RELATED PARTY TRANSACTION POLICY V8

RELATED PARTY TRANSACTION POLICY

VERSION 8.0  |  MARCH 2026

 

GROOVY COMPANY, INC. DBA OTCM PROTOCOL

Wyoming Corporation  |  CIK: 1499275  |  OTC: GROO

12 Daniel Rd East, Fairfield, NJ 07004

 

SEC Category 1 Model B  |  Release No. 33-11412 (Binding)  |  BOARD APPROVED

 

Field	Value
Document ID	OTCM-POL-RPT-001
Version	8.0 (supersedes V1.0)
Effective Date	March 2026
Classification	CONFIDENTIAL
Approved By	Board of Directors
Legal Entity	Groovy Company, Inc. dba OTCM Protocol
Governing Law	Federal Securities Law, Wyoming Business Corporation Act, and New Jersey State Law

 

Article I: Purpose and Scope

Section 1.1 — Purpose

This Related Party Transaction Policy (the “Policy”) establishes procedures for the identification, review, approval, and disclosure of transactions between Groovy Company, Inc. dba OTCM Protocol (the “Company”) and Related Parties. The Policy protects the best interests of the Company and its shareholders, ensures transactions are conducted on fair and reasonable terms, promotes transparency in corporate governance, ensures compliance with applicable securities laws, and prevents actual or perceived conflicts of interest.

 

Section 1.2 — Regulatory Framework

Regulation	Description
Item 404, Regulation S-K	Related Party Transaction Disclosure
Section 13(k), Exchange Act	Prohibition on Personal Loans to Directors/Officers
Rule 10b-5	Prohibition on Fraud in Connection with Securities
Wyoming Business Corporation Act	Fiduciary duties of directors and officers
Release No. 33-11412	SEC–CFTC Binding Digital Securities Taxonomy (March 17, 2026)
ASC 850	Related Party Disclosures (GAAP)

 

Section 1.3 — Scope

This Policy applies to all Related Party Transactions involving the Company, including transactions with the Company’s direct operations, the OTCM Protocol platform, OTCM Utility Tokens, ST22 Digital Securities, Empire Stock Transfer or other custody partners, and issuers on the OTCM Protocol platform.

 

Article II: Definitions

Section 2.1 — Related Party

Individual Related Parties

Category	Definition
Directors	Any director of the Company
Executive Officers	Any executive officer (CEO, CTO, COO, etc.)
Director Nominees	Any nominee for election as a director
5% Shareholders	Any beneficial owner of more than 5% of any class of voting securities
Immediate Family	Immediate family members of any of the above

 

Entity Related Parties

Category	Definition
Controlled Entities	Any entity in which a Related Party has a direct or indirect material interest
Affiliated Companies	Any entity that controls, is controlled by, or is under common control with the Company
Employment Entities	Any entity employing a Related Party as an executive officer
Investment Entities	Any entity in which a Related Party holds a 10%+ ownership interest

 

Section 2.2 — Immediate Family Member

Includes spouse or domestic partner, parents and stepparents, children and stepchildren, siblings and stepsiblings, in-laws (mother, father, son, daughter, brother, sister), and any person (other than a tenant or employee) sharing the person’s household.

 

Section 2.3 — Related Party Transaction

A “Related Party Transaction” means any transaction, arrangement, or relationship in which: (a) the Company or any subsidiary is, was, or will be a participant; (b) the aggregate amount involved exceeds $120,000; and (c) any Related Party has, had, or will have a direct or indirect material interest.

Examples include: loans, guarantees, investments, capital contributions; sales, leases, licenses of real or personal property; consulting, employment, professional services agreements; issuer agreements, ST22 Digital Securities purchases, liquidity provision on CEDEX; joint ventures, partnerships, profit-sharing arrangements; and compensation arrangements outside normal course.

 

Section 2.4 — Material Interest

A “Material Interest” means a direct or indirect interest in a transaction significant enough to affect a Related Party’s judgment or actions. NOT considered material: director of both parties without other relationship, equity ownership less than 10% of entity, limited partner without management role, passive institutional investor.

 

Article III: Identification of Related Party Transactions

Section 3.1 — Annual Questionnaires

All directors and executive officers must complete an annual questionnaire identifying immediate family members and their employment, business affiliations and directorships, material investments in other entities, relationships with OTCM Protocol issuers, ST22 Digital Securities and OTCM Utility Token holdings (including Solana wallet addresses), and known potential Related Party Transactions.

 

Section 3.2 — Ongoing Disclosure

Trigger Event	Timing
New potential Related Party Transaction	Before entering the transaction
Changes in ownership or affiliations	Within 10 business days
Changes in immediate family circumstances	Within 10 business days
New relationships with platform issuers	Before entering any transaction
Significant changes in ST22 or OTCM token holdings	Within 5 business days

 

Section 3.3 — Management Review

The Compliance Officer shall review questionnaire responses annually, monitor transaction records quarterly, review CEDEX platform transaction logs monthly (including on-chain monitoring via Chainalysis KYT), flag potential Related Party Transactions on an ongoing basis, and prepare summary reports for the Audit Committee quarterly.

 

Article IV: Review and Approval Procedures

Section 4.1 — Approval Authority

Transaction Value	Approval Authority
< $120,000	Not subject to Policy (but must be disclosed if material)
$120,000 – $500,000	Chief Executive Officer + Compliance Officer
$500,001 – $1,000,000	Audit Committee
> $1,000,000	Full Board of Directors
Any amount: Director/Officer compensation	Compensation Committee or Full Board
Any amount: involving CEO	Full Board (excluding CEO)

 

Section 4.2 — Pre-Approval Requirement

All Related Party Transactions MUST be approved BEFORE the Company enters into the transaction.

Pre-approval requests must include: identity of the Related Party and relationship, nature and terms of proposed transaction, dollar value or estimate, business reasons, whether comparable terms are available from unrelated parties, nature and extent of Related Party’s interest, and proposed safeguards to protect Company interests.

 

Section 4.3 — Recusal Requirements

The Related Party must recuse from voting on approval, may be asked to leave during deliberations, is not counted for quorum purposes, and the recusal must be documented in meeting minutes.

 

Section 4.4 — Expedited Approval

For time-sensitive transactions: (1) Chair of Audit Committee may grant preliminary approval; (2) transaction must be presented to full committee at next meeting; (3) full committee must ratify or rescind within 60 days; (4) if rescinded, Company must unwind the transaction if practicable.

 

Article V: Standards for Approval

Section 5.1 — General Standard

A Related Party Transaction may only be approved if the approving body determines, in good faith, that the transaction is in the best interests of the Company and on terms no less favorable than could be obtained from an unrelated third party.

 

Section 5.2 — Factors for Consideration

•       Whether there is a legitimate business reason for the transaction

•       Whether the terms are fair and reasonable to the Company

•       Whether terms are comparable to arm’s length transactions

•       Whether the transaction serves the Company’s interests

•       The materiality of the Related Party’s interest

•       The extent of any actual or apparent conflict of interest

•       Availability of alternative transactions or sources

•       Impact on required SEC disclosures

 

Section 5.3 — Independent Evaluation

For transactions exceeding $500,000, the approving body may require a fairness opinion (significant financial transactions), independent appraisal (real property), legal opinion (complex structures), market analysis (service or licensing agreements), or technical assessment (platform or technology transactions).

 

Section 5.4 — Categorical Pre-Approval

Category	Conditions
Compensation	Compensation approved by Compensation Committee
Reimbursements	Expense reimbursements pursuant to Company policy
Banking Services	Banking services at prevailing market rates
D&O Insurance	Directors’ and officers’ insurance
Charitable Contributions	Matching gifts per Company program (< $25,000)
De Minimis Token Transactions	ST22 Digital Securities or OTCM Utility Token purchases < $25,000 at market price on CEDEX

 

Article VI: Platform-Specific Transactions

Section 6.1 — Issuer Relationships

Relationship Type	Approval Requirement
Director/Officer of Issuer	Audit Committee approval for any platform transaction
5%+ Shareholder of Issuer	Audit Committee approval for any platform transaction
Consultant to Issuer	Disclosure + CEO/Compliance Officer approval
Family Member Connection	Disclosure + CEO/Compliance Officer approval

 

Section 6.2 — Token Transactions

OTCM Utility Token Transactions

Transaction Type	Approval Requirement
STO participation > $120,000	Per standard thresholds (Article IV)
Secondary market purchases > $120,000	Per standard thresholds
Token grants to Related Parties	Compensation Committee

 

ST22 Digital Securities Transactions

Transaction Type	Approval Requirement
Purchase of ST22 Digital Securities > $120,000	Audit Committee
Liquidity provision to Global Pool > $120,000	Audit Committee
Participation in issuer onboarding	Full Board if Related Party involved

 

Section 6.3 — Custody and Transfer Agent

Transaction Value	Approval Requirement
Standard Empire custody fees	Deemed pre-approved (qualified custodian standard terms)
Modified fee arrangements	CEO / Compliance Officer approval
New service agreements > $120,000	Per standard thresholds
Equity or partnership arrangements with Empire	Full Board

 

Section 6.4 — Technology and Infrastructure

Software licensing from a Related Party requires Audit Committee approval. Development services, infrastructure hosting, and other technology contracts from Related Parties follow standard thresholds. Intellectual property licensing requires Full Board approval.

 

Patrick Mokros serves as both OTCM Protocol COO and President of Empire Stock Transfer. All transactions between the Company and Empire are automatically classified as Related Party Transactions and require review under this Policy.

 

Article VII: Ongoing Monitoring

Section 7.1 — Quarterly Review

The Audit Committee shall conduct quarterly reviews of all Related Party Transactions entered during the quarter, status of ongoing transactions, payments made under Related Party agreements, CEDEX platform transactions by Related Parties (including on-chain activity), and changes in Related Party status.

 

Section 7.2 — Annual Assessment

The Audit Committee shall annually assess the fairness of ongoing arrangements, market comparability of terms, renewal decisions, disclosure adequacy, and Policy effectiveness.

 

Section 7.3 — On-Chain Monitoring

For blockchain-based transactions, the Company implements wallet tracking for registered wallets of Related Parties, automated alerts for significant ST22 or OTCM token transactions via Chainalysis KYT and TRM Labs, pattern analysis for unusual transaction activity, and quarterly reports summarizing Related Party blockchain activity on CEDEX.

 

Article VIII: Disclosure Requirements

Section 8.1 — SEC Disclosure

Related Party Transactions must be disclosed under Item 404(a) of Regulation S-K (Proxy Statement / Form 10-K), Item 404(b) (policy description in proxy), Form 8-K (material transactions as required), and Form S-1/S-3 (registration statements). Required disclosure elements include: name and relationship of Related Party, transaction description, dollar amounts, nature of interest, and approval process followed.

 

Section 8.2 — Financial Statement Disclosure

Per ASC 850: nature of relationship, transaction description, dollar amounts for each period presented, amounts due to/from Related Parties, and terms and manner of settlement.

 

Section 8.3 — Internal Disclosure

Disclosure Type	Recipient	Timing
New transactions	Audit Committee	Next scheduled meeting
Quarterly summary	Board of Directors	Quarterly
Annual report	Full Board	Annually
Material developments	Audit Committee Chair	Immediately

 

Article IX: Prohibited Transactions

Section 9.1 — Absolutely Prohibited

The following are PROHIBITED regardless of approval: personal loans to directors or executive officers (Section 13(k)); loan guarantees for personal obligations of directors/officers; extensions of credit to directors/officers; Company-supported margin arrangements for Related Party trading.

 

Section 9.2 — Presumptively Prohibited

The following may only be approved by the Full Board with documented extraordinary justification: Related Party as sole source without competitive process; above-market compensation to Related Party service providers; equity grants to non-employee Related Parties outside board compensation; exclusive platform access arrangements for Related Parties; preferential ST22 Digital Securities allocation or below-market token sales to Related Parties.

 

Section 9.3 — Heightened Scrutiny

The following require heightened scrutiny and independent evaluation: real estate transactions (independent appraisal), employment of family members (Compensation Committee review), joint ventures (fairness opinion), intellectual property transactions (independent valuation), and platform revenue-sharing arrangements (third-party market analysis).

 

Article X: Ratification of Transactions

Section 10.1 — Pre-Existing Transactions

If a Related Party Transaction is identified that was not pre-approved: (1) promptly report to Compliance Officer; (2) Compliance Officer reports to Audit Committee Chair; (3) Audit Committee reviews at next meeting or special meeting if material; (4) Committee determines whether to ratify, modify, or rescind.

 

Section 10.2 — Ratification Standards

The Audit Committee must determine that: the transaction is in the best interests of the Company; terms are fair and reasonable; the Related Party acted in good faith; and failure to pre-approve was inadvertent.

 

Section 10.3 — Consequences of Non-Ratification

•       Transaction must be unwound if practicable

•       Related Party may be required to disgorge benefits

•       Transaction must still be disclosed if material

•       Responsible parties subject to disciplinary action

•       Legal Counsel evaluates potential liability

 

Article XI: Administration and Recordkeeping

Section 11.1 — Compliance Officer Duties

•       Distributing and collecting annual questionnaires

•       Identifying potential Related Party Transactions

•       Maintaining database of Related Parties and transactions

•       Preparing materials for Audit Committee review

•       Providing training on Policy requirements

•       Monitoring blockchain transactions by Related Parties via Chainalysis KYT + TRM Labs

 

Section 11.2 — Recordkeeping

The following records must be maintained for seven (7) years: annual director/officer questionnaires, documentation of all approval decisions, meeting minutes reflecting Related Party Transaction discussions, copies of all Related Party Transaction agreements, on-chain transaction logs for ST22 Digital Securities and OTCM token transactions, and supporting documentation for SEC disclosures.

 

Section 11.3 — Amendments

This Policy may be amended at any time by the Board of Directors upon recommendation of the Audit Committee. Material amendments require Audit Committee review, Board majority vote, notice to all Related Parties, and updated acknowledgment.

 

Section 11.4 — Questions

Contact: compliance@otcm.io. Questions regarding this Policy should be directed to the Compliance Officer.

 

Acknowledgment and Certification

 

I acknowledge that I have received and read the Groovy Company, Inc. dba OTCM Protocol Related Party Transaction Policy. I understand its contents and agree to comply with all of its terms and conditions.

 

I certify that I have disclosed all relationships and transactions that may constitute Related Party Transactions under this Policy. I agree to promptly notify the Compliance Officer of any potential Related Party Transaction before entering into such transaction and to update my annual questionnaire as circumstances change.

 

I understand that failure to comply with this Policy may result in disciplinary action, up to and including termination of my relationship with the Company.

 

 

Field
Signature	_________________________________
Date	_________________________________
Printed Name	_________________________________
Title / Position	_________________________________

 

Appendix A: Related Party Transaction Approval Request Form

Transaction Information

Field	Response
Date of Request
Requestor Name
Requestor Title

 

Related Party Information

Field	Response
Related Party Name
Relationship to Company
Nature of Interest

 

Transaction Details

Field	Response
Description of Transaction
Estimated Value
Business Purpose
Duration / Term
Comparable Terms Available?
Basis for Determining Fairness

 

Internal Use Only

Field	Response
Approval Authority
Date Reviewed
Decision	[ ] Approved   [ ] Denied   [ ] Approved with Modifications
Conditions (if any)
Approver Signature

 

 

Document Information

Field	Value
Document ID	OTCM-POL-RPT-001
Version	8.0
Effective Date	March 2026
Legal Entity	Groovy Company, Inc. dba OTCM Protocol
Entity Type	Wyoming Corporation
Governing Law	Federal Securities Law, Wyoming Business Corporation Act, and New Jersey State Law
Approved By	Board of Directors

 

© 2026 Groovy Company, Inc. dba OTCM Protocol  |  All Rights Reserved  |  CONFIDENTIAL