Block Transfer uses cryptographic signatures perpetually stored in the immutable Stellar blockchain for the acceptance of guarantees of securities transfers from eligible guarantor institutions. Individual asset holders are held to this same security standard for transfers. Stellar uses base-32 encoded Ed25519 keys generated by asset holders. Holders sign and broadcast Stellar transfers to the blockchain network using their keys. Anyone with a holder's keys can sign a transfer on their behalf, so eligible guarantor institutions and individuals alike should maintain utmost secrecy of their private keys, as best as able. Participants can generate a keypair through any standard Stellar wallet and request it be linked with their identity by Block Transfer. Further instructions on this process are available in our investor portal. The process requires no more than a mobile phone and five minutes; anyone can easily onboard quickly.

Guarantees are made and verified through private-key cryptographic signatures of instructions to transfer an asset or endorse a transfer. Participants can automatically generate such digital signatures through any standard Stellar wallet, though we recommend Lobstr. So long as the transfer is valid with the claimed signing public key, the guarantee is accepted by the network no matter (and blind to) the original broadcaster. Otherwise, the transfer is rejected, and participants are immediately notified by the network why their signature and thus transfer was invalid via standard error codes in tandem with a local copy of the submitted invalid transfer. Due to (i) local checks for signature validity in standard wallet interfaces and (ii) halted gossip propagation of invalid transactions on the Stellar blockchain, Block Transfer will, in a vast bulk of instances, not be made aware of rejected transfers given only a narrow range of transfers are invalid by false cryptographic attestation, while valid transfer signatures are instantaneously accepted by honest validating peers. Should a transfer instruction be rejected due to unavoidable market conditions such as SEC trading freezes or our servers effecting a stock split, all eligible guarantor institutions requesting transfers will be notified immediately via our app, the use of which requires securityholders to accept our eDelivery terms decreeing digital notice equivalent to such notice made by snail mail. Record of transactions failing for unavoidable reasons will not propagate to the blockchain or reach Block Transfer because such transactions will be dropped by Stellar validator peers in accordance with the Stellar Consensus Protocol and standard BFT optimization. Because it is impossible for Block Transfer to access all potential validator peers' rejected transaction histories, we can only rely on public transfer records archived in the prevailing Stellar distributed ledger.

Most Stellar transactions clear in the next proposed block or one substantially close to it, with blocks created every five seconds on average. In a worst-case scenario, securityholders executing routine transfers on the blockchain may have to wait a few blocks (call it twelve very aggresively, as a denial of service attack over 45 seconds is economically infeasible for most market participants, and such a consensus attack for any amount of time over 180 blocks or approximately 15 minutes is for all intensive purposes statistically impossible, especially given our implimentation of issuer-enforced finality which effectivey caps transfer times at 24 seconds for 99.97% of transfers, n=1461). Therefore, we find it probabilistically impossible that, given the liveliness of the Stellar blockchain network, any posted and cleared transfer per the prior paragraph would ever in any conceivable way take more than 51840 blocks or three days after posting to the network pool of pending transfers. Thus, we assume all routine transfers executed on the Stellar blockchain without error consummated in under three days.

Block Transfer accepts and internalizes the risk of financial loss in the event persons have no recourse against any eligible guarantor institution and, in the opinion of its principals, maintains adequate protection against the issuance of unauthorized guarantees since such guarantees would equate to infeasibly breaking EdDSA given holders maintain robust security of their private keys.

Block Transfer retains the right to clawback assets sent in transfers if some participant can prove beyond all reasonable doubt that their secret key was stolen or they were violently coerced into a transfer. Such cases must prove theft or coercion in a competent court of law, as deemed fit by Block Transfer.

As soon as some good-standing (meaning passed KYC, etc.) participant broadcasts a valid signed transfer to the Stellar network, Block Transfer can in no meaningful way stop the transfer from confirming regardless of the originating sender. Block Transfer accepts all account balances on the Stellar ledger as material fact in the control books and master securityholder files of issuers.

Upon change from a given issuer's prior transfer agent, all certificate-holding shareholders must validate their Stellar blockchain account at no cost to them through Block Transfer's KYC onboarding. Block Transfer will credit physical shareholders with their ownership stakes in DRS form on the Stellar blockchain. Old paper certificates are thus null and void. We will never issue certificates. Block Transfer will not accept new clients with outstanding bearer certificates.

Block Transfer does not make a market for any of the issuers it services. Block Transfer will not directly accept or make payment with securities in exchange for value, except as a tender agent at its sole discresion pursuant to 17Ad-14. Rather, all good-standing market participants can directly trade assets through Stellar's decentralized exchange by signing order messages in their wallet.

In the event we receive a transfer request by mail, such request is a non-routine transfer request. In response to such an inquiry, we will advise such investor to download our app and onboard an account. Our app is built on cross-platform technology that runs on devices as old as the iPhone 5S. Subsequently, we assume that all our investors either have access to a phone which can run our app or can attain using reasonable effort, time, and expense such device.

Assertions

Block Transfer's signature guarantee program does, in good faith:

1. facilitate the equitable treatment of eligible guarantor institutions and
2. promote the prompt, accurate, and safe transfer of securities by providing adequate protection to us against:
1. risk of financial loss in the event persons have no recourse against the eligible guarantor institution and
2. the issuance of unauthorized guarantees.