Overview of the LOYAL3 Platform: How It Works + Specific Risks

Transcription

1 Dated September 2015 Subject to Change for Future Offerings Overview of the LOYAL3 Platform: How It Works + Specific Risks NOTE: THIS IS NOT THE PROSPECTUS. The Information Below is Specific to the LOYAL3 Platform for underwritten public offerings (IPOs and Follow on Offerings). For the Company Prospectus, Click Other Links on the LOYAL3 Platform. This Overview This overview describes the operation of the LOYAL3 platform (the LOYAL3 platform ) in connection with underwritten public offerings. These offerings include Initial Public Offerings (an IPO ) of a company s (the Company ) common stock or a designated class of stock ( common stock ) and Follow on Offerings ( Follow on ) available on the LOYAL3 platform. In this Overview, we refer to either an IPO or a Follow on as the Company s Offering or an Offering, and unless otherwise specified, this overview refers to both types of Offerings. Certain aspects of the Offering process, in particular the process for pricing the Offering and finalizing your investment decision, work differently for an IPO and for a Follow on, and those differences are described below. From time to time, LOYAL3 Securities, Inc., a broker dealer registered with the SEC ( LOYAL3 Securities ), will act as one of the Co Managers (as referenced in the prospectus) or a member of the selling group of an Offering. As part of its Offering, the Company is offering shares of its common stock through the LOYAL3 platform, which is designed to make Offerings available to people who have a high affinity for the Company, such as employees, customers, suppliers, users, and individual investors. The LOYAL3 platform uses a proprietary web and social media platform of LOYAL3 Labs, Inc. ( LOYAL3 Labs ) and brokerage and other services of LOYAL3 Securities (together with LOYAL3 Labs, LOYAL3 ). This overview (the Overview & Risks ) focuses only on the LOYAL3 platform element of the Offering and is not meant to substitute for the Company s prospectus, which you should read carefully before deciding whether to invest in the Company s common stock, including the Company s Risk Factors and the financial statements and related notes. This overview is meant to provide information about buying shares through LOYAL3, specifically (I) How the LOYAL3 Platform Works, and (II) Specific Risk Factors Related to Purchases Through the LOYAL3 Platform (again, those risks only supplement the Company s own risk disclosure under Risk Factors in its prospectus, and the risk factors related to the LOYAL3 platform are best understood once you understand how the LOYAL3 platform works). I. How the LOYAL3 Platform Works Enrollment and Purchase Process Investors can purchase shares online in the Company s Offering through the LOYAL3 platform by making reservations or conditional offers ( reservations or conditional offers ) through LOYAL3 s (and, in many cases, the Company s) website. To participate in an Offering through LOYAL3, you are required to agree to

2 receive electronic communications relating to the Offering, the shares acquired by you in the Offering, and your account with LOYAL3 Securities. (See Fully Electronic below.) No Fees to Buy or Sell Shares. Investors will be charged no commissions or other fees to purchase or sell shares through the LOYAL3 platform. Batch Order Process in the Sale of Shares. In order to make purchases by dollar amount available, purchases will include partial or fractional shares. When you sell shares (including fractional shares), LOYAL3 uses a batch or combined order process, and typically executes trades only once per day. See Sale of Shares and Batch Order Processing, below. Eligibility and Enrollment Offered on a First Come, First Served Basis. In order to be eligible to participate in an Offering through the LOYAL3 platform, you must be a U.S. resident, and you must be of the age of majority in the state in which you reside. As part of the enrollment process, you will need to have a brokerage account with LOYAL3 Securities. You may open a LOYAL3 account through a simple online process reached through LOYAL3 s (and, in many cases, the Company s) website. Before you can participate in an Offering through the LOYAL3 platform, the information you provide will be assessed through a proprietary financial risk algorithm developed by LOYAL3 and identity verification screening to determine if you qualify for this investment. The criteria used by the algorithm to make a financial risk assessment as an Offering participant through the LOYAL3 platform (the participant ) relate to your ability to acknowledge and bear the risk of this investment, including the possible loss of your entire investment, based on the information you provide. LOYAL3 s financial risk assessment will factor in considerations such as your annual income, bank balances, and net worth as they relate to your desired reservation amount. LOYAL3 will also electronically screen for anti money laundering and know your customer criteria mandated by regulatory bodies with the opening of any brokerage account. Investors are enrolled on a first come, first served basis and reservations will no longer be accepted once the reservation limit has been reached (see Limited Shares Available Through the LOYAL3 Platform directly below), or some other time before the anticipated setting of the final Offering price, whichever occurs first. Also, to qualify for the Offering through LOYAL3, you must agree to comply with the LOYAL3 Brokerage Account Agreement as well as the requirements described in this Overview & Risks or on the enrollment site, and LOYAL3 Securities may decide that you are not eligible for other reasons at its discretion. You will be notified if you fail to fulfill the qualification criteria for the offering (but not the basis for that determination) either immediately online during the enrollment process, or by within approximately four working days. Limited Shares Available Through the LOYAL3 Platform. Participation in an Offering through the LOYAL3 platform is limited to a specific number of individuals or aggregate reservation amount, which may be higher than the shares allocated to LOYAL3 ( reservation limit ), set for each Company s Offering through the LOYAL3 platform. A notice will be posted on the landing page for the Offering through the LOYAL3 platform once reservations are no longer accepted for that Offering. Shares will be allocated among participants at an amount depending on the total number of reservations for that Offering through the LOYAL3 platform, generally starting with $100 for each participant. Shares are then allocated proportionately ( pro rata ) to each participant s account based on available funds until each participant has reached their maximum reservation amount, or when the amount of shares allotted to the Offering through the LOYAL3 platform have been exhausted, whichever occurs first. If the participant does not have sufficient available account funds to meet the pro rata allocation, shares will be allocated based on participant s available funds. The number of shares available through the LOYAL3 platform in any given Offering will be limited, so individual Offering participants may not receive the full dollar amount they reserved. In all cases, participants will only pay for the shares they actually receive. A Company may request a different allocation

3 algorithm (including a capped reservation amount for oversubscribed offerings) for different cohorts or segments of participants, at its discretion. Step One Enroll and Open Your LOYAL3 Account; Funding Your Account Enrollment. If you would like to participate in an Offering through the LOYAL3 platform, you need to open a LOYAL3 account. In the enrollment process, you will provide information about your checking account and authorize LOYAL3 Securities to draw electronically from your checking account an amount specified by you. Funding. In order to be allocated Shares in an Offering, you must have sufficient funds in your LOYAL3 account or have initiated a transfer of funds to pay for the Shares. In order to better ensure that good funds are received in time, LOYAL3 also allows investors to voluntarily transfer money from their checking account any time during or after enrollment. If you do not have adequate funds in your LOYAL3 account by having transferred or initiated transfer of funds into your account by the end of the two hour decision window after pricing (referred to below under Step Two Reserve your Maximum Purchase Amount ), you may not be allocated any shares. In the event that you are participating in multiple simultaneous Offerings, it is your responsibility to have sufficient funds or to have initiated transfer of funds to your account by the end of the two hour decision window for each Offering. In the event that you do not have sufficient funds or pending funds in your account, you will receive less than your reservation amount in some or all of the Offerings, or no shares whatsoever. LOYAL3 will not transfer money from your checking account after the two hour decision window. If you withdraw the funds from your LOYAL3 account prior to the end of the two hour decision window, and you have an outstanding reservation to purchase IPO shares through LOYAL3, your Offering reservation will be deemed cancelled. Step Two Reserve your Maximum Purchase Amount You may select a pre set investment amount as provided online (generally $100, $2,500, $10,000) or any amount in $10 increments customized by you (generally between $100 and $10,000) as the maximum dollar amount you would like to reserve. The maximum reservation amount you choose is a conditional offer by you to purchase shares in an Offering through the LOYAL3 platform. The pre set amounts, as well as the customized maximum amount, may change from one Offering to another and may vary among cohorts or segments of participants as designated by the Company. Upon the allocation of shares through LOYAL3, each participant may receive less than his or her maximum reservation amount, and possibly substantially less, depending on factors such as the total shares allocated to the LOYAL3 platform and the total number of participants or the aggregate reservation amount in the Offering through the LOYAL3 platform, but the participant will never receive more than his or her maximum reservation amount. Your offer is conditional because you may cancel your reservation at any time before it is accepted. Your offer is accepted at the end of the two hour decision window that begins after the final Offering price is posted on the enrollment site (the two hour decision window ). That acceptance is subject to the allocation process described above. Although you may cancel your order before the end of the two hour decision window, you may not increase or decrease your maximum reservation amount at any time, including during the two hour decision window. Your reservation will always be in a dollar amount, rather than share amount, and the aggregate purchase price paid by you will not go up or down because of a change in the final Offering price, although the number of shares you will receive will vary based on the final Offering price. As an example, if your reservation is confirmed and filled completely to your $2,500 limit and the final Offering

4 price is $22 per share, you will receive shares. If the final Offering price is $20.00 per share, you will receive 125 shares. Step Three Pricing of the Offering and Your Final Investment Decision The process for pricing the Offering and finalizing your investment decision are different for an IPO and for a Follow on. Please be sure to carefully review the section below that applies to the Offering you wish to participate in. For either type of Offering, after you have enrolled you will be sent an alert or heads up containing important information about the timing of the Offering. Important information about the Offering, including a link to the most recent prospectus for the Offering, will be available in your Account page (under Options and Documents) throughout the Offering. In certain cases you will be required to confirm your reservation after we provide new material information to you. We advise all investors to check your Account page frequently for information regarding timing of pricing and any updates regarding conditions that require your confirmation. If you are participating in an IPO : After you have enrolled in the IPO, you will be sent an alert or heads up with a link to a countdown clock (the countdown clock ) page indicating the anticipated timing of the final IPO pricing. Offering specific information on your Account page will include a link to the prospectus (under Options and Documents) and other new filings in connection with the IPO. If there is a material change to the prospectus (which may include a change to the initial estimated price range), you will receive an with the updated prospectus disclosure, and you will be required to confirm your reservation. In addition, if more than fifteen calendar days have elapsed between the first day of reservations and the day of final IPO pricing, or if the final IPO price is otherwise outside of the automatic confirmation range described below, you will be required to confirm your reservation. The timing for the final IPO pricing is subject to change, and the countdown clock is only an approximation and may change on multiple occasions. Accordingly, we advise you to bookmark the countdown clock page and check back often to note changes in the timing for the final IPO pricing, as well as any revisions to the prospectus or other disclosures by the Company. We may also advise you to provide your mobile phone number, as prompted, so LOYAL3 may text message you if conditions occur that require you to provide a confirmation in order for your IPO reservation to become a firm order for IPO stock. Sometime after the first countdown clock reaches zero, a new a two hour time clock will be displayed. This precise two hour decision window will begin when the final price is posted by LOYAL3 and this will begin the period when participants have a final opportunity to cancel their reservation or in some cases, may have to confirm their reservation. If the final IPO price is within the initial estimated price range set forth in the Company s prospectus, or within 20% of the higher end of the initial estimated price range (the automatic confirmation range ), and if there has not been a material change to the prospectus, and if fifteen days or less have elapsed from the first day of reservations and the date the final IPO price is set, you will be deemed to have confirmed your reservation, although you may still cancel that reservation anytime until the end of the two hour decision window. However, you will be required to log in and confirm your reservation during the decision window under any one of these conditions: The final IPO price is below the estimated price range or above the range by more than 20% (even by a single cent). A material change is made to the prospectus. More than 15 days have elapsed between the first day of reservations on the LOYAL3

5 platform and the date the final IPO price is set. Under any one of these conditions, you will need to confirm your reservation. You can find out if any of these conditions exist by referring to the countdown clock page. Check back frequently for updates regarding conditions that require your confirmation. In addition, you can like us on Facebook or follow us on Twitter to get pending Offerings updates. Remember, if your confirmation is required and you fail to confirm your reservation before the two hour decision window has closed, your reservation will be canceled and you will not receive any shares through the LOYAL3 platform. Once you have confirmed your reservation, you will be bound by that reservation unless you cancel your reservation prior to the end of the two hour decision window. If you are participating in a fixed price offering: Fixed Price Offering. The term "fixed price offering" means the offer of securities is made at a stated public offering price. In a fixed price offering, the company, with the help of its lead underwriters, determines the offering price in advance of making offers to sell (an estimated price range is not used). At the end of the offering period, the offering price will become final, the registration statement for the offering will be declared effective, and shares will be sold at the final offering price. Two Hour Window. Once the offering period ends, the two hour decision window applicable to your reservation (discussed above) will begin. We will notify you of the expected timing of the start of the two hour decision window, when the window begins and whether you are required to confirm your reservation. You will have up until the end of the two hour decision window to cancel your reservation. Confirmation. In certain cases you will be required to confirm your reservation or it will be cancelled. This will occur if the offering price changes by more than a certain amount, or if there is a material change to the prospectus (as discussed above). In determining whether confirmation is required based on a change in price, we will calculate any change in the offering price based on changes from the offering price proposed in the preliminary prospectus. If the final price is below the initial offering price, or above the initial offering price by more than 20%, confirmation will be required. The next section describes the process for pricing and final investment decision for a Follow on. If you are participating in an IPO only, you can skip this next section and go to Final Allocation of Shares Applicable to All Offerings. If you are participating in a Follow on : After you have enrolled in the Follow on, you will be sent an alert or heads up indicating the anticipated timing of the final Follow on pricing. Offering specific information on your Account page will include a link to the prospectus (under Options and Documents) and other new filings in connection with the Offering. If there is a material change to the prospectus, you will receive an with the updated prospectus disclosure, and you will be required to confirm your reservation. The timing for the final Follow on pricing is subject to change and may change on multiple occasions. Accordingly, we advise you to check your often to learn of changes in the timing for the final Follow on pricing, as well as any revisions to the prospectus or other disclosures by the Company. We may also advise you to provide your mobile phone number, as prompted, so LOYAL3 may text message you if conditions occur that require you to provide a confirmation in order for your Follow on reservation to become a firm order for Follow on stock. The final price for the Follow on will be determined by a number of factors including the public trading

6 price of the Company s stock on the pricing day. You will be able to check the trading price of the Company s stock on other websites or news services. After the final price is posted by LOYAL3, we will display a two hour time countdown clock on your Account page. This will begin the period when participants have a final opportunity to cancel their reservation or in some cases, may have to confirm their reservation. Your reservation is not conditioned on the final price. You may cancel your reservation at any time up until the end of the two hour window. When the two hour window expires, your reservation will be automatically confirmed unless we advise you that additional information is required. Check back frequently for updates regarding conditions that require your confirmation. In addition, you can like us on Facebook or follow us on Twitter to get updates regarding pending Offerings. Remember, once you have submitted your reservation, you will be bound by that reservation unless you cancel it prior to the end of the two hour decision window. In some circumstances we will require you to confirm your reservation. If your confirmation is required and you fail to confirm your reservation before the two hour decision window has closed, your reservation will be canceled and you will not receive any shares through the LOYAL3 platform. Final Allocation of Shares Applicable to All Offerings. If reservations are deemed confirmed after the two hour decision window expires on the enrollment site and the aggregate maximum reservation amounts for all participants exceed the shares offered through the Offering through the LOYAL3 platform, those shares will be allocated among all LOYAL3 participants according to LOYAL3 s proprietary algorithm as described above, except as LOYAL3 is instructed by the Company. Because you will purchase a fixed dollar amount of securities, you will typically receive an allocation that includes a fraction of a share and also not receive share amounts that correspond to what is called a round lot (that is, amounts generally in multiples of 100 shares). Subsequent to the expiration of the two hour decision window, and upon allocation of shares in an Offering to you, LOYAL3 Securities will first debit your LOYAL3 account in an amount equal to the value of your allocated shares (as measured on a per share basis by the final Offering price). The amount of shares delivered to your LOYAL3 account at settlement may or may not exceed the amount for which you have fully paid. You will bear the entire risk that the funds arrive in your LOYAL3 account in time to receive your full share allocation. You will receive a notice of your allocation from LOYAL3 Securities prior to the opening of the stock market on the first trading day after pricing (in the case of an IPO, this will be the first day of trading of the Company s common stock). The shares will be in your LOYAL3 account and may be sold the first day of trading after the pricing in LOYAL3 Securities batch order for that day if you place your sale order by 2:00 p.m. Eastern Time ( ET ) that day. (See Sale of Shares, below.) You will be the legal and beneficial owner of the shares held in your LOYAL3 account, and these shares will be registered in the name of LOYAL3 Securities or its designees consistent with customary arrangements by which securities are maintained in a single registered street name. After your purchase of stock in an Offering through LOYAL3 is completed and paid for, you may transfer any remaining cash in your LOYAL3 account to your checking account (which takes 2 3 business days) or keep it in your LOYAL3 account, where it may be used to participate in another Offering, or used to invest in securities available on the LOYAL3 platform. No interest will be paid on the LOYAL3 account cash balance.

7 Fully Electronic Consent to Fully Electronic Communications and Reports By becoming an Offering participant through the LOYAL3 platform, you agree to receive all communications from the Company and LOYAL3 relating to the Offering, any shares you purchase in the Offering and your LOYAL3 account, electronically, either via , or or text message notification to access online information (except when providing the option for non electronic communication or documentation is required by law or regulation at your request). All offering materials relating to the Offering on the LOYAL3 platform will be available on the LOYAL3 platform. You will be notified by at the address you provide on the enrollment site of important developments, including the anticipated date of the final pricing of the Offering (the alert or heads up discussed above) and the number of shares allocated to your LOYAL3 account. Failure to advise LOYAL3 Securities of a change in your address will prevent your receipt of these offering related notifications as well as notification of the availability of other communications. You will also electronically receive U.S. tax reporting documents (such as a 1099 B reflecting proceeds in the case of a sale of shares), unless you affirmatively opt to receive them in paper form by writing to LOYAL3 Support Services, P.O. Box 26027, San Francisco, CA or by to Support@LOYAL3.com account (include your name, address, daytime phone number, and the address you are using for the LOYAL3 platform on the correspondence). Records & Transactions through LOYAL3 Electronic Book Entry of Shares For your convenience, LOYAL3 Securities will maintain shares you purchase through the LOYAL3 platform in your name in its records (in so called book entry form ). LOYAL3 Securities does not provide a mechanism for physical share certificates to be issued in your name, but you may transfer your LOYAL3 account (not an individual shareholding) to another U.S. financial institution and request that the financial institution have the shares registered in your name and reflected on physical share certificates issued to you. Fractional Shares Because all share purchases in an Offering on the LOYAL3 platform are by dollar amount, you will receive the exact dollar amount of your allotted amount of shares, which normally will include fractional shares. Depending on the size of your purchase, the fractional shares could represent a significant percentage of your position. Any shares, including fractional shares, are recorded in book entry form by LOYAL3 Securities in your name. In most cases, you can only vote whole shares and not fractional shares beyond any whole share holdings, so your voting rights may not be fully commensurate with your investment in the Company (for example, if you own shares, you may only be able to vote the 8 shares). You may sell fractional shares as part of an overall order to sell all your shares. For more detailed information concerning sale of shares, see Sale of Shares below. If you decide to transfer your shares from your LOYAL3 account to another financial institution, you will only be able to transfer your whole shares and will receive cash in lieu of your fractional shares after selling your fractional shares, which you may transfer to your checking account. See Transfers of Shares below. Sale of Shares

8 Once shares purchased through the LOYAL3 platform have been allotted to your LOYAL3 account, you may sell, with no transaction fees, all of your shares (including any fractional shares) or a specific whole share portion of your shares through a batch or combined order process administered by LOYAL3 Securities. The batched or combined order process is the only way you can sell your shares through the LOYAL3 platform. See Batch Order Processing, below. You may sell your shares by entering sale instructions online via the platform. Generally, if you place a sell order for whole or partial shares by 2:00 p.m. ET, starting with the first day of trading of the Company s common stock, your sale order will be batched and sent to a third party firm designated by LOYAL3 and will be executed that trading day after 2:00 p.m. ET. Any order placed after 2:00 p.m. ET will be batched with the next trading day s sale order generally after 2:00 p.m. ET (for any trading day when the market closes early, the cut off time to sell will be 2:00 p.m. ET the next full trading day). Your price will be the market price of the sale obtained by the broker (based on the volume weighted average price of all participants within the same batched or combined order). LOYAL3 Securities may, but will not be required to, arrange more than one batched or combined order per trading day. (All orders received before the time of batching will be placed in that batch order). No single market orders will be accepted (a single market order would be one that is placed at the market price when an investor places his or her order). You may keep the sale proceeds in your LOYAL3 account or request that the proceeds be sent electronically to your checking account. Transfers of Shares If you decide to transfer your shares from your LOYAL3 account to another U.S. financial institution, you must have the receiving institution provide appropriate instructions to LOYAL3 Securities to transfer your entire LOYAL3 account. You will only be able to transfer your whole shares, and your LOYAL3 account will receive cash in exchange for your fractional shares (after selling those fractional shares) that you would then to transfer to your checking account. Additional Information about the LOYAL3 Platform Voting. When you hold shares through the LOYAL3 platform, you will enjoy all of the voting rights and privileges associated with ownership of your whole shares. In most cases, you will not be able to vote your fractional shares, so your voting rights may not be fully commensurate with your investment in the Company. You will receive all shareholder communications relating to your whole shares electronically, including proxy material and annual reports. Your shares will not be voted in any way unless expressly authorized by you. Dividends. If the Company declares a cash dividend payable on your shares, the dividend will be paid to you as cash in your LOYAL3 account. Handling of Stock Splits and Other Distributions/Anti Dilution. The number of shares held by you in your LOYAL3 account, as well as any calculations based on the number of such shares, will reflect any increase or decrease in the number of the Company s issued and outstanding shares resulting from a subdivision or consolidation (such as splits and reverse splits ) of the Company s shares or similar capital adjustment, the payment by the Company of a stock dividend, or other increase or decrease in shares, if effected without receipt of consideration by the Company. II. Specific Risk Factors Relating to Participating in Offerings through the LOYAL3 Platform Offerings Through the LOYAL3 Platform Are Not for Everyone The shares offered in Offerings through the LOYAL3 platform are not for everyone and there are some risks

9 you should consider before investing. In particular, investing in Offerings by new or newly public companies can involve certain risks. Investment through the LOYAL3 platform is designed for investors making relatively modest investments over a longer time horizon rather than investors who desire to purchase and sell stock to take advantage of short term changes in stock prices where response time and the ability to place market orders are important. Technology Platform Poses Possible Operational Risks The LOYAL3 platform is a web and social media means to distribute stock, developed to extend access of Offerings of stock to small, high affinity investors. Offerings through the LOYAL3 platform may expose customers to increased operational risk associated with an all electronic platform. Batch Order Processing The batch sale process generally will result in delays in executing your sale orders that increases your exposure to share price volatility (rapid price change) and may cause you to receive lower prices, resulting in lower sale proceeds. As described above, the sale of shares is done on a daily batched or combined basis, meaning that your order is placed for execution, typically only once a day, with other sell orders placed before the deadline. That means that the price you receive will differ, perhaps significantly, from the market price of the shares available when you place your order. Consequently, there may be a substantial delay between the time you enter your sale order and the time it is executed. During that period, the market price may increase or decrease by a significant amount. Price change or volatility is often greater for shares offered in an IPO, since the Company s market price is just being established. In the case of a Follow on, although there is a public trading price for the stock, there may be price change or volatility associated with the offering as well as market fluctuations. A sale order entered after the 2:00 p.m. ET cut off would not be executed until the following trading day, during which time the market price available for the shares may decrease significantly and you may suffer an associated loss on your investment. Due to LOYAL3 s batch sale process, you cannot place a single market order through LOYAL3. You Most Likely Will Not be Able to Vote Your Fractional Shares Because your allocation will be stated as a fixed dollar amount, you should expect to receive a fraction of a share beyond the whole shares you receive as part of your share allocation. Because, in most cases, you can only vote whole shares you own and not the fraction of a share you own between your whole shares and the next whole share amount, your voting rights may not be fully commensurate with your investment in the Company. Electronic Delivery Required Electronic only delivery means that you will not be provided with paper communications and must rely on having access to the Internet. When you own shares through the LOYAL3 platform, you agree to receive all communications from the Company and LOYAL3 Securities electronically either via or notification to access online information (except when the Company or LOYAL3 Securities is required to provide the option for non electronic communication or documentation by law or regulation upon your request). The only way to obtain paper copies of these communications is to print them from your computer. Regular and continuous Internet access is required to access all communications relating to the shares and your LOYAL3 Account. You

10 should not invest if you do not have regular and continuous Internet access. Electronic communications will include, among others, confirmations of transactions, LOYAL3 account statements, annual reports, proxy materials and shareholder communications, notices of modifications of LOYAL3 s privacy policies, as well as other basic communications, including information about your LOYAL3 account. It may also include SMS or automated calls regarding important notices or disclosures, such as events requiring your confirmation of your reservation into a firm order. Depending on the nature of the communication, you will be ed or text messaged directly at the address or mobile phone number, respectively, you provide, or notified by of the availability of such communications on a password protected site for your LOYAL3 account. This also includes information posted, as described above, on the countdown clocks that may not be subject to alerts by or text message. Your consent to receive all communications from the Company and LOYAL3 Securities relating to the Offering, the shares acquired by you, and your account electronically is required for so long as you maintain a LOYAL3 account. If, at any time after opening your LOYAL3 account, you wish to receive communications by non electronic means, you must transfer your holdings from your LOYAL3 account to another financial institution for which non electronic communications are an available option. If you revoke your consent to electronic delivery in order to receive paper copies of these communications, that will constitute a request to liquidate your shares on your behalf unless you have another financial institution that makes those communications available through non electronic means and provide instructions for a transfer of your account from LOYAL3 Securities to that financial institution. Any such revocation will be effective as of the date of the transfer and shall not affect any communications previously delivered by LOYAL3 or pertaining to transactions or matters occurring prior to the transfer. You will only be able to transfer your whole shares and must receive cash in lieu of your fractional shares. See Transfers of Shares above. There is no assurance that you will be able to effect the transfer in order to receive the requested communication in paper form in a timely manner. Legally Binding Reservation You are bound by your reservation even in some instances where you have not actually confirmed it, and conversely, you may miss a requirement to confirm a reservation and unintentionally have your reservation canceled. Unless there is a requirement for you to confirm your reservation (as described in Step Three above), you will be legally bound to purchase the shares represented by your allocation once they have been allocated to you unless you cancel your reservation prior to the end of the two hour decision window. That is, if you are not required to confirm your reservation and you have not cancelled your reservation, you will be deemed to have confirmed your reservation into a firm order. This will occur: In the case of an IPO, if the final Offering price is within the automatic confirmation range and there is no other requirement for you to confirm your reservation; and In the case of a Follow on, no circumstance has occurred that would require you to confirm your reservation. Conversely, confirmation of your reservation may be required prior to the two hour decision window expiration. In these cases, if you fail to confirm your reservation by the end of the two hour decision window, your reservation will be canceled, you will not receive any shares in the Offering, and funds will not be debited from your LOYAL3 account.

11 For these reasons, you will need to check the LOYAL3 website and the Offering specific information on your Account page often and be available and have ready access to the Internet to submit a confirmation or cancellation instruction, as applicable, before the end of the two hour decision window. And we urge you to provide LOYAL3 your mobile phone number, so you can receive important Offering notifications, as applicable, by text message.