These are the principal risks that related to the company and its business:
The SGSS Tokens will be issued in the token generation event, or initial token offering (“ITO”), pursuant to which investors in this Offering will receive SGSS Tokens. The SGSS Tokens may be “securities” under federal and state securities laws. If the Company is required to treat the SGSS Tokens as securities, the token generation event will be required to be qualified or registered with the SEC. The Company’s attempt to qualify or register its offering of SGSS Tokens with the SEC may result in a significant delay in the adoption of the roadmap time-line events.
The Company may be deemed to be a virtual currency exchanger or administrator subject to the Bank Secrecy Act. In 2013, the Financial Crimes Enforcement Network (FinCEN) issued guidance that virtual currency exchangers and administrators are money transmitters and must comply withthe BSA. Anti-money laundering and combating the financing of terrorism (AML/CFT) rules apply to virtual currency exchangers and administrators. Generally, under existing regulations and interpretations, a developer that sells convertible virtual currency, including in the form of ICO coins or tokens, in exchange for another type of value that substitutes for currency is a money transmitter and must comply with AML/CFT requirements that apply to this type of money services business (MSB).
The tax treatment of the right to receive SGSS and SGSS is uncertain and there may be adverse tax consequences for purchasers upon certain future events.
Each purchaser must seek its own tax advice in connection with an investment in this Offering. An investment in this Offering may result in adverse tax consequences to purchasers, including withholding taxes, income taxes and tax reporting requirements. Each purchaser should consult with and must rely upon the advice of its own professional tax advisors with respect to the United States and non-U.S. tax treatment of an investment.
We need to attract, retain and motivate skilled personnel and retain our key personnel in order for our business to succeed. Our ability to promote SGSS to the jewellery industry develop and maintain necessary systems depends on our ability to attract, retain and motivate highly skilled technical, managerial and marketing personnel. Competition for skilled software engineers has greatly increased with the emergence of a number of internet retailers and other electronic commerce developments. If we are unable to attract and retain the necessary personnel, our Web site and other systems may not operate efficiently. These difficulties could materially and adversely affect our business and results.
Our business is subject to risks associated with competition in the marketplace. Our future revenues and profits, if any, will depend substantially upon the acceptance and use of blockchain technology as an effective medium of commerce by our target customers. Rapid growth in the use of blockchains is a recent phenomenon. Acceptance and use of blockchain and related services may not continue to develop at historical rates and a sufficiently broad base of consumers may not adopt, and continue to use, the technology and related services as a medium of commerce. Demand and market acceptance for recently introduced services and blockchain applications are subject to a high level of uncertainty and there exist few proven services and products. Our target customer has historically used traditional means of commerce to purchase jewellery. For us to be successful, these customers must accept and utilize our currency. Blockchain technology may not be accepted as a viable long-term technology for a number of other reasons beyond our control, including potentially inadequate development of the necessary network infrastructure or protocols. In addition, blockchain technology could lose its viability due to delays in the development or adoption of new standards and protocols required to handle increased levels of activity, or due to increased governmental regulation.
Government regulation and legal uncertainties could burden our business. The adoption or modification of laws or regulations applicable to cryptocurrencies could harm our business. The U.S. Congress is considering regulating cryptocurrency and foreign governments are considering similar legislation. The law governing cryptocurrencies, however, remains largely unsettled. New laws may impose burdens on companies issuing cryptocurrencies. Although we arenot incorporated in the United States, the governments of United States or foreign countries might attempt to regulate our transmissions or levy sales or other taxes relating to our activities. It may take years to determine whether and how existing laws governing intellectual property, privacy, and taxation apply to cryptocurrencies.