Filed pursuant to Rule 253(g)(2)

File No. 024-10946

OFFERING CIRCULAR DATED JULY 12, 2019

To The Stars Academy of Arts and Science Inc.

315 S. Coast Hwy 101

Suite U38

Encinitas, CA 92024

760.266.5313

Up to 6,000,000 shares of Class A Common Stock

SEE “SECURITIES BEING OFFERED” AT PAGE 40

Price to Public Underwriting

discount and

commissions* Proceeds to

issuer** Proceeds to

other persons Per share/unit $ 5.00 N/A $ 5.00 N/A Total Maximum $ 30,000,000 N/A $ 30,000,000 N/A

*We do not intend to use commissioned sales agents or underwriters.

** We expect that the expenses of the offering will be approximately $2,700,000 if the maximum number of shares are sold in this offering. See the “Plan of Distribution and Selling Securityholders” for details.

The offering will terminate at the earlier of: (1) the date at which the maximum offering amount has been sold, (2) July 12, 2020, or (3) the date at which the offering is earlier terminated by the company in its sole discretion. See “Plan of Distribution.”

The company has engaged Prime Trust, LLC as escrow agent to hold any funds that are tendered by investors in accordance with Rule 15c2-4 of the Securities Exchange Act of 1934, as amended. Investor funds will be held in a segregated bank account at an FDIC insured bank pending closing or termination of the offering. The offering is being conducted on a best-efforts basis without any minimum target. The company may undertake one or more closings on a rolling basis. Because there is no minimum target, the company may close on any amounts invested, even if those amounts are insufficient for the intended use of proceeds, or do not cover the costs of this offering. After each closing, funds tendered by investors will be made available to the company.

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE “COMMISSION”) DOES NOT PASS UPON THE MERITS OR GIVE ITS APPROVAL OF ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.

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GENERALLY NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(d)(2)(i)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO www.investor.gov .

This offering is inherently risky. See “Risk Factors” on page 9.

Sales of these securities will commence on July 12, 2019.

The company is following the “Offering Circular” format of disclosure under Regulation A.

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TABLE OF CONTENTS

In this Offering Circular, the term “TTS AAS” or “the company” or “us” or “we” refers to To The Stars Academy of Arts and Science Inc. and its consolidated subsidiaries, including To The Stars, Inc. (“TTS”).

THIS OFFERING CIRCULAR MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH CONSTITUTE FORWARD LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.

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SUMMARY

The Company

The company is a public benefit corporation that was established in 2017 as a revolutionary collaboration between academia, industry and pop culture to advance society’s understanding of scientific phenomena and its technological implications. Founded by a next-generation physicist, career intelligence officer and an award-winning artist, the organization seeks to inspire, explore and apply discoveries in ways that can have a profound impact on the future of humanity.

We work towards accomplishing our mission through three dynamic divisions working together within the areas of Entertainment, Science and Aerospace. In the course of the company’s organization it acquired To The Stars, Inc. (“TTS”), an existing business that now comprises the company’s Entertainment Division.

To help identify projects that will be most likely to yield results, we solicited the input of creative and forward-thinking experts within each discipline. While the exact project(s) and order in which we pursue them depend on the amount of capital we raise, we believe the investment we make will yield results to advance human knowledge, create innovative and profitable commercial products, and provide unique entertainment experiences. The Entertainment Division is composed of the company’s wholly-owned subsidiary TTS, a brand manager and vertically integrated business that licenses and creates original intellectual property brought to life by award-winning content creators. Spanning film, television, books, music, art, and merchandise, fans find themselves immersed in exciting stories that inspire a new understanding and appreciation for the profound mysteries of our universe. With the company’s unique access to both credible and incredible information collected by our team of experts, TTS offers informed storytelling where the line between science and science fiction is blurred.

Examples of our approach to a vertically integrated entertainment division that works collaboratively with its own science and aerospace divisions include: our investigative research contribution to the History Channel docu-series, working title UNIDENTIFIED: Inside America’s UFO Investigation, and our award-winning franchises ‘Sekret Machines’ and ‘Poet Anderson,’ which were both number one new releases in their respective categories on Amazon.com. The ‘Sekret Machines’ franchise explores the real and well-documented events behind Unidentified Aerial Phenomenon (“UAP”) and utilizes the company’s valuable relationships to gain access to unique and often exclusive information. With input from top government officials, academia and scientists, ‘Sekret Machines’ is an example of how existing research can generate expansive media content: a fictional Sci-Fi thriller novel, an academically researched non-fiction series, and a motion picture script currently in development.

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‘Poet Anderson’ is an award-winning franchise that comes to life across multiple media formats including animation, live action, comics, a graphic novel, prose novels and toys. A Sci-Fi adventure about lucid dreaming, ‘Poet Anderson’ received IPBA’s Benjamin Franklin Award for Best Teen Fiction and “Best Animation” at the Toronto International Shorts Festival. The inspiration behind the dystopian saga for young adults came from a Stanford University study on how dreams can prepare you for real life events. If we are successful in our raise, future plans include expanding the ‘Poet Anderson’ franchise into a full-length animated feature and adding to its existing catalogue of novels, comic books and graphic novels to enrich Poet’s Dream World universe.

The company’s Science Division is a theoretical and experimental laboratory that seeks to challenge conventional thinking and discover the next-generation of physics. Through its Advisory Board, TTS AAS has access to world-renowned scientists with advanced knowledge to pursue the company’s commercially viable research projects in the near-term, including quantum communication technology, the A.D.A.M. (Acquisition & Data Analysis of Materials) Research Project, and THE VAULT (formerly the Community of Interest (“COI”)), an artificial intelligence-empowered database to be housed in a new mobile application called SCOUT (Signature Collection of UAP Tracker).

The company’s Aerospace Division is dedicated to finding revolutionary breakthroughs in propulsion, energy, and communication. We currently work with and intend to employ additional lead engineers from major Department of Defense and aerospace companies with the capability to pursue an advanced engineering approach to fundamental aerospace topics like Beamed-Energy Propulsion, Space-Time Metrics Engineering, and warp drive metrics.

TTS AAS aims to push the boundaries of what standard academia, corporate and government labs typically support, but we don’t believe discovery that impacts humankind should be a solo venture. The company will provide positive support for government, industry and academia in the accomplishment of our goals. That’s why we decided to be a public benefit corporation. Wherever possible, we will translate our unique knowledge into a medium that we can responsibly share with our customers and community. This could be accomplished in various ways including by providing access to a robust database like THE VAULT, by educating government policymakers so that they can influence changes in official Department of Defense policy like the Navy’s recent new guidelines for reporting UAPs, and through informed entertainment media like the docu-series, working title UNIDENTIFIED: Inside America’s UFO Investigation.

The company is a public benefit corporation as contemplated by subchapter XV of the Delaware General Corporation Law (the “DGCL”) that is intended to operate in a responsible and sustainable manner and to produce a public benefit or benefits, and is to be managed in a manner that balances the stockholders’ pecuniary interests, the best interests of those materially affected by the company’s conduct and the public benefit or benefits identified in its certificate of incorporation. If the DGCL is amended to alter or further define the management and operation of public benefit corporations, then the company will be managed and operated in accordance with the amended DGCL. The purpose of the company is to engage in any lawful act or activity for which a corporation may be organized under the DGCL. The specific public benefit purpose of the company is to produce a positive effect (or a reduction of negative effects) for society and persons by engaging in scientific and engineering research and development, producing literary, music, film and media content and engaging in entertainment-related activities intended to promote knowledge, stimulate discussion, raise awareness, and generate funds to support research, strategic partnerships, ventures, technology, education, charitable and other activities, as the Board of Directors may from time to time determine to be appropriate and within the company’s overall purpose and mission. (see “Risk Factors”, “Directors, Executive Officers and Significant Employees”, and “Securities Being Offered”)

Our company philosophy strongly favors direct consumer relationships – incorporating as a public benefit corporation, taking our ideas to you through equity crowdfunding offerings, and selling products directly to consumers. We consider people and the planet in addition to profits in all our decision-making and work towards always having exciting educational experiences that will ignite a sense of wonder and curiosity in the exciting scientific discoveries and mysteries of our universe.

2017/2018 Recap

On September 29, 2017, the company commenced an offering pursuant to Regulation A of the Securities Act of 1933, as amended (the “2017/2018 Regulation A Offering”), raising $1,370,230 before closing on September 28, 2018 (see “Liquidity and Capital Resources”). On October 11, 2017, the company shared its mission with the world via a live online broadcast event that has reached nearly a half a million people around the globe. The broadcast introduced the TTS AAS team members, their exceptional career experience and areas of expertise, and TTS AAS’s unique mission in entertainment, science and aerospace.

In December 2017, TTS AAS made history by leveraging its team’s access to become the very first company to obtain official U.S. Government footage of Unidentified Aerial Phenomena (“UAP”) that had gone through the declassification process and been approved for public release. The footage was released on THE VAULT (formerly COI) where we gave access to information analyzed by our team of experts that educated viewers about the advanced technology depicted in the footage. We believe that this analysis by best-in-class experts is helping to change the conversation about UAPs from a fringe topic to a credible and serious subject matter attracting headlines from mainstream media outlets around the world, including the New York Times, Washington Post, POLITICO, ABC, NBC, Fox News, BBC, Scientific American, NPR and CNN. This coverage brought high brand visibility, cemented the credibility of the company and established it as an unrivaled leader in its field. TTS AAS has since added military pilot video and written interview. We have created a requirements study document defining objectives for the full capability version of THE VAULT, in the context of enabling it as a collaboration and education tool in addition to a data depository.

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THE VAULT is a cornerstone of the company’s mission to advance human knowledge through the collection, exploration and sharing of information about phenomena. In 2017 we were able to launch the beginnings of a public-facing site that educated users about the U.S. government videos we were able to exclusively obtain and analyze using the company’s unique suite of knowledge that covered physics, engineering and biology. The information that the company was able to share on its site and within the annotated videos has been viewed over 9 million times.

The Entertainment Division, TTS, also saw a history-making year in 2017 with the release of first-press and limited-edition vinyl as well as new music from Angels and Airwaves. The company’s exposure as a result of THE VAULT and videos in 2017 led to other opportunities for the company, including the opportunity to participate in a nationally-syndicated TV docu-series that focuses on topics central to TTS AAS’s educational mission (see “Principal Products and Services – Entertainment Division”).

In 2018, the first full year of the company’s operations, we focused on infrastructure and personnel while pursuing significant research and development projects related to the company’s mission. One such initiative was the August 2018 launch of the A.D.A.M. Research Project, dedicated to analyzing materials that could provide insight into exotic technologies (see “Principal Products and Services – Science Division”). The company also began the process of creating actionable plans to progress on some of its near-term goals, namely Beamed Energy Propulsion Launch System (“BELS”) and Space-Time Metric Engineering (“STME”) (see “Principal Products and Services – Aerospace Division”).

The Entertainment Division, TTS, released the highly-anticipated sequels to its ‘Sekret Machines’ and ‘Poet Anderson’ novel franchises and released new content from Tom DeLonge with the children’s book ‘Who Here Knows Who Took My Clothes?’ In addition to these releases and content development with partners such as TBS and Cartel Entertainment, the company continued its work on the docu-series, working title UNIDENTIFIED: Inside America’s UFO Investigation (see “Principal Products and Services – Entertainment Division”).

Our infrastructure investments in 2017 and 2018 – staffing, operations, and business development – have provided a strong foundation for the company to aggressively pursue its 2019 objectives.

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Our Future Goals

As our business plans evolve to reflect our experiences in 2017 and 2018, we believe it is important to keep our entrepreneurial flexibility even as we sharpen our focus on projects likely to lead to commercial viability. We recognize the necessity for additional capital to execute our ambitious plans, so in 2019, the company added financial and investment expertise to its team by appointing J. Christopher Mizer to its Board of Directors. Mr. Mizer’s experience in business growth and investment banking will provide essential skills to optimally structure the company’s business and make connections with the right funding partners to ensure long-term success. Our long-terms goals are to:

· Be a global player in the entertainment industry that creates exciting and unique media experiences for all ages.

· Have the capital in order to acquire or finance our own media such as feature films to retain equity and downstream revenue.

· Integrate the company as part of pop-culture to inspire curiosity in the general public.

· Continue to increase our network of influence and intelligence to mine information for compelling stories and commercializable science and aerospace products.

· Expand upon the foundation that was built in the last two years and continue to educate the public about phenomena on a mass-media level with investigations that reveal credible, factual evidence that increases understanding.

· Contribute to advancing human intelligence through THE VAULT (formerly COI), an artificial intelligence-driven database to triage and partition data that enables collaboration among the public, academia, industry, government and law enforcement to find anomalies, trends, signatures and patterns.

· Launch mobile application SCOUT to house THE VAULT, allowing users to access and track data on the move in addition to allowing each user to view other users’ contributions and documents posted by TTS AAS.

· Establish the company as the world leader in next-generation intelligence and best-in-class laboratory for advanced physics research.

· Introduce a revolution in physics through Space Time Metric Engineering that would have the possibility of positively changing the current understanding of propulsion, communication, transportation and everyday life.

· Significantly decrease the cost and environmental impact of orbit launches with its Beamed Energy Launch Systems; and

· Have a significant and positive impact on society by continuing to spread the spirit of curiosity and life-changing discovery.

TTS AAS is an organization driven by a relentless pursuit of knowledge and the profound possibilities our investigations, discoveries and innovations can have on global citizens. Our strength lies in a vast collective community of like-minded people that are exceptionally curious and believe we can propel humanity forward by supporting and spreading unconventional ideas that can drastically change our future for the better.

With the support and encouragement of global citizens that share our passion, we will continue to pursue our public benefit mission and explore ways to realize our vision of creating one strategic platform that combines entertainment storytelling, scientific research and aerospace engineering to investigate, innovate, and inspire.

The Offering

The company is offering a maximum of 6,000,000 shares of Class A Common Stock on a “best efforts” basis. The cash price per share of Class A Common Stock is set at $5.00. The minimum investment is 70 shares, or $350.

Summary Risk Factors

Our business is subject to a number of risks and uncertainties, including those highlighted in the section titled “Risk Factors” immediately following this summary. These risks include, but are not limited to, the following:

· This company has a very limited operating history. · As a public benefit corporation, our decision-making includes more than profitability. · The offering price has been arbitrarily set by the company and the valuation is high. · Our costs may grow more quickly than our revenues, harming our business and profitability. · With a retail e-commerce store, we are reliant on the Internet as well as third parties to provide the back end, so we may be vulnerable to hackers.

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· We would be damaged by the death, incapacity, departure, or damage to the reputation of principal investor/key man Tom DeLonge. · We may not be able to maintain and grow our user base and user engagement. · Aerospace and scientific research and development can be risky, and there are no guarantees that any of the projects we undertake will lead to a commercially-viable product. · We are a company with an evolving business structure. · Competitors may be able to call on more resources than the company. · The company may encounter challenges in the legislative or regulatory environment. · We have a concentration risk from a third-party provider in the Entertainment Division. · If we are unable to protect our intellectual property, the value of our brand and other intangible assets may be diminished and our business may be adversely affected. · The failure of the company to attract and retain highly qualified personnel in the future could harm our business. · We expect to raise additional capital through equity offerings, which may include providing substantial discounts to large investors, and to provide employees with equity incentives. · It will take a while for profits to come in. · The company may need more money. · You may not like our projects. · We are required to pay a minimum royalty guarantee of $100,000 each calendar year. · There is no current market for any of the company’s shares of stock. · We may have a large shareholder base. · Equity crowdfunding is new. · We are not required to raise any minimum amount in this offering before accepting investor funds. · Provisions in our Amended and Restated Certificate of Incorporation permit certain directors and shareholders leeway with respect to competition and corporate opportunities. · Our Class B shareholders have the right to approve certain matters. · The exclusive forum provision in our certificate of incorporation and bylaws may have the effect of limiting an investor’s ability to bring legal action against us and could limit an investor’s ability to obtain a favorable judicial forum for disputes. · Investors in this offering may not be entitled to a jury trial with respect to claims arising under the subscription agreement, which could result in less favorable outcomes to the plaintiff(s) in any action under the agreement.

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RISK FACTORS

The Securities and Exchange Commission requires the company to identify risks that are specific to its business and its financial condition. The company is still subject to all the same risks that all companies in its business, and all companies in the economy, are exposed to. These include risks relating to economic downturns, political and economic events and technological developments (such as hacking and the ability to prevent hacking). Additionally, early-stage companies are inherently more risky than more developed companies. You should consider general risks as well as specific risks when deciding whether to invest.

There are several risks and uncertainties in our business plan, including but not limited to the following:

Risks Relating to the Company and its Business

This company has a very limited operating history. TTS AAS was incorporated in February 2017, and although the Entertainment Division, on-going through our subsidiary TTS, has been an operating business for several years, since February 2017 we have been expanding into completely new businesses. Our Aerospace and Science Divisions have no current customers and no revenues. There is limited historical information upon which an evaluation of our past performance and future prospects in the entertainment industry can be made. Moreover, our business model is new and evolving and is based on our mission. It is unclear at this point which of any of our current and intended plans may come into fruition and if they do which ones will be a success. Many of our current and intended plans are new and have no track records. Part of our current plan is to develop and innovate, and we will continue to modify our business model based on our mission, our experience, and opportunities. We cannot offer any assurance that these or any other changes will be successful or that they will not result in harm to the business.

As a public benefit corporation, our decision-making includes more than profitability. A public benefit corporation acts to further not only its business interests, but also its public purpose. Our public purpose, as stated in our Articles of Incorporation, is to produce a positive effect for society by engaging in scientific and engineering research and development, producing literary, music, film and media content, and engaging in entertainment-related activities intended to promote knowledge, stimulate discussion, raise awareness, and generate funds to support research, strategic partnerships, ventures, technology, education, charitable and other activities. Since we have a duty to balance these interests, rather than maximizing profitability, your investment in us may not be as profitable as it would be with respect to a traditional company. Our directors may make decisions aimed at benefitting stakeholders other than the company’s shareholders, and may have greater leeway in the issues they take into account in making decisions than the directors of a traditional company would. The company may prove to be a less attractive takeover target than a traditional company would, and therefore your ability to realize your investment through an acquisition may be limited. (see “Securities Being Offered”)

The offering price has been arbitrarily set by the company and the valuation is high. Valuations for companies at this stage are generally purely speculative, and even more so in our case. We have not generated any revenue from the aerospace and science projects we plan to pursue. While there is emerging customer interest, we have no deals in place yet. Our valuation has not been validated by any independent third party, and may decrease precipitously in the future. It is a question of whether you, the investor, are willing to pay this price for a percentage ownership of a start-up company. You should not invest if you disagree with this valuation. See “Dilution” for more information.

Our costs may grow more quickly than our revenues, harming our business and profitability. The company may invest in projects that end up losing money. Our expenses may be greater than we anticipate and our efforts to make the business more efficient may not be successful. In addition, the company may increase marketing, sales, and other operating expenses in order to grow and expand its operations and to remain competitive. Increases in our costs may adversely affect our business and profitability. Our financial results in any given period can be influenced by numerous factors, many of which we are unable to predict or are outside of our control.

With a retail e-commerce store, we are reliant on the Internet as well as third parties to provide the back end, so we may be vulnerable to hackers. We depend on the Internet and third-party providers to manage the e-commerce website for our Entertainment Division. The company is subject to the risks of any e-commerce store with regards to service interruptions, security breaches, and hackers.

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We would be damaged by the death, incapacity, departure, or damage to the reputation of principal investor/key man Tom DeLonge. We currently depend on the continued services of Tom DeLonge. Mr. DeLonge further provides marketing and promotional opportunities in his professional capacity as a musician and celebrity. The loss or departure of Mr. DeLonge could disrupt our operations and have an adverse effect on our business.

We may not be able to maintain and grow our user base and user engagement. The entertainment industry is generally affected by the same risk factors of other industries, but due to its nature, the production, distribution, and marketing of content can require large capital investments. Even with adequate funding, our products may fail to gain any traction with viewers.

Aerospace and scientific research and development can be risky, and there are no guarantees that any of the projects we undertake will lead to a commercially viable product. The aerospace and science industries are generally affected by the same risk factors as other industries, but the heavy investment in research and development requires large capital investment. Additionally, we are considering projects that are cutting-edge or extremely speculative, with many unknowns. Even with adequate funding, we may fail to produce a commercially viable product. All of the projects we are currently considering are subject to their own specific risks, but they include some of the following:

· Advanced aerospace technologies. The undefined and forward-looking nature of this project means that we may run into unanticipated barriers to implementation of the new research principles involved. Additionally, this type of research will require the use of high-energy directed energy sources, such as laser or microwave, which require safety controls. While these controls are a mature technology, their use in this application has unique elements, which will require development.

· Beamed energy propulsion launch systems. This project has been proposed in academic papers, as have the potential risks, which include:

o beam director failure; o beam instability due to weather conditions; o degradation or failure of command and control; o insufficient power to reach altitude; o failure of beam director, optical, electronic, or mechanical components; o unexpected bird strikes; o regulatory issues with the FAA with regards to altitudes above 2,000 feet; and o problems in acquiring an adequate test site or electrical power.

· Engineering the space-time metric. This technology is in the very early stages, and success depends on a yet to be defined breakthrough in propulsion to enable traveling to the stars at near light speed.

· Quantum communications. This technology is in the laboratory demonstration phase, with the basic physics principles being proven. Possible risk elements include inability to transition to higher temperature superconductors that could result in a device unsuitable for mainstream applications, bandwidth limitations that would constrain data rate and volume to very inefficient levels, and inability to transition the technology to a quantity production unit.

· SCOUT mobile application (housing THE VAULT). The SCOUT mobile application is in final development and will generally be affected by the same risk factors as other mobile applications. Developing mobile applications at the consumer level exposes us to additional individual risks, which include:

o defects or disruptions in service could diminish demand; o security breaches could diminish consumer confidence; o slow growth rate could result in extra expenses; o consumer adoption rates are unpredictable; o integration with future technologies may be difficult; o we rely on third-party apps and technology that may fail or cease to exist; o if our customer base grows too fast it could strain our personnel and/or finances; o our business could be harmed if we fail to keep up with developing technology; o failure to protect our intellectual property could adversely affect our brand; o customer dissatisfaction could adversely affect our brand; o sales to foreign customers expose us to international regulatory and monetary risks; and o evolving regulation of the Internet may affect us adversely.

We are a company with an evolving business structure. Part of our business model includes working to obtain government contracts, which may be partially or entirely classified and involve confidential or classified information. For those and other reasons, in the future we may need to adapt our business and go through a corporate reorganization, including spinning off a business line, creating a holding company, entering into joint ventures and forming new subsidiaries, in order to ensure compliance with government regulations applying to classified information. Should this occur, the company may no longer engage in the full extent of the lines of business described in this Offering Circular. (see “Principal Products and Services”)

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Competitors may be able to call on more resources than the company. Competition in aerospace and science may depend on what projects we take on. Many of our competitors have more resources than us. Existing or new competitors may produce directly competing products and services. These competitors may be better capitalized than the company, which might give them a significant advantage. Competitors may be able to use their greater resources to offer lower prices, even to uneconomic levels that the company cannot match.

The company may encounter challenges in the legislative or regulatory environment. The aerospace industry is highly regulated and we anticipate that changes to the regulatory environment will impact our decision-making on which projects to pursue and when or whether a product or project becomes commercially viable. Since we intend to pursue cutting-edge projects, we may not know what regulations will apply to a project before deciding to invest in it, and legislative or regulatory changes may impact the profitability or viability of a project.

Our media business has a concentration risk from a third-party provider. Our Entertainment Division , which is the only part of the company currently producing revenues, has a concentration risk from a third-party provider which accumulates revenues and royalties due to TTS primarily through digital sales of the company’s music products and then remits the monies collected to TTS. These revenues represent approximately 17% and 14% of total revenues for the year ended December 31, 2018 and 2017, respectively. As of December 31, 2018 and 2017, accounts receivable from this third-party represented 68% and 45% of accounts receivable, respectively. The loss of this third-party provider would not have a material impact on the company’s consolidated financial statements.

If we are unable to protect our intellectual property, the value of our brand and other intangible assets may be diminished and our business may be adversely affected. We rely on intellectual property for our Entertainment Division and anticipate relying on intellectual property for our Aerospace and Science Divisions. We rely and expect to continue to rely on trademark, copyright, patent, trade secret and Internet protection laws and regulations to protect our proprietary rights. We have filed various applications for trademarks in the United States and internationally, however, there is no guarantee we can maintain, or successfully defend such intellectual property. Third parties may knowingly or unknowingly infringe our proprietary rights, or may challenge proprietary rights held by the company, and pending and future trademark and patent applications may not be approved. In addition, effective intellectual property protection may not be available in every country in which we operate or intend to operate business. In any or all of these cases, we may be required to expend significant time and expense in order to prevent infringement or to enforce our rights. If the protection of our proprietary rights is inadequate to prevent unauthorized use or appropriation by third parties, the value of our brand and other intangible assets may be diminished.

The failure of the company to attract and retain highly qualified personnel in the future could harm our business. As we continue to grow, we cannot guarantee that we will be able to attract the personnel we need to maintain our competitive position. If we do not succeed in attracting, hiring and integrating qualified personnel, or retaining and motivating existing key personnel, we may be unable to grow effectively.

We expect to raise additional capital through equity offerings, potentially providing substantial discounts on shares of Class A Common Stock to large investors, and to provide employees with equity incentives. Therefore, your interest in the company is likely to continue to be diluted. We may offer additional shares of our stock and/or other classes of equity or debt, including in a concurrent private offering, which would dilute the ownership percentage of investors in this offering. Further, we may offer substantial discounts on the price paid for our equity to investors investing significant amounts of money. This discount may immediately dilute the value of your stock. Therefore, the value of shares of investors who pay the full price in this offering may be diluted by investments made by investors entitled to the discount, who may pay less for the same stake in the company. Moreover, additional securities in a concurrent private offering or in future offerings may be offered at a lower valuation, which would dilute the interest of investors in this offering. See “Dilution” for more information, especially the impact of a “down round.”

It will take a while for profits to come in. Even in the best-case scenario, the process of making money from research and development-intensive business like aerospace and science is slow. Similarly, in the entertainment business, and film industry in particular, the time a project starts until it is complete, released, and begins to see revenue can be substantial.

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The company may need more money. The company might not raise enough money in this offering to meet its operating needs and fulfill its plans. If that happens, it may cease operating and you will get nothing. Even if the company sells all of the Class A Common Stock it is offering now, it will probably need to raise more funds in the future, and if it can’t get them, the company may have to cut overhead costs, evaluate each Division and project for potential closure, and seek private financing for special projects. Without future funding, it is unlikely the company would be able to continue any research-intensive endeavors and it may fail. Even if the company does make a successful offering in the future, the terms of that offering might result in your investment in the company being worth less, because later investors might get better terms.

You may not like our projects. We are in the process of evaluating which of our planned projects will most likely lead to a viable commercial product. Final decisions on projects are made by our management team. We may choose projects you don’t like, don’t believe in, or even ones you object to.

We are required to pay a minimum royalty guarantee of $100,000 each calendar year. Under a Licensing Agreement, we are required to pay royalty payments to Tom DeLonge, Mr. Handsome, LLC, and Good In Bed Music, ASCAP (see “Intellectual Property”, “Liquidity and Capital Resources”, and “Interest of Management and Others in Certain Transactions”). If total royalty payments in any given calendar year are less than $100,000, we have agreed to pay any shortfall such that the annual minimum royalty paid under the Licensing Agreement will be $100,000. This means that we will have to pay this amount even when we have limited revenues, and this could materially reduce our earnings in any year. Failure to pay the minimum royalty guarantee could lead to termination of the Licensing Agreement, and termination of the Licensing Agreement could result in legal and financial harm to the company.

Risks Relating to the Securities

There is no current market for any of the company’s shares of stock. There is no formal marketplace for the resale of the Class A Common Stock. Investors should assume that they may not be able to liquidate their investment or be able to pledge their shares as collateral for some time.

We may have a large shareholder base which will likely grow even larger over time. Our goal is to grow our shareholder base through the current Regulation A+ campaign and multiple additional rounds of fundraising. It is uncommon for a start-up company with limited resources and a small staff to have so many investors. Despite best efforts, it is possible that unexpected risks and expenses of managing this large shareholder base could divert management’s attention and even cause the company to fail.

Equity crowdfunding is new. Our existing funding and future fundraising plans (including this round) are reliant on equity crowdfunding and provisions of the JOBS Act, which have been in effect for a relatively short period of time. Secondary markets don’t exist yet, and may not exist for some time (or ever), which hampers the investors’ ability to sell their shares. The laws are complex, and interpretation by governing bodies doesn’t exist in some cases and may change over time in others. Changes to the laws (or interpretation of the laws) could impact our ability to raise money as well as your ability to trade your shares.



We are not required to raise any minimum amount in this offering before accepting investor funds. We have not established a minimum amount of capital that must be raised in this offering. You should be aware that there is no assurance that any monies beside your own will be invested in our company in this offering. All of your investment amount will be immediately available to us.

Provisions in our Amended and Restated Certificate of Incorporation permit certain directors and shareholders leeway with respect to competition and corporate opportunities. Holders of Class B Common Stock and members of the Board of Directors who are not employees (each an “Identified Person”) of the company may engage in the same or similar activities or related lines of business as those of the company. Any Identified Person will not be in breach of any applicable duty to the company or its stockholders for failing to communicate or offer corporate opportunity or other business opportunity to the company or any of its affiliates. A corporate opportunity will not be deemed to be a potential corporate opportunity for the company if the company is not financially capable or contractually permitted or legally able to undertake it, or such opportunity is, from its nature, not in the line of the company’s business or is of no practical advantage to the company, or such opportunity is one in which the company has no reasonable expectancy interest or property right, or such opportunity is determined by the Board of Directors not to be of interest or desirable to the company. The company does not renounce its expectancy interest or property right in any corporate opportunity offered to any non-employee Director if that opportunity is not independently developed or sourced or is first expressly offered to that non-employee Director solely in his or her capacity as a Director or officer of the company, then the provisions regarding corporate opportunities and business opportunities will not apply. These provisions may differ from the limitations that are imposed on competition and corporate opportunities by other companies.

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Our Class B shareholders have the right to approve certain matters. Class A Common Stock and Class B Common Stock generally vote together as a single class on all matters submitted to a vote of the stockholders. Certain matters require the affirmative vote of the holders of Class B Common Stock, including, but not limited to, amendment of the Certificate of Incorporation, formation of any subsidiary or entry into a joint venture or partnership, issuance of securities, any change of control transaction, and liquidation or reorganization of the company (see “Securities Being Offered”). Each of the three founders of the company directly or indirectly owns one third of the shares of the outstanding shares of Class B Common Stock and therefore these persons have the ability to control these corporate acts.

The holders of the majority of the outstanding shares of our capital stock may require other stockholders to participate in certain future events, including our sale or the sale of significant amount of our assets. Our stockholders will be subject to a drag-along provision related to a transaction or series of related transactions in which a person, or a group of related persons, acquires shares representing more than 50% of our outstanding voting power, or to a deemed liquidation event, such as the sale of the company; the sale, lease or transfer of substantially all of the company’s assets; or the dissolution or liquidation of the company. If you do not approve the transaction (or series of transactions), but the holders of the majority of the outstanding shares of the company’s capital stock vote in favor of the transaction (or series of transactions) and the transaction (or series of transactions) is approved by the Board of Directors, you will still be required to participate in the transaction (or series of transactions), see “Securities Being Offered – All Classes of Stock – Drag-Along Rights” below. Specifically, investors will be forced to sell their stock in that transaction regardless of whether they believe the transaction is the best or highest value for their shares, and regardless of whether they believe the transaction is in their best interests.

Moreover, there is uncertainty as to enforceability of drag-along provisions under Delaware law. Since the rights of common stock are determined in general by statute as opposed to by contract, and the drag-along provision is a contractual term, the extent to which this provision would be upheld by the courts in Delaware is unclear. If this provision is challenged, a sale of the company might not be effected, and all the stockholders could miss an opportunity to realize the value of their investment.

The exclusive forum provision in our certificate of incorporation and bylaws may have the effect of limiting an investor’s ability to bring legal action against us and could limit an investor’s ability to obtain a favorable judicial forum for disputes. Certificate of Amendment of Amended and Restated Certificate of Incorporation, dated May 3, 2019, amends Section IX of our Amended and Restated Certificate of Incorporation to include exclusive forum provisions for certain lawsuits, see “Securities Being Offered – Forum Selection Provisions.” Further, Section 7 of the subscription agreement for this offering includes exclusive forum provisions for certain lawsuits pursuant to the subscription agreement; see “Securities Being Offered – Forum Selection Provisions.” The forum for these lawsuits will be the Court of Chancery in the State of Delaware. None of the forum selections provisions will be applicable to lawsuits arising from the federal securities laws. These provisions may have the effect of limiting the ability of investors to bring a legal claim against us due to geographic limitations. There is also the possibility that the exclusive forum provisions may discourage stockholder lawsuits, or limit stockholders’ ability to bring a claim in a judicial forum that it finds favorable for disputes with us and our officers and directors. Alternatively, if a court were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.

Investors in this offering may not be entitled to a jury trial with respect to claims arising under the subscription agreement, which could result in less favorable outcomes to the plaintiff(s) in any action under the agreement.

Investors in this offering will be bound by the subscription agreement, which includes a provision under which investors waive the right to a jury trial of any claim they may have against the company arising out of or relating to the subscription agreement, including any claim under the federal securities laws.

If we opposed a jury trial demand based on the waiver, a court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with the applicable state and federal law. To our knowledge, the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by a federal court. However, we believe that a contractual pre-dispute jury trial waiver provision is generally enforceable, including under the laws of the State of Delaware, which governs the subscription agreement, in the Court of Chancery in the State of Delaware. In determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether the visibility of the jury trial waiver provision within the agreement is sufficiently prominent such that a party knowingly, intelligently and voluntarily waived the right to a jury trial. We believe that this is the case with respect to the subscription agreement. You should consult legal counsel regarding the jury waiver provision before entering into the subscription agreement.

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If you bring a claim against the company in connection with matters arising under the subscription agreement, including claims under federal securities laws, you may not be entitled to a jury trial with respect to those claims, which may have the effect of limiting and discouraging lawsuits against the company. If a lawsuit is brought against the company under the subscription agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in such an action.

Nevertheless, if this jury trial waiver provision is not permitted by applicable law, an action could proceed under the terms of the subscription agreement with a jury trial. No condition, stipulation or provision of the subscription agreement serves as a waiver by any holder of common shares or by us of compliance with any substantive provision of the federal securities laws and the rules and regulations promulgated under those laws.

Furthermore, by agreeing to the provision, investors will not be deemed to have waived the company’s compliance with the federal securities laws and the rules and regulations promulgated thereunder.

In addition, when the shares are transferred, the transferee is required to agree to all the same conditions, obligations and restrictions applicable to the shares or to the transferor with regard to ownership of the shares, that were in effect immediately prior to the transfer of the Shares, including but not limited to the subscription agreement.

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DILUTION

Dilution means a reduction in value, control or earnings of the shares the investor owns.

Immediate dilution

An early-stage company typically sells its shares (or grants options over its shares) to its founders and early employees at a very low cash cost, because they are, in effect, putting their “sweat equity” into the company. When the company seeks cash investments from outside investors, like you, the new investors typically pay a much larger sum for their shares than the founders or earlier investors, which means that the cash value of your stake is diluted because all the shares are worth the same amount, and you paid more than earlier investors for your shares.

The following table demonstrates the price that new investors are paying for their shares with the effective cash price paid by existing shareholders and assumes the conversion of all options and grants, including those authorized under the 2017 Stock Incentive Plan regardless of issuance or vesting. The proceeds in the table are not adjusted for the potential proceeds from the hypothetical conversion of options granted and the hypothetical sale of restricted shares sold under the 2017 Stock Incentive Plan.

Minimum Mid Max April 30, 2019 d April 30, 2019 d April 30, 2019 d Tangible Net Book Value (Deficit):a $ (942,216 ) $ (942,216 ) $ (942,216 ) Common Shares Outstandingb 11,516,986 11,516,986 11,516,986 Fully Diluted Sharesc 12,891,916 12,891,916 12,891,916 Per Common Share Outstanding $ (0.08 ) $ (0.08 ) $ (0.08 ) Per Fully Diluted Share $ (0.07 ) $ (0.07 ) $ (0.07 ) Proforma Calculations for new capital raise: New Capital Raise $ 1,000,000 $ 15,000,000 $ 30,000,000 Tangible Net Book Value: $ 57,784 $ 14,057,784 $ 29,057,784 Issuance of additional shares under capital raise 200,000 3,000,000 6,000,000 Common Shares Outstanding 11,716,986 14,516,986 17,516,986 Fully Diluted Shares 13,091,916 15,891,916 18,891,916 Per Common Share Outstanding $ 0.00 $ 0.97 $ 1.66 Per Fully Diluted Share $ 0.00 $ 0.88 $ 1.54 Increase Current Shareholders (fully diluted) $ 0.08 $ 0.96 $ 1.61 Purchase Price $ 5.00 $ 5.00 $ 5.00 Decrease New Shareholders $ 5.00 $ 4.12 $ 3.46 TTS AAS Ownership 12,891,916 12,891,916 12,891,916 Percent Owned Before 100.00 % 100.00 % 100.00 % Percent Owned After 98.47 % 81.12 % 68.24 %

a) Book value of To The Stars Academy of Arts and Science Inc. at December 31, 2018 (excludes Media Assets of $199,665).

b) Includes the following: Class A Common Stock: shares issued to founders (10,607,440); shares issued pursuant to restricted stock grant (392,620); shares issued pursuant to stock options exercised (42,880); shares issued under Reg A offering (274,046); shares issued to a new director of the company (100,000); and shares issued to a consultant of the company (100,000). Class B Common Stock: shares issued to founders (5,400).

c) Assumes full vesting of the 1,374,930 shares of Class A common stock options granted as of April 30, 2019 under the Amended and Restated 2017 Stock Incentive Plan (“ANR Plan”).

d) To provide a reasonable approximation of current value, the table above utilizes the company's Tangible Net Book Value at December 31, 2018, and uses the company's common shares outstanding and fully diluted shares as of June 24, 2019. The company's outstanding and fully diluted shares of Class A Common Stock were significantly reduced as the result of the execution of Rescission and Relinquishment Agreements by the company's Stockholders and Optionholders in April 2019. The company believes that the Rescission and Relinquishment Agreements will have a negligible effect on the Tangible Net Book Value.

Future dilution

Another important way of looking at dilution is the dilution that happens due to future actions by the company. The investor’s stake in a company could be diluted due to the company issuing additional shares. In other words, when the company issues more shares, the percentage of the company that you own will go down, even though the value of the company may go up. You will own a smaller piece of a larger company. This increase in number of shares outstanding could result from a stock offering (such as an initial public offering, another crowdfunding round, a venture capital round, angel investment), employees exercising stock options, or by conversion of certain instruments (e.g. convertible bonds, preferred shares or warrants) into stock.

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If the company decides to issue more shares, an investor could experience value dilution, with each share being worth less than before, and control dilution, with the total percentage an investor owns being less than before. There may also be earnings dilution, with a reduction in the amount earned per share (though this typically occurs only if the company offers dividends, and most early stage companies are unlikely to offer dividends, preferring to invest any earnings into the company).

The type of dilution that hurts early-stage investors most occurs when the company sells more shares in a “down round,” meaning at a lower valuation than in earlier offerings. An example of how this might occur is as follows (numbers are for illustrative purposes only):

• In June 2014 Jane invests $20,000 for shares that represent 2% of a company valued at $1 million.

• In December the company is doing very well and sells $5 million in shares to venture capitalists on a valuation (before the new investment) of $10 million. Jane now owns only 1.3% of the company but her stake is worth $200,000.

• In June 2015 the company has run into serious problems and in order to stay afloat it raises $100,000 at a valuation of only $200,000 (the “down round”). Jane now owns only 0.89% of the company and her stake is worth only $2,667.

This type of dilution might also happen upon conversion of convertible notes into shares. Typically, the terms of convertible notes issued by early-stage companies provide that in the event of another round of financing, the holders of the convertible notes get to convert their notes into equity at a “discount” to the price paid by the new investors, i.e., they get more shares than the new investors would for the same price. Additionally, convertible notes may have a “price cap” on the conversion price, which effectively acts as a share price ceiling. Either way, the holders of the convertible notes get more shares for their money than new investors. In the event that the financing is a “down round” the holders of the convertible notes will dilute existing equity holders, and even more than the new investors do, because they get more shares for their money. Investors should pay careful attention to the amount of convertible notes that the company has issued (and may issue in the future), and the terms of those notes.

If you are making an investment expecting to own a certain percentage of the company or expecting each share to hold a certain amount of value, it’s important to realize how the value of those shares can decrease by actions taken by the company, including the impact of a “down round” (which is likely to be the case in the event that the company succeeds in selling any Class A Common Stock in a concurrent private offering). Dilution can make drastic changes to the value of each share, ownership percentage, voting control, and earnings per share.

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USE OF PROCEEDS TO ISSUER

$30 Million Raise

The net proceeds of a fully subscribed offering to the issuer, after total offering expenses, will be approximately $27.3 million. TTS AAS plans to use these proceeds as follows:

· Approximately $14.2 million towards project initiatives, acquisitions or strategic partnerships in the Entertainment, Science and Aerospace Divisions.

· Approximately $6.4 million on sales and marketing expenses through June 2020, including engagement of a full-time public relations firm on retainer for both product releases and corporate communications.

· Approximately $5.7 million on operating expenses, which includes employee salaries through June 2020. Additional operating expenses will go towards infrastructure, logistics solutions, premises, inventory, warehousing and shipping expenses.

· Approximately $0.5 million to support initiatives related to the company’s public benefit purpose – science and art education, research to benefit the public, citizen science and support for veterans.

· Approximately $0.5 million to repay a line of credit, if there is an outstanding balance. See “Interest of Management and Others in Certain Transactions” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources”.

$15 Million Raise

The net proceeds to the issuer, after total offering expenses will be approximately $13.6 million. TTS AAS plans to use these proceeds as follows:

· Approximately $6.9 million towards project initiatives, acquisitions or strategic partnerships in the Entertainment, Science and Aerospace Divisions.

· Approximately $3.2 million on sales and marketing expenses through June 2020, including engagement of a full-time public relations firm on retainer for both product releases and corporate communications.

· Approximately $2.7 million on operating expenses, which includes employee salaries through June 2020. Additional operating expenses will go towards infrastructure, logistics solutions, premises, inventory, warehousing and shipping expenses.

· Approximately $0.3 million to support initiatives related to the company’s public benefit purpose – science and art education, research to benefit the public, citizen science and support for veterans.

· Approximately $0.5 million to repay a line of credit, if there is an outstanding balance. See “Interest of Management and Others in Certain Transactions” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources”.

$5 Million Raise

The net proceeds to the issuer, after total offering expenses will be approximately $4.5 million. TTS AAS plans to use these proceeds as follows:

· Approximately $2.0 million towards project initiatives, acquisitions or strategic partnerships in the Entertainment, Science and Aerospace Divisions.

· Approximately $1.1 million on sales and marketing expenses through June 2020, including engagement of a full-time public relations firm on retainer for both product releases and corporate communications.

· Approximately $0.8 million on operating expenses, which includes employee salaries through June 2020. Additional operating expenses will go towards infrastructure, logistics solutions, premises, inventory, warehousing and shipping expenses.

· Approximately $0.1 million to support initiatives related to the company’s public benefit purpose – science and art education, research to benefit the public, citizen science and support for veterans.

· Approximately $0.5 million to repay a line of credit, if there is an outstanding balance. See “Interest of Management and Others in Certain Transactions” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.”

The company reserves the right to change the above use of proceeds if management believes it is in the best interests of the company.

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THE COMPANY’S BUSINESS

Structure and history

TTS AAS was formed in 2017 as a public benefit corporation, and we are in the early phase of operations. Our subsidiary, TTS, was established on October 28, 2002, as Resting Bird, Inc. Resting Bird, Inc. became a subsidiary of Really Likeable People. Inc. (“RLP”) in 2007, in which Archive West Investments, LLC (an RLP shareholder) was an equal owner. The name of TTS was changed to To The Stars, Inc. on August 17, 2011, and Archive West Investments acquired the shares of TTS on January 1, 2015. Archive West Investments contributed the shares of TTS to Gravity Holdings, LLC in 2017. Gravity Holdings contributed all of the shares of TTS to TTS AAS on June 1, 2017. TTS was the parent company to Love Movie, LLC and Poet Productions, LLC, both of which were dissolved in 2018. Depending on project development and funding received, we anticipate forming additional corporate entities for each of the Aerospace and Science Divisions.

Our mission

Our mission is to be a vehicle for change by inspiring a newfound appreciation and understanding of the profound, yet unresolved, mysteries of the universe that can have a positive impact on humanity. We are working to achieve our mission via an entertainment, science and aerospace consortium that inspires and collaborates with global citizens to investigate the outer edges of science and unconventional thinking in order to push human knowledge and capability forward.

Principal Products and Services

The company is currently organized as three separate divisions: the Entertainment Division, To The Stars, Inc. (TTS), the Science Division and the Aerospace Division. Our public benefit purpose is a unifying factor across our divisions. While progress on program initiatives is still pending sufficient funding, the company was able to make significant achievements in support of its mission in 2017 and 2018.

Entertainment Division

The Entertainment Division (TTS) creates and licenses original content across a variety of media platforms including music, books, movies and television. TTS also manufactures brand-related novelty merchandise, primarily sold direct to consumer within its own e-commerce and retail channels. Existing products may be found at www.tothestars.media. During 2018, media and merchandising of original intellectual property brands accounted for 45% of TTS’s revenues. TTS is also the licensee or sublicensee of Angels and Airwaves (AVA), Cathedrals of Glass, and Tom DeLonge’s professional name and likeness, which accounted for 55% of revenues. TTS has a strong existing retail customer base with a high returning customer rate. We are able to nimbly respond to demand for various products that we can sell directly via our own distribution channels, including locally in our own brick and mortar store in Encinitas, CA and worldwide through our e-commerce store. In 2018, approximately 95% of TTS’s revenues was derived from its online operations.

TTS released the following products in 2017:

· The Hope Collection: A limited edition vinyl record set of the entire Angels & Airwaves music catalog.

· Box Car Racer. The 15th anniversary vinyl edition of the band’s debut album in exclusive colors.

· We Don’t Need to Whisper Acoustic EP. TTS released a 4-song acoustic version of Angels & Airwaves’ iconic album We Don’t Need to Whisper in August 2017.

· We Don’t Need to Whisper. Original full-length album on two black vinyl LPs.

· I-Empire. Original full-length album on two black vinyl LPs.

TTS released the following products in 2018:

· ‘Poet Anderson…In Darkness’. This is the second book in the three-book ‘Poet Anderson’ series by Tom DeLonge and Suzanne Young. TTS sold advance copies of the book in December 2017 and the book was released for trade on January 30, 2018. After release, it jumped to the #1 New Release in Young Adult on Amazon and met with 4-star reviews.

· ‘Sekret Machines’ Fiction Series, Book 2: A Fire Within. Book 2 in the ‘Sekret Machines’ fictional book series, written by Tom DeLonge and A.J. Hartley, was released on September 18, 2018.

· ‘Who Here Knows Who Took My Clothes?’. A children’s book by Tom DeLonge released during Holiday 2018.

· We Don’t Need to Whisper. Original full-length album on two special edition colored vinyl LPs.

· I-Empire. Original full-length album on two special edition colored vinyl LPs.

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We continue to believe in the power of storytelling to educate and inspire and in 2019 plan to continue to produce our original stories, explore new distribution channels for our media properties, and invest in developing more stories influenced by our unique access to scientific information.

TTS anticipates the release of the following products in 2019:

· Docu-Series on A+E's History Channel, working title 'UNIDENTIFIED: Inside America’s UFO Investigation'. The company allowed its personnel to be key cast members in a six-part docu-series on A+E’s History Channel, scheduled to premiere in May. The series will include licensed footage from TTS AAS’s film archive. The series is based on the December 2017 New York Times stunning front-page expose uncovering the Pentagon’s mysterious UFO program, the Advanced Aerospace Threat Identification Program (“AATIP”) featuring an interview with former military intelligence official, Luis Elizondo, who ran the program. The controversial story was the focus of worldwide attention. In UNIDENTIFIED, Elizondo is speaking out for the first time with Tom DeLonge, co-founder and President of To The Stars Academy of Arts & Science and Chris Mellon, former Deputy Assistant Secretary of Defense for Intelligence, to expose a series of startling encounters and embark on fascinating new investigations. · ‘Cathedrals of Glass’ Fiction Series, Book 2: Valkrys Wakes. Book 2 in the ‘Cathedrals of Glass’ fiction series published by TTS under license is due for trade release in 2019. In this book, teenagers fight for survival on an icy planet in this dystopian science fiction thriller from the New York Times bestselling author of Steeplejack A. J. Hartley.

· ‘Sekret Machines’ Non-Fiction Series, Book 2: Man. Book 2 in the ‘Sekret Machines’ non-fiction book series is due for trade release in 2019. This book is the stunning continuation of an intensive study of UFO phenomena in which hard science, technology, and the human mind are explored as they relate to our world.

· New music and U.S. tour by Angels & Airwaves. These events (release dates to be determined) are expected to bring high brand visibility and increased product sales.

TTS has successfully developed its original entertainment properties to the stage where they are currently being solicited for major network and studio opportunities, including:

· ‘Strange Times’ Television Series. Currently in development at TBS. This series is an adventure through a whimsical paranormal world with a group of skate-rats from Southern California who are as obsessed with girls as they are ghosts.

· ‘Monsters of California’ Feature Film. A coming-of-age science fiction film being developed with Cartel Entertainment, a production house with an international presence. This franchise is filled with adventure, humor and extraordinary visual effects.

· ‘Poet Anderson’ Feature Film. TTS has paused the release plans for the ‘Poet Anderson’ short film to allow for discussions on a more comprehensive development deal for a full-length movie. The story centers around an invisible world existing beside us that only a few can see… In this parallel universe, a dangerous war has been waged between the forces of good and evil. The future has yet to be written as the battlefield itself has not touched on any terrestrial land, but instead insidiously upon the souls of man.

· ‘Sekret Machines’ Television Series. A television series based on the non-fiction trilogy Sekret Machines: Gods, Man and War is being developed with Cartel Entertainment, a production house with an international presence. The series centers around an FBI agent who, while investigating a string of murders, learns the victims were linked to a government program exploiting alien technology and were targeted by a group of abductees who believe they’re saving the human race from self-destruction. Recruited to their cause, the agent is forced to choose between illusion and reality, “normal” life and the shadowy world of the Phenomena.

We will continue to expand our franchises by seeking collaboration with forward-thinking creative partners, developing content in a wide-range of formats and mobilizing new distribution channels to reach customers directly.

Science Division

The company’s Science Division is a theoretical and experimental laboratory, challenging conventional thinking by discovering a new world of physics. During 2017, the Science Division began developing its staffing plans, identifying funding requirements and sensitivities, and met with individuals in the U.S. government about possible government-funded studies. The Science Division is evaluating quantum communications technology and possibly exotic materials and technologies in the A.D.A.M. Research Project, but our most significant accomplishment in advancing science and education to date was the launch of our initial version of TTS AAS’s online Community of Interest (COI), which we have renamed THE VAULT. In 2019, we will continue the evolution of THE VAULT by taking it mobile with the launch of the SCOUT (Signature Collection of UAP Tracker) mobile application.

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In December 2017, TTS AAS made history by leveraging its team’s access to become the very first company to obtain official U.S. government footage of unidentified aerial phenomena (“UAP”) that had gone through the declassification process and been approved for public release. The footage was released on THE VAULT (formerly COI) where we gave access to information analyzed by our team of experts that educated viewers about the advanced technology depicted in the footage. We believe that this analysis by best-in-class experts is helping to change the conversation about UAPs from a fringe topic to a credible and serious subject matter attracting headlines from mainstream media outlets around the world, including the New York Times, Washington Post, POLITICO, ABC, NBC, Fox News, BBC, Scientific American, NPR and CNN. This coverage brought high brand visibility, cemented the credibility of the company and established it as an unrivaled leader in its field. TTS AAS has since added military pilot video and written interview. The information that the company was able to share on its site and within the annotated videos has been viewed over 9 million times.

We have created a requirements study document defining objectives for the full capability version of THE VAULT (formerly COI) in the context of enabling it as a collaboration and education tool in addition to a data depository. The company’s vision of THE VAULT running at its full potential is an online collection, storage, and analysis point for information regarding events, witness and data reporting associated with advanced technologies and capabilities. One of our objectives in developing THE VAULT is using artificial intelligence to optimize functionality by creating proprietary algorithms that can discover detailed patterns in the data submitted by users and correlate them with other academic research. This may also result in commercially-valuable algorithms, and because there is no real competition in this area that we are aware of, we believe the probability of capturing such business is high.

In furtherance of this plan, in April 2019, TTS AAS acquired the mobile application, social media accounts, website and all intellectual property of Project Capture. Project Capture was designed to extract data from reports directly input by users and serve as a host not only for sophisticated reports, but media content as well. Project Capture was designed with public participation of data collection in mind, which is directly applicable to company's plans for SCOUT. The company is in the process of updating and rebranding Project Capture to SCOUT (Signature Collection of UAP Tracker).

The SCOUT mobile application will enable data collection directly from the public that will contribute to THE VAULT. SCOUT will allow users to access, track and view other users’ data contributions as well as information published by TTS AAS. We plan to evolve THE VAULT to also allow data submission from larger databases such as the U.S. government, and foreign governments in the future. SCOUT will be made available to the public through the iTunes App Store and Google Play later in 2019.

The Science Division continues its efforts to direct research and analysis on materials necessary to the foundational work in the Aerospace Division, specifically regarding the results of the Statement of Work for the SOW-MSSA with ETI (both terms defined below) for the analysis and experiments on materials. Under the SOW-MSSA, ETI will be responsible for planning, execution analysis, and experimentation to establish the properties of specific materials. They will advise on the collection and scientific evaluation of materials samples the company obtains through reliable reports of advanced aerospace vehicles of unknown origin (see also “Principal Products and Services – Aerospace Division”).

We continue to have direct meetings with industry partners, and we anticipate that our efforts to have collaborative relationships will gain significant momentum in 2019.

Aerospace Division

The Aerospace Division is dedicated to finding revolutionary breakthroughs in propulsion, energy, and communication. In 2017, the Aerospace Division began developing business plans, identifying funding requirements and sensitivities and presenting a baseline craft to be used for technology trade studies. In 2017, the Aerospace Division hired two highly qualified employees from the public and private sides of the aerospace/defense industry, whose backgrounds added value to TTS AAS with their contributions to research and development (“R&D”) and technical expertise (see “Employees”). Our team continues to participate in meetings and ongoing discussions with individuals in the U.S. government about possible government-funded studies and other business opportunities.

The company is in the process of evaluating which projects will most likely lead to viable commercial products. Projects under consideration in this Division include advanced aerospace technologies, Beamed Energy Propulsion Launch Systems (“BELS”) and Space-Time Metric Engineering (“STME”). In August 2018, the company entered into two statements of work with EarthTech International, Inc. (“ETI”) (see “Interest of Management and Others in Certain Transactions”) to prepare plans, perform scientific analysis and advise the company on and beamed energy propulsion launch systems (“SOW-BELS”) and materials analysis (“SOW-MSSA”).

With the completion of the SOW-BELS, the company now has a defined program plan for requirements development, analysis, experimentation, risk reduction efforts, demonstrations, operational system development, and initial fielding of the BELS cubesat launch system development program. Among the company’s proposed project areas, BEP has the advantage of existing feasibility testing, significant technical analysis, early program planning, and a promising market (see “Market”).

To stay on track for our long-term project goals, we are also initiating development of STME because it is necessary technology required to achieve the Aerospace Division’s exotic engineering objectives. While the basis of the physics has been established, there is foundational work – in the form of multiple experiments – necessary to further develop this technology.

In a joint effort with the Science Division to perform research and analysis on materials to support this foundational work, the Aerospace Division will benefit from the results of the Statement of Work for the SOW-MSSA with ETI for the analysis and experiments for the Materials Analysis – Set A (see “Principal Products and Services – Science Division”).

We continue to have direct meetings with industry partners, and we anticipate that our efforts to have collaborative relationships will gain significant momentum in 2019.

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Public Benefit Corporation

In 2017 and 2018, the company operated in manner that balanced the stockholders’ pecuniary interests, the best interests of those materially affected by the company’s conduct, and the public benefits identified in the company’s certificate of incorporation. Highlights included: publishing mission-specific educational materials on THE VAULT (formerly COI) (see Principal Products and Services – Science Division), supporting the Center of Innovation at the Boys & Girls Club of Oceanside through helping to formulate their STREAM lab curriculum; working with MusicCorps by donating time to help establish its San Diego headquarters and bringing music and artwork together to raise funds for its music therapy program for veterans; in-store donations and fundraising for Freedom Station, monetary donations and volunteering to help Feeding America San Diego. Additionally, approximately 90% of TTS’s screen-printed goods suppliers are Worldwide Responsible Accredited Production (“WRAP”) certified.

In 2019, the company plans to maintain or expand initiatives that advance the understanding of human knowledge about scientific phenomena while educating and informing the public. This includes educating policymakers in the U.S. government, such as our work to inform high-level decision making in the Department of Defense that may lead to the Navy issuing official guidelines for reporting UAPs. This is the first step for better reporting, better data and better research for the future of understanding the phenomenon.

Market

We operate in diverse business sectors by way of vertical integration, for which there is currently no parallel marketplace. The Entertainment, Science and Aerospace Divisions each have their own market factors:

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Entertainment

Globally, according to PricewaterhouseCoopers’s 2018 Global Entertainment and Media Outlook forecast, entertainment and media revenues are expected to rise from $1.9 trillion in 2017 to $2.4 trillion in 2022. In the United States, entertainment and media spending is expected to reach $830 billion by 2021, from $735 billion in 2017. Despite continued widespread industry disruption and intense competition for consumer attention, we believe that growth opportunities abound for TTS in the new media environment.

We anticipate that the entertainment and media market will see an increase in both influence and purchasing power. Anticipated growth in industries relevant to our current and proposed business plans include:

· TV & Video – 1.3% by 2022 · Cinema – 1.8% by 2022 · Book Publishing – grew 2.5% from 2017 to 2018, with expectation the digital publishing market will account for 45% of all publishing by 2021 · Music – grew 11.9% overall from 2017 to 2018, vinyl sales in particular grew 8% in the same period

Live experiences, consumers interacting in real time with mobile media, are also on the rise. It is estimated that smartphone data consumption will overtake broadband data consumption by 2020, and so we will continue to engage consumers by providing quality content where they live –on their mobile devices.

TTS’s current consumers are based in the coastal regions of the United States as well as internationally, with a 75/25 male to female ratio, ages 18-34, with interests in music, entertainment, comedy, and comic books, and are fans of the bands Blink 182 and AVA.

The entertainment and media industry in the United States is demonstrating a renewed trend of convergence, defined in the current period by diversified revenue streams, strategic positioning in the value chain and achieving relevant scale. As a vertically-integrated media company, TTS has an established and engaged audience and as such is a content provider with a demonstrated ability to build and sustain customer trust, a vital differentiator in the current and future entertainment and media industry.

Data shows that despite media saturation, customer engagement in entertainment and media sectors is expected to grow by double digits through 2022. We believe growth opportunity will come from capturing additional market share on a variety of platforms as opposed to general market expansion.

Science

When the company was formed, there was no identifiable market for the type of scientific exploration in which TTS AAS planned to engage (e.g., niche physics and consciousness). Market viability has been an important measure in considering the viability of the following near-term projects:

· Quantum Communications . The market potential for a production version of the quantum communications system is vast. It has the potential to replace all specialized communication systems that simultaneously require high data rates and transmission assurance, which is becoming more important as cyber intrusions increase. According to a report published by Market Study Report, LLC the unified communications market is expected to be $186 billion by 2026, with a significant percentage requiring attributes that can be addressed by quantum communications technology.

· SCOUT Mobile Application . The market for mobile applications (or “apps”) is already well developed and showing stronger growth rates every year. Over one billion smartphones have been sold every year since 2015, which equates to 1.4 smartphones per person on earth. In addition, the average mobile app user spends more than 30 hours a month on more than two dozen apps. While the company is still evaluating methods of commercialization for SCOUT, the mobile app market provides a range of opportunities, from subscription models to advertising revenue, which alone has increased over 400% in the last five years.

As to some of the long-term projects and educational initiatives, we continue to view the market value for science as variable in nature. Specifically, there is a general decrease in programmed funding for exploratory science while there is a marked increase in philanthropic funding for focused scientific pursuits. This structure provides funding opportunities for TTS AAS and is shaping our funding pursuits with the focused nature of the investments, and it allows us to direct the resources in order to meet our public benefit commitments.

Aerospace

In 2017, the global aerospace industry experienced growth driven by higher defense spending, which resulted in large part from the U.S. administration’s increased focus on strengthening its military. Foreign firms have been attracted to the U.S. aerospace market because it is the largest in the world and has a skilled and educated workforce, extensive distribution systems, diverse offerings, and strong support at the local and national level for policy and promotion.

The U.S. Defense budget saw realization of 2017 projections for 2018 budget levels. A two-year budget agreement shows a defense funding increase of $52.8 billion or 9.8% over current budget cap in 2018, but a similar increase is no longer anticipated for 2019. While the Pentagon continues to demonstrate interest in investing in research and development across a broad range of capabilities with an emphasis on “game changing technologies” that maintain the nation’s qualitative advantages, research and development for the U.S. Air Force, the branch most relevant to TTS AAS’s technology focus, shows only inflation-adjusted funding levels over 2018.

According to the Department of Defense, despite the expected reduction in Pentagon spending growth, the commercial market for small satellites (practical application of a BEP launch system) is expected to grow from 375 annual launches in 2018 to almost 600 by 2022 (see also “Principal Products and Services”). The Administration’s efforts to develop a ‘Space Force’ continue. TTS AAS’s technologies and capabilities are well aligned for this development and we expect will place the company in a favorable position for research contracts.

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Brand Visibility

The launch of TTS AAS in 2017 had the advantage of utilizing TTS’s existing global fan base in connection with the online broadcast, which was then amplified by favorable algorithms that increased is virality and organic reach. In December, the brand’s visibility was exponentially increased with the launch of THE VALUT (formerly COI) when the company became the very first company to obtain official U.S. Government footage of UAP that had gone through the declassification process and been approved for public release. This historic achievement put the company at the forefront of mainstream media outlets, establishing it as the dominant company in its field.

The company has high brand visibility. Combined social media followings for TTS AAS, TTS, Tom DeLonge, Angels and Airwaves, and other original brands as of May 10, 2019 are as follows:

· Facebook – 1.546 million · Twitter – 833,000 · Instagram – 848,600 · YouTube – 188,000

Competition

At the moment, we believe that there are no direct competitors to our entertainment, science and aerospace consortium as a whole. Direct competitors for the Science Division and Aerospace Division will depend on which products and/or services are brought to market in future, but it is possible competitors with more resources may be able to use their resources to develop products and technology faster or offer lower prices, even to uneconomic levels that the company cannot match.

Our Entertainment Division, TTS, competes for consumer discretionary spending on entertainment and media products and services. Many companies operate in entertainment media in the wider sense. Examples include:

· Marvel. Marvel is a wholly-owned subsidiary of The Walt Disney Company and has a library of over 8,000 characters featured in a variety of media. Marvel utilizes its character franchises in entertainment, licensing and publishing.

· DC Comics. DC Comics is a subsidiary of Warner Bros. Entertainment, a division of Time Warner, and is one of the largest and oldest American comic book companies, and produces multi-media material featuring its comic book characters.

· LucasFilm. LucasFilm (acquired by The Walt Disney Company in 2012) is among the world’s leading entertainment service companies and a pioneer in visual effects and sound across multiple mediums.

As with the above-listed competitors, the company’s Entertainment Division, TTS, has a loyal fan base that is invested in its branded franchises, but its competitors have a longer history and superior available resources that may be able to use their resources to offer lower prices, even to uneconomic levels that the company cannot match.

Raw Materials/Suppliers

Our Entertainment Division, TTS, uses Internet-based and standard software to produce products and services. It uses cameras and other equipment for filming and editing work (some owned, others rented). TTS also uses e-commerce solution software as well as shipping software to deliver products to customers. Most of the content for foreseeable product releases has either already been created or delivery of such content is anticipated. In terms of creating new content throughout the year, TTS uses a mixture of in-house and outsourced resources. TTS sells direct to customer, either in its brick and mortar store in Encinitas, CA or worldwide through its e-commerce store.

TTS works with a variety of suppliers in connection with its products, but such suppliers are not unique and TTS is not dependent on any one supplier to source or manufacture its products.

THE VAULT and SCOUT mobile app it is encased in will use Internet-based and standard software to produce its services.

Other than the foregoing, here are currently no raw materials or suppliers for our Science and Aerospace Divisions.

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Research and Development

In 2018, the company initiated research subcontracts in material studies and beamed energy totaling $60,000. Those contracts are to be completed in 2019. The company incurred $226,681 and $ 5,750 in third-party and internal costs towards R&D efforts in development of the company’s projects during 2018 and 2017, respectively.

Employees

As of May 30, 2019 we had seven employees at TTS AAS. All of our employees are employed by the Entertainment Division (TTS), and some of our employees provide services for both TTS and TTS AAS.

Intellectual Property

The company continues to evaluate appropriate intellectual property protection for its corporate branding. The company filed a trademark application for the word mark ‘To The Stars Academy of Arts and Science’, Serial No. 87721197 and received a Notification of Allowance from the U.S. Patent and Trademark Office on January 29, 2019. For protection of IP rights associated with its project initiatives, TTS AAS has not filed for any patents, copyrights, or other trademarks but plans to do so when appropriate.

Our Entertainment Division, TTS, has an established trademark and copyright portfolio for its brands and regularly consults with IP counsel to protect that portfolio. TTS also relies on content, logos, and designs related to its brands, as seen on its website, www.tothestars.media.

TTS is aware of a current trademark rights-holder, ‘Strange Music’, that has in the past filed oppositions to TTS’s class 9 and 25 trademark applications for the ‘Strange Times’ mark. TTS has abandoned those applications. TTS executed a co-existence agreement with Gildan Apparel, trademark rights-holder of certain ‘Secret’ word marks in Canada in relation to TTS’s ‘Sekret Machines’ mark. Sellry Inc., a trademark applicant attempting to register ‘Strange Times’ in connection with software and web development, marketing and business development services abandoned its application after TTS filed an opposition on February 11, 2019.

In April 2019, TTS AAS acquired the mobile application, social media accounts, website and all intellectual property of Project Capture.

Licensing Agreement

Tom DeLonge, Mr. Handsome, LLC, and Good In Bed Music, ASCAP (“GIBM” and together with Tom DeLonge and Mr. Handsome, LLC, the “DeLonge Parties”) have licensed intellectual property rights to TTS AAS and TTS for 5 years under verbal license and currently under a Licensing Agreement dated April 26, 2017. The rights include name and likeness rights, rights of publicity of Mr. DeLonge, trademarks, copyrights, domain names, social media handles, master recordings, and musical compositions (“Licensed Rights”). TTS AAS will design, develop, produce, manufacture, promote and sell digital and physical products, including novels, albums, apparel, accessories and all manner of merchandise featuring the Licensed Rights (the “Licensed Products”). The territory of the Licensing Agreement is the Universe.

Grant of License

Mr. DeLonge has granted TTS AAS and its subsidiaries the non-exclusive right to use Mr. DeLonge’s legal and professional name, approved likeness, approved voice, approved photographs and approved video footage in connection with the advertising, promotion, publicizing and marketing of the Licensed Products in any and all media, including television, radio, print publications, digital and social media and outdoor media.

Mr. Handsome has granted to TTS AAS an exclusive license to exploit certain master recordings owned and/or controlled by Mr. Handsome subject to the approvals and royalty payments set forth below. Mr. DeLonge and GIBM agreed to use commercially reasonable efforts to have third party music publishers grant TTS AAS licenses for musical compositions that Mr. DeLonge has written and/or co-written, provided, it is not a breach of the Licensing Agreement if any DeLonge Party is unable to grant or secure a grant of such licenses. Certain music rights require us to obtain licenses and permissions from third parties in order to exploit such music rights. In each such case, we are responsible for obtaining such licenses and permissions and for paying any and all costs or fees associated therewith.

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We are permitted to sublicense any part of the license granted above, provided the DeLonge Parties have the right of approval over any such sublicense arrangement. The license applies to TTS, without need for further approval as a sublicensee.

Approvals

We have to submit, for Mr. DeLonge’s prior approval, samples of all preliminary and final artwork for each Licensed Product and its accompanying packaging and/or promotional materials. We have to present information regarding quantity of units to be manufactured, marketing plan, advertising copy and promotional materials for Mr. DeLonge’s approval. Approval is required for each photograph, video or other use of Mr. DeLonge’s name and/or likeness and such approval will be valid for subsequent use in connection with the licensed product without requiring further approval. Promotional events relating to the Licensed Products will be subject to Mr. DeLonge’s prior approval and professional schedule. If we release any Licensed Product and/or related promotional materials with source materials, we have to include credit and/or songwriter information, attribution, or other notice.

Royalty

We are required to pay the DeLonge Parties royalties on gross sales ranging from 0.5 – 15% depending on the product category (see “Risk Factors”, “Liquidity and Capital Resources” and “Interest of Management and Others in Certain Transactions”). Mr. DeLonge has the right to approve any royalty granted to a third party in connection with a Licensed Product. If total royalty payments to the DeLonge Parties in any given calendar year fail to meet $100,000, we have agreed to pay any shortfall such that the annual minimum royalty paid to the DeLonge Parties will be $100,000. The Licensing Agreement allows Tom DeLonge to elect to invest any royalty payment due to the DeLonge Parties for the development of Licensed Products beyond what is commercially practical for TTS AAS and recoup that investment. During both of the years ended December 31, 2018 and 2017, the royalties due the DeLonge Parties was the minimum guarantee amount of $100,000 and was recorded by the company as a cost of revenues. For the years ended December 31, 2018 and 2017, the $200,000 and $100,000, respectively, in accumulated royalties due the DeLonge Parties had not been paid and are included within current Amounts Due Related Party on the accompanying consolidated financial statements.

Termination

Any party has the right to terminate the Licensing Agreement by written notice to the other party if the other party fails to perform or observe any term or condition of the Licensing Agreement, and such failure is either: (i) not susceptible to cure, or (ii) if curable, is not fully cured within 30 days after written notice, or (iii) if not capable of cure within the cure period, the breaching party does not begin the cure within that period. Mr. DeLonge has the right to terminate the Licensing Agreement for convenience, on his own behalf and on behalf of Mr. Handsome and GIBM, on at least 60 days prior written notice to TTS AAS.

Our rights under the Licensing Agreement automatically terminate immediately upon the expiration or termination of the Licensing Agreement for any reason. After termination, we may not advertise, promote, distribute, sell or otherwise use the licensed rights in the territory.

Following the expiration or termination of the Licensing Agreement for any reason, we have to provide the DeLonge Parties with an inventory report, setting forth the Licensed Products in stock and in production. The DeLonge Parties will have the right of first refusal to purchase any or all such Licensed Products in stock or in production, at a price to be determined by the parties in good faith, but in no event more than cost of goods. The DeLonge Parties will have 30 days to notify us of their intent to exercise this right of first refusal. If the DeLonge Parties collectively elect not to purchase any or all of such inventory, we have 90 days to sell off any inventory featuring the licensed rights.

Promptly after the expiration or termination of the Licensing Agreement for any reason, each of the DeLonge Parties and TTS AAS have to return or destroy all confidential information.

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Litigation

TTS is aware of a current trademark rights-holder, ‘Strange Music’, that has in the past filed oppositions to TTS’s class 9 and 25 trademark applications for the ‘Strange Times’ mark. TTS has abandoned those applications. TTS executed a co-existence agreement