Rule 506 (the “506 Securities”), none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the Onshore Offering, any beneficial owner of twenty percent (20%) or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506, and has furnished to the Investor a copy of any disclosures provided thereunder.

2.6          Other Covered Persons. The Company is not aware of any Person (other than any Selling Agent) that has been or will be paid (directly or indirectly) remuneration for solicitation of Investors or potential Investors in connection with the sale of any of the 506 Securities.

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2.7          Notice of Disqualification Events. The Company will notify the Investors and any Selling Agent in writing, prior to each Closing Date (i) any Disqualification Event related to any Issuer Covered Person, and (ii) any event that with the passage of time, become a Disqualification Event relating to any Issuer Covered Person.

2.8          No Conflict. The execution, delivery and performance of this Agreement and the other Transaction Documents, by the Company and the issuance and sale of the Securities contemplated hereby, does not to the knowledge of the Company: (i) violate any provision of the Bylaws or the Certificate of Incorporation, (ii) constitute an event of default under any material agreement which the Company is a party where such event of default would have a Material Adverse Effect, or (iii) create a lien or encumbrance on any material property of the Company under any agreement by which the Company is bound, which would have a Material Adverse Effect.

2.9          Capitalization. The authorized capital stock of the Company is set forth on Schedule 2.8 hereto and consists of (i) 500,000,000 shares of Common Stock, of which 168,625,000 shares of Common Stock are issued and outstanding; and (ii) 100,000 shares of preferred stock, par value $0.0001 per share, of which no preferred shares are outstanding. Schedule 2.8 hereto provides the capital structure of the Company and similar information regarding the Warrants and Ember Tokens, including the Founders Tokens immediately prior to and following the Closing. Other than as set forth in this Agreement (including Schedule 2.8 hereto and in the Rights Agreement), to the knowledge of the Company, there are no (i) warrants or options to acquire, or instruments convertible into or exchangeable for, any unissued shares of capital stock of the Company; (ii) obligations of the Company to purchase redeem or otherwise acquire any of its outstanding capital stock or any interest therein or to pay any dividend or make any other distribution in respect thereof; and/or (iii) anti-dilution or price adjustment provisions, co-sale rights, registration rights, rights of first refusal or other similar rights contained in the terms governing any outstanding securities of the Company that will be triggered by the issuance of the Securities. Except as set forth above, including Schedule 2.8, there are no authorized or outstanding equity securities in the Company. There are no outstanding options, warrants, rights (including conversion, preemption rights or otherwise) or agreements for the subscription or purchase from the Company of any equity securities.

2.10          Actions Pending. To the knowledge of the Company, there is no action, suit, claim, investigation or proceeding pending against the Company which questions the validity of this Agreement or the issuance and sale of the Securities that would have a Material Adverse Effect.

2.11          Liabilities. There are no liabilities of the Company other than liabilities (i) disclosed in, related to or arising under any agreements, instruments or other matters disclosed in the Transaction Documents, (ii) incurred in the ordinary course of business, or (iii) other undisclosed liabilities that are not material to the Company taken as a whole.

2.12          Financial Statements. The Company has delivered to the Investor the Company financial statements, which fairly present in all material respects the financial condition and operating results of the subsidiaries of the Company as of the dates, and for the periods, indicated therein. Except as set forth in the financial statements, none of the subsidiaries have material Liabilities or obligations, contingent or otherwise. The Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with the applicable accounting principles.

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2.13          Tax Filings. The Company has timely filed or caused to be filed all tax returns required to be filed by it, all such tax returns are true, correct and complete in all material respects, and the Company has paid, or provided adequate reserves, for all deficiencies or other assessments of tax owed by it. No unassessed tax deficiency has been proposed or threatened against the Company.

2.14          Compliance with Law. To the Knowledge of the Company, the Company’s business is currently being conducted in accordance with applicable federal, state and local governmental laws, except as would not reasonably be expected to cause a Material Adverse Effect.

2.15          Private Placement. Assuming the accuracy of the Investors’ representations and warranties set forth in this Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Investors as contemplated hereby.

2.16          No General Solicitation; Agent Fees. Neither the Company, any of its Affiliates nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Securities. The Company has not agreed to pay any Person any commissions or other payments in connection with the sale of the Securities.

SECTION 3

Representations and Warranties of the Investor

The Investor represents, warrants and acknowledges as of the date hereof and on the Closing Date as follows:

3.1          Access to Information; Certain Disclosure. Investor has performed extensive due diligence on the Company, its business and proposed business including, but not limited to, its intellectual property, technology, officers, directors, capitalization, capital structure, its securities including the Warrants, Ember Tokens including Founder Tokens and other Tokens, the holders of the outstanding Securities and other securities of the Company, the Transaction Documents and all other items that the Investor determined necessary to enter into and perform its obligations under this Agreement and the other Transaction Documents. Investor and certain of its Affiliates has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from the Company, concerning and/or relating to, among other items and matters, the items and matters set forth in “(i)” of this Section 3.1 and the merits and risks of investing in the Securities; (ii) access to information and documents about the Company, its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; (iii) copies of all of the Transaction Documents; and (iv) the opportunity to obtain such additional information and/or documents that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.

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3.2          Experience. The Investor is experienced in evaluating companies such as the Company, including early and/or development stage technology, entities including those involved in the financial industry including financial technology, crypto securities and blockchain technology businesses that have no trading markets for their securities and has knowledge and experience in financial and business matters such that the Investor is capable of evaluating the merits and risks of the Investor’s prospective investment in the Company, before and after the Closing, and has the ability and financial wherewithal to bear the economic risks of its purchase of the Securities including a complete loss of the Purchase Price.

3.3          Purchase Entirely for Own Account. This Agreement is made with Investor in reliance upon Investor’s representation to the Company, which, by Investor’s execution of this Agreement, Investor hereby confirms, that the Securities (including the Founders Tokens issuable upon exercise of the Warrants) to be acquired by Investor pursuant to this Agreement will be acquired for investment for Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, Investor further represents that Investor does not presently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third Person with respect to any of the Shares.

3.4          Restricted Securities; Rule 144. Investor understands that the Securities have not been registered under the Securities Act, by reason of specific exemptions from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Investor’s representations as expressed herein. Investor understands that the Securities (including the Founders Tokens issuable upon exercise of the Warrants) are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to such laws, Investor must hold all such Securities indefinitely unless they are registered with the SEC and qualified by state authorities, or an exemption from such registration and qualification requirements is available. Investor acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Securities (including the Founders Tokens issuable upon exercise of the Warrants), and on requirements relating to the Company which are outside of Investor’s control, and which the Company is under no obligation and may not be able to satisfy. The Investor is aware of the provisions of Rule 144 promulgated under the Securities Act which permit limited resale of Securities purchased in a private placement subject to the satisfaction of certain conditions. In connection therewith, the Investor acknowledges that the Company will make a notation on its stock books regarding the restrictions on transfers set forth in this Section 3.4 and in the Rights Agreement, subject to Sections 4.1(a) and (b), and will transfer the Securities on the books of the Company only to the extent not inconsistent herewith and therewith and/or not in violation of or prohibited by the Rights Agreement. The Investor acknowledges that there is no trading market for any of the Securities (including the Founders Tokens issuable upon exercise of the Warrants) and none may ever develop, or if developed, maintained

3.5          Authorization. This Agreement and the other Transaction Documents when executed and delivered by the Investor and WB Inc. will constitute a valid and legally binding obligation of the Investor, enforceable in accordance with its terms, subject to: (i) judicial principles respecting election of remedies or limiting the availability of specific performance, injunctive relief, and other equitable remedies; and (ii) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect generally relating to or affecting creditors’ rights.

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3.6          Investor Status.  At the time such Investor was offered the Securities, it was, and at the date hereof it is, and on each date on which it receives the Securities it will be, either:  (i) an “accredited investor” as defined in Rule 501 of the Securities Act, and/or (ii) a “qualified institutional buyer” as defined in Rule 144A of the Securities Act.  Such Investor was not organized for the purpose of acquiring the Securities (including the Founders Tokens issuable upon exercise of the Warrants) and is not required to be registered as a broker-dealer under Section 15 of the Exchange Act.

3.7          General Solicitation.  Such Investor is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement. Such Investor further acknowledges that he or it, or his or its Affiliate, has a pre-existing relationship with the Company such as (i) as a holder of currently outstanding securities of the Company, or (ii) another affiliation with the Company or its affiliates.

3.8          Fees and Commissions.  The Investor has not retained any intermediary with respect to the transactions contemplated by this Agreement.

3.9          Non-United States Person Status. The Investor is (i) not a U.S. Person (as defined in Regulation S) and is not acquiring the Securities for the account or benefit of a U.S. Person, (ii) was not in the United States at the time of the origination of contact concerning this Agreement, and at the date of execution and delivery of this Agreement, the Investor was outside the U.S., its territories and possessions, and (iii) has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any use of this Agreement, including (a) the legal requirements within its jurisdiction for the purchase of the Securities, (b) any foreign exchange restrictions applicable to such purchase, (c) any governmental or other consents that may need to be obtained under applicable securities laws, and (d) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Securities. The Investor’s purchase and payment for and continued beneficial ownership of the Securities will not violate any applicable securities or other laws of the Investor’s jurisdiction. Investor agrees not to engage in hedging transactions with regard to any of the Shares, unless in compliance with the Securities Act. Investor acknowledges that the Company will refuse to register any transfer of the Securities not made in accordance with the provisions of Regulation S of the Securities Act, pursuant to registration under the Securities Act or pursuant to an available exemption from registration under the Securities Act, provided in all cases each Transfer is not prohibited and/or in violation of the Rights Agreement. Investor agrees to resell the Securities only in accordance with the provisions of Regulation S of the Securities Act, pursuant to registration under the Securities Act or pursuant to an available exemption from registration under the Securities Act and in any event such does not violate and/or is prohibited by the Rights Agreement.

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3.10        Stop Transfer.  The Investor agrees that the Company shall refuse to register any transfer of any Securities (including the Founders Tokens issuable upon exercise of the Warrants) not made in accordance with Regulation S, Rule 506 and/or Regulation D, pursuant to registration under the Securities Act or pursuant to an exemption from registration under the Securities Act and otherwise not prohibited by and/or in violation of the Rights Agreement, and that the Company may place a stop transfer order on its books and records and with any transfer agent, the Company may in the future hire, covering all certificates representing the Securities.

3.11        No Government Review. Investor understands that no federal or state agency, any other governmental agency nor any governing or regulatory body, including, but not limited to, the SEC, any State securities commission, any trading market or FINRA, has passed upon or made any recommendation or endorsement of the Securities, the Company or the transactions contemplated hereby.

3.12        Restrictions on Transfer. Investor covenants and agrees that it shall not transfer any of the Securities (including the Founders Tokens issuable upon exercise of the Warrants) in a transaction that is not registered under the Securities Act and any applicable state securities laws, unless (a) an exemption from registration and qualification requirements is available for such transaction under the Securities Act and applicable state securities laws, (b) the Company has received an opinion of counsel satisfactory to it stating that such registration and qualification is not required, and (c) such transfer complies with and is not prohibited by and/or in violation of the Rights Agreement. Investor understands that certificates representing the Shares shall bear one or more of the legends provided in Section 4.1(b) hereof, or legends substantially similar, until such time as they have been registered under the Securities Act or otherwise may be sold without volume or other limitations under Rule 144 promulgated under the Securities Act, but subject to the Rights Agreement.

3.13        Counsel. In connection with its due diligence and the negotiation and execution of this Agreement and the other Transaction Documents, Investor has not relied, directly or indirectly, on the Company, or any of its officers, stockholders, directors, attorneys, accountants, representatives, agents, Affiliates, Founders and/or advisors for any advice, including any investment, accounting and/or legal advice.

3.14        Authorization. The Investor is a corporation duly organized, validly existing and in good standing under the laws of Hong Kong. WB Inc. is a corporation duly organized, validly existing and in good standing under the laws of the Peoples Republic of China. Each of the Investor and WB Inc. has all requisite corporate power and authority to carry on their businesses as presently being conducted and to enter into this Agreement and the other Transaction Documents (as applicable) and perform their respective obligations hereunder and thereunder. The execution and delivery of this Agreement and the other Transaction Documents by the Investor and WB Inc. (as applicable), and the performance of their respective obligations hereunder and thereunder including, but not limited to, the purchase of the Securities by the Investor, have been duly authorized by all necessary corporate action and no further consent or authorization of the Company, WB Inc., their respective Board of Directors (the “Board”) and/or stockholders is required. This Agreement and the other Transaction Documents each have been duly executed and delivered and constitutes valid and binding obligation of the Investor and WB Inc. (as applicable), enforceable against each in accordance with their terms, except as such enforceability may be limited by applicable bankruptcy, securities, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies, or indemnification or by other equitable principles of general application.

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3.15        No Conflict. The execution, delivery and performance of this Agreement and the other Transaction Documents by the Investor and WB Inc. (as applicable) does not and will not (i) violate any provision of the bylaws or the certificate of incorporation (or similar organizational documents), each as amended through and including the date hereof, of the Investor and/or WB Inc., (ii) constitute an event of default under any material agreement which the Investor and/or WB Inc. is a party, (iii) create a lien or encumbrance on any material property of the Investor and WB Inc. under any agreement by which the Investor and/or WB Inc. is bound, and/or (iv) violate any laws, rules and/or regulations.

3.16        Actions Pending. To the knowledge of the Investor and WB Inc., there is no action, suit, claim, investigation or proceeding pending against either which questions the validity of this Agreement, the other Transaction Documents and/or the performance hereby or thereof by the Investor and/or WB Inc.

3.17        That Investor and WB Inc. each have made all necessary arrangement to perform all required obligations and duties in this Agreement and the other Transaction Documents.

SECTION 4

Other Agreements of the Parties

4.1          Legends; Removal of Legends, Etc. 

(a)          Investor acknowledges and agrees that the Securities (including the Founders Tokens) may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, the Investor acknowledges that it will be required to provide the Company and the Company transfer agent (if and when one is appointed by the Company) with an opinion of counsel selected by the Investor (who is reasonably acceptable to the Company and the Transfer Agent), the form and substance of which opinion shall be reasonably satisfactory to the Company and the Transfer Agent, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act and such transfer complies with the Rights Agreement.

(b)          Investor acknowledges and agrees that all certificates representing Securities (as well as the Founders Tokens issuable upon exercise of the Warrants), shall contain one or more of the following legends thereon providing substantially as follows: 

THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO, AMONG OTHER THINGS, AGREEMENTS, COVENANTS AND RESTRICTIONS PROVIDED IN THE INVESTOR AND FOUNDERS RIGHTS AGREEMENT DATED AS OF DECEMBER __, 2018, AS AMENDED FROM TIME TO TIME, BY AND AMONG THE COMPANY AND THE PERSONS NAMED THEREIN. A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY ANY SHAREHOLDER OF THE COMPANY UPON REQUEST WITHOUT CHARGE FROM THE SECRETARY OF THE COMPANY AT THE PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY.

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THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED IN REGULATION S) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE SECURITIES ACT.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED (DIRECTLY OR INDIRECTLY) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER COMPLIES WITH THE SECURITIES ACT.

(c)          Unless otherwise required pursuant to the Rights Agreement, certificates evidencing the Securities shall not contain any legend (including the legends set forth in Section 4.1(b) hereof): (i) following the resale of such Securities pursuant to an effective registration statement under the Securities Act covering the resale of such Securities, or (ii) following any resale of the Securities pursuant to and in compliance with Rule 144. Investor, at the Company’s request, shall cause its counsel to issue a legal opinion to the Company and any transfer agent (in form and substance satisfactory to the Transfer Agent) to effect the removal of the legend hereunder.   

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4.2          Form D Filing.  The Company agrees, to the extent required by law, to timely file a Form D with respect to the Shares as required under Regulation D. 

4.3          Use of Proceeds. The Company will use the net proceeds from the sale of the Shares for general corporate purposes and working capital of the Company.

SECTION 5

Miscellaneous

5.1          Governing Law. This Agreement and the terms and conditions set forth herein, shall be governed by and construed solely and exclusively in accordance with the internal laws of the State of New York without regard to the conflicts of laws principles thereof. The parties hereto hereby expressly and irrevocably agree that any suit or proceeding arising directly and/or indirectly pursuant to or under this Agreement shall be brought solely in a federal or state court located in the City, County and State of New York. By its execution hereof, the parties hereto covenant and irrevocably submit to the in personam jurisdiction of the federal and state courts located in the City, County and State of New York and agree that any process in any such action may be served upon any of them personally, or by certified mail or registered mail upon them or their agent, return receipt requested, with the same full force and effect as if personally served upon them in New York, New York. The parties hereto expressly and irrevocably waive any claim that any such jurisdiction is not a convenient forum for any such suit or proceeding and any defense or lack of in personam jurisdiction with respect thereto. In the event of any such action or proceeding, the party prevailing therein shall be entitled to payment from the other parties hereto of all of its reasonable counsel fees and disbursements.

5.2          Survival. The representations and warranties, covenants and agreements made by the Investor and the Company herein shall survive each Closing Date for a period of nine (9) months.

5.3          Successors, Assigns. Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto. This Agreement may not be assigned by either party without the prior written consent of the other; except that either party may assign this Agreement to an Affiliate of such party or to any third party that acquires all or substantially all of such party’s business, whether by merger, sale of assets or otherwise. 

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5.4          Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile or electronic mail (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall be:

If to the Company:

Prometheum, Inc.

120 Wall Street, 25th Floor

New York, NY 10005

Telephone: (212) 514-8369

Facsimile: (212) 809-4147

Attn: Benjamin S. Kaplan, Co-Chief Executive Officer

Email: ben@prometheum.info

If to the Investor:

HashKey Digital Asset Group Limited

614-615, Level 6, Cyberport 3

100 Cyberport, Hong Kong

Telephone: (852) 3598-3078

Facsimile: (852) 8343-0950

Attn: Ben El-Baz

Email: ben@xdaex.com

5.5          Expenses. Each of the Company and the Investor shall bear its own expenses and legal fees incurred on its behalf with respect to this Agreement and the transactions contemplated hereby.

5.6          Finder’s Fees. Each of the Company and the Investor shall indemnify and hold the other harmless from any liability for any commission, compensation and/or other compensation to any intermediary retained by the Company or the Investor (as the case may be) with respect to the transactions contemplated hereby, including, but not limited to, the costs, expenses and legal fees of defending against such liability, for which the Company or the Investor, or any of its respective Partners, Affiliates, employees, or representatives, as the case may be, is responsible.

5.7          Counterparts. This Agreement may be executed in counterparts, each of which shall be enforceable against the party actually executing the counterpart, and all of which together shall constitute one instrument.

5.8          Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party.

5.9          Entire Agreement. This Agreement including the exhibits and schedules attached hereto and thereto, constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof. No party shall be liable or bound to any other party in any manner with regard to the subjects hereof or thereof by any warranties, representations or covenants except as specifically set forth herein or therein.

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5.10        Waiver. The failure of either party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition by the other party. None of the terms, covenants and conditions of this Agreement can be waived except by the written consent of the party waiving compliance.

5.11        Independent Nature of Investors’ Obligations and Rights.  The obligation of the Investor under this Agreement are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under this Agreement.  Nothing contained herein and no action taken by any Investor pursuant hereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations.  The Investor has been represented by its own separate legal counsel in its review and negotiation of this Agreement and related documents.  The Company has elected to provide all Investors with the same terms and Offering documents for the convenience of the Company and not because it was required or requested to do so by the Investors.

5.12        Incorporation by Reference. The “WHEREAS” and “NOW, THEREFORE, IN CONSIDERATION” clauses of this Agreement are expressly incorporated and made a part of this Agreement.

[SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, the Investor and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.

COMPANY:
PROMETHEUM, INC.
By:	/s/ Martin H. Kaplan
	Name: Martin H. Kaplan
	Title: Chairman
INVESTOR:
HASHKEY DIGITAL ASSET GROUP LIMITED
By:	/s/ Xiao Feng
	Name: Dr. Xiao Feng
	Title: Director

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SCHEDULE I

The number of shares of Common Stock, Ember Tokens and other Company Securities owned by each Holder are set forth below.

SCHEDULE 2.8

Capitalization

EXHIBIT A

Form of Warrant

EXHIBIT B

Form of Rights Agreement

EX1A-6 MAT CTRCT

Exhibit 6.3

STRATEGIC PARTNERSHIP AND JOINT DEVELOPMENT AGREEMENT

This Strategic Partnership and Joint Development Agreement (the “Agreement”) is made and entered into as of the 14^th day of December, 2018 by and between Prometheum, Inc. (“Prometheum” or the “Company”) a Delaware corporation, with offices located at 120 Wall Street, New York, NY 10005 and Shanghai Wanxiang Blockchain Inc. (“Wanxiang”) having offices at 12/F, No. 463, Tanggu Road, Shanghai 200085, a People’s Republic of China Corporation. Wanxiang and Prometheum are collectively referred to as the “Parties” or each a “Party”.

WHEREAS, Prometheum has a need to innovate and develop its systems and products for the implementation of Prometheum’s ecosystem for the creation distribution, trading, clearing, settlement and custodial services for crypto-securities (the “Ecosystem”) in compliance with the United States Federal Securities Laws;

WHEREAS, a partner of Wanxiang has entered into a Stock Purchase Agreement making an equity investment in Prometheum and has also entered into a Technology Agreement with Prometheum;

WHEREAS, Wanxiang has established itself as a leading developer of both blockchain and trading technologies, which are in current use, and have demonstrated varied commercial usage, utility and functionality of same;

WHEREAS, the Parties are committed and will facilitate, develop and advance Prometheum’s Ecosystem, as set forth in documents and materials previously provided to Wanxiang and or its Partners, as defined in the Technology Agreement, it being understood that development of the Ecosystem may necessitate change to those documents and materials; and

WHEREAS, the Parties are committed to share resources and efforts to expeditiously implement the Ecosystem’s functionality and advance Prometheum’s competitive advantages in the furtherance of implementation and development of the Ecosystem.

WITNESSETH

Now, therefore, in consideration of the mutual covenants contained herein and for such other good and valuable consideration, the receipt and adequacy which are hereby acknowledged, it is agreed as follows:

1. Incorporation of Whereas Clauses. The “Whereas” and the “Witnesseth” clauses set forth above are incorporated herein by reference and form a material part of this Agreement.

2. Intent and Purpose

a. This Agreement contemplates strategic development between Prometheum and Wanxiang so that the “Technology” commitment to Prometheum by Wanxiang’s partner are assured and fully satisfied, including without limitation the use of Wanxiang’s or its Partners blockchain and trading system software and expertise as set forth in the Technology Agreement.

b. It is the purpose of this document to memorialize and announce the joint intent of the Parties that Prometheum obtain the benefit of Wanxiang’s goodwill, including without limitation, Wanxiang’s technology resources, industry contacts, intellectual capital, and community building mechanisms in furthering Prometheum’s business plan and Ecosystem, as set forth in the Technology Agreement.

3. Expenses. Each Party shall bear their own expenses unless otherwise agreed to in writing.

4. Term. The term of this Agreement shall correspond to the period that Wanxiang or its partners own ten percent (10%) or more of the common stock of Prometheum.

5. Further Assurances. The Parties hereto shall at any time and from time to time take all such actions, as reasonably requested by the other Parties for the purposes of implementing and effectuating the provisions and intent of this Agreement.

6. Entire Agreement. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged herein.

7. Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed by the Parties hereto.

8. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their assigns. No Party hereto may assign this Agreement, or any rights or obligations hereunder or thereunder without the prior written consent of the other Party.

9. Governing Law; Jurisdiction. This Agreement and all questions concerning the construction, validity, enforcement and interpretation of this Agreement and all the transactions governed hereby shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings or action concerning the interpretations, enforcement and defense of this this Agreement shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute regarding this Agreement and hereby irrevocably waives, and agrees not to assert in any legal proceeding or action, any claim that it is not personally subject to the jurisdiction of any such court, that such legal proceeding or action is improper or is an inconvenient venue for such legal proceeding or action. Each party hereby irrevocably waives personal service of process and consents to process being served in any such legal proceeding or action by emailing or mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to the email of the receiving Party, Wanxiang agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any Party shall commence any legal proceeding or action to enforce any provision of this Agreement, then, the prevailing Party in such legal proceeding or action shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such legal proceeding or action.

10. Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart.

11. WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

(Signature Pages Follow)

[SIGNATURE PAGE]

IN WITNESS WHEREOF, the parties hereto have caused this Strategic Partnership and Joint Development Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

SHANGHAI WANXIANG BLOCKCHAIN INC.
By:	/s/ Xiao Feng
Name: Dr. Xiao Feng
Title: Chairman
PROMETHEUM, INC.
By:	/s/ Martin H. Kaplan
Name: Martin H. Kaplan
Title: Chairman

EX1A-6 MAT CTRCT

Exhibit 6.4

TECHNOLOGY AGREEMENT

This Technology Agreement (this “Agreement”) is made and entered into as of the 14^th day of December, 2018, by and between Prometheum, Inc. a Delaware corporation (the “Company”), Hashkey Digital Asset Group Limited, a Hong Kong corporation (“HK”) and Shanghai Wanxiang Blockchain Inc., a PRC corporation and a Partner (as defined below) of HK (“Provider”). The Company, HK and the Provider are collectively referred to herein as the “Parties,” and each individually, a “Party.”

WITNESSETH:

WHEREAS, the Company is developing systems and products for the implementation of the Company’s ecosystem for, among other related activities, the creation, issuance, distribution, trading, clearing, settlement and custodial services for securitized tokens in compliance with the United States federal securities laws (the “Ecosystem”);

WHEREAS, Provider is a leading Chinese research and technology company whose business includes, among other items, the development, implementation and commercialization of blockchain related technology and financial technology including trading technologies, which are in current use, and have demonstrated varied commercial usage, utility and functionality thereof including, but not limited to, the Business (as defined below) of the Company;

WHEREAS, the Company and HK have entered into various agreements including, but not limited to, a Securities Purchase Agreement, dated as of the date hereof (the “SPA”), an Investor and Founders Rights Agreement, dated as of the date hereof, by and between the Company and HK (the “Rights Agreement,” and together with this Agreement, the SPA and a Strategic Partnership and Joint Development Agreement, dated on or about the date hereof, by and among the Company and the Provider (the “Partnership Agreement), collectively, the “Transaction Documents”);

WHEREAS, pursuant to the SPA, HK is purchasing certain securities of the Company as described in the SPA (the “Equity”) in consideration for (i) US $3,000,000 of cash, and (ii) providing the Company with (a) Technology (as defined below), and (b) Services (as defined below) relating to the Business including, but not limited to, the Ecosystem valued at $9,000,000; and

WHEREAS, the Provider and its Partners shall provide such Technology and Services to the Company pursuant to this Agreement.

NOW, THEREFORE, in consideration of the mutual premises and covenants set forth in this Agreement and the other Transaction Documents and for such other good and valuable consideration, which the Parties acknowledge the sufficiency of, the Parties hereto hereby agree as follows:

1.            DEFINITIONS. The following capitalized terms used in this Agreement shall have the meaning set forth below:

“$,” “dollars,” “Dollars,” “USD,” “US dollars” or similar symbols, phrases or words means the lawful currency of the United States of America.

“Background IP” means the Company’s Background IP and the Provider Background IP, collectively.

“Business” means the Company’s current and future business including, but not limited to, the creation, issuance, distribution, trading, clearing, settling and custodial services for securitized tokens and related market data services as it relates to the Ecosystem.

“Company’s ATS” means the Company’s alternative trading system that is intended to commence commercial operations at such time as, among other things, receipt by the Company of all required licenses, authorizations and/or consents from FINRA and the SEC, Prometheum Ember ATS, Inc., a wholly-owned subsidiary of the Company.

“Company’s Background IP” means all Intellectual Property and IP Rights in and to all Technology and Information, including, but not limited to, all diagrams and Diagrams, the White Paper and Ember Tokens, owned, developed or created by the Company and/or any of its Partners on or prior to the Effective Date, which does not provide for Token economic modeling.

“Company’s Foreground IP” means all Company Information and/or Technology developed, created and/or otherwise obtained by the Company following the Effective Date.

“Company Partner(s)” means at any time of determination, all Partners of the Company including any successors and/or predecessors thereto, other than the Provider and any Partners of the Provider.

“Confidential Information” means all non-public, proprietary Information that embodies or describes any Technology and/or Information of a Party or any of such Party’s Partners or that reasonably would be expected to be declared confidential.

“Ecosystem” has the meaning set forth in the “WHEREAS” clauses.

“Effective Date” has the meaning set forth in the introductory clause of this Agreement.

“Ember Token” means the Company’s blockchain token which will be a part of, and provide a basis for transactions, in addition to other purposes, on the Ecosystem.

“Foreground IP” means the Company’s Foreground IP and the Provider Foreground IP, collectively

“Governmental Authority” shall mean any nation or government, any state, municipality or other political subdivision thereof, and any entity, body, agency, commission, department, board, bureau, court, tribunal or other instrumentality, whether federal, state, provincial, local, domestic, foreign, supranational or multinational, exercising executive, legislative, judicial, regulatory, administrative or other similar functions of, or pertaining to, government and any executive official thereof, including any self-regulatory body under applicable securities Laws.

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“Hot/Cold Wallet Storage Software System” means the Provider’s Partner’s software and systems for storage of securitized tokens.

“Information” shall mean information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, customer names and records, supplier names and records, customer and supplier lists, customer and vendor data or correspondence, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, employee or business information or data, files, papers, tapes, keys, correspondence, plans, invoices, forms, product data and literature, promotional and advertising materials, technical data, operating manuals, instructional documents, quality records and regulatory and compliance records relating to the Business including the creation, development, operation, maintenance, usage and commercialization of the Ecosystem.

“Intellectual Property” means all industrial and intellectual property, including, without limitation, all U.S. and non-U.S. patents, patent applications, patent rights, trademarks, trademark applications, common law trademarks, Internet domain names, trade names, service marks, service mark applications, common law service marks, and the goodwill associated therewith, copyrights, in both published and unpublished works, whether registered or unregistered, copyright applications, franchises, licenses, know-how, trade secrets, technical data, designs, customer lists, confidential and proprietary Information, processes and formulae, all computer software programs, Technology or applications, layouts, inventions, development tools and all documentation and media constituting, describing or relating to the above, including manuals, memoranda, and records, whether such intellectual property has been created, applied for or obtained anywhere throughout the world. 

“IP Rights” means any and all rights under copyrights (including rights in software), patents, patent applications, trademarks, trademark applications, trade names, service marks, business names (including internet domain names), design rights, database rights, rights in undisclosed or confidential information (such as know-how, proprietary ideas, trade secrets, techniques, methods, specifications, inventions (whether patentable or not) and the like) and all other Intellectual Property or similar proprietary rights of any nature whatsoever (whether registered or not and including applications to register or rights to apply for registration) which may now or in the future subsist anywhere in the world.

“Partnership Agreement” has the meaning set forth in the “WHEREAS” clauses.

“Law” shall mean any national, supranational, international, federal, state, provincial, local or similar law (including common law), statute, code, order, ordinance, rule, regulation, treaty (including any tax treaty), license, permit, authorization, approval, consent, decree, injunction, binding judicial or administrative interpretation or other requirement, in each case, enacted, promulgated, issued or entered by a Governmental Authority.

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“Modification” means all inventions, developments, discoveries, techniques, modifications, improvements, updates, technology, trade secrets, computer programs, mask works, know-how, processes, concepts, methods, systems, specifications, algorithms, designs, formulas, original works of authorship, and/or any other Intellectual Property or IP Rights whatsoever, whether or not patentable or registrable under copyright, trademark or similar Laws or subject to analogous protection which any Party and/or any of such Party’s respective Partners makes to Background IP or Foreground IP.

“Partner” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the Person specified. As used in this definition, “control” shall mean the possession, directly or indirectly, of the power to cause the direction of the management and policies of a Person, whether through the ownership of voting securities or by contract or other written instrument.

“Person” means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, limited company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity or organization, including a government or political subdivision, department or agency of a government.

“Provider Background IP” means all Intellectual Property and IP Rights in and to Technology and Information used in the Business including related to the creation and development of the Ecosystem owned, used and/or developed by the Provider and/or its Partners prior to the Effective Date.

“Provider Foreground IP” means Intellectual Property and IP Rights to original or custom Technology and/or Information developed by the Provider and/or any of its Partners in connection with the Ecosystem including all Modifications to Background IP relating to the Company’s Business.

“Provider Partners” means up to but in no event exceeding in the aggregate a total of four (4) Persons consisting of (i) Shanghai Wanxiang Blockchain Inc. and Tokyo Hash Co., Ltd. (collectively, the “Existing Provider Partners”), and (ii) no more than in the aggregate two (2) at least seventy (70%) percent owned subsidiaries of the Existing Provider Partners.

“Qualifying Transaction” means (a) a Board approved (i) sale of all or substantially all of the assets or business of the Company and its Subsidiaries (on a consolidated basis), to a Person (or group of Persons), that are not Partners of the Company (ii) consolidation or merger of the Company and its Subsidiaries (on a consolidated basis), with or into a Person that is not a Partner of the Company, in which the stockholders of the Company immediately prior to such transaction possess less than fifty percent (50%) of the voting securities of the surviving entity Person (or its entity parent) immediately after the transaction; or (iii) the closing of the transfer (whether by merger, consolidation, sale or otherwise), in one transaction or a series of related transactions, to a Person or group of affiliated Persons (other than any underwriter of the Company’s securities), of the Company’s securities if, after such closing, such Person (or group of affiliated Persons) would hold fifty percent (50%) or more of the issued and outstanding shares of Common Stock of the Company (or the surviving or acquiring entity or entity parent), and (b) the Company and/or its shareholders receive in any such transaction described in (a)(i) (ii) or (iii) of this definition of Qualifying Transaction, gross cash proceeds of $165,000,000 or greater in the aggregate.

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“Rights Agreement” has the meaning set forth in the ‘WHEREAS” clauses hereof.

“SEC” means the United States Securities and Exchange Commission.

“Services” means all Services required to be provided by the Provider and/or any of its Partners to the Company hereunder including, but not limited to, those set forth in Section 2 and those necessary and/or requested by the Company in connection with the Business including, but not limited to, those relating to the Ecosystem.

“Subsidiary” shall mean, with respect to any Person, any corporation, limited liability company, joint venture or partnership of which such Person (a) beneficially owns, either directly or indirectly, more than fifty percent (50%) of (i) the total combined voting power of all classes of voting securities, (ii) the total combined equity interests or (iii) the capital or profit interests, in the case of a partnership, or (b) otherwise has the power to vote, either directly or indirectly, sufficient securities to elect a majority of the board of directors or similar governing body.

“Technology” means blockchain and trading software, algorithms, apparatus, circuit, databases, data collections, diagrams, inventions (whether or not patentable), innovations, products, services, know-how, methods, network configurations and architectures, processes, Confidential Information, protocols, schematics, specifications, software, software code (in any form, including source code and executable or object code), subroutines, techniques, user interfaces, URLs, web sites, works of authorship, training protocols and similar methods and processes and other forms of technology (whether or not embodied in any tangible form and including all tangible embodiments of the foregoing, such as instruction manuals, laboratory notebooks, prototypes, samples, studies and summaries), relating to the Business including the creation, development, operation, maintenance, usage and commercialization of the Ecosystem.

“Third Party” shall mean any Person other than the Parties or any of their respective Partners.

2.            TECHNOLOGY, SERVICES, INFORMATION, ETC.

2.1.          General. Provider will provide to the Company and its Partners all Technology, Services and Information, on the terms and conditions set forth in this Agreement, necessary, requested by the Company and/or otherwise required hereunder relating to the Business including, but not limited to, for the creation, development, operation, maintenance, usage and commercialization of the Ecosystem.

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(a)          Development. In connection with the creation and development of the Business including, but not limited to, the Ecosystem, the Provider shall provide to the Company and its Partners all necessary, requested by the Company and/or otherwise required under this Agreement, Services, Technology and Information including, but not limited to, the following:

(i)         Completion of work on a system designed and developed with the Company and in a manner agreed to by the Provider and the Company in order to achieve the Company’s goals as set forth in the Company’s proprietary Ecosystem diagrams, set forth on Exhibit A attached hereto (the “Diagrams”) and more generally in the Company’s White Paper v4.20, dated September 14, 2018 (as supplemented, amended modified, replaced and/or restated from time to time, the “White Paper”).

(ii)         Implement blockchain Technology to meet the Company’s overall Ecosystem design that may include original work, extensions, or modifications to existing (e.g. including but not limited to BCOS) systems.

(iii)        Provide a trading system backend suitable for the Company’s ATS as set forth in the Diagrams and more generally in the White Paper.

(iv)        Provide support, documentation, test systems and any relevant operational tools required for the Company to implement a trading front-end for and related to the Company’s ATS.

(v)         Provide to the Company, completed Work (defined below), Technology and Services, and grant the Company a non-exclusive royalty-free, worldwide, perpetual license to the Provider Background IP therein, as may be necessary and/or reasonably requested by the Company to fully use and exploit such IP Rights, as provided herein.

(vi)        Where restrictive open source licenses have been incorporated into the Technology provided by Provider (which is disclosed to the Company in advance) and where those licenses prevent modification (e.g. GPL) their use is considered as part of the overall system design agreed to by the Company.

(vii)       Provide access to technology, designs and systems that are suitable and sufficient in their use and operation for compliance requirements as defined by the Company.

(viii)      Provide completed work and technology that are free from licensing or intellectual property limitations, impairment to use and/or restrictions, including, but not limited to, limitations, impairments and restrictions under the GPL or the like.          

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(b)          Maintenance and Support Services. In connection with the maintenance, usage, support modification and commercialization of the Business including, but not limited to, the Ecosystem, the Provider shall provide to the Company and its Partners all necessary, Company requested and/or otherwise required under this Agreement, Services, Technology and Information including, but not limited to, the following:

(i)          with all Modification and maintenance and support for, all Background IP and Foreground IP including, but not limited to, the Company’s network blockchain development, Company’s ATS trading system code and system development support (including, but not limited to, matching engine and market data components), and Ember Token economic model design support.

(ii)         Provider shall provide the Company and its Partners’ tech team personnel training relating to Technology and Information provided by Provider, its Partners in order for such tech team’s personnel to deploy, operate, maintain, and adapt such technologies as required.

(iii)        The Company, HK and Provider shall agree to a reasonable end date when maintenance and support services provided herein shall terminate, which in no event shall be earlier than a year from the date of the first commercial transaction on Prometheum Ember ATS, Inc’s alternative trading system.

2.2.          Project Manager. The Provider and the Company shall each appoint a project manager (each a “Project Manager”) to serve as the primary point of contact for such Person, each of which Project Manager shall have the experience, knowledge and ability to act as a project manager in connection with the Business including the Ecosystem.

2.3.          Additional Personnel and Related Items. In connection with its obligations and responsibilities and related items set forth in this Section 2, the Provider shall provide to the Company and its Partners the following:

(a)          Provider shall provide qualified personnel (the “Personnel”) to complete the Services. The Personnel shall perform their assignments under the general supervision of, and at the site specified by the Company’s Project Manager. Each of the Personnel shall devote such Person’s full knowledge, time and skill to perform the applicable Services effectively and timely.

(b)          Provider shall use all reasonable means to ensure the continued employment by Provider of the Personnel then performing Services. If the employment of any Personnel performing Services is terminated by Provider for any reason whatsoever Provider shall furnish the Company with Personnel of experience at least equal to that of the Personnel affected by the occurrence of such event.

(c)          Provider shall not withdraw any Personnel from any assignment and/or project with the Company without the Company’s prior written consent.

(d)          When Personnel are on the Company’s premises, they shall comply with all applicable Company rules, regulations and policies including such matters as working hours, holidays and Company security measures.

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2.4.          Reserved

2.5.          Further Assurances. Each Party will provide and take all actions necessary including the Provider providing all strategic, technical, and other cooperation to facilitate the timely completion and commercialization of the Ecosystem.

3.            OWNERSHIP OF INTELLECTUAL PROPERTY, OTHER

3.1.          Background IP. The Company’s Background IP will be owned by the Company and the Provider Background IP will be owned by the Provider, and except as otherwise provided herein, nothing in this Agreement will be deemed to grant any ownership of a Party’s Background IP to any other Party. Any Modifications to the Background IP are permitted by either party.

3.2.          Foreground IP. Provider Foreground IP shall be owned jointly by each of the Provider and the Company.

3.3.          Reserved

3.4.          Modifications.

(a)          Provider Modifications. Provider and the Company will retain all right, title and interest in and to any Modifications, including any IP Rights and/or Intellectual Property therein, made by Provider and/or any of its Partners to any Background IP and/or Foreground IP (“Provider Modifications”). For clarity purposes, as it relates to the Provider and/or any of its Partners Background IP, the Company will only retain right, title and interest to Modifications to Provider Background IP relating to the Company’s Business.

(b)          Company Modifications. The Company will retain all right, title, and interest in and to any Modifications, including any IP Rights and Intellectual Property therein, made by the Company and/or any of its Partners to any Background IP and/or Foreground IP (“Company Modifications”).

(c)          Reserved

3.5.          Provider Ownership. The Parties acknowledge and agree that: (i) as between the Parties, Provider owns all right, title and interest in and to the Provider Background IP (the “Provider IP”); and (ii) such ownership includes the exclusive right of Provider to conduct clearance, prosecute, maintain, protect, enforce and defend Provider’s interest in the Provider IP, including to file any IP Rights and/or Intellectual Property applications anywhere in the world, to abandon prosecution of such applications, and to discontinue payment of any maintenance or renewal fees with respect to any patents.

3.6.          Company Ownership. The Parties acknowledge and agree that: (i) as between the Parties, the Company owns all right, title and interest in and to the Company’s Background IP and the Company Modifications (the “Company IP”); and (ii) such ownership includes the exclusive right of the Company to conduct clearance, prosecute, maintain, protect, enforce and defend the Company’s interest in the Company IP, including to file any IP Rights applications anywhere in the world, to abandon prosecution of such applications, and to discontinue payment of any maintenance or renewal fees with respect to any patents.

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3.7.          Cooperation. The Parties will each perform all acts, execute and deliver such information, instruments and documents, and do all such other things as may be reasonably necessary to accomplish the transactions contemplated in this Agreement, including, without limitation, providing or executing any affidavits, providing any testimony, and/or rendering any other assistance, as is necessary or useful for: (a) the Provider to secure and perfect sole and exclusive ownership of, and obtain registrations in the name of solely the Provider, for the Provider IP and any part thereof; and (b) the Company to secure and perfect sole and exclusive ownership of, and obtain registrations in the name of solely the Company, for the Company IP and any part thereof. Such acts may include: (i) execution of prosecution-related documents; (ii) assistance in the registration of IP Rights and Intellectual Property (including providing prosecution files in the possession or under the or control of such Party); and (iii) assistance in the enforcement of IP Rights and Intellectual Property (including providing documents and materials in the possession or under the or control of such Party and making its employees available to testify as a witness), provided that the other Party pays or reimburses such Party the reasonable out-of-pocket costs and expenses incurred by such Party in connection therewith.

4.            GRANTS OF LICENSES TO INTELLECTUAL PROPERTY

4.1.          Provider Background IP. Provider hereby grants to the Company a non-exclusive, royalty free, worldwide and perpetual license to use, exploit, commercialize, in any manner related to the Company’s Business the Provider Background IP, subject to Section 5 of this Agreement.

4.2.          Provider Hot/Cold Wallet Storage System. Provider hereby grants to the Company an irrevocable, non-exclusive, royalty-free, fully paid, one-year worldwide license to use, exploit, in any manner now known or in the future discovered and for whatever purpose, the Provider’s and its Partners’ Hot/Cold Wallet Storage Software System.

4.3.          Provider Modifications. The Provider covenants and agrees to promptly disclose to the Company all material Provider Modifications.

4.4.          Enforcement of Intellectual Property and Intellectual Property Rights. The Provider covenants and agrees that, whenever requested by the Company to assist the Company and/or its Partners to secure the Company’s or its Partners licensed rights in the Provider Background IP, Hot/Cold Wallet Storage System, Provider Modifications, and any copyrights, patents, trademarks, mask work rights, moral rights, or other IP Rights relating thereto in any and all countries, including the disclosure to the Company or its designee of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, recordation’s, and all other instruments and the taking of all such other acts (including appearances as a witness) which the Company or its designee shall deem necessary in order to perfect, obtain, maintain, review, restore, enforce, defend and transfer such licensed rights, subject to this Agreement.

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5.            LIMITS ON TRANSFER; PARTNER OWNERSHIP

5.1.          Background IP.

(a)          The Company covenants and agrees that it will not transfer any Intellectual Property and/or IP Rights it has to the Provider Background IP without the Provider’s express prior written consent, which shall not be unreasonably withheld; provided, however, the foregoing notwithstanding, the Company may transfer including sub-license its Intellectual Property and/or IP Rights to the Provider Background IP without the consent of the Provider (i) to a Subsidiary of the Company, or (ii) in connection with a Qualifying Transaction. Notwithstanding the foregoing, the Company may transfer the Foreground IP and the and Intellectual Property and IP Rights related thereto in connection with a Qualifying Transaction where the Company and/or its shareholders receive gross proceeds of no less than $165,000,000 in the aggregate.

(b)          Neither the Provider nor any of Provider Partners or partners shall directly or indirectly transfer or otherwise make available any Intellectual Property and/or IP Rights to Background IP to any Person that directly or indirectly competes with the Company in the United States and Canada, without the Company’s express prior written consent. Provided, however, that prior to any permitted transferee or licensee shall first enter into an agreement with the Company requiring the Company’s express prior written consent to any subsequent transfer of any IP Rights to Background IP.

5.2.          Foreground IP.

(a)          All Foreground IP created by the Provider, Provider’s Partners and/or any of their Partners in connection with Provider performing its obligations pursuant to this Agreement, shall be jointly owned by the Company and the Provider. Each Party covenants and agrees that it will not transfer, license, sublicense, assign or otherwise allow any Third Party access to the any of Foreground IP, or any Intellectual Property and/or IP Rights thereto, for any purpose without the other Party’s prior express written consent (which consent shall not be unreasonably withheld). Notwithstanding the foregoing, the Company may transfer the Foreground IP and the and Intellectual Property and IP Rights related thereto in connection with a Qualifying Transaction where the Company and/or its shareholders receive gross proceeds of no less than $165,000,000 in the aggregate.

(b)          Notwithstanding the above, the Provider, Provider Partners and the Company may use the Foreground IP for any purposes that furthers and benefits the business of the Company.

6.            PARTNER OWNERSHIP

6.1.          Company Partners. The ownership and license rights of the Company described herein extend to the Company Partners.

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6.2.          Provider Partners. The ownership and license rights of the Provider described herein extend to Provider Partners, provided, that at the time of such grant of ownership or license rights, such Person is a Partners of the Provider. Prior to a Provider Partner receiving any ownership and/or license rights described herein, such Provider Partner shall be required to enter into an agreement with the Company and the Provider, in form and substance reasonably satisfactory to the Company, pursuant to which (i) such Provider Partner represents and warrants to the Company that it is a Partner of the Provider, (ii) agrees to be bound by and subject to the terms and conditions of this Agreement, and (iii) agrees that, such ownership and license rights shall terminate at such time as the Provider Partner is no longer a Partner of the Provider.

7.            CONFIDENTIALITY

7.1.          Confidentiality Obligations. At all times during the Term and for a period of four (4) years following termination or expiration hereof in its entirety, each Party shall and shall cause its officers, directors, employees, managing members, managers, equity and debt holders and agents (collectively, “Representatives”) to, (a) hold, and to cause its respective Representatives to hold, in strict confidence, all Confidential Information concerning the other Party or any of the other Party’s Partners or their respective businesses that is either (i) in its possession (including confidential and Confidential Information in its possession prior to the date hereof) or (ii) furnished by any such other Party or any member of such Party’s Group or their respective Representatives at any time pursuant to this Agreement; and (b) not to use any such confidential and Confidential Information other than for such purposes as are expressly permitted hereunder, keep confidential and not publish or otherwise disclose to a Third Party, and not use, directly or indirectly, for any purpose any confidential information, except to the extent such disclosure or use is expressly permitted by the terms of this Agreement.

7.2.          No Release; Return or Destruction. Each Party agrees that except as otherwise provide elsewhere in this Agreement not to release or disclose, or permit to be released or disclosed, any Confidential Information to any other Person, except its Representatives who need to know such Confidential Information in their capacities as such (who will be advised of their obligations hereunder with respect to such Confidential Information). Without limiting the foregoing, when any such Confidential Information is no longer needed for the purposes contemplated by this Agreement, each Party will, at its option and as promptly as practicable after receiving a written request from the other Party, either: (a) return to the other Party all such Confidential Information in a tangible form (including all copies thereof and all notes, extracts or summaries based thereon); or (b) certify to the other Party that it has destroyed such Confidential Information (and such copies thereof and such notes, extracts or summaries based thereon); provided, that such Party’s Representatives may retain one (1) copy of such Confidential Information to the extent required by applicable Law or professional standards, and will not be required to destroy any such Confidential Information located in back-up, archival electronic storage).

7.3.          Third-Party Information; Privacy or Data Protection Laws. Each Party acknowledges that it and its Representatives may presently have and, following the Effective Time, may gain access to or possession of confidential or Confidential Information of, or personal information relating to, Third Parties: (a) that was received under confidentiality or non-disclosure agreements entered into between such Third Parties, on the one hand, and the other Party or members of such Party’s Group, on the other hand, prior to the Effective Time; or (b) that, as between the Parties, was originally collected by the other Party or members of such Party’s Group and that may be subject to and protected by privacy, data protection or other applicable Laws. Each Party agrees that it will hold, protect and use, and will cause its Representatives to hold, protect and use, in strict confidence the confidential and Confidential Information of, or personal information relating to, Third Parties in accordance with privacy, data protection or other applicable Laws and the terms of any agreements that were either entered into before the Effective Time or affirmative commitments or representations that were made before the Effective Time by, between or among the other Party or the other Party’s Representatives, on the one hand, and such Third Parties, on the other hand.

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7.4.          Protective Arrangements. In the event that a Party or any of its Representatives either determines on the advice of its counsel that it is required to disclose any information pursuant to applicable Law or receives any request or demand under lawful process or from any Governmental Authority to disclose or provide information of the other Party (or any of the other Party’s Representatives) that is subject to the confidentiality provisions hereof, such Party will notify the other Party (to the extent legally permitted) as promptly as practicable under the circumstances prior to disclosing or providing such information and will cooperate, at such other Party’s cost and expense, in seeking any appropriate protective order reasonably requested by the other Party. In the event that such other Party fails to receive such appropriate protective order in a timely manner and the Party receiving the request or demand reasonably determines that its failure to disclose or provide such information will actually prejudice the Party receiving the request or demand, then the Party that received such request or demand may thereafter disclose or provide information to the extent required by such Law (as so advised by its counsel) or by lawful process or such Governmental Authority provided such Party identifies such information as confidential, and the disclosing Party will promptly provide the other Party with a copy of the information so disclosed, in the same form and format so disclosed, together with a list of all Persons to whom such information was disclosed, in each case to the extent legally permitted.

8.            WARRANTIES; DISCLAIMER

8.1.          Mutual Warranties. Each party represents and warrants that: (i) it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation or organization and has full power and authority to enter into and perform its obligations and engage in the activities contemplated under this Agreement; (ii) its entry into this Agreement and performance hereunder does not and will not conflict with or violate any agreement or obligation it has to any third party; and (iii) it is and shall remain fully in compliance with all applicable laws, rules, and regulations.

8.2.          Provider Warranties.

(a)          Services. Provider represents and warrants that the Services will be performed in a professional and workmanlike manner, and that the Work will materially conform to the Company’s specifications. Company’s exclusive remedy, and Provider’s sole obligation, in the event of a breach of warranty, will be for Provider to promptly re-perform, repair, or replace the affected Service or Work at no additional charge.

(b)          Ownership and Non-infringement. Provider represents and warrants to Publisher that it has obtained all rights, licenses and authorizations necessary to enter into this agreement and grant the rights granted herein; Provider represents and warrants that the execution and performance of this Agreement does not and will not violate or interfere with any other agreement to which it is a party, Provider represents and warrants that the source code and development tools for the Technology and Services is or will be original to Provider, exclusively owned by Provider, or validly licensed by Provider at Provider's expense for all uses to be made of them pursuant to this Agreement and that the source code and development tools are not nor will they be a violation of the rights of any other person or organization; and Provider represents and warrants that no part of the Technology or Services provided by Provider, the exercise of the rights granted hereunder violates or infringes upon any rights of any person or entity, including, but not limited to, copyrights, trademark rights, patent rights, trade secrets rights, or contractual, common law or statutory rights.

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9.            INDEMNITY

9.1.          Indemnity. Each Party will indemnify, defend, and hold harmless the other party against any liabilities, costs, and expenses (including without limitation reasonable attorney’s fees) incurred in connection with any third party claims to the extent based on (i) a breach of the representations, warranties and covenants of such party contained in Section 7 of this Agreement; or (ii) an allegation that any products or materials provided by the indemnifying party infringe or misappropriate any third party IP Rights.

9.2.          Procedure. In the event of an Indemnified Claim, the party seeking indemnity will: (i) provide the other party prompt written notice of such claim, provided that no delay will affect the indemnifying party’s obligations except to the extent such delay was materially prejudicial to it); (ii) grant the indemnifying party the right to defend any such claim with its counsel of choice, provided that the indemnifying party will not settle such claim in any way that imposes any financial or other liabilities or obligations on the indemnified party, except with prior written consent of the indemnified party; and (iii) provide such assistance and information as the indemnifying party may reasonably require to settle or oppose such claims, at the indemnifying party’s expense. The indemnified party may participate in the defense or settlement of such claim at its own expense and with its own choice of counsel.

9.3.          Mitigation. In addition to Provider’s obligations under Section 9.1, if any Deliverable is held, or in Provider’s opinion is likely to be held, to infringe or misappropriate any third party’s IP Rights, Provider may, at its expense and option: (a) procure the right for Company to continue using the Deliverable; or (b) replace the Deliverable with a non-infringing product materially conforming to the Specifications; or (c) modify the Deliverable to make it non-infringing while materially conforming to the Specifications. If none of the foregoing options are commercially feasible, Provider may terminate this Agreement and refund Company any prepaid fees for such infringing Deliverable.

10.          GENERAL

10.1.          Severability. If any provision in this Agreement is invalid or unenforceable, that provision will be construed, limited, modified or, if necessary, severed, to the extent necessary, to eliminate its invalidity or unenforceability, and the other provisions of this Agreement will remain in full force and effect.

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10.2.          Assignment. Neither party may assign this Agreement, except to a Partner, without the other party’s prior written consent (which will not be unreasonably withheld). Any attempt to assign this Agreement in violation of this section, will be null and void. This Agreement will be binding upon the parties hereto and their heirs, successors, and assigns.

10.3.          Waiver. No waiver of any right under this Agreement shall be deemed effective unless contained in writing signed by a duly authorized representative of the waiving party, and no waiver of any past or present right arising from any breach or failure to perform shall be deemed to be a waiver of any future right arising under this Agreement.

10.4.          Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without regard to the conflicts of laws principles thereof. The Parties hereto hereby irrevocably agree that any suit or proceeding arising directly or indirectly pursuant to or under this Agreement shall be brought solely in a federal or state court located in the City, County and State of New York. By its execution hereof, the Parties hereby covenant and irrevocably submit to the in personam jurisdiction of the federal and state courts located in the City, County and State of New York and agree that any process in any such action may be served upon any of them personally, or by certified mail or registered mail upon them or their agent, return receipt requested, with the same full force and effect as if personally served upon them in New York City. The Parties hereto waive any claim that any such jurisdiction is not a convenient forum for any such suit or proceeding and any defense or lack of in personam jurisdiction with respect thereto. In the event of any such action or proceeding, the party prevailing therein shall be entitled to payment from the other party hereto of its reasonable counsel fees and disbursements in an amount judicially determined.

10.5.          Notices. Except as otherwise provided in this Agreement, any notice required or permitted to be sent by one of the parties shall be delivered by hand, by overnight courier, by facsimile, or by registered mail, return receipt requested, to the address of the parties first set forth in this Agreement or to such other address of the parties designated in writing in accordance with this subparagraph. Notice will be deemed given when delivered by hand, the following day after being sent by overnight courier, when electronically confirmed after being sent by facsimile and three (3) business days after being sent by registered mail.

10.6.          Entire Agreement. This Agreement, together with all Exhibits hereto, constitutes the entire agreement between the parties concerning the subject matter hereof and supersedes and replaces any prior or contemporaneous agreements or understandings regarding such subject matter. The terms of this Agreement may be modified only by a writing that expressly references this Agreement and is executed by the parties.

10.7.          Execution; Counterparts. This Agreement may be executed in one or more counterparts (including electronic .pdf counterparts), each of which shall be deemed an original and all of which together shall constitute but one instrument.

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10.8.          Time is of Essence. The parties hereto agree that (i) with respect to each party’s respective obligations hereunder, time is of the essence, and (ii) and each party will provide the necessary resources and personnel to complete such party’s obligations in a timely and efficient manner.

10.9.          Incorporation by Reference. The Introductory paragraph and the “WHEREAS” and “NOW, THEREFORE” paragraphs/provisions of this Agreement are hereby incorporated herein and made a part hereof.

10.10.        Representation and Warranty of HK and Provider. HK and Provider represent, warrant, covenant and agree to and with the Company that they own all of the IP Rights, Intellectual Property, Technology, Information and ability to provide all Services hereunder in accordance with this Agreement to allow for the development, testing, operation and commercialization/usage of the Business including the Ecosystem.

[Signature page follows]

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IN WITNESS WHEREOF the parties hereto, each acting with proper authority, have executed this Agreement as of the day, month and year first above written.

PROMETHEUM, INC.
By:	/s/ Martin H. Kaplan
	Name: Martin H. Kaplan
	Title: Chairman
SHANGHAI WANXIANG BLOCKCHAIN INC.
By:	/s/ Xiao Feng
	Name: Dr. Xiao Feng
	Title: Chairman
HASHKEY DIGITAL ASSET GROUP LIMITED
By:	/s/ Xiao Feng
	Name: Dr. Xiao Feng
	Title: Director

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EXHIBIT A

Diagrams

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EX1A-6 MAT CTRCT

Exhibit 6.5

INVESTOR AND FOUNDERS RIGHTS AGREEMENT

OF

PROMETHEUM, INC.

(A Delaware corporation)

INVESTOR AND FOUNDERS

RIGHTS AGREEMENT

OF

PROMETHEUM, INC.

(A Delaware Corporation)

THIS INVESTORS AND FOUNDERS RIGHTS AGREEMENT (this “Agreement”) effective as of December __, 2018 (the “Effective Date”) by and among PROMETHEUM, INC., a Delaware corporation (the “Company”); HASHKEY DIGITAL ASSET GROUP LIMITED, a company organized under the laws of Hong Kong (“Investor”) and all holders of shares of Common Stock and Ember Tokens who are founders of the Company (each a “Founder,” and collectively, the “Founders,” and together with the Investor, collectively, the “Holders” with each being a “Holder”). Each Holder, the amount and type of Company Securities and Ember Tokens owned by such Holder are set forth on the “Schedule of Holders” attached hereto as Schedule I. Each Person set forth on page s-3 is a Founder as each own Founder Tokens.

RECITALS

1.             Pursuant to a Securities Purchase Agreement, dated as of December __, 2018, by and between the Company and the Investor, the Investor purchased (a) 68,875,000 shares of Common Stock, which represents on the Effective Date twenty-nine (29%) percent of the issued and outstanding shares of Common Stock on an as-converted and fully-diluted basis, and (b) 10,150,000 Warrants to purchase 10,150,000 Founder Tokens of the Company (each Warrant being exercisable (subject to the provisions thereof) into one (1) Founder Token), which such Founder Tokens equal on the Effective Date twenty-nine (29%) percent of the total supply of Founder Tokens, on the terms and conditions set forth therein (together with all exhibits and schedules and as amended and/or supplemented following the date hereof, the “SPA”).

2.             The Company and the Holders have entered into this Agreement for the purpose of setting forth the rights and duties of the Holders and the Company.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company, the Investor and the Founders agree as follows:

Article I.

DEFINITIONS

1.01        Capitalized Terms. The following capitalized terms used in this Agreement have the meanings set forth below:

“$,” “dollars,” “Dollars,” “USD,” “US dollars” or similar symbols, phrases or words means the lawful currency of the United States of America.

“A Certificate” means the Company’s Certificate of Designation, Rights and Preferences of the A Shares to be filed with the Secretary of State of the State of Delaware on or immediately prior to the A Share Closing.

“Additional Holder” mean Persons admitted as a holder of shares of Common Stock and/or other Company Securities of the Company after the date hereof.

“Affiliate” means any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with a Person, and as used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and/or policies of a Person, whether through ownership of voting securities or other ownership interest by contract, or otherwise.

“Agreement” means this Agreement as it may be amended from time to time.

“A Preferred Shares” means the Series A Convertible Preferred Stock of the Company that the Investor has the right to purchase pursuant to the Investor A Share Purchase Right.

“Board” means the Board of Directors of the Company.

“Capital Stock” means the authorized shares of the Company’s capital stock, including all classes and series of common, preferred (including the A Preferred Shares), voting and nonvoting capital stock.

“Common Stock” means the common stock, par value $0.0001 per share.

“Company” has the meaning set forth in the Preamble of this Agreement.

“Company Securities” means any Capital Stock and Convertible Securities (including as to the Investor, the A Preferred Shares (when and if issued pursuant to Section 6.08 and the Conversion Shares), of the Company. For purposes of this Agreement and avoidance of doubt, neither the Warrants nor the Founder Tokens shall constitute Company Securities.

“Conversion Shares” means the shares of Common Stock issuable upon conversion of the A Preferred Shares, which shares of Common Stock shall when and if issued equal the product of (i) the number of shares of Common Stock and preferred stock issued and outstanding on the A Preferred Share Exercise Notice Date, multiplied by (ii) ten (10%) percent

“Convertible Securities” means securities, contract rights, notes, obligations, options, warrants, or other rights that are directly or indirectly exercisable for, convertible into, or exchangeable for Common Stock or other Capital Stock of the Company, but expressly excluding Capital Stock from such definition of Convertible Securities.

“Customer” means any broker-dealer, selling agent, IR or PR agent, investment advisor, fund, fund manager, retail or institutional customer or account, issuers, others who connect with the Prometheum’s ecosystem including, without limitation, providers of services to the Prometheum ecosystem; Persons who obtain access to and information or data from the Prometheum ecosystem and/or any providers of verification processes or providers of other Prometheum ecosystem elements.

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“Deemed Liquidation Event” means a liquidation, dissolution or winding up if the affairs of the Company as approved by the vote or written consent of the Board of Directors and neither (a) the sale of all or substantially all of the assets or business of the Company (or any Subsidiary of the Company), (b) the consolidation or merger of the Company (or any Subsidiary of the Company) with or into any other Person (as defined in the Securities Act of 1933, as amended, the “Securities Act”), nor (c) any Transfer or other transfer of any Company (or any Subsidiary of the Company) securities, individually or in a series of transactions, shall be deemed a Deemed Liquidation Event.

“Directors” means the Persons selected to serve as Directors pursuant to the terms of this Agreement.

“Entity” means a Person other than a natural person and includes, without limitation, corporations (both non-profit and other corporations), partnerships (both limited, limited liability, general), trusts, joint ventures, limited liability companies, and unincorporated associations.

“Excluded Issuance” means the issuance and/or grant (as the case may be) of (a) Stock Options to employees, consultants, advisors and Directors of the Company, (b) shares of Common Stock or other securities issuable upon exercise of all Stock Options, (c) shares of Common Stock and/or other capital stock in connection with any merger, acquisition, and/or similar transactions involving the Company or any Subsidiary, (d) the initial public offering of securities of the Company, (e) the Investor A Preferred Purchase Right, A Preferred Shares and the Conversion Shares upon conversion of the A Preferred Shares (collectively, the “Investor A Preferred Purchase Right Securities”) pursuant to the Investor’s Purchase Right, (f) any convertible securities issued and outstanding on the date hereof and any shares of Common Stock issuable upon conversion, exercise and/or exchange of any convertible securities, (g) the Investors A Preferred Purchase Right and the Investor A Preferred Purchase Right Securities, and (h) Offered Securities sold pursuant to the exercise of a Holders right of first refusal pursuant to Section 6.08.

“Fiscal Year” has the meaning set forth in Section 4.02 of this Agreement.

“Founders” has the meaning set forth in the preamble of this Agreement.

“Founder Tokens” has the meaning set forth in the SPA.

“Holders” means the Investor and each Founder and all other Persons admitted as Additional Holders pursuant to this Agreement, so long as they remain Holders.

“Initial Investor Director” has the meaning set forth in Section 3.01(a)(ii).

“Investor A Preferred Purchase Price” has the meaning set forth in Section 6.08.

“Investor A Preferred Purchase Right” has the meaning set forth in Section 6.08.

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“Investor A Preferred Purchase Right Closing” has the meaning set forth in Section 6.08.

“Investor A Preferred Purchase Right Closing Date” has the meaning set forth in Section 6.08.

“Investor A Preferred Purchase Right Exercise Period” has the meaning set forth in Section 6.08.

“Investor A Preferred Purchase Right Securities” has the meaning set forth in the definition of “Excluded Issuance”.

“Investor Director” has the meaning set forth in Section 3.01(a)(ii).

“Investor 2^nd Director” has the meaning set forth in Section 3.01(a)(ii).

“Liquidation Transaction” has the meaning set forth in Section 6.08.

“Person” means any individual or Entity, and the heirs, executors, administrators, legal representatives, successors and assigns to such Person as the context may require.

“Preemptive Percentage” has the meaning set forth in Section 2.03(a) of this Agreement.

“Proposed Transferee” has the meaning set forth in Section 6.05(c) of this Agreement.

“Qualifying Offer” as the meaning set forth in Section 6.05(b) of this Agreement.

“Restricted Business” has the meaning set forth in Section 5.02(a)(i) of this Agreement.

“Start Date” has the meaning set forth in Section 6.08.

“Stock Option Plan” means any equity incentive plan of the Company adopted for the purpose of enabling the Company to issue to certain employees, consultants, directors, Stock Options, as any such plan may be amended, restated or modified from time to time.

“Stock Options” means stock options of the Company granted (a) pursuant to any Stock Option Plan and any award agreements thereunder, and (b) outside of any Stock Option Plan.

“Tag-Along Notice” has the meaning given to such term in Section 6.06(a) of this Agreement.

“Trade Area” has the meaning set forth in Section 5.02(b) of this Agreement.

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“Transaction Documents” means (a) this Agreement, (b) the SPA, (c) the Technology Agreement, dated on or about the date of this Agreement, by and among the Company and the Investor, (d) the Strategic Partnership and Joint Development Agreement, dated on or about the date of this Agreement, by and among the Company and Shanghai Wanxiang Blockchain Inc., a PRC corporation and an Affiliate of the Investor (the “JV Agreement”), and (e) all amendments, supplements and schedules and exhibits to each of the agreements listed in (a) – (d) of this definition of Transaction Documents and all closing documents related to the transactions contemplated in the SPA and the other transactions herein, the Technology Agreement and the JV Agreement .

“Transfer” has the meaning given to such term in Section 6.01 of this Agreement.

“United States GAAP” means United States of America generally accepted accounting principles.

“Voting Stock” of a Person means the capital stock of such Person of the class or classes pursuant to which the holders thereof have the general voting power to vote in the election of the board of directors of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

“Warrant” has the meaning set forth in the SPA.

Article II.

COMPANY SECURITIES

2.01        Company Securities.

(a)          The number of shares of Common Stock, Warrants and other Company Securities held by each Holder is set forth on Schedule I.

(b)          The number of shares of Common Stock, Ember Tokens and other Company Securities held by each Holder may be revised from time to time as necessary to reflect the Transfer of shares of Common Stock, Ember Tokens and other Company Securities in accordance with this Agreement and the future issuance of shares of Common Stock, Ember Tokens and other Company Securities. Additional Persons who acquire shares of Common Stock, Warrants and other Company Securities from a Holder may be added to this Agreement by execution and delivery of a joinder to this Agreement agreeing to be bound by all of its terms, which joinder must also be executed by the Company. The execution and delivery of such joinder and related update to Schedule I shall not constitute an amendment or waiver under this Agreement. The form of Joinder is attached as Exhibit A hereto.

2.02        Rights of Holders. The Holders shall be subject to the terms and conditions of, and shall have the rights and duties set forth in, this Agreement.

2.03        Pre-Emptive Rights.

(a)          Subsequent Offerings. Each Holder will have the preemptive right to purchase its Preemptive Percentage (as defined below) of any Company Securities that the Company may, from time to time, propose to sell and issue after the date of this Agreement other than Excluded Issuances. Each Holder’s “Preemptive Percentage” will be determined by dividing: (i) the number of shares of Common Stock (including as to the Investor, the Conversion Shares (when and if the A Preferred Shares are purchased pursuant to Section 6.08), held by such Holder immediately prior to the issuance of such Company Securities by (ii) the total number of shares of Common Stock issued and outstanding (including the Conversion Shares when and if the A Preferred Shares are purchased by the Investor pursuant to Section 6.08), immediately prior to the issuance of the Company Securities.

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(b)          Exercise of Rights. If the Company proposes to issue any Company Securities (other than Company Securities issued pursuant to an Excluded Issuance), it will give each Holder written notice of its intention, describing the Company Securities, the price and the terms and conditions upon which the Company proposes to issue the Company Securities. Each Holder will have fourteen (14) days from the date of the Holder’s receipt of such notice to agree to purchase its Preemptive Percentage of the Company Securities for the same price and upon the same terms and conditions specified in the Company’s notice by delivering written notice to the Company and stating therein the number of Company Securities to be purchased. The closing of such purchase by any electing Holder of its right to acquire any such Company Securities pursuant to this Section 2.03 shall occur on the final closing date of each such issuance of Company Securities (other than Excluded Issuances).

Article III.

MANAGEMENT OF THE COMPANY

3.01        Board of Directors.

(a)          Each Holder agrees to vote, or cause to be voted, all shares of Voting Stock owned by such Holder, or over which such Holder has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure that the Board shall be comprised of the following five (5) Directors (and six (6) Directors upon the appointment of the Investor 2^nd Director (as defined below)) and that the Board shall consist of the Directors elected as follows:

(i)           Four (4) Directors appointed by the Founders; and

(ii)         One (1) Director appointed by the Investor (the “Initial Investor Director”), provided, that in the event a closing of the purchase by the Investor of the A Preferred Shares pursuant to the Investor A Preferred Purchase Right, the Investor shall be entitled to appoint a second (2^nd) Director (the “Investor 2^nd Director”), to the Board, so that the Investor shall be entitled to appoint a total of two (2) Directors to the Board. If the Investor becomes entitled to appoint an Investor 2^nd Director pursuant to this Section 3.01(a)(ii), the Board shall be automatically increased to six (6) Directors, of which the Founders shall be entitled to appoint four (4) Directors and the Investor two (2) Directors. For purposes of this Agreement, the term “Investor Director” means (i) prior to any appointment of the Investor 2^nd Director, the Initial Investor Director and (ii) following any appointment of the Investor 2^nd Director pursuant to this Section 3.01(a)(ii), the Initial Investor Director and the Investor 2^nd Director.

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(b)          RESERVED

(c)          The right of the Investor to appoint each Investor Director shall terminate at such time as the Investor no longer owns at least ten (10%) percent of the issued and outstanding Voting Stock. Notwithstanding the above, each Investor Director must be an individual.

(d)          Each Holder agrees to vote, or cause to be voted, all Voting Stock owned by such Holder, or over which such Holder has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure that:

(i)          In the event that any Director appointed hereunder should be unwilling or unable (by removal or otherwise) to serve as a Director, his or her successor will be appointed by Holders owning a majority of the Voting Stock held by the Holders entitled to appoint such Director; and

(ii)         The Holders who are entitled to appoint a Director hereunder may remove such Director at any time and from time to time and appoint his or her successor by written notice to the Company and the other Holders.

3.02        Certain Matters Requiring Approval by the Board of Directors. So long as the Investor has the right to appoint an Investor Director pursuant to Section 3.01(a)(ii), the Company will not, without approval of at least a majority of the then Directors of the Board, which approval must include the approval of at least one (1) Investor Director (which approval shall not be unreasonably withheld):

(a)          (i) make any loan or advance to, or own any stock or other securities of, any subsidiary or other corporation, partnership, or other entity Person unless it is at least eighty percent (80%) owned by the Company; (ii) make any loan or advance to any individual Person, including, any employee or Director, except advances and similar expenditures in the ordinary course of business or under the terms of an employee stock or option plan approved by the Board; (iii) guarantee, any indebtedness except for trade accounts of the Company or any subsidiary arising in the ordinary course of business except for indebtedness incurred for acquisitions and capital expenditures; (iv) make any investment inconsistent with any investment policy approved by the Board; (v) incur any indebtedness in excess of $10,000,000 aggregate amount of indebtedness that is not already included in a Board-approved budget, other than trade credit incurred in the ordinary course of business, indebtedness incurred for capital expenditures and acquisitions; or (vi) enter into or be a party to any transaction with any Director, officer or employee of the Company or any “associate” (as defined in Rule 12b-2 promulgated under the Exchange Act) of any such person other than which terms are similar to terms for a comparable transaction if such comparable transaction was negotiated between two (2) unaffiliated parties on an “arms-length basis.”

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(b)          adopt any amendment or modification to or waiver under any of the Company’s constitutional documents in a manner that is materially adverse to the rights of the Investor provided in this Agreement;

(c)          make any declaration, set aside or payment of a dividend or other distribution, or the adoption of, or any change to, the dividend policy;

(d)          commence or consent to any proceeding seeking (i) to adjudicate it as bankrupt or insolvent, (ii) a Deemed Liquidation Event or other arrangement under law relating to bankruptcy, insolvency or reorganization or relief of debtors, or (iii) the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property; or

(e)          any material change to the business scope or nature of business, or cessation of any business line of the Company.

Article IV.

ACCOUNTING AND REPORTS

4.01        Financial Reports. The Company will prepare and distribute to the Holders as soon as practicable after (a) each Fiscal Year end (but in no event later than one hundred twenty (120) days thereafter) (i) unaudited financial statements prepared in accordance with United States GAAP for such Fiscal Year, and (ii) such other information the Board so determines, and (b) each quarter ending March 31, June 30 and September 30 of the Fiscal Year (but in no event later than seventy-five (75) days thereafter) (i) unaudited financial information for each such quarter, and (ii) a capitalization table of the Company as of the last day of each such quarter.

4.02        Fiscal Year. The Fiscal Year of the Company (“Fiscal Year”) will end on December 31.

4.03        Accounting. The books of the Company for financial reporting purposes will be maintained on an accrual basis of accounting in accordance with United States generally accepted accounting principles, consistently applied, unless otherwise determined by the Board.

Article V.          

RIGHTS AND OBLIGATIONS OF HOLDERS

5.01        Other Activities of the Directors, Holders and their Affiliates. Except as may be limited by Section 5.02 and/or any provision of the other Transaction Documents, each Holder and the Company expressly agrees that the Directors, the other Holders and each of their respective Affiliates may engage independently or with others, for its or their own account and for the account of others, in other business ventures and activities of every nature and description and neither the Company nor any Holder shall have any rights or obligations by virtue of this Agreement in and to such independent ventures and activities or the income or profits derived from such ventures and activities.

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5.02        Non-Competition, Non-Disclosure and Non-Solicitation Covenants.

(a)          Covenants. During the period that any Person is a Holder and for a period of three (3) years after such Person ceases to be a Holder, such Person shall not, for his or her own account or jointly with another, directly or indirectly, for or on behalf of any other Person (except for the Company or an Affiliate of the Company), as a principal, agent or otherwise:

(i)           own, control, manage, be employed by, consult with, or otherwise participate in, any business in the Trade Area (as defined below) which competes with the Company and/or its Affiliates, including, but not limited to, any business which is directly and/or indirectly engaged in the business of developing and offering an SEC registered and regulated market for securities and compliant cryptographic securities, which will provide a blockchain based venue for the issuance of registered and/or exempt securities (e.g. initial token offerings (“ITO”) of companies, projects and organizations), secondary trading of ITOs, clearing and settling ITO transactions, and maintaining custody and control of customer’s assets (the “Restricted Business”);

(ii)          solicit or attempt to solicit any Person who is an employee, consultant or advisor of the Company or its Affiliates (or who has served in such capacity during the twelve (12) months preceding the solicitation) by the Company or any of its Affiliates to terminate its services to the Company or its Affiliates, whether or not such services are pursuant to a written contract; or

(iii)         solicit, contact or deal with any Person who is and/or was a Customer or prospective Customer of the Company or any of its Affiliates in the Trade Area for the purpose of providing Restricted Business which are competitive with the services or products provided by the Company or its Affiliates (for purpose of this provision, a Customer or prospective Customer is any Person to whom the Company or its Affiliates provides and/or provided products or services, or with whom the Company or its Affiliates had and/or has material contacts for the purposes of soliciting business, at any time during the one-year period prior to termination of Agreement).

(b)          Trade Area. As used herein, the term “Trade Area” means the United States of America including its territories and provinces and Canada.

(c)          Enforcement. Each Holder acknowledges that the covenants contained in this Article V are reasonable in scope and in all other respects, do not constitute a material restraint of trade and are essential to protect the Company’s business. Each Holder further acknowledges that if he, she, or it breaches any covenant contained in this Article V, the Company would suffer immediate and irreparable injury for which no remedy at law would be adequate. Accordingly, the Company will be entitled to an injunction restraining any breach or threatened breach of any covenant in this Article V and need not post any bond or other security or show actual damages. The exercise by the Company of its rights under this Section 5.02 does not limit any other rights or remedies that the Company may have. No failure by the Company to pay compensation to any Holder nor any claim or cause of action that an Holder may have against the Company, whether predicated on this Agreement or otherwise, will be an excuse or defense for any failure by an Holder to abide by this Article V or constitute a defense to the enforcement of this Article V by the Company. The Company’s rights and remedies under this Article V are cumulative and do not limit any other rights or remedies it may have.

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(d)          Blue Pencil. If any court of competent jurisdiction determines that any of the covenants set forth in this Article V, or any part thereof, is unenforceable because of the scope or duration of such provision, such court shall have the power to modify any such unenforceable provision in lieu of severing such unenforceable provision from this Agreement in its entirety, whether by rewriting the offending provision, deleting any or all of the offending provision, adding additional language to this Article V or by making such other modifications as it deems warranted to carry out the intent and agreement of the parties as embodied herein to the maximum extent permitted by applicable law. The parties hereto expressly agree that this Agreement as so modified by the court shall be binding upon and enforceable against each of them.

(e)          Survival. This Article V survives any termination of this Agreement and/or the dissolution of the Company.

Article VI.

RESTRICTIONS ON TRANSFER

6.01        Restrictions on Transfer. No Holder shall, directly and/or indirectly, sell, assign, transfer, pledge, hypothecate, mortgage, encumber or dispose of, use as collateral, offer, encumber, assign and/or otherwise transfer, contract to transfer, grant any option or contract to purchase, purchase any option or contract to sell, grant any right or issue any Convertible Security, warrant to purchase, lend or otherwise transfer, or contract to do the same, directly or indirectly, any Company Securities (including, but not limited to, as to the Investor, the Investor’s A Preferred Purchase Right, the A Preferred Shares and the Conversion Shares), whether such Company Securities are currently owned and/or acquired in the future, nor shall the Founders and the Investor directly and/or indirectly enter into any swap, hedging or other arrangement that transfers directly and/or indirectly to another Person, in whole or in part, any voting rights, economic consequences or benefits of any Company Securities including any right to participate in any sale proceeds of ownership of any Company Securities or enter into an agreement to do any of the same (each a “Transfer”), for a period of three (3) years following the Effective Date. Any attempted Transfer in violation of this Article VI shall be null and void.

6.02        Permitted Transfers. Notwithstanding Section 6.01, but subject to any restrictions under the US Federal Securities Laws and any securities laws of any State of the United States of America, the Company Securities of each Holder may be Transferred under the following circumstances:

(a)          any Holder who is an individual may Transfer all or any of his or her Company Securities to a trust, family limited partnership or limited liability company for the benefit of such Holder, his or her spouse, lineal descendants or ancestors, provided that such Holder retains the sole right to control the exercise of all rights under this Agreement with respect to such Company Securities;

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(b)          any Holder who is an individual may Transfer all or any of his or her Company Securities, upon his or her death, by will or the laws of descent and distribution;

(c)          any Holder who is an individual may Transfer all or any of his or her Company Securities to any entity Person in which the Holder owns and retains all of the outstanding equity interests;

(d)          any Holder who is an entity may Transfer all or any of its Company Securities to any entity Person in which the Holder owns and retains at all times while this Agreement is in effect 100% of (i) the issued and outstanding equity interests, and (ii) the voting securities of such entity Person transferee; and

(e)          any Holder may Transfer all or any of such Holder’s Company Securities with the prior written consent of at least a majority of the Board, which shall also require prior written consent of at least one (1) (i) Founder Director if the Investor is making such Transfer; and (ii) Investor Director if the Founder is making such Transfer.

6.03        No Transfers to Bad Actors. No Holder shall, directly or indirectly, Transfer any Company Securities to any Person (other than the Company) unless and until the proposed transferee confirms to the reasonable satisfaction of the Company, which shall not be unreasonably withheld, that neither the proposed transferee nor any of its directors, executive officers, other officers that may serve as a director or officer of any company in which it invests, general partners or managing members, nor any Person that would be deemed a beneficial owner of those Company Securities (in accordance with Rule 506(d) of the Securities Act) is subject to any of the “bad actor” disqualifications described in Rule 506(d)(l)(i) through (viii) under the Securities Act (“Bad Actor Disqualifications”), except as set forth in Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Securities Act and disclosed, reasonably in advance of the Transfer, in writing in reasonable detail to the Company. Each Holder will promptly notify the Company in writing if the Holder or, to the Holder’s knowledge, any Person specified in Rule 506(d)(1) under the Securities Act becomes subject to any Bad Actor Disqualification.

6.04        Holder Ceasing to be a Holder. A Holder will cease to be a Holder only upon the occurrence of one or more of the following events:

(a)          A Transfer of all of the Holder’s Company Securities in accordance with the provisions of this Article VI; or

(b)          The purchase of all of the Holder’s Securities in accordance with the provisions of this Article VI.

6.05          Right of First Refusal on Dispositions of Company Securities.

(a)          Subject to Section 6.01, any Holder (the “Selling Holder”) will be entitled to sell all or any of its Company Securities, provided that such sale is made pursuant to a Qualifying Offer (as defined below) and complies with the requirements of Section 6.02(e) and this Section 6.05. For avoidance of doubt, the parties hereto acknowledge that the provisions of this Section 6.05 do not apply to any Transfer under Sections 6.02(a), (b), (c) or (d).

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(b)          For purposes of this Agreement, a “Qualifying Offer” means a bona fide written offer from an un-Affiliated third (3^rd) party to purchase such Selling Holder’s Company Securities for cash. The Qualifying Offer must be contained in a binding written agreement and be accompanied by evidence which reasonably demonstrate the ability of the Proposed Transferee to purchase the Offered Company Securities of the Selling Holder.

(c)          If at any time a Selling Holder desires to sell or otherwise Transfer all or any of its Company Securities pursuant to a Qualifying Offer from a third party (the “Proposed Transferee”), the Selling Holder will submit a written offer (the “Offer”) to sell such Company Securities (the “Offered Company Securities”) to the other Holders. The Offer will: (i) contain the same terms and conditions, including price as the Qualifying Offer, and (ii) be accompanied by a copy of the Qualifying Offer. The Offer will further state that the other non-selling Holders may acquire, in accordance with the provisions of this Agreement, all of the Offered Company Securities for the price and on the terms set forth therein.

(d)          Each of the non-selling Holders will have the right to purchase its pro-rata portion of the Offered Company Securities in accordance with reasonable procedures to be adopted by the Board. A Holder’s pro rata portion, for purposes of the right of first refusal set forth in Section 6.05, shall equal the ratio of (a) the number of shares of Common Stock owned by such Holder immediately prior to the issuance of the Offered Company Securities (assuming (i) full conversion of the A Preferred Shares if the Investor has purchased the A Preferred Shares pursuant to and in accordance with Section 6.08, and (ii) exercise or conversion (as the case may be) of all issued and outstanding Convertible Securities, including all options and warrants into Conversion Shares or shares of Common Stock held by such Holder) to (b) the total number of shares of Common Stock issued and outstanding immediately prior to the issuance of the Offered Company Securities (assuming (i) full conversion of all A Preferred Shares if the Investor has purchased the A Preferred Shares pursuant to and in accordance with Section 6.08, and (ii) exercise or conversion of all issued and outstanding Convertible Securities, including all options and warrants into Conversion Shares or shares of Common Stock (as the case may be)).

(e)          The non-selling Holders will have thirty (30) days from the date the Offer was delivered to elect to purchase all, but not less than all, of the Offered Company Securities.

(f)          Each of the non-selling Holders that elects to purchase all of its pro-rata portion of the Offered Company Securities will communicate in writing its election to purchase such Offered Company Securities to the Selling Holder, the Company and the other non-selling Holders. Such communication will, when taken in conjunction with the Offer, be deemed to constitute a valid, legally binding and enforceable agreement for the sale and purchase of the Offered Company Securities. The sale of the Offered Company Securities will be consummated remotely within 60 days following the date the Offer was delivered to each non-selling Holder.

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(g)          If the non-selling Holders do not purchase the Offered Company Securities, then the Offered Company Securities may be sold by the Selling Holder at any time within 105 days after the date of delivery of the Offer. Any such sale will be to the Proposed Transferee, at not less than the price and on other terms, if any, not more favorable to the Proposed Transferee than those specified in the Qualifying Offer. If all of the Offered Company Securities are not sold with such 105 day period, then the Offered Company Securities will continue to be subject to the requirement of a prior offer pursuant to this Section 6.05. If Offered Company Securities are sold pursuant to this Section 6.05 to any purchaser who is not a party to this Agreement, the purchaser of such Offered Company Securities will execute a counterpart of this Agreement as a precondition of the purchase of the Offered Company Securities and any Offered Company Securities sold to such purchaser will continue to be subject to the provisions of this Agreement.

(h)          The right of first refusal granted under Section 6.05, shall expire upon, and not be applicable to an initial public offering of any of the Company Securities.

6.06        Tag-Along Rights.

(a)          In the event that a Holder receives a Qualifying Offer from a Proposed Transferee which the Holder in its sole discretion, wishes to accept, the Holder who is selling (the “Selling Holder”) shall deliver written notice thereof (“Tag-Along Notice”) to the Company and the other Holders, and provided the Holders do not exercise their right of first refusal in Section 6.05, then each other Holder will have the right to participate in the sale to the Proposed Transferee For avoidance of doubt, the parties acknowledge that no Holder may Transfer any of its Company Securities under this Section 6.06 without the prior written consent of a majority of the Board of Directors as provided in Section 6.02(e), and (ii) the provisions of this Section 6.06 do not apply to any Transfer pursuant to Section 6.02(a), (b), (c) or (e).

(b)          In the event that the other Holders elect to participate in the sale (i) the purchase price payable for each Company Security sold by the other Holders will be equal to the amount to be paid by the Proposed Transferee, and (ii) the terms and conditions of the sale will be the same as the terms and conditions applicable to the sale by the Selling Holder. 

(c)          If the Proposed Transferee will not purchase all of the Company Securities which the Selling Holder and the other Holders wish to sell pursuant to Section 6.06(a), the percentage of Company Securities which each of the Selling Holders and the other Holders will be permitted to sell to the Proposed Transferee will equal to the product of (i) the number of Company Securities which the Proposed Transferee desires to purchase, multiplied by (ii) by a fraction, (a) the numerator of which is the number of shares of Common Stock owned by the Holder in question, and (b) the denominator of which is the aggregate number of shares of Common Stock owned by the Selling Holder and the other Holders in the sale.

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(d)          Each of the other Holders may exercise its rights under Section 6.06(a) above by providing written notice to the Selling Holder within thirty (30) days after the date of delivering the Tag-Along Notice.

(e)          The Tag-Along rights of each Holder pursuant to this Section 6.06 shall not apply to any Transfer made in (i) accordance with and pursuant to Section 6.05(a), (b), (c) and/or (e), and/or (ii) pursuant to any merger and/or acquisition in which 100% of the Company’s issued and outstanding Common Stock and preferred stock (if any) are acquired.

6.07        Transferees. Any transferee acquiring Company Securities of a Holder as permitted under this Article VI will be deemed to be a Holder concurrently with the effectiveness of the Transfer so long as such transferee, unless already a Holder, has, as a condition to such Transfer, executed a joinder agreement to this Agreement, agreeing thereby to be bound by all of the terms and conditions hereof. Upon execution of such joinder agreement, such transferee will be entitled to all of the rights and benefits and subject to all obligations and limitations under this Agreement of a Holder. Each transferee will reimburse the Company for all reasonable expenses incurred by the Company in connection with such Transfer. Any Transfer in contravention of any of the provisions of this Article VI will be void ab initio and of no effect and will not bind or be recognized by the Company.

6.08        Investor’s Right to Purchase A Convertible Preferred Shares. The Investor is hereby granted the right to purchase shares of newly issued A Preferred Shares convertible into such number of Conversion Shares equal to ten (10%) percent of the issued and outstanding shares of Common Stock and shares of preferred stock of the Company convertible into shares of Common Stock immediately prior to the date of the Investor A Preferred Purchase Right Exercise Date (the “Investor A Preferred Purchase Right”). The purchase price to be paid by the Investor for the A Preferred Shares shall be US $12,500,000 (the “Investor A Preferred Purchase Price”), which shall be paid in full in cash at the Investor A Preferred Purchase Right Closing (as defined below). The Investor A Preferred Purchase Right shall be exercisable only during the period commencing on the later to occur of (i) the date the Company’s broker/dealer ATS receives (a) FINRA approval, and (b) SEC approval to trade cryptographic security tokens (the latest of such dates, the “Start Date”) and terminating on the date thirty (30) days following the Start Date (the “Investor A Preferred Purchase Right Exercise Period”). To exercise its Investor A Preferred Purchase Right, the Company shall deliver during the Investor Preferred Purchase Right Exercise Period, a written notice to the Company, which notice shall state that (i) the Investor is exercising such right to purchase the A Preferred Shares, and (ii) a representation and warranty that the Investor has the A Preferred Purchase Right Exercise Price available for payment to the Company. Upon receipt of such notice from the Investor, the Company shall confirm in writing to the Investor (i) the number of A Preferred Shares the purchaser will be purchasing (as provided above), (ii) the calculations used in determining such amount, and (iii) confirm the closing date thereof (the “Investor A Preferred Purchase Right Closing” and such closing, the “Investor A Preferred Purchase Right Closing Date”). Thereafter, the Investor and the Company shall take any and all action so that it can effect such Investor A Preferred Purchase Right Closing as soon as reasonably practicable. Following such A Share Purchase Right Closing, the A Preferred Shares shall be entitled to vote on “as converted” basis with the Common Stock as a single class, and shall have no other voting rights other than as required by the Delaware General Corporation Laws. The A Preferred Shares shall be entitled in connection with a Deemed Liquidation Event to be paid, at the option of the Investor, a liquidation preference equal to $12,500,000, before any distribution of assets may be made to holders of capital stock ranking junior to the A Preferred Shares including the Common Stock. Once such liquidation preference is paid, the A Preferred Shares (and all rights thereof including the Investor with regard to the A Preferred Shares), shall be automatically terminated and shall have no further force or effect, including, but not limited to, any conversion rights, voting rights and/or any other rights, including upon a Deemed Liquidation Event. Notwithstanding the above, in the event of (a) a Board approved (1) sale of all or substantially all of the assets or business of the Company and its Subsidiaries (on a consolidated basis), to a non-affiliated Person (or group of nonaffiliated Persons), (ii) consolidation or merger of the Company and its Subsidiaries (on a consolidated basis), with or into a non-Affiliated Person, in which the stockholders of the Company immediately prior to such transaction possess less than fifty percent (50%) of the voting securities of the surviving Person (or its parent) immediately after the transaction; or (iii) the closing of the transfer (whether by merger, consolidation, sale or otherwise), in one transaction or a series of related transactions, to a Person or group of affiliated Persons (other than an underwriter of the Company’s securities), of the Company’s securities if, after such closing, such Person (or group of affiliated Persons) would hold fifty percent (50%) or more of the issued and outstanding shares of Common Stock of the Company (or the surviving or acquiring entity or parent thereof), and (b) the Company and/or its shareholders receive in such transaction gross cash proceeds of less than $125,000,000 in the aggregate (a “Liquidation Transaction”), the Investor shall, at its option, be entitled to receive its $12,500,000 liquidation preference payment and after such payment the A Preferred Shares shall be deemed automatically terminated and otherwise treated as if a Deemed Liquidation Event occurred and the Investor’s liquidation preference was paid. If the number of Conversion Shares the A Preferred Shares are convertible into immediately prior to the closing date of a Liquidation Transaction is less than ten (10%) percent of the then issued and outstanding shares of Common Stock and shares of preferred stock convertible into shares of Common Stock (the “Post-Closing Investor Percentage”), the value of a Liquidation Transaction, if any, shall be adjusted so that the value of a Liquidation Transaction times the Post-Closing Investor Percentage Investor’s is equivalent to $12,500,000. Notwithstanding anything to the contrary provided herein or elsewhere and for clarity purposes, the $12,500,000 liquidation preference payment (whether payable upon a Deemed Liquidation Event or a Liquidation Transaction), shall be reduced proportionately based upon prior conversions of the A Preferred Shares. Notwithstanding anything to the contrary provided herein or elsewhere, all A Preferred Shares shall automatically convert into shares of Common Stock upon the first trading day that the shares of Common Stock become publicly traded. On or prior to the Investor A Preferred Purchase Right Closing, the Company shall file the A Certificate with the Secretary of State of the State of Delaware.

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6.09        Market Stand-Off. In the event the Company (or any successor to the Company) effectuates an initial public offering of shares of Common Stock, and, if requested by the Company’s underwriter of such initial public offering, the Founders and the Investor each agree to enter into a lock-up agreement with the lead underwriter inform and substance satisfactory to the lead underwriter, but in no event shall the lock-up period be greater than180 days from the closing date of such initial public offering.

Article VII.

GENERAL PROVISIONS

7.01        Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile or electronic mail (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) two (2) Business Days after deposit with a reputable international courier service with 2nd day delivery specified, in each case, properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall be:

If to the Company:

Prometheum, Inc.

120 Wall Street, 25^th Floor

New York, NY 10005

Telephone: (212) 514-8369

Facsimile: (212) 809-4147

Attn: Benjamin S. Kaplan, Co-Chief Executive Officer

Email: ben@prometheum.info

If to the Investor:

HashKey Digital Asset Group Limited

614-615, Level 6, Cyberport 3

100 Cyberport, Hong Kong

Telephone: (852) - 3598-3078

Facsimile: (852) - 8343-0950

Attn: Ben El-Baz

Email: ben@xdaex.com

7.02        Governing Law. This Agreement and the terms and conditions set forth herein, shall be governed by and construed solely and exclusively in accordance with the internal laws of the State of New York without regard to the conflicts of laws principles thereof. The parties hereto hereby expressly and irrevocably agree that any suit or proceeding arising directly and/or indirectly pursuant to or under this Agreement shall be brought solely in a federal or state court located in the City, County and State of New York. By its execution hereof, the parties hereto covenant and irrevocably submit to the in personam jurisdiction of the federal and state courts located in the City, County and State of New York and agree that any process in any such action may be served upon any of them personally, or by certified mail or registered mail upon them or their agent, return receipt requested, with the same full force and effect as if personally served upon them in New York, New York. The parties hereto expressly and irrevocably waive any claim that any such jurisdiction is not a convenient forum for any such suit or proceeding and any defense or lack of in personam jurisdiction with respect thereto. In the event of any such action or proceeding, the party prevailing therein shall be entitled to payment from the other parties hereto of all of its reasonable counsel fees and disbursements.

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7.03        Headings. The Article and Section headings of this Agreement are for convenience only, do not form a part of this Agreement, and will not in any way affect the interpretation hereof.

7.04        Parties in Interest. Nothing in this Agreement will be construed to be for the benefit of or enforceable by any Person not a party to this Agreement, including, but not limited to, any creditor of the Company, other than the Persons entitled to indemnification.

7.05        Further Assurances. The Holders will execute and deliver such further instruments and do such further acts and things as may reasonably be required to carry out the intent and purposes of this Agreement.

7.06        Remedies Cumulative. Except as otherwise provided herein, no remedy conferred upon or reserved to the Company or any Holder by this Agreement is intended to be exclusive of any other remedy. Except as otherwise provided herein, each and every such remedy will be cumulative and will be in addition to any other remedy given to the Company or any Holder hereunder or now or hereafter existing at law or in equity or by statute.

7.07        Successors and Assigns. Subject to the restrictions on Transfer set forth in Article 6, this Agreement will bind and inure to the benefit of the parties hereto and their respective successors and assigns.

7.08        Legal Fees. In the event that any party should commence legal proceedings with respect to the rights and duties of the parties to this Agreement, the prevailing party in such legal proceedings will be entitled to reimbursement from the non-prevailing party of all legal fees and expenses incurred in such proceedings.

7.09        Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed to be an original and all of which will constitute one and the same agreement.

7.10        Entire Agreement. The terms and conditions of this Agreement constitutes the entire agreement between the Holders concerning the subject matter hereof, and will supersede all previous communications, either oral or written, between the parties hereto, and no agreement or understanding modifying this Agreement will be binding upon any Holder unless such modification is in writing and signed by such Holder.

7.11        Appraisal Rights. Each Holder hereby waives any right to cause the Company to pay the fair value of its Common Shares if and as required pursuant to the laws of the State of Florida.

7.12        Waivers and Amendments. This Agreement, and any and all provisions of this Agreement, may be waived, modified or amended from time to time with the prior affirmative vote of at least a majority of the Directors and the prior written approval of the Investor and the Founders provided each owns at least ten (10%) percent of the issued and outstanding Common Stock at such time.

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7.13        Confidentiality. Each of the Holders shall maintain in strict confidence, and will cause their officers, directors, managers, employees, agents, shareholders, partners, members, accountants, consultants, legal counsel and other advisors and representatives to maintain in strict confidence all, and not disclose to any third party any, information they have with respect to (i) the Company and its business, assets, liabilities, results of operations and financial condition (the “Confidential Information”) and (ii) the terms of this Agreement, unless such information is already known to such third party or to others not bound by a duty of confidentiality or such information becomes publicly available through no fault of such party or unless the furnishing of such information (a) is authorized by the Board, (b) is necessary to conduct the Company’s business, (c) is made to their lenders and their respective officers, directors, managers, employees, agents, shareholders, partners, members, accountants, consultants, legal counsel and other advisors and representatives, (d) is required by or necessary in the conduct of the prosecution or defense of any legal proceeding or (e) is required or necessary in connection with the preparation and filing of any tax return or to comply with any applicable legal requirement in effect from time to time. Notwithstanding anything to the contrary in this Agreement, any Holder may disclose the terms of this Agreement and any information such Holder has with respect to the Company and its Business, assets, liabilities, results of operations and financial condition to potential purchasers of such Holder’s Company Securities, provided such Holder notifies the Board before such disclosure and, if required by the Board, the potential purchasers execute and deliver to the Company a confidentiality agreement in a form reasonably acceptable to the Board.

7.14        RESERVED

7.15        Legends. The Investor agrees that, so long as this Agreement is in effect, all Company Securities (and all Warrants and Founder Tokens issuable upon exercise of the Warrants) now or hereafter held by the Investor will be stamped or otherwise imprinted with legends in substantially the following form:

THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO, AMONG OTHER THINGS, AGREEMENTS, COVENANTS AND RESTRICTIONS PROVIDED IN THE INVESTOR AND FOUNDERS RIGHTS AGREEMENT DATED AS OF DECEMBER __, 2018, AS AMENDED FROM TIME TO TIME, BY AND AMONG THE COMPANY AND THE PERSONS NAMED THEREIN. A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY ANY SHAREHOLDER OF THE COMPANY UPON REQUEST WITHOUT CHARGE FROM THE SECRETARY OF THE COMPANY AT THE PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY.

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED IN REGULATION S) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE SECURITIES ACT.

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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED (DIRECTLY OR INDIRECTLY) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER COMPLIES WITH THE SECURITIES ACT.

7.16        Construction of Agreement and Bylaws. In the event of any inconsistency between the provisions of this Agreement and the Bylaws or the A Certificate of the Company, the provisions the Bylaws of the Company or the A Certificate (as the case may be) shall be deemed amended to the extent necessary to be consistent with this Agreement.

7.17        Termination of Term Sheet. The Term Sheet for Common Stock financing of Prometheum, Inc. between the Company and the Investor executed as of October 18, 2018 shall be automatically terminated on the Effective Date.

7.18        Termination of this Agreement. This Agreement shall terminate and have no further force and effect upon the closing of the initial public offering (an “IPO”) of the Common Stock (or of the common stock of a successor entity and/or a parent thereof to the Company), except that Section 3.01 (but not Section 3.02), Article V, Section 6.09 and this Section 7.18 all of which shall survive an IPO.

7.19        Warrants and Founder Tokens. The Warrants and Founder Tokens issuable upon exercise of the Warrants shall be subject to the same restrictions and limitations as the Warrants and Founder Tokens issued to the Founders.

7.20        Certain Additional Covenants and Agreements of the Investor.

(a)          Investor hereby agrees with the Company and the Founders that it will:

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(i)           On a best efforts basis, provide consulting services to the Company and its Subsidiaries in regards to its Ember Token economic model;

(ii)          On a reasonable efforts basis, assist the Company and its Subsidiaries with community building;

(iii)         On a reasonable efforts basis, develop new issuer deal flow for the Company’s and/or any of its Subsidiary’s business;

(iv)         On a best efforts basis, assist with the Company’s and its Subsidiary’s proposed Regulation A $50mm capital raise including, but not limited to, having the most qualified personnel of the Investor attend and present potential investors including on road shows and conference calls and assist in the preparation of materials and the presentation thereof; and

(v)          On a best efforts basis, coordinate with the Company’s PR team/firm to contemporaneously publicize this binding term sheet in Asia and assist the Company’s PR team/firm in securing press regarding the Company, when needed.

(b)          The agreements and covenants of the Investor set forth in this Section 7.20 shall survive any termination of this Agreement.

7.21        Notwithstanding anything to the contrary provided herein or elsewhere, in the event the Founders and the Company determine to transfer Founder Tokens to a non-Affiliated Person or Persons as partial or full compensation for such Person or Persons providing a benefit to the Company (for capital raising, mergers and acquisitions, technology related and/or other strategic purposes of the Company), then the Investor and each Founder shall each transfer to such Person or Persons their respective pro-rata portion of each of their respective Founder Tokens of the total amount of Founder Tokens being provided to such Person or Persons, provided (i) the Investor shall be entitled to all information regarding any such Person(s) and the benefit so provided to the Company, and (ii) the total number of Founder Tokens transferrable shall not exceed fifteen (15%) percent of the supply of Founder Tokens.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

COMPANY:

PROMETHEUM, INC.

By:	/s/ Martin H. Kaplan
	Name: Martin H. Kaplan
	Title: Chairman

S-1

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

INVESTOR:

HASHKEY DIGITAL ASSERT GROUP LIMITED

By:	/s/ Xiao Feng
	Name: Dr. Xiao Feng
	Title: Director

S-2

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

FOUNDERS:

/s/ Martin H. Kaplan

Martin H. Kaplan

/s/ Aaron L. Kaplan

Aaron L. Kaplan

/s/ Benjamin S. Kaplan

Benjamin S. Kaplan

/s/ Lawrence G. Nusbaum

Lawrence G. Nusbaum

/s/ Junichi Watanabe

Junichi Watanabe

/s/ Jonathon Braun

Jonathon Braun

/s/ Jerry Schneider

Jerry Schneider

/s/ Alex Shapiro

Alex Shapiro

S-3

SCHEDULE I

The number of shares of Common Stock, Ember Tokens and other Company Securities owned by each Holder are set forth below.

EXHIBIT A

Joinder to Investors and Founders Agreement

EX1A-6 MAT CTRCT

Exhibit 6.6

  WWW. STOCKCROSS.COM
T. 800-993-2015
F. 8011-927-0183

January 25, 2019

Martin H. Kaplan

Chairman of the Board
Prometheum Inc.

120 Wall Street

New York, New York 10005

Dear Marty:

This letter shall memorialize StockCross Financial Services Inc.’s (“STX”) commitment and agreement that subject to regulatory approvals STX will provide Prometheum Inc. (“Prometheum”) and its broker-dealer affiliate Prometheum ATS, Inc. (PEATS) with clearance, settlement and custody and control of crypto-securities traded/held in customer accounts introduced to STX by PEATS.

It is understood that the blockchain applications for use in connection with Prometheum’s crypto-securities transactions will use the Prometheum Blockchain for the purposes allowed by the Securities and Exchange Commission, FINRA or other relevant regulatory authority for purposes of maintaining compliance with broker-dealer books and records, 15c3-3 custody and control purposes and for such other and further broker-dealer applications approved under applicable law and regulation. While the US regulatory agencies are finalizing their full acceptance of blockchain uses, in accordance with clearing practicality, StockCross will maintain conventional electronic records provided by Prometheum of all transactions for clients introduced by Prometheum and theiraccounts. 

Ultimately, it is our mutual intention to build a crypto-securities clearance, reporting, custody and control infrastructure for all crypto-securities, including but not limited to Ember Tokens being issued by Prometheum which will trade through PEATS.

It is intended that PEATS shall introduce all its customer accounts to StockCross on a fully disclosed basis. 

MEMBER FINRA • SIPC • EST.1971

BEVERLY HILLS - 9464 Wilshire Blvd, Beverly Hills, CA90212

All of the above and such other and further terms that are agreed to by the Parties hereto shall be set out in a Clearing Agreement to be entered into between PEATS and StockCross.

If the above is consistent with our understanding please evidence your acceptance of same by co-signing in the space provided below.

Very truly yours,

/s/ Michael J. Columbino

Michael J. Colombino, CFO

Read, Agreed and Accepted
this 25^th day of January 2019

By:	/s/ Martin H. Kaplan
Martin H. Kaplan, Chairman

EX1A-6 MAT CTRCT

Exhibit 6.7

TRANSFER AGENT AND REGISTRAR AGREEMENT

This Transfer Agent and Registrar Agreement (the “Agreement”), dated as of January 29, 2019, by and between Prometheum, Inc. a corporation duly organized and existing under the laws of the State of Delaware (“Corporation”), and VStock Transfer, LLC, a California limited liability company (“Transfer Agent”), is for the purpose of performing the services described therein.

RECITALS

WHEREAS, the Corporation desires that certain services be provided by the Transfer Agent with regard to the issuance, transfer and registration of certain securities of the Corporation;

WHEREAS, the Transfer Agent is engaged in the business of providing services for issuers of securities and seeks to provide such services to the Corporation; and

WHEREAS, the parties hereto desire to set forth the terms and conditions for the providing of services by the Transfer Agent to the Corporation.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the parties agree as follows:

I. GENERAL APPOINTMENT OF TRANSFER AGENT; DOCUMENTS

a. The Corporation hereby appoints the Transfer Agent as the sole transfer agent for the issuance, cancellation, transfer and registration of the securities of the Corporation set forth in the Preliminary Information Form annexed hereto as Exhibit B (the “Securities”) and to perform such other services related to the Securities as provided for in this Agreement and is authorized and directed to maintain records showing the name and address of, and the number of Securities issued to each holder of said Securities together with such other records as the Transfer Agent may deem necessary or advisable to discharge its duties as set forth herein.

b. The Transfer Agent is authorized and directed to issue Securities of the Corporation from time to time upon receiving from the Corporation (i) written instructions as to the issuance from an authorized officer of the Corporation, and (ii) an opinion of counsel that (1) the Securities are duly authorized, validly issued, fully paid and nonassessable, (2) issuance of the Securities has been registered (stating effective date thereof) under the Securities Act of 1933 (as amended) (the “Act”) and the class of Securities represented by the Securities has been registered under the Securities Exchange Act of 1934 (as amended), or, if exempt from registration, the basis of such exemption, (3) no order or consent of any governmental or regulatory authority other than that provided to the Transfer Agent is required in connection with the issuance of the Securities or, if no such order or consent is required, a statement to that effect. The opinion should also indicate whether it is necessary that the Securities bear a restrictive legend and the wording of the legend or a statement to the effect that all Securities to be issued are freely transferable upon presentation to the Transfer Agent for that purpose, and (iii) such further documents as the Transfer Agent may reasonably request.

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c. The Transfer Agent is further authorized and directed to make transfers of Securities from time to time upon the books of the Corporation as maintained by the Transfer Agent. Securities, in either certificated or book entry form (or other appropriate form of ownership), will be transferred or exchanged upon the surrender of the old Securities (or appropriate instructions in the case of noncertificated shares) in a form reasonably deemed by the Transfer Agent to be properly endorsed for transfer and accompanied by such documents as the Transfer Agent may deem necessary to evidence the authority of the person making the transfer. The Transfer Agent reserves the right to refuse to transfer Securities until it has received reasonable assurance that each necessary endorsement is genuine and effective, that the transfer of the Securities is legally valid and genuine and that the requested transfer is otherwise legally in order. For that purpose, Transfer Agent may require an acceptable guaranty of the signature of the person signing and appropriate assurance of authority to do so. The Transfer Agent may rely upon the Uniform Commercial Code, applicable law or regulation, and generally accepted industry practice in effecting transfers, or in delaying or refusing to effect transfers. The Transfer Agent may delay or refuse to process any transfer that in its reasonable judgment appears improper or unauthorized. Upon a request for the transfer of a restricted item, the Transfer Agent may require an opinion of either presenter’s counsel or the Corporation’s counsel to process such transfer.

d. The Transfer Agent may conclusively rely and act or refuse to act without further investigation upon any list, instruction, certification, authorization, stock certificate or other communication, including electronic communication, instrument or paper believed by it in good faith to be genuine and unaltered, and to have been signed, countersigned or executed by any duly authorized person or persons, or upon the instruction of any officer of the Corporation or the advice of counsel for the Corporation. The Transfer Agent may make any transfer or registration of ownership for such securities which is believed by it in good faith to have been duly authorized or may refuse to make any such transfer or registration if in good faith the Transfer Agent deems such refusal necessary in order to avoid any liability upon either the Corporation or itself. Corporation agrees that it shall not give Transfer Agent direction to take any action or refrain from taking any action, if implementing such direction would be a violation of applicable law or regulation. Corporation agrees that it shall not direct Transfer Agent to transfer any security if such security is subject to any restriction or prohibition on transfer to or from a securities intermediary in its capacity as such, and Transfer Agent shall be protected in refusing to effect any such transfer.

e. When the Transfer Agent deems it expedient it may apply to the Corporation, or counsel for the Corporation, or to its own counsel for instructions and advice; that the Corporation will promptly furnish or will cause its counsel to furnish, and, for any action taken in accordance with such instructions or advice, or in case such instructions and advice shall not be promptly furnished, the Corporation will indemnify and hold harmless the Transfer Agent from any and all liability, including attorney’s fees and court costs.

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f. The Corporation will at all times advise the Transfer Agent of any and all stop transfer notices or adverse claims lodged against Securities of the Corporation and further, will promptly notify the Transfer Agent when any such notices or claims have expired or been removed. The Transfer Agent is not otherwise responsible for stop transfer notices or adverse claims from either the Corporation or third parties unless it has received actual written notice. Notwithstanding, the Transfer Agent’s responsibility with respect to any such stop transfer notice or adverse claim is subject to the rights of the registered holder of the Securities in accordance with applicable law.

II. AUTHORIZED OFFICERS

a. Specimen signatures of the officers of the Corporation authorized to sign the physical evidence of Securities, including any certificate together with any applicable specimen certificates, shall be provided to the Transfer Agent to be used by it. The Transfer Agent shall be protected and held harmless in recognizing and acting upon any signature, certificates or other document believed by it in good faith to be genuine. When any officer of the Corporation shall no longer be vested with the authority to sign evidence of Securities for the Corporation, a written notice thereof shall be given to the Transfer Agent and until receipt of such notice the Transfer Agent shall be fully protected and held harmless in recognizing and acting upon the evidence of Securities bearing the signature of such officer or any signature believed by it in good faith to be such genuine signature.

b. The Transfer Agent shall not be charged with notice of any change in the officers of the Corporation until notice of such change shall be given in writing by the Corporation to the Transfer Agent.

c. In the event any officer of the Corporation who shall have signed blank stock certificates or other evidence of Securities (or whose facsimile signature shall have been used) shall die, resign or be removed prior to the issuance of such certificates or other evidence of Securities, the Transfer Agent in its capacity as Transfer Agent or Registrar, may issue or register such stock certificates or other evidence of securities as the stock certificates or evidence of Securities of the Corporation, notwithstanding such death, resignation or removal, unless directed to the contrary by the Corporation in writing.

d. Transfer Agent shall be fully protected and held harmless in recognizing and acting upon written instructions of an authorized officer of the Corporation.

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III. RESPONSIBILITIES AND INDEMNITIES, AND COMPENSATION

a. The Transfer Agent may conclusively and in good faith rely and act, or refuse to act, upon the records and information provided to it by the Corporation and its prior transfer agent or recordkeeper without independent review and shall have no responsibility or liability for the accuracy or inaccuracy of such records and information.

b. The Corporation will indemnify, defend, protect and hold harmless the Transfer Agent and its managers, affiliates, agents, officers and employees (the “Indemnitees”) from and against any and all: losses, costs, claims, damages, suits, judgments, penalties, liabilities, and expenses, including, without limitation, reasonable attorney’s fees and expenses, incurred or made, arising out of or in connection with any act or omission of a prior transfer agent of the Corporation or the performance of the Transfer Agent’s obligations under the provisions of this Agreement, including but not limited to, acting, or refusing to act, in reliance upon any signature, endorsement, assignment, certificate, order, request, notice, report, record, instructions or other instrument or document believed by the Transfer Agent in good faith to be valid, genuine and sufficient (the foregoing are referred to as “Indemnifiable Costs”); provided, however, such indemnification shall not apply to any such act or omission finally adjudicated to have been directly caused by the bad faith or gross negligence of the Transfer Agent. The Indemnitees shall be under no obligation to institute or defend any action, suit, or legal proceeding in connection herewith or to take any other action likely to involve the Indemnitees in expense, unless first indemnified to the Transfer Agent’s satisfaction. The indemnities provided by this paragraph shall survive the resignation or removal of the Transfer Agent or the termination of this Agreement. If the indemnification provisions of this Agreement are inadequate or unavailable for any reason, the Indemnitees shall be entitled to contribution from the Corporation and any third-party payors including insurers for all Indemnifiable Costs.

c. Anything in the Agreement to the contrary notwithstanding, in no event shall either party or its respective affiliates, agents, officers, directors, managers and employees be liable under or in connection with this Agreement for special, indirect, incidental, punitive, or consequential losses or damages of any kind whatsoever, including but not limited to lost profits, whether or not foreseeable, even if advised of the possibility thereof and regardless of the form of action in which such damages are sought.

d. The Transfer Agent may, in connection with the services described in the Agreement, engage subcontractors, agents, co- transfer agents or attorneys-in-fact, provided the same shall have been selected with reasonable care. The Transfer Agent is authorized by the Corporation to execute all agreements, appoint agents or sub-agents and do all other acts deemed necessary to carry out the general purposes of this Agreement. The Corporation shall provide to the Transfer Agent any books, records, or memoranda which are required in defense of any claim which may arise in the performance of the Transfer Agent’s duties hereunder.

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e. The Corporation agrees that the Transfer Agent shall be paid fees for its services and reimbursed for expenses in accordance with the attached fee schedule (See attached Fee Schedule – Exhibit C), which may be updated by the Transfer Agent from time to time. Requests for payment of fees and expenses shall be submitted by the Transfer Agent in the form of a written invoice at the beginning of each month for the services provided for the prior month. The Corporation shall make payment upon receipt of all invoices and all invoices shall be considered late if not paid in full by the last day of each month.

f. The Transfer Agent will not have any liability for failure to perform or delay in performing duties set forth herein if the failure or delay is due to an event of force majeure. An event of force majeure is an event or condition beyond the Transfer Agent’s control including, but not limited to acts of God, natural disaster, civil unrest, state of war, fire, power failure, equipment failure, act of terrorism, or similar events beyond the Transfer Agent’s control. The Transfer Agent will make reasonable efforts to minimize performance delays or disruptions in the event of such occurrences.

g. Nothing in the Agreement shall be construed to give any person or entity other than the Transfer Agent and the Corporation, and their successors and assigns, any legal or equitable right, remedy or claim under this Agreement. The Agreement shall be for the sole and exclusive benefit of the Transfer Agent and the Corporation.

IV. CONSENT TO USE OF NAME AND LOGO

Each party may disclose in regulatory filings, marketing materials and in other communications the fact Transfer Agent has been appointed pursuant to this Agreement.

V. UNCLAIMED PROPERTY ADMINISTRATION

a. The Transfer Agent will provide unclaimed property reporting services for unclaimed Securities and related cash payments, which may be deemed abandoned or otherwise subject to applicable unclaimed property law or regulation.

b. The Corporation shall assist the Transfer Agent and provide such cooperation as may reasonably be necessary in the performance of the services hereunder including delivery to the Transfer Agent of any and all such unclaimed property which may not otherwise be in the Transfer Agent’s possession.

VI. LOST SECURITY HOLDER SEARCH SERVICES

a. Pursuant to SEC rules (See SEC Rule 240.17Ad-17, as amended), the Transfer Agent is required to provide certain services regarding lost security holder accounts for the Securities.

b. The Corporation agrees to reimburse the Transfer Agent for reasonable fees and expenses incurred by the Transfer Agent in the course of providing the referenced search services.

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VII. CONFIDENTIAL INFORMATION

a. The Transfer Agent and Corporation acknowledge that during the course of the Agreement, the parties (the Discloser being the “Discloser” and the Recipient the “Recipient”) may make confidential data available to each other or may otherwise have access to proprietary or confidential information regarding the Corporation, its stockholders, or the Transfer Agent, or its or their affiliates (collectively, “Confidential Data”). Confidential Data includes all information not generally known or used by others and which gives, or may give the possessor of such information an advantage over its competitors or which could cause Corporation or Transfer Agent injury, loss of reputation or goodwill if disclosed. Such information includes, but is not necessarily limited to: data or information that identifies past, current or potential customers, stockholders, business practices, financial results, fees, research, development, systems and plans; certain information and material identified by the Discloser as “Proprietary” or “Confidential”; data that the Transfer Agent furnishes to the Corporation from the Transfer Agent’s database; data received from the Corporation and enhanced by the Transfer Agent; and/or data or information that the Recipient should reasonably be expected to know is confidential, but does not include any information which has become public without violation of this Agreement. Confidential Data may be written, oral, recorded, or maintained on other forms of electronic media. This Agreement, together with the exhibits and schedules referred to herein or delivered pursuant hereto, are Confidential and Proprietary, and shall be treated as Confidential Data by the parties hereto. The parties agree to maintain security measures to protect Confidential Data in its possession.

b. The Recipient agrees to hold as confidential all Confidential Data it receives from the Discloser. As between the Recipient and Discloser, ownership of Confidential Data shall remain with the Discloser, and Recipient shall not take any ownership interest in or right to use the Confidential Data unless expressly agreed in writing by the Discloser. The Recipient will use at least the same care and discretion to avoid unauthorized use and disclosure of the Discloser’s Confidential Data as it uses with its own similar information that it does not wish disclosed, but in no event less than a reasonable standard of care and no less than is required by law. The Recipient may only use and disclose Confidential Information of the Discloser only as necessary for the following “Permitted Purposes”: (1) performing its obligations under this Agreement, (2) in the case of Corporation, deriving the reasonable and intended benefit from the services provided by Transfer Agent under this Agreement, and (3) as otherwise specifically permitted in writing by the Discloser in this Agreement or elsewhere. The Recipient may disclose Confidential Data to: (i) its employees and employees of permitted subcontractors and affiliates who have a need to know; (ii) its attorneys and accountants as necessary in the ordinary course of its business; (iii) any regulatory authority, including the Securities and Exchange Commission (“SEC”) and the Depository Trust & Clearing Corporation (“DTCC”), (iv) to the New York Stock Exchange, NASDAQ or OTC Markets as applicable and (iv) any other party with the Discloser’s prior written consent.

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c. Except as prohibited by applicable law or regulation or upon request of any regulatory authority, the Recipient shall promptly notify the Discloser in writing of any subpoena, summons or other legal process served on the Recipient for the purpose of obtaining Confidential Data consisting of a stockholder list, such as an identified class of Corporation stockholders. In such cases, the Discloser shall have a reasonable opportunity to seek appropriate protective measures; provided, however, that this subsection shall not require the Transfer Agent to notify the Corporation of its receipt of any subpoena, summons or other legal process seeking Confidential Data for a single stockholder or group of related stockholders in connection with routine tax levies or other routine third party litigation or investigation involving a stockholder. The Discloser will indemnify the Recipient for all reasonable expenses incurred by the Recipient in connection with determining the lawful release of the Confidential Data that is subject to a subpoena, summons or other legal process.

VIII. TERM

a. The Agreement shall have a term of three (3) years, which term shall automatically renew for successive three (3) year terms without any action unless either party shall provide written notice of cancellation thirty (30) days prior to the end of any applicable term period. In addition, either party may terminate the Agreement upon thirty (30) days advance written notice that the other party is in material breach of its obligations hereunder, unless the breaching party has cured such breach within such thirty (30) day period. Any notice of termination by the Corporation shall include a certified copy of a resolution of the Board of Directors of the Corporation related to such termination and payment for all amounts due and owing to the Transfer Agent pursuant to this Agreement.

b. Upon the effective date of termination in accordance with the provisions noted above the Transfer Agent shall deliver, at the expense of the Corporation, to the Corporation, or to a successor transfer agent as directed in writing by the Corporation (and if no successor transfer agent has been identified at the time of resignation or removal, then the following shall be provided directly to the Corporation), all records of the Corporation in the possession of the Transfer Agent.

IX. NOTICES

All notices to be given by one party to the other under the Agreement shall be in writing and shall be sufficient if made to such party at their respective address.

If notice to the Corporation: As set forth in the Certificate of Appointment.

If notice to the Transfer Agent:

V Stock Transfer, LLC

Attn: Chief Executive Officer

18 Lafayette Place

Woodmere, New York 11598
Facsimile: (646) 536-3179

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All notices and communications hereunder shall be in writing and shall be deemed to have been duly given if mailed, by registered or certified mail, return receipt requested, or, if by other means, including facsimile capable of transmitting or creating a written record directly to the office of the recipient, when received by the recipient party at the address shown above, or at such other addresses as may hereafter be furnished to the parties by like notice. Any such demand, notice or communication hereunder shall be deemed to have been received on the date received at the premises of the addressee (as evidenced, in the case of registered or certified mail, by the date noted on the return receipt, or in the case of facsimile, the date noted on the confirmation of such transmission).

X. GOVERNING LAW AND COURTS

The Agreement shall be construed, performed and enforced in accordance with, and governed by, the laws of the State of New York, without regard to the conflict of laws doctrine applied in such state. All disputes arising out of or in connection with this Agreement, or in respect of any legal relationship associated with or derived from this Agreement, shall only be heard in any competent court residing in New York, New York, USA. The parties hereto agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any manner provided by law. The parties further waive any objection to venue in any such action or proceeding on the basis of inconvenient forum.

XI. AMENDMENT; ENTIRE AGREEMENT; SEVERABILITY

a. The Agreement may be amended or modified only by a written document authorized, executed and delivered by the Corporation and the Transfer Agent. Such document may be in the form of a resolution of the Corporation adopting a written amendment approved by the Transfer Agent.

b. The Agreement, together with the exhibits and schedules referred to herein or delivered pursuant hereto, constitute the entire agreement and understanding of the parties with respect to the matters and transactions contemplated by this Agreement and supersede any prior agreement and understandings, including any fee proposals, with respect to those matters and transactions. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.

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IN WITNESS WHEREOF, the Corporation and Transfer Agent have caused this Transfer Agent and Registrar Agreement to be duly executed and delivered as of the date first written above.

VSTOCK TRANSFER, LLC
By:	/s/ Seth Farbman
	Name: Seth Farbman
	Title: Chairman
Corporation Name:
PROMETHEUM, INC.
By:	/s/ Aaron L. Kaplan
	Name:  Aaron L. Kaplan
	Title: Co-Chief Executive Officer
By:	/s/ Benjamin S. Kaplan
	Name:  Benjamin S. Kaplan
	Title: Co-Chief Executive Officer

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Exhibit A

LEGAL DOCUMENTATION CHECKLIST

Exhibit B

PRELIMINARY INFORMATION FORM

Exhibit C

Services Included in Set-Up and

Ongoing Transfer and Registrar

Exhibit D

Payment Authorization

Exhibit E

Signature Specimen

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EX1A-6 MAT CTRCT

Exhibit 6.8

ADMINISTRATIVE SERVICES AGREEMENT

This Administrative Services Agreement (“Agreement”) is made and entered into as of March 20, 2019 by and between Prometheum, Inc., a Delaware corporation (“Prometheum”) and Manorhaven Capital, LLC, a Delaware limited liability company (“Manorhaven”). Prometheum and Manorhaven may be referred to herein each as a “Party” and collectively, as the “Parties.”

WHEREAS, Manorhaven is a broker-dealer registered with the Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority (“FINRA”); and

WHEREAS, Prometheum is conducting an offering (the “Offering”) pursuant to Regulation A, as amended (“Regulation A”), promulgated under the Securities Act of 1933, as amended (the “Securities Act”) of its ember warrants (the “Ember Warrants”) on a reasonable “best efforts” basis with a minimum offering amount of 5,000,000 Ember Warrants ($5,000,000) (the “Minimum Amount”) and a maximum offering amount of 50,000,000 Ember Warrants for gross proceeds to the Company of $49,500,000 (the “Maximum Amount”); and

WHEREAS, in connection with the Offering, Prometheum has filed with the Securities and Exchange Commission (the “SEC”) and offering statement filed pursuant to Tier 2 of Regulation A on Form 1-A (File No. 024-10760), seeking to qualify the Ember Warrants; and

WHEREAS Prometheum desires to engage Manorhaven to provide the compliance Services (as defined below) in connection with the Offering and Manorhaven desires to provide the Services pursuant to the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.Retention.

(a)Subject to the terms and conditions of this Agreement, Prometheum hereby engages Manorhaven to provide the Services in connection with Prometheum’s Offering pursuant to Regulation A and Manorhaven hereby accepts the engagement.

(b)Manorhaven’s engagement hereunder shall be limited to provision of only the Services and shall expressly not include, and Manorhaven shall not (i) provide any advisory or consulting services to Prometheum or any prospective Investor (defined below) with respect to the Offering, or the terms and structure thereof, which will be determined solely and exclusively by Prometheum and its advisers; (ii) participate in the preparation or review of any Offering materials and disclosures, including the investor subscription agreement and the offering circular (collectively, the “Offering Circular”); (iii) participate in the distribution of the Ember Warrants in the Offering on any basis; or (iv) furnish customer or broker lists for solitication. Under no circumstances shall any communication, whether oral or written, be construed or relied on by Prometheum as advice from Manorhaven. Prometheum acknowledges that Manorhaven is not acting as a placement agent or underwriter or otherwise participating in the Offering and has not and will not at any time provide any securities, financing, legal or accounting advice to Prometheum. Prometheum represents that it will only rely on the advice of its securities counsel, accountants and/or auditors, and any placement agent or underwriter. Further, Prometheum acknowledges and understands that Manorhaven will not have any direct communication with investors other than unsolicited contact that will be redirected to Prometheum or Prometheum’s designees.

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(c)Manorhaven will not provide Services for any Investors who are introduced to the Offering by a registered broker-dealer that has entered into a selling agreement with Prometheum.

2.Manorhaven Services.

(a)Each prospective investor subscribing to purchase Ember Warrants (each an “Investor”) will be required to complete and execute a subscription agreement (each a “Subscription Agreement”) and to deliver the Subscription Agreement to Prometheum pursuant to instructions provided in the Subscription Agreement. Upon receipt of each Subscription Agreement, Prometheum shall promptly send a copy of the Subscription Agreement, by electronic mail, to Manorhaven for its review.

(b)Promptly after receipt of the Subscription Agreement, Manorhaven shall perform the following (the “Services”) as soon as practicable after receive of a Subscription Agreement:

(i)review the Subscription Agreement for completeness;

(ii)conduct reasonable background checks on the Investor(s) for anti-money laundering (“AML”), IRS tax fraud identification and USA PATRIOT Act purposes, and review responses to customer identification information;

(iii)contact Prometheum, if needed, to gather additional information or clarification regarding Investors;

(iv)advise Prometheum as to permitted investment limits for Investors pursuant to Regulation A, Tier 2;

(v)provide Prometheum with prompt notice about inconsistent, incorrect or otherwise flagged (e.g. AML reasons) subscriptions; and

(vi)keep investor details and data confidential and not disclose to any third-party except Prometheum or as is required by law, or in our performance under this Agreement (e.g. as needed for AML).

3.Fees; Expenses.

(a)Administration Fee. As compensation for the Services rendered, Prometheum shall pay to Manorhaven in cash by wire transfer in immediately available funds to an account designated by Manorhaven and amount equal to two percent (2%) of the gross proceeds of each closing.

(b)Offering Expenses. Prometheum shall reimburse Manorhaven for reasonable documented expenses incurred in connection with providing the Services.

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4.Term and Termination of Agreement. The term of this Agreement will commence upon the execution of this Agreement and will terminate at the earlier of the (i) the one year anniversary of the date the Offering is qualified by the SEC, (ii) the date that the Maximum Amount has been sold, and (iii) the date that the Offering is terminated by Prometheum (the “Termination Date”). Notwithstanding anything to the contrary contained herein, any provision in this Agreement concerning or relating to indemnification, contribution, advancement, Prometheum’s representations and warranties and Prometheum’s obligations to pay fees and reimburse expenses will survive any expiration or termination of this Agreement.

5.Representations and Warranties of Prometheum. Prometheum hereby represents, warrants and covenants to Manorhaven, as of the date hereof that:

(a)Organization and Qualification. Prometheum is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Prometheum is not in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Prometheum is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of this Agreement or any other agreement entered into between Prometheum and the Investors, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of Prometheum and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on Prometheum’s ability to perform in any material respect on a timely basis its obligations under this Agreement or any transaction contemplated in connection with the Offering (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened (“Proceeding”) has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

(b)Authorization; Enforcement. Prometheum has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by Prometheum and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of Prometheum. This Agreement has been duly executed by Prometheum and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of Prometheum enforceable against Prometheum in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

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6.Representations and Warranties of Manorhaven. Manorhaven hereby represents and warrants to Prometheum, as of the date hereof that:

(a)Organization and Qualification. Manorhaven is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Manorhaven is not in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Manorhaven is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in a Material Adverse Effect and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

(b)Authorization; Enforcement. Manorhaven has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by Manorhaven and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of Manorhaven. This Agreement has been duly executed by Manorhaven and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of Manorhaven enforceable against Manorhaven in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

7.Mutual Indemnification. Each Party shall indemnify, defend and hold the other Party harmless from all liabilities, costs and expenses (including, without limitation, attorneys fees) that such Party may suffer, sustain or become subject to as a result any misrepresentation or breach of warranty, covenant or agreement of the indemnifying Party contained herein or the indemnifying Party’s gross negligence or willful misconduct in performance of its obligations under this Agreement.

8.Amendments and Waivers. No supplement, modification or waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby. The failure of a party to exercise any right or remedy shall not be deemed or constitute a waiver of such right or remedy in the future. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any such waiver be deemed or constitute a continuing waiver unless otherwise expressly provided.

9.Confidentiality. In the event of the consummation or public announcement of any Offering, Manorhaven shall have the right to disclose its participation in such Offering, including, without limitation, the placement at its cost of “tombstone” advertisements in financial and other newspapers and journals. Manorhaven agrees not to use any confidential information concerning Prometheum provided to Manorhaven by Prometheum for any purposes other than those contemplated under this Agreement. 

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10.Headings. The headings of the various sections of this Agreement have been inserted for convenience of reference only and will not be deemed to be part of this Agreement. 

11.Counterparts. This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original and all such counterparts shall together constitute one and the same instrument. 

12.Severability. In case any provision contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein will not in any way be affected or impaired thereby. 

[Signature Page Follows]

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IN WITNESS WHEREOF, Prometheum and Manorhaven have caused this Agreement to be duly executed and delivered as of the date first written above.

PROMETHEUM, INC.
By:
	Name: Martin H. Kaplan
	Title: Chairman
MANORHAVEN CAPITAL, LLC
By:
	Name: Zachary Marans
	Title: Chief Executive Officer

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EX1A-8 ESCW AGMT

Exhibit 8.1

ESCROW AGREEMENT

This ESCROW AGREEMENT (this “Agreement”) made as of the 4^th day of January, 2019, by and between Prometheum, Inc. (the “Issuer”) whose address and other information appear on the Information Sheet (as defined herein) attached to this Agreement, and Cross River Bank (the “Escrow Agent”), a New Jersey state chartered bank, having an address at 400 Kelby Street, 14^th Floor, Fort Lee, NJ 07024.

WITNESSETH:

WHEREAS, the Issuer has filed with the Securities and Exchange Commission (the “Commission”) an offering statement (the “Offering Statement”) covering a proposed public offering (the “Offering”) pursuant to Tier 2 of Regulation A promulgated under the Securities Act of 1933, as amended (the “Securities Act”) of up to $50,000,000 of the Issuer’s Securities (as defined in the attached Information Sheet) to subscribers for Issuer’s Securities in the Offering (“Investors”);

WHEREAS, the Issuer proposes to offer the Securities to “qualified purchasers” (as defined in Rule 256 of Regulation A) on a “best efforts all or none” basis with respect to the Minimum Offering Amount (as defined in the attached Information Sheet) and thereafter on a “best efforts” basis up to the Maximum Offering Amount (as defined in the attached Information Sheet); and

WHEREAS, the Issuer proposes to establish an escrow account (the “Escrow Account”), to which subscription monies which are received by the Escrow Agent from the Issuer in connection with such private offering are to be credited, and the Escrow Agent is willing to establish the Escrow Account on the terms and subject to the conditions hereinafter set forth; and

WHEREAS, the Escrow Agent has agreed to establish a special bank account at Cross River Bank (the “Bank”) into which the Investors’ subscription monies, which are received by the Escrow Agent from Investors or the Issuer and credited to the Escrow Account, are to be deposited.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto hereby agree as follows:

1.           Information Sheet. Each capitalized term not otherwise defined in this Agreement shall have the meaning set forth for such term on the information sheet which is attached to this Agreement as Exhibit A and is incorporated by reference herein and made a part hereof (the “Information Sheet”).

2.            Establishment of the Bank Account.

2.1            The Escrow Agent shall establish a non-interest-bearing bank account at the branch of Bank selected by the Escrow Agent, and bearing the designation set forth on the Information Sheet (heretofore defined as the “Bank Account”). The purpose of the Bank Account is for (a) the deposit of all subscription monies (checks or wire transfers) which are received by the Issuer and delivered by the Issuer to the Escrow Agent and which are delivered directly to the Escrow Agent by the Investors, (b) the holding of amounts of subscription monies which are collected through the banking system and (c) the disbursement of collected funds, all as described herein.

2.2            On or before the date of the initial deposit in the Bank Account pursuant to this Agreement, the Issuer shall notify the Escrow Agent in writing of the qualification date of the Offering Statement (the “Qualification Date”), and the Escrow Agent shall not be required to accept any amounts for credit to the Escrow Account or for deposit in the Bank Account prior to its receipt of such notification.

2.3           The “Offering Period,” which shall be deemed to commence on the Qualification Date, shall terminate on the earlier to occur of (i) the one year anniversary of the Qualification Date, (ii) the date that the Maximum Offering Amount is been sold, and (iii) the date that the Offering is terminated by the Issuer. The last day of the Offering Period is referred to herein as the “Termination Date”. After the Termination Date, the Issuer shall not deposit, and the Escrow Agent shall not accept, any additional amounts representing payments by prospective purchasers.

3.            Deposits to the Bank Account.

3.1            Pursuant to Rule 15c2-4 promulgated pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Issuer shall promptly deliver to the Escrow Agent all monies which it receives from prospective purchasers of the Securities, which monies shall be in the form of checks or wire transfers, provided however that “Cashiers” checks and “Money Orders” must be in amounts greater than $10,000; Cashier’s checks or Money Orders in amounts less than $10,000 shall be rejected by the Escrow Agent. Upon the Escrow Agent’s receipt of such monies, they shall be credited to the Escrow Account. All checks delivered to the Escrow Agent shall be made payable to “Cross River Bank as Escrow Agent for Prometheum, Inc.” Any check payable other than to the Escrow Agent as required hereby shall be returned to the prospective purchaser, or if the Escrow Agent has insufficient information to do so, then to the Issuer (together with any Subscription Information, as defined below or other documents delivered therewith) by noon of the next business day following receipt of such check by the Escrow Agent, and such check shall be deemed not to have been delivered to the Escrow Agent pursuant to the terms of this Agreement.

3.2            Promptly after receiving subscription monies as described in Section 3.1, the Escrow Agent shall deposit the same into the Bank Account. Amounts of monies so deposited are hereinafter referred to as “Escrow Amounts”. The Escrow Agent shall cause the Bank to process all Escrow Amounts for collection through the banking system. Simultaneously with each deposit to the Escrow Account, the Issuer shall inform the Escrow Agent in writing of the name and address of the prospective purchaser, the amount of Securities subscribed for by such purchase, and the aggregate dollar amount of such subscription and any other information requested by Escrow Agent (collectively, the “Subscription Information”).

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3.3            The Escrow Agent shall not be required to accept for credit to the Escrow Account or for deposit into the Bank Account checks which are not accompanied by the appropriate Subscription Information, which at minimum shall include the name, address, tax identification number and the number of Issuer Securities being acquired. Wire transfers representing payments by prospective purchasers shall not be deemed deposited in the Escrow Account until the Escrow Agent has received in writing the Subscription Information required with respect to such payments.

3.4            The Escrow Agent shall not be required to accept in the Escrow Account any amounts representing payments by prospective purchasers, whether by check or wire, except during the Escrow Agent’s regular business hours.

3.5            Only those Escrow Amounts, which have been deposited in the Bank Account and which have cleared the banking system and have been collected by the Escrow Agent, are herein referred to as the “Fund.”

3.6            If the Offering is terminated before the Termination Date, the Escrow Agent shall refund any portion of the Fund prior to disbursement of the Fund in accordance with Article 4 hereof upon instructions in writing signed by the Issuer.

4.            Disbursement from the Bank Account.

4.1            If by the close of regular banking hours on the Termination Date the Escrow Agent determines that the amount in the Fund is less than the Offering Amount, as indicated by the Subscription Information submitted to the Escrow Agent, then in either such case, the Escrow Agent shall promptly refund to each prospective purchaser the amount of payment received from such purchaser which is then held in the Fund or which thereafter clears the banking system, without interest thereon or deduction therefrom, by drawing checks on the Bank Account for the amounts of such payments and transmitting them to the purchasers. In such event, the Escrow Agent shall promptly notify the Issuer of its distribution of the Fund.

4.2            If at any time up to the close of regular banking hours on the Termination Date, the Escrow Agent determines that the amount in the Fund represents the sale of the Offering Amount, the Escrow Agent shall promptly notify the Issuer of such fact in writing. The Escrow Agent shall promptly disburse the Fund, by drawing checks on the Bank Account in accordance with instructions in writing signed by both the Issuer as to the disbursement of the Fund, promptly after it receives such instructions.

4.3            [Reserved]

4.4            Upon disbursement of the Fund pursuant to the terms of this Article 4, the Escrow Agent shall be relieved of further obligations and released from all liability under this Agreement. It is expressly agreed and understood that in no event shall the aggregate amount of payments made by the Escrow Agent exceed the amount of the Fund.

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5.            Rights, Duties and Responsibilities of Escrow Agent. It is understood and agreed that the duties of the Escrow Agent are purely ministerial in nature, and that:

5.1            The Escrow Agent shall notify the Issuer, upon request, of the Escrow Amounts which have been deposited in the Bank Account and of the amounts, constituting the Fund, which have cleared the banking system and have been collected by the Escrow Agent.

5.2            The Escrow Agent shall not be responsible for the performance by the Issuer of its respective obligations under this Agreement.

5.3            The Escrow Agent shall not be required to accept from the Issuer any Subscription Information pertaining to prospective purchasers unless such Subscription Information is accompanied by checks or wire transfers meeting the requirements of Section 3.1, nor shall the Escrow Agent be required to keep records of any information with respect to payments deposited by the Issuer except as to the amount of such payments; however, the Escrow Agent shall notify the Issuer within a reasonable time of any discrepancy between the amount set forth in any Subscription Information and the amount delivered to the Escrow Agent therewith. Such amount need not be accepted for deposit in the Escrow Account until such discrepancy has been resolved.

5.4            The Escrow Agent shall be under no duty or responsibility to enforce collection of any check delivered to it hereunder. The Escrow Agent, within a reasonable time, shall return to the Issuer any check received which is dishonored, together with the Subscription Information, if any, which accompanied such check.

5.5            If the Escrow Agent is uncertain as to its duties or rights hereunder or shall receive instructions with respect to the Bank Account, the Escrow Amounts or the Fund which, in its sole determination, are in conflict either with other instructions received by it or with any provision of this Agreement, it shall be entitled to hold the Escrow Amounts, the Fund, or a portion thereof, in the Bank Account pending the resolution of such uncertainty to the Escrow Agent’s sole satisfaction, by final judgment of a court or courts of competent jurisdiction or otherwise.

5.6            The Escrow Agent is acting solely as a stakeholder at the request of the Issuer and for its convenience and shall not incur any liability whatsoever, except for its own willful misconduct or bad faith. The Escrow Agent shall not be liable for any action taken or omitted hereunder, or for the misconduct of any employee, agent or attorney appointed by it, except in the case of willful misconduct or gross negligence. The Escrow Agent shall be entitled to consult with counsel of its own choosing and shall not be liable for any action taken, suffered or omitted by it in accordance with the advice of such counsel.

5.7            The Escrow Agent shall have no responsibility at any time to ascertain whether or not any security interest exists in the Escrow Amounts, the Fund or any part thereof or to file any financing statement under the Uniform Commercial Code with respect to the Fund or any part thereof.

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5.8           The Escrow Agent may consult with, and obtain advice from, counsel of its own choice in the event of any bona fide question as to any of the provisions hereof or the Escrow Agent’s duties hereunder. The Escrow Agent shall incur no liability and shall be fully protected in acting in good faith in accordance with the opinion and instructions of such counsel.

5.9           The Escrow Agent shall not be bound or affected in any way by any notice of modification or cancellation of this Agreement unless written notice thereof is given to the Escrow Agent by the Issuer in accordance with this Agreement. The Escrow Agent shall not be bound by any modifications of its obligations hereunder unless the Escrow Agent consents in writing thereto. The Escrow Agent shall be entitled to rely upon any judgment, certification, demand, notice or other writing delivered to it hereunder without being required to determine the authenticity or the correctness of any fact stated therein or the propriety or validity of the service thereof.

5.10           The Escrow Agent may act in reliance upon any instrument or signature reasonably believed by it to be genuine and the Escrow Agent may assume that any person purporting to give any notice or receipt of advice or make any statement in connection herewith has been duly authorized so to do.

5.11           The Escrow Agent shall have no responsibilities regarding compliance of the securities (which are the subject of the subscription) with the securities laws of the United States or any applicable state securities law. In addition, the Escrow Agent shall have no responsibility in determining whether any Investor in the securities subscription meets the requirements to be considered an accredited investor or any other requirements that must be fulfilled in order to participate in the subscription.

5.12           The Escrow Agent makes no representations regarding the quality of the securities which are the subject of the subscription and as to whether registration with the U.S. Securities and Exchange Commission or any other regulatory body, is necessary.

6.           Amendment; Resignation or Removal of Escrow Agent. This Agreement may be altered or amended only with the written consent of the Issuer, and the Escrow Agent. The Escrow Agent may resign and be discharged from its duties hereunder at any time by giving written notice of such resignation to the Issuer specifying a date when such resignation shall take effect and upon delivery of the Fund to the successor escrow agent designated by the Issuer in writing. Such successor Escrow Agent shall become the Escrow Agent hereunder upon the resignation date specified in such notice. If the Issuer fails to designate a successor Escrow Agent within thirty (30) days after such notice, then the resigning Escrow Agent shall promptly refund the amount in the Fund to each prospective purchaser, without interest thereon or deduction. The Escrow Agent shall continue to serve until its successor accepts the escrow and receives the Fund. The Issuer and shall have the right at any time to remove the Escrow Agent and substitute a new escrow agent by giving notice thereof to the Escrow Agent then acting. Upon its resignation and delivery of the Fund as set forth in this Section 6, the Escrow Agent shall be discharged of and from any and all further obligations arising in connection with the escrow contemplated by this Agreement. Without limiting the provisions of Section 8 hereof, the resigning Escrow Agent shall be entitled to be reimbursed by the Issuer for any expenses incurred in connection with its resignation, transfer of the Fund to a successor escrow agent or distribution of the Fund pursuant to this Section 6.

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7.            Representations and Warranties. The Issuer hereby represents and warrants to the Escrow Agent that:

7.1             No party other than the parties hereto and the prospective purchasers have, or shall have, any lien, claim or security interest in the Escrow Amounts or the Fund or any part thereof.

7.2             No financing statement under the Uniform Commercial Code is on file in any jurisdiction claiming a security interest in or describing (whether specifically or generally) the Escrow Amounts or the Fund or any part thereof.

7.3            The Subscription Information submitted with each deposit shall, at the time of submission and at the time of the disbursement of the Fund, be deemed a representation and warranty that such deposit represents a bona fide payment by the purchaser described therein for the amount of Securities set forth in such Subscription Information.

7.4           All of the information contained in the Information Sheet is, as of the date hereof, and will be, at the time of any disbursement of the Fund, true and correct.

7.5            Reasonable controls have been established and required due diligence performed to comply with “Know Your Customer” regulations, USA Patriot Act, Office of Foreign Asset Control (OFAC) regulations and the Bank Secrecy Act.

7.6           Will comply with all applicable federal and state laws and regulations including but not limited to the United States Securities Acts of 1933 and 1940, the accredited investor rules and applicable state securities (Blue Sky) laws.

8.            Fees and Expenses. The Escrow Agent shall be entitled to the Escrow Agent Fees set forth on the Information Sheet, payable as and when stated therein. In addition, the Issuer agrees to reimburse the Escrow Agent for any reasonable expenses incurred in connection with this Agreement, including, but not limited to, reasonable counsel fees.

9.            Indemnification and Contribution.

9.1            The Issuer (the “Indemnitor”) agrees to indemnify the Escrow Agent and its officers, directors, employees, agents and shareholders (collectively referred to as the “Indemnitees”) against, and hold them harmless of and from, any and all loss, liability, cost, damage and expense, including without limitation, reasonable counsel fees, which the Indemnitees may suffer or incur by reason of any action, claim or proceeding brought against the Indemnitees arising out of or relating in any way to this Agreement or any transaction to which this Agreement relates, unless such action, claim or proceeding is the result of the willful misconduct or gross negligence of the Indemnitees.

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9.2            If the indemnification provided for in Section 9.1 is applicable, but for any reason is held to be unavailable, the Indemnitor shall contribute such amounts as are just and equitable to pay, or to reimburse the Indemnitees for, the aggregate of any and all losses, liabilities, costs, damages and expenses, including counsel fees, actually incurred by the Indemnitees as a result of or in connection with, and any amount paid in settlement of, any action, claim or proceeding arising out of or relating in any way to any actions or omissions of the Indemnitor.

9.3            The provisions of this Article 9 shall survive any termination of this Agreement, whether by disbursement of the Fund, resignation of the Escrow Agent or otherwise.

10.          Termination of Agreement. This Agreement shall terminate on the final disposition of the Fund pursuant to Section 4, or the resignation of the Escrow Agreement pursuant to Section 6; provided that the rights of the Escrow Agent and the obligations of the other parties hereto under Section 9 shall survive the termination hereof and the resignation or removal of the Escrow Agent.

11.          Governing Law and Assignment. This Agreement shall be construed in accordance with and governed by the laws of the State of New York, without regard to the conflicts of laws principles thereof, and shall be binding, upon the parties hereto and their respective successors and assigns; provided, however, that any assignment or transfer by any party of its rights under this Agreement or with respect to the Escrow Amounts or the Fund shall be void as against the Escrow Agent unless (a) written notice thereof shall be given to the Escrow Agent; and (b) the Escrow Agent shall have consented in writing to such assignment or transfer.

12.          Disputes. If any party timely delivers an objection notice to the Escrow Agent with respect to the disbursement of any Escrow Amounts, then the Escrow Agent shall continue to hold the Escrow Amounts, or portion thereof, in escrow and thereafter deliver it to the party entitled thereto when the Escrow Agent receives: (a) a notice from the such party withdrawing the objection notice, (b) a notice signed by both parties directing disposition of all or such portion of the Escrow Amounts, or, if neither (a), nor (b) is applicable, (c) a judgment or order from a court of competent jurisdiction. The Escrow Agent shall have the right in the event of any such dispute to deposit the Escrow Amounts with the clerk of the court in the jurisdiction in which it maintains its principal office.

13.          Notices. All notices required to be given in connection with this Agreement shall be sent by registered or certified mail, return receipt requested, or by hand delivery with receipt acknowledged, or by the Express Mail service offered by the United States Postal Service, and addressed, if to the Issuer, at its respective address set forth on the Information Sheet, and if to, at its address listed above, and if to the Escrow Agent, at its address set forth above, to the attention of the Trust Department.

14.          Severability. If any provision of this Agreement or the application thereof to any person or circumstance shall be determined to be invalid or unenforceable, the remaining provisions of this Agreement or the application of such provision to persons or circumstances other than those to which it is held invalid or unenforceable shall not be affected thereby and shall be valid and enforceable to the fullest extent permitted by law.

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15.          Execution in Several Counterparts. This Agreement may be executed in several counterparts or by separate instruments and by facsimile or PDF transmission, and all of such counterparts and instruments shall constitute one agreement, binding on all of the parties hereto.

16.          Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings (written or oral) of the parties in connection therewith.

17.          Amendments. This Agreement may be waived, amended or terminated only by written notice signed by the Issuer and the Escrow Agent, but the duties or responsibilities of the Escrow Agent may not be changed without the Escrow Agent’s prior written consent.

[signatures on the following page]

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year first above written.

CROSS RIVER BANK
By:	/s/ Gilles Gade
	Name:  Gilles Gade
	Title: CEO
By:	/s/ Arlen Gelbard
	Name:  Arlen Gelbard
	Title  EVP, General Counsel
PROMETHEUM, INC.
By:	/s/ Aaron L. Kaplan
	Name: Aaron L. Kaplan
	Title: Co-Chief Executive Officer
By:	/s/ Benjamin S. Kaplan
	Name: Benjamin S. Kaplan
	Title: Co-Chief Executive Officer

9

EXHIBIT A

ESCROW AGREEMENT INFORMATION SHEET

10

EX1A-9 ACCT LTR

Exhibit 9.1

EX1A-9 ACCT LTR

Exhibit 9.2

 

March 28, 2019

Securities and Exchange Commission, Office of the Chief Accountant

100 F Street, N.E.

Washington, DC 20549

Re: Prometheum, Inc.

Dear Sir or Madam:

We have read the statements made by Prometheum, Inc. which we understand will be filed with the Securities and Exchange Commission within the Offering Circular constituting part of the Offering Statement on Form 1-A of Prometheum, Inc., dated March 28, 2019. We agree with the statements concerning our Firm under the heading “Change in Certifying Accountant.”

We have no basis on which to agree or disagree with the other statements in the Form 1-A.

Sincerely,

 

EX1A-11 CONSENT

Exhibit 11.1

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the inclusion in this Offering Circular as filed with the SEC of our audit report dated May 10, 2018, with respect to the consolidated balance sheet of Prometheum, Inc. as of December 31, 2017 and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows from September 18, 2017 (inception) through December 31, 2017. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

 

Spokane, Washington

March 28, 2019

EX1A-12 OPN CNSL

Exhibit 12.1

[Letterhead of Gusrae Kaplan Nusbaum PLLC]

[·], 2019

Prometheum, Inc.
120 Wall Street, 25^th Floor
New York, NY 10005

Re: Offering Statement on Form 1-A (File No. 024-10760)

Ladies and Gentlemen:

We have acted as counsel to Prometheum, Inc., a Delaware corporation (the “Company”), in connection with an Offering Statement on Form 1-A (the “Offering Statement”) filed by the Company with the Securities and Exchange Commission (the “Commission”) pursuant to Regulation A promulgated under Section 3(b) of the Securities Act of 1933, as amended (the “Securities Act”), relating to the offer and sale by the Company of up to 50,000,000 of warrants (the “Ember Warrants”) to purchase, when and if issued, ember tokens (the “Ember Warrants”).

We have examined such documents and have reviewed such questions of law as we have considered necessary or appropriate for the purposes of our opinions set forth below. In rendering our opinions set forth below, we have assumed the authenticity of all documents submitted to us as originals, the genuineness of all signatures and the conformity to authentic originals of all documents submitted to us as copies. We have also assumed the legal capacity for all purposes relevant hereto of all natural persons. As to questions of fact material to our opinions, we have relied upon certificates or comparable documents of officers and other representatives of the Company and of public officials.

Based on the foregoing, we are of the opinion that (i) the Ember Warrants, when issued, delivered and paid for as described in the Offering Statement, will be duly authorized for issuance and will constitute binding obligations of the Company enforceable against the Company in accordance with their terms, and (ii) the Ember Tokens, when created in the Genesis Block, when issued, delivered and paid for as described in the Offering Statement, will be duly authorized for issuance, validly issued, fully paid and nonassessable.

We express no opinion other than as to the federal laws of the United States of America, the laws of New York State, and the Delaware General Corporation Law (also including the statutory provisions, all applicable provisions of the Delaware Constitution and reported judicial decisions interpreting the forgoing).

We hereby consent to the filing of this opinion as an exhibit to the Offering Statement, and to the reference to our firm in the Offering Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.

Very truly yours,

 Gusrae Kaplan Nusbaum PLLC