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Digisign investor rights agreement

okay what is an investment contract for purposes of the securities law well generally it's an investment of money in a common enterprise with the expectation of profits from that investment and the profits are based solely upon the efforts of others okay so let's break each of those down so an investment of money all right you're putting assets into a business entity you're capitalizing the business in a common enterprise well this is generally any form of concerted business activity right any form of carrying on business for an intended profit the next element is the expectation of profits that is your investment is going to return something now it may not be in the traditional form of profits it could even be an expectation of losses to offset perhaps some other gains in another situation still this qualifies under the expectation of gains or profits from your investment in the activity and then the last one which is a key element derived solely from the efforts of others so that business activity is carried on by others you're not actively taking part in that business activity yourself it is based upon the actions of others that they are carrying out that concerted activity to gain value and that value will then flow to you as a beneficial interest holder generally an owner of some sort of the business entity so think about it as a separate business activity where an individual capitalizes that business with some form of funds or transfers value to the business entity with the expectation that it will return some type of value and the individual themselves are not working in the business entity this definition seems basic in its elements but it has a very very broad application it's been interpreted in so many Scituate to include so many situations that otherwise would not appear to be your additional business ownership situation or scenario