Private Placement Memorandum

Private Placement Memorandum


 

Private Placement Memorandum


 

INTERNATIONAL LEGAL CENTER INC.


 

20,000,000 $

Up to 20,000,000 digital tokens on STO ("Tokens")

at a price of 1$ per Token


 

NOTICE TO INVESTORS

AN INVESTMENT IN THE TOKENS IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK. PROSPECTIVE INVESTORS SHOULD MAKE THEIR OWN DECISIONS AS TO WHETHER THIS OFFERING MEETS THEIR RESPECTIVE INVESTMENT OBJECTIVES AND RISK TOLERANCE LEVEL AND SHOULD CAREFULLY REVIEW AND CONSIDER THE MATTERS SET FORTH IN THIS MEMORANDUM, INCLUDING THOSE MATTERS DESCRIBED UNDER THE CAPTION “RISK FACTORS”.

NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (“SEC” OR “COMMISSION”) NOR ANY STATE SECURITIES ADMINISTRATOR HAS APPROVED OR DISAPPROVED THE TOKENS OFFERED HEREIN NOR HAS THE COMMISSION OR ANY STATE SECURITIES ADMINISTRATOR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURES CONTAINED IN THIS CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM OR THE MERITS OF AN INVESTMENT IN THE TOKENS OFFERED HEREIN.

THIS PRIVATE OFFERING MEMORANDUM (THIS “MEMORANDUM”) HAS BEEN PREPARED BY ILC INC. (HEREINAFTER REFERRED TO AS THE “ILC” OR THE “COMPANY”), SOLELY FOR USE BY CERTAIN QUALIFIED INVESTORS TO WHOM ILC IS OFFERING (HEREINAFTER REFERRED TO AS THE “OFFERING”) THE OPPORTUNITY TO PURCHASE THE RIGHT TO ACQUIRE TOKENS.

THE TOKENS OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT, OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED IN RELIANCE UPON CERTAIN EXEMPTIONS FROM REGISTRATION UNDER SUCH LAWS.  SUCH EXEMPTIONS IMPOSE SUBSTANTIAL RESTRICTIONS ON THE SUBSEQUENT TRANSFER OF TOKENS SUCH THAT AN INVESTOR HEREIN MAY NOT SUBSEQUENTLY RESELL THE TOKENS OFFERED HEREIN UNLESS THE TOKENS ARE SUBSEQUENTLY REGISTERED UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.  SEE “RISK FACTORS”.

A SUBSCRIBER MUST BEAR THE ECONOMIC RISK OF INVESTMENT IN THE TOKENS OFFERED HEREIN. THE TOKENS ISSUABLE HEREUNDER MAY NOT BE RESOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER FEDERAL AND APPLICABLE STATE LAW OR AN OPINION OF COUNSEL TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED, OTHER THAN THOSE WHICH MAY BE CONTAINED HEREIN.  IF MADE, SUCH INFORMATION MUST NOT BE RELIED UPON.

NO STATEMENT CONTAINED HEREIN SHALL BE DEEMED TO MODIFY, SUPPLEMENT, OR CONSTRUE IN ANY WAY THE PROVISIONS OF ANY DOCUMENTS ATTACHED HERETO AS EXHIBITS OR LISTED HEREIN OR ANY OF THE LANGUAGE CONTAINED THEREIN.  ANY STATEMENT MADE HEREIN WITH RESPECT TO ANY SUCH DOCUMENT IS QUALIFIED BY REFERENCE TO THE TEXT OF SUCH DOCUMENT.

PROSPECTIVE SUBSCRIBERS ARE NOT TO CONSTRUE THE CONTENTS OF THIS MEMORANDUM AS LEGAL, BUSINESS, OR TAX ADVICE.  EACH PROSPECTIVE SUBSCRIBER SHOULD CONSULT HIS OWN ATTORNEY, BUSINESS ADVISER, OR TAX ADVISER CONCERNING LEGAL, BUSINESS, TAX, AND RELATED MATTERS RELATING TO THIS INVESTMENT.

THIS OFFERING IS DIRECTED TO ACCREDITED INVESTORS AND UP TO 35 NON-ACCREDITED INVESTORS (RULE 501 OF REG. D).  

THIS OFFERING IS LIMITED IN THE UNITED STATES: SOLELY TO ACCREDITED INVESTORS AS DEFINED IN RULE 501 OF REGULATION D UNDER THE SECURITIES ACT AND, SUBJECT TO RULE 901 OF REGULATION S. IN CANADA, SUCH INVESTOR MUST BE AN ACCREDITED INVESTOR AS DEFINED UNDER APPLICABLE CANADIAN SECURITIES LAWS, OR IF OUTSIDE OF THE UNITED STATES, MUST BE A NON-U.S.

THE TOKENS ARE OFFERED SOLELY BY THIS MEMORANDUM AND ARE SUBJECT TO PRIOR SALE.  WE RESERVE THE RIGHT, IN OUR DISCRETION, TO WITHDRAW OR MODIFY THIS OFFERING WITHOUT PRIOR NOTICE OR TO REJECT ANY SUBSCRIPTION IN WHOLE OR IN PART OR TO ALLOT TO ANY PROSPECTIVE SUBSCRIBER A LESSER NUMBER OF SHARES THAN SOUGHT TO BE PURCHASED BY SUCH SUBSCRIBER.

THIS PRIVATE PLACEMENT MEMORANDUM IS SUBMITTED TO YOU ON A CONFIDENTIAL BASIS SOLELY IN CONNECTION WITH YOUR CONSIDERATION OF AN INVESTMENT IN INTERNATIONAL LEGAL CENTER INDIA INC. BECAUSE OF THE CONFIDENTIAL NATURE OF THIS PRIVATE PLACEMENT MEMORANDUM, ITS USE FOR ANY OTHER PURPOSE MAY INVOLVE LEGAL CONSEQUENCES. THIS PRIVATE PLACEMENT MEMORANDUM MAY NOT BE REPRODUCED IN WHOLE OR IN PART AND IT MAY NOT BE DELIVERED TO ANY PERSON WITHOUT THE PRIOR WRITTEN CONSENT.

UNLESS THE CONTEXT REQUIRES OTHERWISE, IN THIS MEMORANDUM THE TERMS “ILC INC.,” “COMPANY,” “WE,” “US” AND “OUR” REFER TO ILC AND ALL DOLLAR ($) AMOUNTS SET FORTH HEREIN REFER TO UNITED STATES DOLLARS.

PROSPECTIVE INVESTORS AND PURCHASER REPRESENTATIVES ARE URGED TO REQUEST ANY ADDITIONAL INFORMATION THEY MAY CONSIDER NECESSARY IN MAKING AN INFORMED INVESTMENT DECISION.


 

FORWARD-LOOKING STATEMENTS

This memorandum may contain estimates and forward-looking statements which are mainly based on the current expectations and estimates of future events and trends that affect or may affect the business, financial condition, results of operations, cash flows, liquidity, prospects and the envisaged valuation of the Tokens. Although we believe that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to many significant risks, uncertainties and are made in light of the current available information. Forward-looking statements speak only as of the date they were made, and we do not undertake the obligation to update publicly or to revise any forward-looking statements after we distribute this document because of new information, future events or other factors. Considering the risks and uncertainties described above, the forward-looking events and circumstances discussed in this document might not occur and future results may be materially different from those expressed in or suggested by these forward-looking statements.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results, performance or achievements to differ materially from the estimates or the results implied or expressed in such forward-looking statements. These factors include, amongst others:

A - changes in political, social, economic and stock or cryptocurrency market conditions, and the regulatory environment in the countries in which the Issuer conducts its businesses and operations;

B - the risk that the Issuer may be unable to execute or implement its respective business strategy and future plans;

C - changes in interest rates and exchange rates of fiat currencies and cryptocurrencies;

D - changes in the anticipated growth strategies and expected internal growth of the Issuer;

E - changes in the availability and salaries of employees who are required by the Issuer to operate their respective businesses and operations.

 

GLOSSARY

The Company/the Issuer – ILC Inc., a Delaware corporation

Tokens – digital assets issued by the Company

Airdrop – a periodic cryptocurrency payment which will be transferred from the Company to Tokenholders

Smart contract - a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code

Ethereum – an open blockchain platform that allows for building and using decentralized applications that run on blockchain technology

Ether/ETH – a native token of the Ethereum protocol

Stable Coin – a digital asset with a fixed price of 1 USD

STO – security token offering

Accredited investors - a person or entity described in rule 501 of Regulation D of the Securities Act of the United States

U.S./the United States - The United States of America, its territories and possessions including the States and the District of Columbia

U.S. Person - any individual or entity that would be a U.S. Person under Regulation S of the Securities Act. The Regulation S definition of U.S. Person includes: (a) any natural person resident in the United States; (b) any partnership or corporation organized or incorporated under the laws of the United States; (c) any estate of which any executor or administrator is a U.S. person; (d) any trust of which any trustee is a U.S. person; (e) any agency or branch of a foreign entity located in the United States; (f) any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person; (g) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States; and (h) any partnership or corporation if: (i) organized or incorporated under the laws of any foreign jurisdiction; and (ii) formed by a U.S. person principally for the purpose of investing in securities not registered under the Act, unless it is organized or incorporated, and owned, by accredited Investors (as defined in Rule 501(a) under the Securities Act) who are not natural persons, estates or trusts

U.S. Dollar/USD – the lawful currency of the United States of America

KYC – a procedure of personal identification which is required to prevent money laundering and other financial crimes

AML - Anti Money Laundering is the execution of transactions to eventually convert illegally obtained money into legal money


 


 

SUMMARY OF THE OFFERING

10,000,000 $

This memorandum describes the offering (the "Offering") of up to 100,000,000 digital tokens  ("Tokens") to be issued by ILC Inc., a Delaware corporation (the "Company"). The Company will issue a maximum of 100,000,000 Tokens for the current offering and reserves the right to issue additional Tokens in the future.

The Company has established a "base price" of $1 per Token.

The maximum number of Tokens that may be sold in the Offering is 20,000,000 Tokens. The Tokens will be sold in Packages.

Our Security Token Offering (“STO”) aims at raising funds to “tokenize” a diversified portfolio of LEGAL TECH assets located in INDIA.

There is currently no public market for our digital tokens.

At the inception of the STO, no secondary market trading of the Tokens will be available. We intend to create a marketplace with strategic partners to provide Tokenholders with the ability to exchange their assets, thus potentially increasing liquidity.

For prospective purchasers, the STO (i) brings a unique opportunity to access, through a low-cost/tax-efficient structure, the Indian Legal tech service market, (one of the fastest-growing markets), (ii) relies on the expertise, proven track record and credibility of the ILF A&A teams and (iii) is conducted through a simple, direct and innovative way using a blockchain-based technology asset known as “ILC” (the “Token”).

Our STO will be based on an audited smart contract generating the requisite tokens (ILC). Purchases will be made either in crypto-assets (ETH or Stable Coins) or U.S. dollars

It is very important to emphasize that, in contrast to many ICOs, the funds raised during the STO will not be retained by the Issuer or any other participant of the STO and shall only be used to invest into Target Assets.

The token aims to provide each Purchaser with the opportunity to indirectly invest in Indian legal service distressed assets.

This STO is intended for international purchasers based worldwide, excluding persons with residence/nationality from India and the United States of America, as well as any other country where the purchase of cryptocurrencies is legally forbidden, such as, but not limited to, China, Algeria, Bolivia, Ecuador, Morocco and Pakistan, in addition to persons located in any of the jurisdictions blacklisted by the Organization for Economic Co-operation and Development and the United Nations.

Tokenholders will potentially benefit from periodic airdrop payments - in the form of Ether (“ETH”) or a USD-pegged stable coin (“Stable Coin”).


 

BUSINESS DESCRIPTION

ILC Inc. operates in the legal consulting sphere and is a subsidiary of ILC Inc. (a holding company), established to develop the online legal services sector in India through the SIRIUS Artificial Intelligence based software. ILC Inc. is chartered in the United States. The company has strategically chosen the STO issuance strategy to finance the largest market in the world - INDIA. By acquiring ILC tokens, the partner becomes a member and ILC Global Inc. holding company, which goes public in 2022.

ILC Inc. is a company with the main purpose of developing an international online legal consulting service.

Our expertise comes from a history of more than 10 years of activities, with the most specialized team in the market and over 50 employees, management of over 11,000 court cases distributed between thousands of non-performing corporate loans and legal service assets.

ILC Inc. intends to fund a pool of projects in various countries with emerging economies with the support of the business community, allowing its members to participate directly and transparently in the future revenue stream and capital gains from these projects.

This is a unique opportunity to become a co-owner, shareholder of International Investment Portfolio, which operates in the legal sector.

At the moment the holding company has already launched the product "SIRIUS" in Russia and Kazakhstan. Having expanded its geography to India.

OUR INDUSTRY (LEGAL TECH MARKET)

LegalTech (short for legal technology) refers to IT services for professional legal activities, as well as the provision of legal services to consumers using information technology.

The digitalization of the world's conservative legal industry is accelerating: from 2017 to 2020, legal services' spending on information technology has increased by one and a half times; instead of 2.6% of the internal budget, it now accounts for 3.9%. Gartner predicts that by 2025 these costs will triple and the share of technology in legal budgets will reach 12%.

INTERNATIONAL LEGAL CENTER & LEGAL TECH

ILC Inc. intends to finance a pool of projects in various countries with emerging economies with the support of the business community, allowing its members to participate directly and transparently in the future flow of income and capital gains from these projects. The primary remuneration for ILC Inc. stakeholders is income from the Company's dividends, as well as the significant potential for capital appreciation capital as a result of the resolution of business growth risks resulting from promotion of projects, as well as the Company's own unique SIRIUS online legal consulting program built on the basis of Artificial Intelligence. By the beginning of December 2022, the company plans to go public and expand the geography of its legal services in the CIS, Latin America and the USA. The company plans to extend its services to the CIS, Latin America, India and the USA. ILC Global Inc. provides an innovative system of consultation through the use of IT technology and legal professionals, as well as the opportunity for the company to participate in the equity of the real business. Thus, the ILC Global Inc. program addresses a significant lack of accessibility to legal services and equity participation in law firms by offering potential holders a more clearly defined, more predictable future revenue stream from existing business and global development projects, turned into an international digital legal instrument.

This is a unique opportunity to become a co-owner, shareholder of International Investment Portfolio, which operates in the legal sector.


 

OUR TEAM

Abzal Mynbayev - Head of the ILC Global Inc.

Mynbaev Abzal is the managing partner of the Company and the head of investment project management. Abzal has over 20 years of managerial and legal experience. He specializes in supporting private investments, managing capital and assets, managing construction projects and developing business projects, including franchising.

Abzal Mynbayev is a great specialist in strategic planning. 

He is in charge of the launch of a major project - a Red Pad Game game studio. 

Abzal also supervised the project of launching the security token World Cru and was directly involved in obtaining a license for a payment system in Switzerland - Global Unit Pay.

Ruslan Kurmangaliyev - CEO Kazakhstan

 Ruslan is the partner of ILF A & A, is a recognized expert in the areas of litigation and construction law. His 8 years of experience in legal practice includes representing clients in dozens of complex disputes, including multi-jurisdictional disputes, comprehensive legal support for large international companies, and consulting in relation to commercial activities in general.

Ruslan accompanies and takes part in such projects as:

- Construction of Freedom Village, Khorgos, Kazakhstan, within the framework of Kazakh-American cooperation;

- Provides legal support in the agricultural sector of the Republic of Kazakhstan in cooperation with private investors in Italy.

- Construction of Abu Dhabi Plaza, Nur-Sultan, Kazakhstan, within the framework of an international agreement between the governments of the Republic of Kazakhstan and the UAE "an agreement on the construction of a multifunctional complex Abu Dhabi Plaza;

- Development and implementation of games from the game studio Red Pad Games;

- Development and implementation of the first digital International Legal Center project.

CURRENT CAPITALIZATION

Key figures of our holding include:

12 billion in distressed debt and distressed legal service assets under management, with highly scalable structures and technology.

7 million investment in software development and management tools based on cutting-edge technology such as artificial intelligence and data mining.

 

Management of over 11,000 court cases distributed between thousands of non-performing corporate loans and legal service assets.

 

187 million in third-party legal service assets under management.

 


 

ADVANTAGES OF THE PROJECT

The above mentioned reasons are the main factors that make the project attractive to investors. The attractiveness of the project:

  • Security, provided with STO;

  • The ready product SIRIUS;

  • CROWE investment assessment

  • Potential of legal tech

  • Geographical advantages

Private placement advantages:

  • Uncorrelated to Stock market

  • Gives You an opportunity to participate in Unique Deal

  • Invest Directly into Private company

  • Diversify portfolio

  • Above Average estimated Returns

Private placement offers Investors the opportunity to invest in assets that are uncorrelated to the stock market investments. Additionally, Investors have the unique ability to invest directly into privately-held companies and benefit from our experience and growth.

POTENTIAL OF LEGAL TECH

First, an ongoing expansion of “expert” legal tools will disrupt the consumer legal market. Consumer tools like Legal Zoom (Revenue $200 million) or Legal Shield (Revenue $400 million) will dramatically increase individual access to typical consumer legal needs, e.g., incorporating documents, wills, simple contracts, etc. (just as consumer tax prep software has done). This in turn will put price pressure on smaller law firms to adopt AI technologies in order to remain competitive. These firms would do well to be early adopters and demonstrate ongoing value enhancement right now — and consumer-oriented firms that resist adoption will run the risk of being rendered obsolete.

Second, “insourcing” will continue. In the larger corporate market, we’ve seen an increased spend on in-house counsel as spend on outside counsel plateaus or decreases. As was the case in the accounting industry, the continuation of the trend is expected to result both from corporate counsel’s increased access to AI technology and an in-flux regulatory environment that incentivizes bringing work in-house. Indeed, we’ve heard from multiple law firms that corporate clients have been more aggressive in pushing back on the prices for contract review as part of due diligence due to the increased availability of AI tools in document review.

Third, AI technology embedded into practitioner workflow, along with automating technology that breeds efficiency, will continue to transform the practice of law from within corporate law firms. Large corporate firms must, want to, and will invest both in expert systems that automate repeatable tasks and in augmented intelligence that will assist attorneys in their “artisanal” analytical work. This kind of machine learning offers all of the potentialities of big data mining and document analytics, natural language processing and predictive analytics.

The economic impact on the large law firms is going to be a complex determination and, to some extent, firm-dependent. Generally, expect to initially see large firms charging clients the same fees for increasingly larger bundles of service, with downward pressure on fees over time. That being said, many large law firms are looking to AI as new profit centers. The efficiencies emanating from these technologies can drive down costs, potentially expanding margins.

More importantly, many large law firms believe that the skills of their attorneys will continue to be the differentiators. AI will give lawyers the ability to provide more comprehensive counsel, but some will do better than others optimally employing AI to maximize both client value and firm profit. It’ll be those firms, and those lawyers, who grasp how to correctly insert inputs when framing data analyses, and how to interpret the outputs against the backdrop of a given client’s situation, that will sustain pricing power.

The NAFI analytical center created a model of the evolution of LegalTech, conditionally dividing it into four main stages. LegalTech at the zero level of development is a legal company that does not use IT technologies.

ADVANTAGES OF DOING BUSINESS IN INDIA

India is the second most populous country in the world after China, with 1.3 billion people. Economic liberalization has helped India enter a high-growth orbit after three decades with a growth rate of 4%. Today the country has a stable government and an extensive structural base, as well as "soft" infrastructural factors (transparent judiciary, good corporate governance). Thus, India maintains a healthy sustained economic growth. One of the key attributes of India's economy is its transition to a service-based economy. Over the past few decades, India has transformed from an agrarian economy to a service-based economy. India's steady economic growth has been fueled by strong growth in manufacturing and the service sector. Domestic consumption is India's growth engine. India has one of the largest consumer markets in the world, with a steady growth rate. A McKinsey study found that India's domestic consumption will quadruple by 2025 if economic growth remains at 7 to 8 percent. One of the key drivers of this growth will be an increase in household income. This combination of rising disposable income and a growing middle class will increase overall consumer spending. One of the features of India is an exceptionally favorable business environment for outsourcing services. Because of the extremely low price of the final product, the opportunity to save 40-70% (depending on the process), combined with the availability of top-notch professionals (FY-10 alone has trained 3.7 million graduates), is extremely attractive to foreign customers. Infrastructure development, coupled with active government policy, has had a positive impact on industrial growth. As the size and seriousness of the supplier base has increased, so has the skill and quality. India is now on a path of healthy growth. Strong economic and demographic fundamentals, favorable government policies, and sustained growth drivers are creating a fascinating growth story for India.

BENEFITS FOR TOKENHOLDERS

Our token intends to provide Tokenholders with the following benefits, namely:

  • An asset-backed token in a market currently dominated by tokens lacking intrinsic value;

  • Access to investments in Online Legal Service to foreign purchasers that may be unable to invest directly in India because of lack of international & local operational experts;

  • An evergreen vehicle that reinvests all or a large part of the cash flow from operations into new opportunities;

  • Future liquidity in a LEGAL TECH market;

  • The ability to get paid periodic distributions of profits in the form of token airdrops based on the number of Tokens held.

WAYS OF GETTING PROFIT:

Dividend policy

 The Purchasers will have a right to receive dividends twice a year. The sum of dividends will depend on the Company’s revenue and the amount of Tokens in possession.

Additional profit distribution will be carried out through (i) ETH airdrops; or (ii) Stable Coin Airdrops.

A unique opportunity to become a co-owner, shareholder International Investment Portfolio, which operates in the legal sector.


 

THE TERMS AND MECHANISMS FOR DISTRIBUTION OF PROFITS

As a US foundation company, the Issuer will designate Tokenholders as a class of beneficiary of the Issuer. Under such designation, and subject to the terms and conditions of the purchase, the Issuer will set out terms including, but not limited to, the following:

Each Token Holder will be granted a proportionate right to any airdrop of (i) ETH or (ii) a Stable Coin that is declared and made by the Issuer (each an “Airdrop”), such right proportionate according to the number of Tokens held by such Token Holder against the total Tokens then in issue, each to be determined at the time of the Airdrop;

The directors of the Issuer will, at all times, have sole discretion as to whether the profits generated by the Target Assets (including any capital gains and/or distributable rent) are to be partially or fully distributed to Tokenholders through Airdrops, reinvested or used for other purposes (including, but not limited to, satisfying liabilities, expenses, running costs and other fees);

The Airdrop of profits by the Issuer is at the discretion of the Issuer at all times up until the time of payment to the Tokenholders and is revocable by the Issuer at any time.

The Airdrop will be made in either (i) ETH) or (ii) Stable Coin and any profits generated in fiat currency or otherwise are eligible for distribution


 

MILESTONES OF THE PROJECT

  1. After KYC/AML approvals, each Purchaser acquires Tokens by entering into terms and conditions of purchase. On the specified delivery date, the Issuer provides the Purchaser with Tokens;

  2. The Issuer invests directly into Target Assets via a branch of the Company registered in USA;

  3. The funds are deployed for the acquisition of On-line Legal Service (Target Assets);

  4. ILC Inc. manages Target Assets and receives a Success Fee, as defined below;

  5. Issuer sells (via its ILC Inc.) Target Assets at a profit;

  6. Issuer may then reinvest proceeds of sale into further Target Assets or may exchange proceeds for (i) CRYPTO or a (ii) Stable Coin and airdrop pro rata to the Tokenholders in (i) CRYPTO or a (ii) Stable Coin, as described in the item “Terms and mechanisms for distribution of profits” of the private memorandum.

As consideration for the management services provided, Legal Service will be entitled to a Success Fee, composed as follows:

1% on the funds allocated to buy a Target Asset;

10% on the net collection arising from the sale of Target Assets (i.e. sale value, reduced by all costs related to the legal service, fees and taxes); and

30% performance fee on the amount exceeding a 15%/year post-tax hurdle rate of the Target Assets portfolio.


 

RISK FACTORS

Risk factors connected to Indian governmental regulation

The Republic of India government has significant influence over the Indian economy. This influence, as well as Indian political and economic conditions, could adversely affect the tokens.

The Indian government frequently intervenes in the Indian economy and occasionally makes significant changes in policy and regulation. The Indian government, recently elected, could have an impact on inflation rates, interest rates, changes in tax policies, wage and price controls, currency devaluations, capital controls, exchange controls and several other matters. We cannot control or predict the Indian government's future policy decisions. Any uncertainty over whether the Indian government will implement changes affecting these and other factors may create instability and, as a result, this may adversely affect the tokens and their price. Regardless of the fact that the field of legal services is protected by consumer demand, politics has an impact on the field of business and investment.

RISKS IN LEGAL SPHERE

We are subject to anti-corruption, anti- bribery, anti-money laundering, sanctions and antitrust laws and regulations.

We are required to comply with the applicable laws and regulations of India, and we may become subject to such laws and regulations in other jurisdictions. We cannot guarantee that our internal policies and procedures will be sufficient to prevent or detect any inappropriate practices, fraud or violations of law by our affiliates, employees, officers, executives, partners, agents, suppliers and service providers, nor that any such persons will not take actions in violation of our policies and procedures. Any violations by us or any of our affiliates, employees, directors, officers, partners, agents, suppliers and service providers of anti-bribery and anti-corruption laws or sanctions regulations could have a material adverse effect on our business, reputation, results of operations and financial condition.

Risks relating to the token regulatory environment

Regulation of crypto assets, digital tokens and token offerings is underdeveloped and is likely to evolve quickly, with potentially adverse consequences for Tokenholders. In addition, developments in regulation may change the nature of the Issuer ́ s business or restrict the use of blockchain assets or the operation of a blockchain network upon which the Issuer will rely.

Digital tokens are being closely scrutinized by various regulatory bodies around the world. There is a substantial risk that in numerous jurisdictions, Tokens may be deemed to be a security. For example, applicable securities laws may limit the ability to hold more than certain amounts of Tokens, restrict the ability to transfer Tokens, require disclosure or other conditions on purchasers in connection with any sale of Tokens, and may restrict the businesses that facilitate exchanges or carry out transfers of Tokens. Every Purchaser of a Token is required to make a diligent inquiry to determine if the acquisition, possession and possible transfer of the Tokens are legal in its jurisdiction and to comply with all applicable laws.

The legal ability of the Issuer to provide Tokens in some jurisdictions may be eliminated by future regulation or legal actions. In response to such action, the Issuer may take actions that adversely impact you and the Tokens you hold, including (a) ceasing operations or restricting access in certain jurisdictions, (b) adjusting Tokens in such a way to comply with applicable rules and regulations, (c) restricting distributions or payouts, or (d) ceasing operations entirely.

In regard to the Issuer, a filing has not been made with SEC, the main regulator in the United States of America. The offering of Tokens is not registered or regulated in the USA and the Issuer’s activities are not approved or guaranteed by SEC or by the United States of America’s Government. Neither SEC nor any other governmental authority in the United States of America has any obligation to any Purchaser of Tokens as to the performance or credit worthiness of the Issuer. Neither SEC nor any other governmental authority in the United States of America has passed judgment upon or approved the terms or merits of the offering of Tokens. SEC shall not be liable for any losses or default of the Issuer or for the correctness of any opinions or statements expressed in this memorandum. There is no investment compensation scheme available in the United States of America to either (i) purchasers of Tokens or (ii) the Issuer.

Risk Factors belonged to the regulation of the blockchain’s technology

Blockchain technologies have been the subject of intense scrutiny by various regulatory bodies around the world. The functioning of the Ethereum network, associated blockchain networks, and Tokens may be adversely impacted by regulatory actions, including restrictions or prohibitions on their use, purchase, or possession. The Issuer could become subject to various compliance obligations, such as licensing, minimum net worth requirements, bonding, biographical and financial approval of officers and directors, and other ongoing compliance, examination, and reporting obligations.

Blockchain technologies have been the subject of intense scrutiny by various regulatory bodies around the world. The functioning of the Ethereum network, associated blockchain networks, and Tokens may be adversely impacted by regulatory actions, including restrictions or prohibitions on their use, purchase, or possession. The Issuer could become subject to various compliance obligations, such as licensing, minimum net worth requirements, bonding, biographical and financial approval of officers and directors, and other ongoing compliance, examination, and reporting obligations.

RISK FACTORS RELATING TO THE TOKEN

Purchaser may never receive a distribution:

Investors may never receive any benefit from holding ILC tokens. A legally compliant trading market for tokens may never be developed and peer-to-peer transfers of tokens received by Investors will not be permitted unless and until token holders are otherwise notified by the Company, which may require holders to hold their tokens indefinitely.

As per the content of this private memorandum, it is intended that Tokenholders will be eligible to receive payments from the Issuer upon determination of a distribution to Tokenholders by the directors of the Issuer. However, as per these risk factors, the Issuer may never make a profit or have any funds available to make a distribution to Tokenholders. Furthermore, it is possible that Tokenholders will be ineligible to receive any payout due to the determinations of the Issuer including, for example, where Tokenholders have not provided KYC for AML purposes or where Tokenholders are citizens or residents in those restricted jurisdictions as determined by the Issuer.

Furthermore, any payout shall be subject to the designation terms of the Tokenholders as a class of beneficiary of the Issuer. Such terms may restrict payments by the Issuer under certain circumstances or restrict certain Token holders to any payout where such payment would not be in the best interests of the Issuer or would be in breach of any laws or regulations. Furthermore, the directors have the power to determine that profits of the Issuer may be used for reinvestment or any other purpose (such as satisfying any liabilities) and therefore may choose not to make any distribution to Tokenholders during the time that the holder holds the Tokens. Additionally, the Tokenholders may trade or transfer the Tokens and therefore may lose all rights to any distribution following such trade.

If there is insufficient demand, the STO will be canceled:

If there is insufficient demand, the STO will be canceled and purchase orders made by purchasers may be canceled. In such a scenario, any amounts already paid by purchasers will be refunded net of charges incurred, if any.

Tokens are non-refundable:

Save where the STO is canceled, the Issuer is not obliged to provide Tokenholders with a refund for any reason and Tokenholders will not receive money or other compensation in lieu of a refund.

Statements set out in this memorandum are merely expressions of the Issuer’s objectives and desired work plan to achieve those objectives and no promises of future performance or price are or will be made in respect to Tokens, including no promise of inherent value and no guarantee that Tokens will hold any particular value.

Tokens are provided on an “as is” basis:

Tokens will be provided on an “as is” basis. The Issuer and each of their respective directors, officers, employees, equity holders, supervisors, affiliates and licensors make no representations or warranties of any kind, whether express, implied, statutory or otherwise regarding Tokens, including any warranty of title, merchantability or fitness for a particular purpose or any warranty that Tokens will be uninterrupted, error-free or free of harmful components, secure or not otherwise lost or damaged. Except to the extent prohibited by applicable law, the Issuer and each of their respective directors, officers, employees, equity holders, supervisors, affiliates and licensors disclaim all warranties, including any implied warranties of merchantability, satisfactory quality, fitness for a particular purpose, non-infringement, or quiet enjoyment, and any warranties arising out of any course of dealings, usage or trade.

The Tokens will be entirely uninsured:

The Tokens are not like bank accounts or other similar accounts. The Tokens are entirely uninsured and any value they may hold at any time may decrease or be eliminated in the future.

Smart contracts are subject to limitations

Smart contract technology is still in its early stages of development, and its application is experimental in nature. This carries significant operational, technological, regulatory, reputational, and financial risks. Smart contracts may not be fit for the purpose intended by the Issuer and may contain flaws, vulnerabilities, or other issues, which may cause technical problems or the complete loss of Tokens.

The purchase of the Tokens involves liquidity risks that may subject a Tokenholders to losses

There is no existing trading market for our Tokens, and we have no guarantees that the Tokens will be negotiated in any exchange or secondary market. The Tokens are a new issuance of digital assets for which there is no established public market. Moreover, there can be no assurance that any such existing token exchanges will accept the listing of Tokens or maintain the listing if it is accepted. There can be no assurance that a secondary market will develop or if a secondary market does develop, that it will provide Tokenholders with liquidity of investment or that it will continue for the life of the Tokens. Additionally, the Issuer cannot guarantee that there will be enough liquidity to sell Tokens on any exchange or secondary market.

In addition, at times it may be difficult to dispose of the legal service assets due to low or nonexistent demand or negotiability. In such cases, we may face difficulties in negotiating or disposing of such assets at a convenient price or time. As a consequence, we depend on the income from our investments to make distributions to Tokenholders.

We will have the right to cancel the Tokens:

We shall have the right to cancel the Tokens of a Tokenholders at any time at our sole discretion, including if the relevant Tokenholders has not provided information requested by us (including, but not limited to, information requested in connection with AML/KYC purposes). Any such cancellation shall be made in exchange for a cancellation price, which will be based on the current fair market value attributed to the Token. On the other hand, Tokenholders will have no right to force or induce a repurchase or redemption of the Tokens.

RISKS RELATING TO BLOCKCHAIN NETWORKS

Potential purchasers may not have the appropriate skills to secure, trade or collect distributions using the Tokens or to comply with the requirements of the Issuer (including, but not limited to, information requested in connection with a periodic Tokenholders check). Knowledge of blockchain asset exchanges and other industry participants may be needed to comply with the requirements of the offering.

In addition, the Ethereum blockchain, which will be used for Tokens, is susceptible to mining attacks, including double-spend attacks, majority mining power attacks, “selfish-mining” attacks, and race condition attacks, as well as other new forms of attack that may be created. Any successful attacks present a risk to Tokens, expected proper execution and sequencing of Tokens, and to expected proper execution and sequencing of Ethereum contract computations in general. Mining attacks may also target other blockchain networks with which Tokens interact, which may consequently significantly impact Tokens.

Loss of private keys may render Tokens worthless:

If a private key (seed phrase) is lost, destroyed or otherwise compromised and no backup of the private key is accessible, you will not be able to access the blockchain asset associated with the corresponding address, and the Issuer will not be able to restore the private key. Any loss of private keys relating to digital wallets used to store blockchain assets may result in a complete and irreversible loss of the Tokens.

Exchange risks:

If Purchaser sends (i) ETH or a (ii) Stable Coin to the Issuer from an exchange or an account that Purchaser does not control, Tokens will be allocated to the account that has sent (i) ETH or a (ii) Stable Coin; therefore, Purchaser may never receive or be able to recover Purchaser’s Tokens. Furthermore, if Purchaser chooses to maintain or hold Tokens through a cryptocurrency exchange or other third party, Purchaser’s tokens may be stolen, lost or retained by the exchange. The Issuer cannot control the exchange process on secondary markets or exchanges and therefore cannot guarantee the safety of Tokens.

Risk of incompatible wallet services:

The wallet or wallet service provider used for the acquisition and storage of Tokens has to be technically compatible with Tokens and ERC20 protocol. Failure to ensure this may result in the Purchaser not being able to gain access to its Tokens.

Risk of weaknesses or exploitable breakthroughs in the field of cryptography:

Advances in cryptography, or other technical advances such as the development of quantum computers, could present risks to cryptocurrencies, Ethereum and Tokens, which could result in the theft or loss of Tokens.

Quantum computers pose several risks to cryptocurrencies due to their incrementally faster processing speeds. Although application- specific integrated circuits (ASICs) used to mine cryptocurrencies are likely to remain faster than quantum computers in the near term, within the next 10 years, experts expect quantum computers to outpace them, with potentially harmful effects on the ledgers. For example, if a group of cryptocurrency miners controlled a majority of the computational power on the network, it could control the ledger in a manner adverse to other users. Another issue could arise with private keys, as quantum computers may be able to hack them using the public key. Certain protocols could be changed to be resistant to hacking by quantum computers, but such alternatives may not exist until well into the future if at all. If quantum computers are used to hack cryptocurrencies without our knowledge, ledgers will be affected, which could have a material adverse effect on our business. The Issuer cannot guarantee the resistance of Tokens and the protocol to hacking, malware or any other types of attacks.

Irreversible nature of blockchain transactions:

Transactions involving Tokens that have been verified, and thus recorded as a block on the blockchain, generally cannot be undone. Even if the transaction turns out to have been in error, or due to theft of a user’s Tokens, the transaction is not reversible. Further, at this time, there is no governmental, regulatory, investigative, or prosecutorial authority or mechanism through which actions or complaints can be made regarding missing or stolen Tokens. Consequently, the Issuer may be unable to replace missing Tokens or seek reimbursement for any erroneous transfer or theft of Tokens.

The Sirius program may be the target of malicious cyberattacks or may contain exploitable flaws in its underlying code, which may result in disruption of business, security breaches and the loss or theft of tokens. If the security of ILC is compromised or if the Sirius application is subjected to attacks that frustrate or thwart our users’ ability to access the Platform, their tokens or the Sirius Platform products and services, users may cut back on or stop using the Sirius Platform altogether, which could seriously curtail the utilization of the tokens and cause a decline in the market price of the tokens.

There can be no assurances that the Sirius program and the creating, transfer or storage of the ILC tokens will be uninterrupted or fully secure which may result in a complete loss of Investors’ ILC tokens

The Issuer is subject to cybersecurity and data loss risks or other security breaches:

The Tokens involve the storage and transmission of Tokenholders’ proprietary information, and security breaches could cause a risk of loss or misuse of this information, and of resulting claims, fines and litigation. The Tokens may be subject to a variety of cyber-attacks, which may continue to occur from time to time. An attack or a breach of security could result in a loss of private data, unauthorized trades, an interruption of potential trading for an extended period of time, violation of applicable privacy and other laws, significant legal and financial exposure, damage to reputation, and a loss of confidence in security measures, any of which could have a material adverse effect on the financial results and business of the Issuer. Attackers can also manipulate the crypto assets markets. Moreover, markets for cryptocurrencies are not typically subject to oversight by any prudential or by other regulators that impose minimum financial or business conduct standards, or that require minimum cybersecurity protections. Additionally, attackers can target platforms that buy and sell crypto assets and digital wallets that hold cryptocurrencies.

Problems in the Ethereum Virtual Machine environment:

Any malfunction, breakdown or abandonment of the Ethereum protocol may have a material adverse effect on the functioning of the Token. Moreover, advances in cryptography, or technical advances such as the development of quantum computing, could present risks to the Token, including the utilities of the Token, by rendering ineffective the cryptographic consensus mechanism that underpins the Ethereum protocol. The Ethereum blockchain rests on open source software, and accordingly there is the risk that the Token smart contract may contain intentional or unintentional bugs or weaknesses which may negatively affect Tokens or result in the loss or theft of Tokens or the loss of ability to access or control Tokens. In the event of such a software bug or weakness, there may be no remedy and Token holders are not guaranteed any remedy, refund or compensation.

In terms of the Ethereum blockchain, timing of block production is determined by proof of work, so block production can occur at random times. For example, ETH contributed to the Token smart contract in the final seconds of a distribution period may not get included for that period. Purchaser acknowledges and understands that the Ethereum blockchain may not include the Purchaser’s transaction at the time Purchaser expects and Purchaser may not receive Tokens on the same day Purchaser sends ETH. The Ethereum blockchain is prone to periodic congestion during which transactions can be delayed or lost. Individuals may also intentionally spam the Ethereum network in an attempt to gain an advantage in purchasing cryptographic tokens. Purchaser acknowledges and understands that Ethereum block producers may not include Purchaser’s transaction when Purchaser wants and that Purchaser’s transaction may not be included at all. The Issuer is not liable for any errors occurring in the Ethereum protocol and cannot guarantee that the protocol will function correctly and predictably at all times.

A decrease in the price of a single blockchain asset may cause volatility in the entire blockchain asset industry and may affect other blockchain assets including the ILC tokens. For example, a security breach that affects investor or user confidence in Bitcoin may affect the industry as a whole and may also cause the price of the ILC tokens and other blockchain assets to fluctuate.


 

TAX RISKS

The tax characterization of the Token is under consideration in different jurisdictions and may vary even within a jurisdiction. Likewise, the investments made by the Issuer in the Target Assets may be impacted by amendments in tax regulations in force to date. Prospective Tokenholders must seek their own tax advice in the relevant jurisdictions in connection with acquiring Tokens, which may result in adverse tax consequences, including withholding taxes, income taxes and tax reporting requirements.

RISK FACTORS RELATING TO ISSUER AND OUR BUSINESS

Legal structure of Issuer:

The Issuer is an exempted foundation company incorporated in the United States of America. The Issuer is a corporate body which has a separate legal personality capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit and having perpetual succession. The constitution of the Issuer is contained in two documents: the memorandum of association and the articles of association (Articles). The Articles of exempted foundation companies typically provide that there must be at least one director and the management of the company is the responsibility of, and is carried out by, its board of directors. As a holder of Tokens, you are not entitled to any shares of the Issuer nor to any other right or interest in or to the Issuer (including any debt or equity interest therein) and will have no rights to appoint or remove the board of directors or operators of Issuer. Because Tokens confer no governance rights of any kind with respect to the Issuer, all decisions involving the Issuer´s activities will be made by the Issuer at its sole discretion.

The Issuer may require additional capital to support operations or growth and may need to create and sell additional Tokens in the future.

From time to time, the Issuer may need additional capital to operate or grow its

business. Any Tokens sold (or issuable upon conversion of other instruments we may sell) may be sold at prices and on other terms that differ from those in this private placement memorandum. The Issuer’s ability to obtain additional capital will depend on investors and lender demand, operating performance, the condition of the capital markets, and other factors. Additional capital may not be available on favorable terms when required, or at all.

Our lack of business diversification could cause you to lose all or some of your investment if we are unable to generate revenues from our primary services.

There is and will be limited information related to the business of the Issuer:

You may not be able to obtain all information you would want regarding the Issuer, the Tokens, the investments made by the Issuer or the corporate governance of the Issuer, on a timely basis or at all. It is possible that you may not be aware on a timely basis of material adverse changes that have occurred with respect to certain of its investments. While the Issuer has made efforts to use open- source development for Tokens, this information may be highly technical by nature. The Issuer is not obliged to keep users, purchasers, and holders of Tokens updated on its business (including progress and expected milestones). Because of these difficulties, as well as other uncertainties, you may not have accurate or accessible information about the Issuer.

Ownership of tokens does not give the owners voting rights or any other control over the Company or the Sirius technology.

Tokens are not a loan and you will have no control of the Issuer:

Tokens do not represent a loan to the Issuer nor do they provide the Purchaser with any ownership or other interest in or to the Issuer. For greater certainty, the purchase of Tokens does not provide the Purchaser with any form of ownership right or other interest in or to Issuer or its present or future assets and revenues, including, but not limited to, any voting, distribution, redemption, liquidation, revenue sharing, proprietary (including all forms of intellectual property), or other financial or legal rights. You are not, and will not be, entitled to vote or be deemed the holder of capital stock of the Issuer for any purpose, nor will anything be construed to confer on you any of the rights of a stockholder of the Issuer or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action or to receive notice of meetings, or to receive subscription rights or otherwise.

The Issuer may not be able to fully execute its business strategy, which could adversely affect the results of the Token.

The Issuer believes that it is necessary to expand its online legal advice product by country to consolidate and expand its parent company portfolio, although the Issuer cannot guarantee that its projects and portfolio expansion strategies can be successfully implemented in the future, but the introduction of new technology and successfully implemented projects in the CIS, reduces the risk component of the project. The licensing process for new programs in Legal Services may require excessive time and expense, which could adversely affect the performance and profitability of the Token.

Relationship between Issuer, BTG Actual and Enforce:

The Issuer (ILC Inc.), an Indian affiliate, and ILC Global Inc. intend to enter into an investment management agreement pursuant to which "Enforce will provide certain services to the Issuer, including the management of the Target Assets. The Issuer and ILC Global Inc. will be independent contractors and not partners in any partnership agreement.

Related-Party Transactions:

In the ordinary course of business, the Issuer and/ or Legal Service/BTG Actual may enter into related party transactions on an arm’s length basis and on market terms, pursuant to our related party transactions and conflicts of interest policy.

There may be occasions when certain individuals involved in the development of Target assets may encounter potential conflicts of interest in connection with the Product Launch, such that said party may avoid a loss, or even realize a gain, when other Investors in the STO are suffering losses.

There may be occasions when certain individuals involved in the development and launch of the Target assets or tokens may encounter potential conflicts of interest in connection with this Offering, such that said party may avoid a loss, or even realize a gain, when other Investors in the are suffering losses. Investors may also have conflicting investment, tax, and other interests. Decisions made by the key employees of ILC may be more beneficial for some Investors than for others.

LITIGATION

In the ordinary course of business, the Issuer and/ or ILC Inc. may enter into related party transactions on an arm’s length basis and on market terms, pursuant to our related party transactions and conflicts of interest policy, business transactions, taxes, and others. It will assess the likelihood of any loss or exposure of any claims. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business. If a loss is considered probable and the amount can be reasonably estimated, it will recognize an expense for the estimated loss. In addition to the estimated loss, the recorded liability would include probable and estimable legal costs associated with the claim or potential claim. The Issuer may not have insurance coverage for certain matters. There is no assurance that any claim would not materially and adversely affect its business, financial position, and results of operations or cash flows.

Rights of ownership in the Company

Your purchase of Tokens does not convey any rights of ownership in the Company or any rights to any financial obligation of the Company (debt or otherwise). Accordingly, the financial state of the Company is relevant only insofar as the Company must have sufficient funding and ability to perform the tasks to develop and maintain the Target Asset.

We do not anticipate dividends to be paid on our common stock and investors may lose the entire amount of their investment.

A dividend has never been declared or paid in cash on our common stock and we do not anticipate such a declaration or payment for the foreseeable future. We expect to use future earnings, if any, to fund business growth. Therefore, stockholders will not receive any funds absent a sale of their shares. We cannot assure stockholders of a positive return on their investment when they sell their shares nor can we assure that stockholders will not lose the entire amount of their investment.

We have sought or intend to seek an exemption in multiple states for this offering; however, there can be no assurance that an investor in this offering will have a similar exemption covering their resale and we do not currently have plans to qualify any resells in any state.

 

For this offering, we have sought or intend to seek in multiple states an exemption from registration for securities offered and sold under Rule 506 of Regulation D of the Securities Act.  There can be no assurance that a subscriber to this offering will have a state exemption for their resale.  We do not currently have plans to qualify any resells in any state.  In the event that a subscriber to this offering does not have available a state exemption for the transfer of his shares and we have not qualified such transfers in the state, the subscriber will not be able to transfer his shares.

 

OTHER DISCLOSURES

Purchases of Tokens should be undertaken only by individuals, entities, or companies that have significant experience with, and understanding of, the usage and intricacies of cryptocurrencies, including cryptographically secured digital tokens and blockchain-based software systems. The Purchaser should have a functional understanding of storage and transmission mechanisms associated with other cryptographic tokens. The Issuer will not be responsible in any way for loss of ETH, Stable Coins or Tokens resulting from actions taken by, or omitted by purchasers. If you do not have such experience or expertise, then you should not purchase Tokens or participate in the sale of tokens. Cryptographic tokens such as Tokens are a new and untested technology. In addition to the risks included above, there are other risks associated with your purchase, possession and use of Tokens, including unanticipated risks. Such risks may further materialize as unanticipated variations or combinations of the risks discussed above.

PLAN OF DISTRIBUTION

ILC is uniquely positioned to build a Global Investment Portfolio and provide to Investors an opportunity to become its shareholder.

ILC will be conducting a Security Token Offering to raise money for its further development and purchasing new assets.

A total of 100,000,000 (100 millions) Tokens will be issued.

OTHER REQUIREMENTS

In addition to submitting documentation to confirm their status as non “U.S. Persons,” all potential purchasers of the Tokens will need to complete requisite know-your-customer and anti-money laundering procedures to execute a Subscription.


 

THE USA PATRIOT ACT

WHAT IS MONEY LAUNDERING?

HOW BIG IS THE PROBLEM AND WHY IS IT IMPORTANT?

 

The USA PATRIOT Act is designed to detect, deter and punish terrorists in the United States and abroad. The Act imposes anti-money laundering requirements on brokerage firms and financial institutions. Since April 24, 2002, all United States brokerage firms have been required to have comprehensive anti-money laundering programs in effect. To help you understand these efforts, the Issuer wants to provide you with some information about money laundering and the Issuer’s efforts to help implement the USA PATRIOT Act.

 

Money laundering is the process of disguising illegally obtained money so that the funds appear to come from legitimate sources or activities.

 

The use of the United States financial system by criminals to facilitate terrorism or other crimes could taint its financial markets. According to the United States State Department, one recent estimate puts the amount of worldwide money laundering activity at $1 trillion a year.

 

WHAT THE COMPANY IS REQUIRED TO DO TO HELP ELIMINATE MONEY LAUNDERING?

Under new rules required by the USA PATRIOT Act, the Company’s anti- money laundering program must designate a special compliance officer, set up employee training, conduct independent audits and establish policies and procedures designed to detect and report suspicious transactions and ensure compliance with the new laws and rules.

As part of the Company’s required program, it may ask you to provide various identification documents or other information. Until you provide the information or documents that the Company needs, it may not be able to provide any transactions for you.


 

ILC, or the Issuer, reserves the right to request such information as is necessary to verify the identity of purchasers of the Tokens, and the source of the payment of subscription monies, or as is necessary to comply with any customer identification programs or such information as may be required in order for the Issuer to discharge its obligations under Delaware law (including pursuant to the Proceeds of Crime Law (as revised)). In the event of delay or failure by the applicant to produce any information required for verification purposes, an application for or transfer of the Tokens and the subscription monies relating thereto may be refused.

You should check the Office of Foreign Assets Control (the “OFAC”) website at http://www.treas.gov/ofac before making the following representations:

  1. you represent that the amounts invested by you in this Offering were not and are not directly or indirectly derived from any activities that contravene Federal, state or international laws and regulations, including anti-money laundering laws and regulations. Federal regulations and Executive Orders administered by the OFAC prohibit, among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals. The lists of the OFAC-prohibited countries, territories, individuals and entities can be found on the OFAC website at http://www.treas.gov/ofac. In addition, the programs administered by the OFAC (the “OFAC Programs”) prohibit dealing with individuals or entities in certain countries, regardless of whether such individuals or entities appear on any OFAC list;

 

  1. you represent and warrant that none of: (1) you; (2) any person controlling or controlled by you; (3) if you are a privately-held entity, any person having a beneficial interest in you; or (4) any person for whom you are acting as agent or nominee in connection with this investment is a country, territory, entity or individual named on an OFAC list, or a person or entity prohibited under the OFAC Programs. Please be advised that the Issuer may not accept any subscription amounts from a prospective purchaser if such purchasers cannot make the representation set forth in the preceding sentence. You agree to promptly notify the Issuer should you become aware of any change in the information set forth in any of these representations. You are advised that, by law, the Issuer may be obligated to “freeze the account” of any purchaser, either by prohibiting additional subscriptions from it, declining any redemption requests and/or segregating the assets in the account in compliance with governmental regulations, and that the Issuer may also be required to report such action and to disclose such purchaser’s identity to the OFAC;

 

  1. you represent and warrant that none of: (1) you; (2) any person controlling or controlled by you; (3) if you are a privately-held entity, any person having a beneficial interest in you; or (4) any person for whom you are acting as agent or nominee in connection with this investment is a senior foreign political figure , or (5) any immediate family member or (6) close associate of a senior foreign political figure, as such terms are defined in the footnotes below; and

 

  1. if you are affiliated with a non-U.S. banking institution (a “Foreign Bank”), or if you receive deposits from, make payments on behalf of, or handle other financial transactions related to a Foreign Bank, you represent and warrant to the Issuer that: (1) the Foreign Bank has a fixed address, and not solely an electronic address, in a country in which the Foreign Bank is authorized to conduct banking activities; (2) the Foreign Bank maintains operating records related to its banking activities; (3) the Foreign Bank is subject to inspection by the banking authority that licensed the Foreign Bank to conduct its banking activities; and (4) the Foreign Bank does not provide banking services to any other Foreign Bank that does not have a physical presence in any country and that is not a regulated affiliate. The Issuer is entitled to rely upon the accuracy of your representations.

The Issuer may, but under no circumstances will it be obligated to, require additional evidence that a prospective purchaser meets the standards set forth above at any time prior to its acceptance of a prospective purchaser’s subscription. You are not obligated to supply any information so requested by the Issuer, but the Issuer, upon advice of the Investment Banking Advisor, may reject a subscription from you or any person who fails to supply such information.

An investment in the Interests may involve significant risks. Only Investors who can bear the economic risk of the investment for an indefinite period of time and the loss of their entire investment should invest in the Interests. See “Risk Factors.”

NOTICE TO RESIDENTS OF THE UNITED STATES AND “U.S. PERSONS”

The tokens offered hereby have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state, and are being offered and sold in reliance on exemptions from the registration requirements of the securities act set forth in section 4(a)(2) thereof and rule 506(c) of Regulation D promulgated thereunder to accredited investors. Rule 506 of Regulation D sets forth certain restrictions as to the number and nature of purchasers of tokens offered pursuant thereto. We have elected to sell tokens only to accredited investors as such term is defined in rule 501(a) of Regulation D. Each prospective investor will be required to make representations as to the basis upon which it qualifies as an accredited investor. The tokens offered hereby will be subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Securities Act and under applicable state securities laws or pursuant to registration or exemption therefrom. Prospective investors should be aware that they may be required to bear the financial risks of this investment for an indefinite period of time. Only persons who can afford to lose their entire investment in the tokens should purchase the tokens. The tokens offered hereby have not been approved or disapproved by the Securities and Exchange Commission (“SEC”) or any state securities commission, nor has the sec or any state securities commission passed upon the accuracy or adequacy of this memorandum. Any representation to the contrary is a criminal offense. The information presented herein was presented and supplied solely by the company and is being furnished solely for use by prospective investors in connection with the offering. The company makes no representations as to the future performance of the company. This memorandum was prepared by the company and its representatives. No person is authorized to give any information or make any representation not contained in this memorandum or an authorized summary hereof, or in any agreement contemplated hereby, and any information or representation not contained herein or in such authorized summary or agreement must not be relied upon. This offering is subject to withdrawal, cancellation or modification by the company at any time and without notice. We reserve the right in our sole discretion to reject any investment in whole or in part. This memorandum does not constitute an offer to sell, or a solicitation of an offer to buy, any security other than the tokens offered hereby. This memorandum further does not constitute an offer to sell or a solicitation of any offer to buy the tokens offered hereby by anyone in any jurisdiction in which such offer or solicitation is not authorized, or in which the person making such offer or solicitation is not qualified to do so. This memorandum contains summaries of certain pertinent documents, applicable laws and regulations. Such summaries are not complete and are qualified in their entirety by reference to the complete texts of such documents, applicable laws and regulations. ILC Inc. does not make any express or implied representation or warranty as to the accuracy or completeness of the information contained in this memorandum or in any additional evaluation material, whether written or oral, made available in connection with any further investigation of the company. To the extent legally allowable, the company expressly disclaims any and all liability that may be based upon such information, errors therein or omissions therefrom. Only those particular representations and warranties, if any, which may be made to a party in a definitive written agreement regarding a transaction involving the company, when, as and if executed, and subject to such limitations and restrictions as may be specified therein, will have any legal effect. By accepting delivery of this memorandum, each prospective investor hereby expressly agrees with the company to keep strictly confidential all of the contents hereof, including, but not limited to, the offering and all information related to the company, its affiliates and subsidiaries, and not to disclose the same to any third-party and/or otherwise use the same for any purpose other than an evaluation by such offeree of a potential investment in the company and the tokens offered hereby. You also agree to make your agents, affiliates and representatives aware of the confidential nature of the information contained herein. We have caused this memorandum to be delivered to you in reliance upon such agreements by you. This memorandum is subject to amendment and supplementation as appropriate. We do not intend to update the information contained in the offering documents for any investor who has already made an investment. We may update the information contained herein from time to time either by providing such updated documents to potential investors or through our website. Nonetheless, the company undertakes no obligation to provide any such updated documents to an investor who has already made an investment.

NOTICE TO PROSPECTIVE INVESTORS IN CANADA

Each Canadian Investor who purchases securities (including Agreement and JEMIS token) on a private placement basis pursuant to this offering memorandum will be deemed to have represented to and agreed with the Company that such Investor: (i) is resident in Canada; (ii) is purchasing the securities with the benefit of the prospectus exemption provided by Section 2.3 of National Instrument 45-106 – Prospectus Exemptions (NI 45106) (that is, such Investor is an “accredited investor” within the meaning of NI 45-106 and is either purchasing securities as principal for its own account, or is deemed to be purchasing the securities as principal for its own account in accordance with applicable securities laws); (iii) if not an individual, the Investor was not created or used solely to purchase or hold securities as an accredited investor under NI 45106; and (iv) if required by applicable securities laws, the Investor will execute, deliver and file or assist the Company in obtaining and filing such certificates, reports, undertakings and other documents relating to the purchase of the securities by the Investor as may be required by any securities commission or other regulatory authority.

Canadian Resale Restrictions

The distribution of the securities in Canada is being made only on a private placement basis exempt from the requirement that the Company prepare and file a prospectus with the applicable securities regulatory authorities. The Company is not a reporting issuer in any province or territory in Canada and its securities are nor listed on any stock exchange in Canada and there is currently no public market for the securities of the Company or Agreements or JEMIS tokens in Canada. The Company currently has no intention of becoming a reporting issuer in Canada, filing a prospectus with any securities regulatory authority in Canada to qualify the resale of the securities to the public, or listing its securities on any stock exchange in Canada. Accordingly, to be made in accordance with securities laws, any resale of the securities in Canada must be made under available statutory exemptions from registration and prospectus requirements or under a discretionary exemption granted by the applicable Canadian securities’ regulatory authority.

Canadian investors are advised to seek legal advice prior to any resale of the securities.

Investors’ Rights - Ontario

Securities legislation in certain of the provinces of Canada provides Investors with rights of rescission or damages, or both, where an offering memorandum or any amendment to it contains a misrepresentation. A “misrepresentation” is an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make any statement not misleading in light of the circumstances in which it was made. These remedies must be commenced by the Investor within the time limits prescribed and are subject to the defenses contained in the applicable securities legislation.

The following is a summary of the statutory rights of rescission or damages, or both, under securities legislation in Ontario, and as such, is subject to the express provisions of the legislation and the related regulations and rules and reference is made thereto for the complete text of such provisions. Such provisions may contain limitations and statutory defenses not described here on which the Company and other applicable parties may rely. The rights described below are in addition to, and without derogation from, any other right or remedy available at law to Investors of the securities. Investors should refer to the applicable provisions of the securities legislation of Ontario for the particulars of these rights or consult with a legal adviser.

Ontario securities legislation provides that where an offering memorandum is delivered to an Investor and contains a misrepresentation, the Investor will, except as provided below, have a statutory right of action for damages or for rescission against the Company, without regard to whether the Investor relied on the misrepresentation; if the Investor elects to exercise the right of rescission, the Investor will have no right of action for damages against the Company. No such action shall be commenced more than, in the case of an action for rescission, 180 days after the date of the transaction that gave rise to the cause of action, or, in the case of any action other than an action for rescission, the earlier of: (i) 180 days after the Investor first had knowledge of the facts giving rise to the cause of action, or (ii) three years after the date of the transaction that gave rise to the cause of action. The Ontario legislation provides a number of limitations and defenses to such actions, including: (a) the Company is not liable if it proves that the Investor purchased the securities with knowledge of the misrepresentation; (b) in an action for damages, the Company shall not be liable for all or any portion of the damages that the Company proves do not represent the depreciation in value of the securities as a result of the misrepresentation relied upon; and (c) in no case shall the amount recoverable exceed the price at which the securities were offered.

These rights are not available for an Investor that is: (a) a Canadian financial institution, meaning either: (i) an association governed by the Cooperative Credit Associations Act (Canada) or a central cooperative credit society for which an order has been made under section 473(1) of that Act; or (ii) a bank, loan corporation, trust company, trust corporation, insurance company, treasury branch, credit union, caisse populaire, financial services cooperative, or league that, in each case, is authorized by an enactment of Canada or a province or territory of Canada to carry on business in Canada or a province or territory of Canada; (b) a Schedule III bank, meaning an authorized foreign bank named in Schedule III of the Bank Act (Canada); (c) the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada); or (d) a subsidiary of any person referred to in clauses (a), (b) or (c), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary.

ADDITIONAL INFORMATION

 

This memorandum does not contain all of the information with respect to the various agreements and other documents referred to herein.  The delivery of this memorandum at any time does not imply that the information contained herein is correct as of any time subsequent to the date hereof.  For further information with respect to us and the tokens being offered hereby, any prospective purchaser should contact our manager.

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