SEC v. Christopher S. Kirchner; and KFIM LLC, No. 4:23-cv-00147, Northern District of Texas (Feb. 14, 2023) — Complaint

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION

SECURITIES AND EXCHANGE
COMMISSION,

   Plaintiff,

  v.

CHRISTOPHER S. KIRCHNER,

   Defendant,

-and-

KFIM LLC,

Relief Defendant.

C.A. No.: 4:23-cv-147

Jury Trial Demanded

COMPLAINT
Plaintiff Securities and Exchange Commission (“SEC”) files this Complaint against
Defendant Christopher S. Kirchner (“Kirchner” or “Defendant”) and Relief Defendant KFIM
LLC (“KFIM” or “Relief Defendant”) and alleges as follows:
SUMMARY
1. This case concerns an offering fraud orchestrated by Kirchner, the co-founder and
former Chief Executive Officer (“CEO”) of Slync, Inc. (“Slync” or the “Company”), involving
his brazen theft of over $28 million of investor funds to fund his lavish lifestyle.
2. From approximately January 2020 through May 2021, Defendant raised
approximately $67 million for the Company from investors in connection with two rounds of
capital fundraising—an initial offering of Slync Series A Preferred Stock (the “Series A Raise”)
and a subsequent offering of Slync Series B Preferred Stock (the “Series B Raise,” and together
with the Series A Raise, the “Capital Raises”)—through a series of deceptions ranging from

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grossly inflating Slync’s revenue figures, to intentionally misrepresenting the number and nature
of Slync’s customer contracts, to falsely claiming that investor proceeds would be used to fund
product development and to support the Company’s growth.
3. After luring investors to participate in the Capital Raises on the basis of these
false promises, Defendant siphoned investor proceeds by diverting funds to his personal bank
accounts and to a related entity he controlled, and by paying for personal expenses directly out of
a Company bank account. Kirchner used investor funds to support his lavish lifestyle, including
for the purchase of a private jet, payment of personal credit cards, and funding of Defendant’s
personal investment accounts, all while continuing to lie to investors about Slync’s financial
health and repeatedly failing to meet payroll deadlines for Company employees.
4. All told, prior to his termination from Slync in August 2022, Defendant
misappropriated more than $28 million of the $67 million of investor funds raised by Slync in
connection with the Capital Raises.
VIOLATIONS
5. By virtue of the foregoing conduct and as alleged further herein, Defendant has
violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)] and
Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)],
and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
6. Unless Defendant is restrained and enjoined, he will engage in the acts, practices,
transactions, and courses of business set forth in this Complaint or in acts, practices, transactions,
and courses of business of similar type and object.
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
7. The SEC brings this action pursuant to the authority conferred upon it by

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Securities Act Sections 20(b) and 20(d) [15 U.S.C. § 77t(b) and 77t(d)] and Exchange Act
Section 21(d) [15 U.S.C. § 78u(d)].
8. The SEC seeks a final judgment: (a) permanently enjoining Defendant from
violating the federal securities laws and rules this Complaint alleges he has violated; (b) ordering
Defendant to disgorge all ill-gotten gains he received as a result of the violations alleged herein,
pursuant to Exchange Act Sections 21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§78u(d)(3),
78u(d)(5), and 78u(d)(7)], and to pay prejudgment interest thereon; (c) ordering Defendant to
pay civil money penalties pursuant to Securities Act Section 20(d) [15 U.S.C. § 77t(d)] and
Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]; (d) permanently prohibiting Defendant
from serving as an officer or director of any company that has a class of securities registered
under Exchange Act Section 12 [15 U.S.C. § 78l] or that is required to file reports under
Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], pursuant to Securities Act Section 20(e) [15
U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2) [15 U.S.C. § 78u(d)(2)]; (e) ordering Relief
Defendant to disgorge all unjust enrichment it received as a result of the violations alleged
herein, pursuant to Exchange Act Sections 21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C.
§§78u(d)(3), 78u(d)(5), and 78u(d)(7)], and to pay prejudgment interest thereon; and (f) ordering
any other and further relief the Court may deem just and proper.
JURISDICTION AND VENUE
9. This Court has jurisdiction over this action pursuant to Securities Act Section
22(a) [15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa].
10. Defendant has, directly and indirectly, made use of the means or instrumentalities
of interstate commerce or of the mails or of any facility of any national securities exchange,
and/or use of any means or instruments of transportation or communication in interstate

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commerce in connection with the transactions, acts, practices, and courses of business alleged
herein.
11. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)]
and Exchange Act Section 27 [15 U.S.C. § 78aa]. Defendant resides in the Northern District of
Texas, and Slync’s principal place of business is in this District. In addition, certain of the acts,
practices, transactions, and courses of business alleged herein occurred in this District, including,
but not limited to, offers to investors.
DEFENDANT
12. Christopher S. Kirchner, age 35, is a resident of Westlake, Texas. Kirchner is
the co-founder of Slync and served as the Company’s CEO from approximately June 2017 to
August 4, 2022, when the Slync Board of Directors (the “Board”) terminated his employment.
RELIEF DEFENDANT
13. KFIM LLC is a Delaware limited liability company with its principal place of
business in Westlake, Texas. Defendant formed KFIM in late November 2020 primarily to
purchase a private jet for his personal use and to hold certain assets that Defendant
misappropriated from investors in the Series B Raise. KFIM is wholly owned by its two
members, Defendant and his wife, who bear a 51% ownership interest and a 49% ownership
interest in the company respectively. Defendant is the sole manager of KFIM and maintains
exclusive authority to manage KFIM’s affairs. KFIM conducts no business operations and has no
employees.
OTHER RELEVANT ENTITY
14. Slync, Inc. (formerly known as SupplyLinc, Inc.) is a Delaware corporation with
its principal place of business in Southlake, Texas. Slync develops and maintains an eponymous

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process automation software system that facilitates global supply chain logistics for its
customers, which include international shippers and service providers.
FACTS
I. Slync Background
15. Defendant co-founded Slync as a start-up company in 2017 with four other
individuals (collectively, the “Founders”). The Company was incorporated in Delaware in June
2017 with headquarters located in California (later moved to Texas in 2020), and with Defendant
as the sole director of the Company.
16. In December 2017, the Board increased its size to two members, adding another
Founder as a director. In April 2018, one additional director joined the Board, and a fourth
director joined in July 2019.
17. By January 2020 and continuing through early August 2022 (the “Relevant
Period”), Slync maintained two bank accounts.
18. The first bank account (“Slync Bank Account A”) was managed and controlled by
Defendant, and the only Slync employees who had access to that account were Defendant and
Slync’s chief of staff. In addition, any transfer out of Slync Bank Account A in excess of
$100,000 required the signature of both Defendant and the chief of staff.
19. Slync’s second bank account (“Slync Bank Account B”) was under the exclusive
management and control of Defendant at all times. No other Slync employee was able to access
that account. In addition, Defendant was not required to obtain any additional authorization to
make transfers out of Slync Bank Account B, regardless of amount.
20. Throughout the Relevant Period, Defendant maintained sole control over Slync’s
financials and actively monitored the inflows and outflows of cash for Slync Bank Account A

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and Slync Bank Account B, including the receipt of revenues and investor funds into those
accounts.
21. Between 2019 and August 2022, Slync earned and collected a combined revenue
of approximately $1,726,883 from all customers.
22. At all times prior to his termination in August 2022, Defendant oversaw,
managed, and controlled all of Slync’s capital fundraising efforts, finances, banking, business
operations, capital structure, and customer contracts and relationships.
II. Defendant Orchestrates the Series A Raise and Fraudulently Solicits Investments
23. Prior to January 2020, Slync had raised approximately $2 million from seed
investors who were connected to Defendant and the Founders.
24. By early 2020, the seed funding was mostly depleted, and Slync required
additional capital to continue normal business operations.
25. To address the Company’s liquidity needs, Kirchner coordinated and launched a
round of capital fundraising in early 2020.
26. Between approximately January 2020 and mid-May 2021, Slync conducted a
private offering of Series A preferred stock to institutional and individual investors (the Series A
Raise).
27. Defendant had ultimate authority over all aspects of the Series A Raise, including
outreach to and communications with potential and actual investors, and he oversaw the
collection of Series A investor proceeds.
28. In order to secure investments in the Series A Raise, Defendant deceived and
defrauded prospective Series A investors by making numerous false representations concerning
Slync’s actual revenue, annual recurring revenue (“ARR”) (a metric that estimated expected

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revenue over the course of a year based upon existing customer contracts),  and capital structure,
and by materially misleading investors concerning the planned use of investment proceeds.
A. Misrepresentations to Series A Investors Concerning Slync’s Financial
Condition

29. Throughout the Series A Raise, Defendant made statements to Series A investors
concerning various Slync financial metrics that were materially false or misleading.
30. For example, on January 30, 2020, Kirchner sent an unsolicited email to a
potential institutional investor (“Investor 1”), representing, among other things, that: Slync’s
ARR was approaching $3 million; Slync had signed a seven-figure ARR deal; there were two
additional seven-figure deals currently in the latter stages of closing; and Slync’s customers
included three of the top five global freight forwarders.
31. Each of these statements to Investor 1 was false: Slync had no existing customer
contracts and thus could not generate ARR of $3 million per year; it had not signed any seven-
figure ARR deal; and it did not have three freight forwarder customers, but rather two unsigned
software pilot agreements with three freight forwarder companies worth a combined total of
$75,000.
32. Defendant knew the statements to Investor 1 were false when made because he
managed and oversaw Slync’s relationships with potential and actual customers, including the
solicitation of customer business and contract placement, and he was aware that Slync had no
existing customer contracts in place as of the date of the email to Investor 1.
33. Defendant also misled Investor 1 concerning the Company’s capital structure.
34. In one such instance, on or about February 24, 2020, Defendant emailed Investor
1 a copy of Slync’s capitalization table, a document that he prepared and controlled. The
capitalization table showed $6,252,319.95 of “Cash Raised” as of February 24, 2020.

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35. As Defendant knew from overseeing Slync’s fundraising efforts and managing
Slync’s bank accounts into which raised funds were deposited, Slync had raised approximately
$1.95 million as of that date, so the “Cash Raised” figure falsely inflated the actual amount of
Slync’s raised capital by more than $4 million.
36. On February 25, 2020, the day after receiving Slync’s capitalization table, the
Chief Financial Officer of Investor 1 sent Defendant a proposed term sheet for a $4 million
Series A investment.
37. Defendant continued to make additional materially false and misleading
representations to Investor 1 leading up to its investment. For example, on or about March 20,
2020, Defendant sent a text message to an employee of Investor 1 representing that a current
Slync customer who previously had a $288,000 deal in place with Slync told Defendant it
intended to increase its commitment to $1.02 million per year, set to take effect in the second
quarter of 2020.
38. In reality, as Defendant was aware from managing the relationship with the
referenced customer, there was no previous deal with the customer for $288,000 per year, nor
any new commitment of $1.02 million per year. Slync ultimately earned and collected only
$17,500 total  from the customer in 2020, which it received months after Defendant’s text
message to the employee of Investor 1.
39. Defendant knew, or was at least severely reckless or negligent in not knowing,
that the statements described in paragraphs 30 through 38 were false or misleading when he
made them to Investor 1.
40. The information Defendant provided to Investor 1 as described in paragraphs 30
through 38 was material to Investor 1’s decision to invest in the Series A Raise. Investor 1 would

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not have made its $4 million investment in Slync had it known Defendant misrepresented,
among other things, Slync’s financial condition.
41. In or around February 2020, Defendant made similar misrepresentations to
another potential institutional investor (“Investor 2”) and knew, or was at least severely reckless
or negligent in not knowing, that the subject statements were false or misleading.
42. For example, on our around February 20, 2020, Defendant provided a slide deck
to Investor 2 that he had prepared, which stated that Slync had a $2.2 million contract with a
particular customer. In fact, as Defendant knew, as of this date, Slync had only three unsigned
pilot agreements with the customer worth a combined total of $105,000.
43. Defendant also told Investor 2 on or around February 24, 2020 that Slync
currently had $3 million in ARR, when, in reality, Slync had no individual customer contract
with annual recurring revenue of $3 million, nor customer contracts with an aggregate annual
recurring revenue of $3 million, in place as of this date.
44. The information Defendant provided to Investor 2 was material to Investor 2’s
decision to invest in the Series A Raise. Investor 2 would not have made its approximately
$2.8 million investment in Slync had it known Defendant misrepresented, among other things,
Slync’s financial condition.
B. Misrepresentations to Series A Investors Concerning Use of Proceeds
45. Defendant also substantially misled all Series A investors concerning the use of
investor funds generated in the Series A Raise.
46. Each Series A investor executed an identical Series A Preferred Stock Purchase
Agreement in connection with its investment in Slync (the “Series A SPA”), which was drafted
under Defendant’s direction and review. Defendant was also the Slync signatory on each Series

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A SPA executed with investors.
47. The Series A SPA contained a section titled “Use of Proceeds” which, among
other things, represented that, “the Company will use the proceeds from the sale of the Shares for
product development and other general corporate purposes.”
48. That representation was false and misleading because it stated that the proceeds
collected from the offering would be spent on product development and corporate purposes and
not used by Kirchner to fund his own personal expenses, as described further in Section V.A
below.
49. The misleading nature of the description of the use of Series A proceeds was
material to each Series A investor in making its respective decision to invest, and Series A
investors would not have invested in Slync had they known that Defendant would divert
approximately $1.9 million in Series A investor funds for his personal use.
50. For example, Investor 1 would not have wired nearly $4 million to Slync Bank
Account A for its Series A investment on or about March 30, 2020 had it known that Defendant
planned to use investment proceeds from the Series A Raise to also fund his own personal
expenses, and not just for the purposes set forth in the “Use of Proceeds” section in the Series A
SPA.
51. Likewise, Investor 2 would not have wired approximately $2.8 million to Slync
Bank Account A for its Series A investment on or about March 31, 2020 had it known that
Defendant planned to use investment proceeds from the Series A Raise to also fund his own
personal expenses, and not just for the purposes set forth in the “Use of Proceeds” section in the
Series A SPA.
52. In total, between approximately March 30, 2020 and May 13, 2020, Slync raised

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at least $7.2 million in financing from at least five investors through the Series A Raise. None of
the Series A investors would have invested in the Series A Raise had they known that known that
Defendant planned to use investment proceeds from the Series A Raise to also fund his lifestyle,
and not just for the purposes set forth in the “Use of Proceeds” section in the Series A SPA.
III. Defendant Fraudulently Induces Two Series A Investors to Exercise Stock Purchase
Warrants Issued In Connection with the Series A Raise

53. Concurrent with their respective investments in the Series A Raise, Investors 1
and 2 each also entered into a Stock Purchase Warrant with Slync, which entitled them to
purchase a certain number of Series A preferred stock shares at a set price per share any time
within two years of their respective initial Series A investments (collectively, the “Warrants”).
54. The Warrants were issued pursuant and subject to the terms and conditions of the
Series A SPA.
55. Following the Series A Raise, Defendant continued to make false and misleading
representations to Investors 1 and 2, including concerning Slync’s financial condition, which
ultimately prompted Investors 1 and 2 to exercise their Warrants and collectively wire the
Company an additional nearly $3.4 million (the “Series A Warrant Exercises”).
56. At the first Board meeting after the close of the Series A Raise, on or about May
20, 2020, Defendant provided Board members, including a representative of Investor 1, with a
slide deck he had prepared. The deck included a “Financial Overview” section that stated that
revenues for January, February, March, and April of 2020 were $74,583, $56,149, $78,642, and
$94,125, respectively. In fact, as Defendant knew from his oversight of Slync’s bank accounts,
total customer revenues earned and collected for those periods were $6,250, $25,000, $0, and
$10,000, respectively.
57. Later, on or about January 13, 2021, Defendant sent a slide deck he had drafted to

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Investor 1, among other recipients, falsely stating that Slync’s total revenue for 2020 was
$3,259,306—even though Defendant knew that figure was over eighteen times greater than the
$175,715 in revenue the Company earned and collected in 2020.
58. On or about April 14, 2021, Defendant sent another slide deck he had prepared to
Investor 1, among other recipients, falsely reporting that Slync’s first quarter of 2021 revenue
was $2,617,626. In reality, Slync’s total revenue earned and collected for the first quarter of
2021 was $354,205.
59. On or about July 16, 2021, Defendant circulated an email to the Board, including
a representative of Investor 1, claiming that Slync had “doubled [its] quarterly revenue and did
more revenue this quarter than all of last year.” Defendant knew this statement was false because
he was aware that the Company had earned and collected $121,019 in customer revenue in the
second quarter of 2021, compared with $354,205 in the first quarter of 2021, and that Slync’s
total revenue earned and collected for 2020 was $175,714.
60. Months later, shortly prior to the expiration date of Investor 1’s Warrant, on or
about January 13, 2022, Defendant created a spreadsheet that was provided to Investor 1, which
purported to show certain Slync financial metrics through the third quarter of 2021. Among other
things, the metrics spreadsheet claimed that Slync’s total year-to-date revenue for 2021 was in
excess of $15 million, that its 2021 third quarter revenue totaled over $7.3 million, and that the
Company’s ARR in the third quarter of 2021 exceeded $14.2 million.
61. Defendant knew at the time he prepared the spreadsheet, however, that those
figures were false. Slync’s third quarter revenue earned and collected was approximately
$146,000, and its year-to-date revenue earned and collected was approximately $500,000. In
addition, Slync had not signed any customer contracts for which the annual recurring revenue

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amounts exceeded $14.2 million (individually or collectively), contrary to the misleading ARR
figure provided by Defendant.
62. Defendant similarly continued to mislead Investor 2 concerning Slync’s financial
condition by, among other things, emailing Investor 2 on or about January 20, 2022 and stating
that Slync’s total revenue was $3.2 million in 2020 and $23.3 million in 2021, when he knew
revenues earned and collected by Slync for those years were $175,714 and $667,778,
respectively.
63. The misinformation communicated by Defendant to each of Investors 1 and 2 was
material to Investors 1 and 2 in making their decisions to exercise their respective Warrants.
64. For example, Investor 1 ultimately exercised its Warrant on February 9, 2022 and
wired nearly $2 million to Slync Bank Account A for its purchase of 1,516,760 shares of Series
A preferred stock. Investor 1 would not have done so if it had known the truth about Slync’s
actual financial condition.
65. Investor 2 similarly exercised its Warrant on March 2, 2022 and wired nearly $1.4
million to Slync Bank Account A for its purchase of 1,057,571 shares of Series A preferred
stock. Like Investor 1, Investor 2 would not have done so if it had known the truth about Slync’s
actual financial condition.
IV. Defendant Orchestrates the Series B Raise and Fraudulently Solicits Investments
66. Following the close of the Series A Raise in mid-May 2020, there was ongoing
investor interest in Slync.
67. By early summer 2020, Defendant began soliciting investments for a second
round of fundraising (the Series B Raise).
68. As had been the case with the Series A Raise, Defendant had ultimate authority

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over all aspects of the Series B raise, including negotiating and communicating with investors on
behalf of Slync and overseeing the flow of Series B investor proceeds into the Company
throughout the offering.
69. The Series B Raise was structured in two phases: an initial offering of Series B
Preferred Stock (the “Series B Primary”), followed by a secondary sale once the Company had
surpassed the issuance of a certain number of Series B preferred shares in the Series B Primary
(the “Series B Secondary”).
70. Slync offered Series B Primary investors preferred stock on terms similar to those
governing the preferred stock ownership of Series A stockholders pursuant to a Series B Stock
Purchase Agreement (“Series B SPA”).
71. Investors in the Series B Secondary purchased preferred stock pursuant to a Stock
Transfer Agreement, and each such investor also became a party to the Series B SPA by
executing a counterparty   signature page to that agreement.
72. The entire Series B Raise was conducted from approximately summer 2020
through spring 2021.
A. Misrepresentations to Series B Investors Concerning Slync’s Financial
Condition

73. On or about June 9, 2020, an employee from an institutional investor (“Investor
3”) contacted Defendant after identifying Slync as a possible investment opportunity.
74. Defendant subsequently began negotiating with Investor 3, as well as with
multiple other prospective investors, to participate in the Series B Primary, and later with other
potential investors to participate in the Series B Secondary.
75. In order to obtain investments in connection with the Series B Raise, Defendant
serially lied to and misled investors concerning Slync’s financial condition, as he had done in the

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previous fundraising round to secure investments from Series A investors.
76. For example, during a telephone call between Defendant and an employee of
Investor 3 on or about June 9, 2020, Defendant claimed that Slync had a current cash balance of
$7 million, $6 million of ARR, and three customers with seven-figure signed deals. In reality, as
Defendant knew from overseeing and monitoring Slync’s bank accounts, Slync did not have
$7 million in cash—in part due to Defendant’s misappropriation of Series A investor funds
(described further at Section V.A below). Moreover, Slync did not have $6 million worth of
signed customer contracts whose revenue would recur annually, or three customers with seven-
figure signed deals, as Defendant was aware from managing the Company’s customer
relationships.
77. Defendant made numerous additional false statements to Investor 3. On or about
July 14, 2020, Defendant provided Investor 3 with a profit and loss statement he had prepared
showing that Slync’s year-to-date revenue as of June 1, 2020 was $351,230, despite that, as
Defendant knew from his oversight of Slync bank records, the amount of revenue earned and
collected during that period was $140,710.
78. In addition, on or about August 4, 2020, Defendant prepared and sent to Investor
3 a list of purported Slync customers that indicated nine customers had signed contracts with the
Company as of June 2020, and that Slync’s then-current booked ARR was $6,397,300. Those
statements were false, as Slync had no signed customer contracts as of June 2020 with annual
recurring revenue valued at $6,397,300.
79. Defendant emailed Investor 3 a similar list of customers on or about August 24,
2020 that claimed total current ARR across all customers was $6,198,800. In fact, there were no
signed customer contracts in place at that time with any of the listed companies that individually

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or aggregately were valued at $6,198,800.
80. On or about November 20, 2020, Kirchner emailed an accounting firm retained by
Investor 3 to perform due diligence in connection with Investor 3’s potential Series B Primary
investment attaching written responses to a series of inquiries the accounting firm had posed to
Defendant concerning Slync’s finances and accounting. Among other things, the accounting firm
asked Defendant whether Slync was “still on track to meet 2020 revenue forecast of
$4.2 million,” and who Slync’s external service providers were for financial reporting.
81. In response to the revenue question, Defendant wrote back, “Yes.” Defendant
knew this statement was untrue because Slync’s 2020 year-to-date revenue earned and collected
as of the date of this email exchange totaled approximately $175,000, as reflected in Slync’s
bank accounts.
82. In response to the service provider question, Defendant claimed that Slync was
currently “moving to” a particular accounting and advisory company, when, in reality, Defendant
was not in the process of engaging, and never did engage, the referenced company.
83. Defendant knew, or was at least severely reckless or negligent in not knowing,
that the statements described in paragraphs 76 through 82 were false or misleading when he
made them to Investor 3 or Investor 3’s agents or representatives.
84. On or around December 14, 2020, Investor 3 wired approximately $35 million to
Slync Bank Account A for its Series B Primary investment.
85. Investor 3 would not have made its investment in Slync had it known that
Defendant had misrepresented, among other things, Slync’s financial condition.
86. Defendant made similar false representations to another institutional investor
(“Investor 4”) in connection with its Series B Primary investment.

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87. On or about September 27, 2020, for example, Defendant provided Investor 4
with a pitch deck he prepared that stated Slync had ten customers, including a $3 million contract
in place with a particular customer. In reality, Slync only had six customers at this time, and
there was no $3 million contract in place with the specified customer.
88. On or about October 21, 2020, Defendant emailed Investor 4 a set of Slync
historical financials that he had prepared, claiming that the Company’s revenue had increased
from $18,750 to $488,210 between September 2019 and September 2020. This was false. The
amount of revenue Slync had earned and collected by the end of September 2020 was less than
$300,000.
89. Defendant also told Investor 4 during a call on or about November 12, 2020 that
Slync had twelve customers, including a contract with one customer for $3.8 million and with
another for $1.9 million. In fact, Slync only had six customers as of that date, and neither of the
two purported seven-figure customer contracts existed. And, ultimately, the amount earned and
collected from the two customers in all of 2020 was $6,250 and $17,500, respectively, as
Defendant knew from his oversight of Slync bank records.
90. In addition, Defendant represented to Investor 4 in or around November 2020 that
Slync would use the proceeds of Investor 4’s Series B Primary investment towards working
capital and accelerating product, account management, and sales capabilities. Defendant failed to
disclose that he would deploy Series B invested funds for his personal use and to fund his
lifestyle, which he ultimately did, as described in Section V.B below.
91. Based upon Defendant’s false representations to Investor through the end of 2020,
Investor 4 wired nearly $7.5 million to Slync as an initial Series B Primary investment on
December 28, 2020.

 18
92. Defendant continued to make additional misrepresentations to Investor 4 that led
to Investor 4’s second Series B Primary investment, as well as a subsequent Series B Secondary
investment.
93. For example, on or about January 28, 2021, Defendant sent an email to Investor 4
stating, among other things, that Slync had a contract in place with a particular customer for
$12.5 million. In fact, there was no such contract in place, and Slync had earned and collected
approximately $127,000 in revenue from the referenced customer relationship as of that date.
94. A month later, on or about February 24, 2021, Investor 4 emailed Defendant and
asked him to confirm, among other things, Slync’s 2020 revenue, after noticing a discrepancy in
revenue figures provided in two different documents prepared by Defendant—a January 2021
Board deck that stated Slync’s 2020 revenue was $3.2 million, and an October 2020 profit and
loss statement that projected $4.2 million in revenue for 2020.
95. Both revenue figures provided by Defendant to Investor 4 were false. As of
October 2020, Slync’s year-to-date revenue earned and collected was approximately $140,710.
Ultimately, Slync’s total revenue earned and collected for 2020 was approximately $175,000. In
addition, Defendant lied when responding to Investor 4 concerning the purported reason for the
discrepancy, claiming it was due to a recognition change and movement of a certain customer
revenue due back to Slync, when Defendant knew Slync had never received any revenue from
that customer.
96. In another instance, on or about April 14, 2021, Kirchner emailed Slync’s Board,
including Investor 4 as a Board observer, a slide deck that Defendant had prepared, which stated
that Slync’s revenue for the first quarter of 2021 was $2,617,626. In addition, the presentation
represented that Slync had “Over $11MM in booked ARR.”

 19
97. This information was false. In fact, Slync had earned and collected approximately
$354,000 in revenue in the first quarter of 2021, and Defendant knew that Slync did not have
customer contracts in place with annual recurring revenue in amounts to support $11 million in
ARR.
98. Following Defendant’s additional false and misleading representations to Investor
4 throughout the first several months of 2021, on May 7, 2021, Investor 4 invested another
approximately $5 million in the Series B Primary and more than $3.8 million in the Series B
Secondary.
99. Defendant knew, or was at least severely reckless or negligent in not knowing,
that the statements described in paragraphs 87 through 97 were false or misleading when he
made them to Investor 4.
100. The information Defendant provided to Investor 4 as described in paragraphs 87
through 97 was material to Investor 4’s decision to invest in the Series B Raise.
B. Misrepresentations to Series B Investors Concerning Use of Proceeds
101. In addition to making misrepresentations to Series B investors concerning Slync’s
financial condition, Defendant also materially misled all Series B investors concerning the use of
Series B investor proceeds.
102. Each Series B SPA, which was drafted under Defendant’s direction and review
and signed by Defendant on behalf of the Company, contained a section titled “Use of Proceeds”
which, among other things, represented that, “the Company will use the proceeds from the sale
of the Shares as follows: (i) $391,666 (plus interest accrued thereon) for full repayment of the
outstanding balance owed by the Company in connection with [a preexisting loan] and (ii) the
balance of the proceeds for product development and other general corporate purposes.”

 20
103. That representation was false and misleading because it did not alert Series B
investors that Kirchner would also use Series B investment proceeds to fund his own personal
expenses, including, but not limited to, the purchase of a private jet for personal use, as described
further in Section V.B below.
104. The false and misleading “Use of Proceeds” disclosure was material to each
Series B investor in making its respective decision to invest. Series B investors would not have
invested in the Series B Raise had they known Defendant was also going to take a large
percentage of the proceeds of their investments to fund his lifestyle.
105. In total, between December 11, 2020 and May 7, 2021, Slync raised
approximately $60 million in financing from thirteen investors across the Series B Primary and
Series B Secondary.
V. Defendant Misuses and Misappropriates More than $28 Million of Investor Funds
106. After fraudulently deceiving Series A and Series B investors into making
investments in connection with the Capital Raises, Defendant began to misappropriate investor
funds from Slync’s bank accounts, often almost immediately after funds had been received by
the Company (including, on multiple occasions, while the offerings were still ongoing),
ultimately siphoning more than $28 million of investor funds for himself.
107. As described in further detail below, Defendant’s misappropriations of investment
proceeds from the Capital Raises and cash received from Investors 1 and 2 in connection with
the Series A Warrant Exercises included depositing certain investor funds directly into his
personal bank account and misdirecting investor funds to, among other things, purchase a private
jet, pay for ongoing costs associated with the jet, and to fund purchases of other luxury goods
and services to support Defendant’s lifestyle.

 21
A. Defendant’s Misappropriation of Investor Funds from the Series A Raise
108. In total, Slync obtained approximately $7.2 million in investor funds in
connection with the Series A Raise. All of those proceeds were wired directly from the Series A
investors to Slync Bank Account A.
109. Defendant knew, or recklessly disregarded, that, in order to make any transfer in
excess of $100,000 out of Slync Bank Account A, he would have to obtain the authorizing
signature of Slync’s chief of staff.
110. To avoid triggering the secondary authorization requirement for transfers over
$100,000, Defendant executed a series of wire transfers out of Slync Bank Account A, each
under the $100,000 threshold, to Slync Bank Account B, over which he maintained exclusive
control and to which he had exclusive access.
111. Specifically, between late March 2020 and late November 2020 (including on the
same day the first Series A investor funds were wired to Slync), Defendant made at least 28 wire
transfers from Slync Bank Account A to Slync Bank Account B, totaling approximately
$2.2 million.
112. Because Defendant was the only Slync employee with access to Slync Bank
Account B, Defendant knew that, once investor funds had been moved to Slync Bank Account B,
he could transfer them to his own personal bank accounts without anyone at the Company having
visibility into those transfers.
113. Between late March 2020 and late November 2020, Defendant transferred a total
of approximately $1.3 million of Series A investor funds from Slync Bank Account B to his
personal checking and savings accounts, including a $150,000 transfer that was marked “Cash
Bonus” (despite that no cash bonus to Defendant in that amount had been authorized or issued by

 22
the Board).
114. In addition to fraudulently diverting Series A proceeds to his own bank accounts,
between approximately April 2020 and August 2020, Defendant al so paid for numerous personal
expenses with Series A investor money directly out of Slync Bank Account B, including
approximately $274,000 to a company that provides luxury concierge services for private jet
aviation; $209,000 to a provider of “on demand” private aviation, including aircraft management
services; and $75,000 for luxury items and experiences, including clothing purchases and
expenditures at a golf club and vineyard.
115. In all, Defendant misappropriated at least approximately $1.9 million of Series A
investor funds.
116. The false and misleading disclosure concerning use of proceeds made in the
Series A SPA—claiming that proceeds would be used to fund Slync product development and
for other corporate purposes—failed to alert Series A Investors that Defendant would also divert
over a quarter of the proceeds of their investments to fund his personal expenses. Had Series A
Investors known the proceeds of their investments would be used for that purpose, they would
not have invested in the Series A Raise.
B. Defendant’s Misappropriation of Investor Funds from the Series B Raise and
the Series A Warrant Exercises

117. Defendant undertook similar efforts to fraudulently misappropriate, for his
personal benefit, more than $26.2 million of funds raised by Series B investors and paid in
connection with the Series A Warrant Exercises.
1. Defendant Diverts $20 Million of Investor 3 Investment Proceeds,
Including for Purchase of a Private Jet for Personal Use

118. Defendant’s primary misuse of Series B proceeds was to fund the purchase of a

 23
$16.1 million private jet purely for Defendant’s personal use and enjoyment.
119. On or about November 22, 2020, after the term sheet with Investor 3 had been
signed, but a few weeks before Investor 3’s investment was funded, Defendant met with an
aircraft sales broker to discuss purchasing a private jet for Defendant’s personal use.
120. Defendant did not possess sufficient personal funds to afford the private jet, and
instead intended to siphon incoming Series B investor proceeds to cover the purchase price in
order to buy the private jet before year end.
121. On December 11, 2020, Investor 3 wired $35 million to Slync Bank Account A in
connection with the Series B Raise.
122. Defendant knew, or recklessly disregarded, that, in order to transfer Investor 3
funds in any amount greater than $100,000 out of Slync Bank Account A, he would be required
to obtain authorization for the wire from Slync’s chief of staff. He was also aware that the Series
B SPA he executed on behalf of Slync stated that Series B investment proceeds would be used to
repay a preexisting loan owed by the Company and for product development and other corporate
purposes.
123. In order to induce Slync’s chief of staff to approve the intended wire of Investor 3
investment proceeds out of Slync Bank Account A, Defendant lied to him concerning the
logistics and rationale for the proposed transfer.
124. On December 13, 2020, Defendant sent a text message to Slync’s chief of staff
stating that there was a “big week coming up” for Slync and advised that, in light of those
circumstances, Defendant was going to move money from Slync Bank Account A to Slync’s
investment account and Slync Bank Account B.
125. Defendant’s statements were knowingly false, as Defendant never intended to

 24
transfer, and never did transfer, any of the subject Investor 3 funds to Slync Bank Account B or
to a Slync investment account (—in fact, as Defendant knew, no investment account existed). In
addition, the purpose of the transfer was to fund Defendant’s purchase of a personal private jet,
not for any Slync corporate expense or approved business purpose.
126. Based upon Defendant’s false representations, Slync’s chief of staff provided the
necessary authorization for the transfer.
127. The next day, on December 14, 2020, Defendant wired $20 million from Slync
Bank Account A directly to Defendant’s personal bank account with the intention of using those
proceeds to fund his purchase of the private jet.
128. On that same day, as soon as the $20 million in Investor 3 funds from Slync Bank
Account A became available in Defendant’s personal bank account, Defendant emailed a
representative at his personal bank stating: “I took a distribution from my company today and am
moving money out for a few things that I need to get taken care of before year end. One, is a
wire for $5,000,000 to an escrow company for a plane that I am purchasing. I need this one
completed ASAP as it’s very time sensitive in order to complete a transaction this month.  Could
you make sure this one in particular is done as fast as possible?”
129. Later that day, Defendant received confirmation from his personal bank and from
the aircraft sales broker that the escrow company had received the $5 million wire from
Defendant’s personal bank account as a deposit for the private jet he intended to purchase.
130. A week later, on December 21, 2020, Defendant, through his company KFIM,
executed an aircraft management agreement for the private jet.
131. The next day, on December 22, 2020, Defendant wired another approximately
$11.1 million of Investor 3 funds from his personal bank account to the escrow company for the

 25
remaining payment for the private jet.
132. On December 23, 2020, Defendant completed the purchase of the private jet for
$16.1 million, with title to the aircraft in the name of KFIM.
133. In addition to buying the private jet, Defendant also used Investor 3 investment
proceeds toward the purchase of a suite at a National Football League stadium for $495,000 on
December 14, 2020. He accomplished this by wiring funds out of his personal account directly to
a bank account in the name of the company from which he purchased the suite.
134. Defendant kept the remaining approximately $3.4 million of the $20 million of
Investor 3 proceeds that he had misappropriated on December 14, 2020 and either retained those
funds in his personal bank account(s) or used them for personal expenses (or both).
135. Meanwhile, in the same month that Defendant fraudulently diverted funds from
Investor 3’s investment to pay for the private jet and to fund his personal bank account, Slync
was late on making payroll for its employees.
136. At no time was Defendant authorized to use Series B investment funds to
purchase the private jet or the stadium suite, or to direct those funds to his personal bank
account, nor did he ever seek (or receive) approval from Slync’s Board to use investor proceeds
for those purposes.
137. In fact, with respect to the private jet, Defendant told Board members and some
investors that the private jet was specifically not for business use and falsely claimed that the
funds he used to purchase it came from successful cryptocurrency investments and sales he had
made.
2. Defendant Pays Other Personal Expenses With Series B Investor
Funds and Series A Warrant Exercise Proceeds

138. Over the several months following his purchase of the private jet, Defendant

 26
continued to misappropriate additional Series B investor funds, as well as proceeds from the sale
of Series A preferred stock to Investors 1 and 2 in connection with the Series A Warrant
Exercises, which had all been paid into Slync Bank Account A.
139. Using the same method he had employed to divert Series A investor proceeds
without risking detection by anyone at Slync, Defendant concealed his misappropriation of
millions of additional dollars of Series B and Series A Warrant Exercise proceeds by making
serial individual wire transfers out of Slync Bank Account A in amounts less than $100,000.
140. Between approximately January 15, 2021 and May 10, 2022, Defendant made 74
wire transfers that included Series B investor funds and money received from the Series A
Warrant Exercises from Slync Bank Account A to Slync Bank Account B—each of which was
just under the $100,000 threshold that would otherwise trigger the requisite authorization by
Slync’s chief of staff—amassing a total of more than $7.1 million of additional investor funds in
Slync Bank Account B.
141. Defendant then fraudulently diverted approximately $5.3 million of those
proceeds by making an additional 29 transfers from Slync Bank Account B to a personal bank
account in the name of KFIM (which Defendant owned, controlled, and managed, together with
his wife, and to which no one at Slync had access) between approximately January 27, 2021 and
May 3, 2022.
142. Defendant used the $5.3 million of investor funds siphoned into the KFIM bank
account to, among other things, pay for golf-related expenditures, ongoing costs associated with
Defendant’s private jet, and other personal expenses, and to finance investment accounts in
KFIM’s name through which Defendant traded equities securities and options using the
misappropriated funds.

 27
143. In addition to wrongfully diverting $25.3 million of funds from the Series B Raise
and Series A Warrant Exercises to his personal bank account and the KFIM bank account as
described in paragraphs 139 to 142 above, between approximately mid-February 2021 and early
January 2022, Defendant also fraudulently misused Series B investor funds to pay over $902,000
of personal credit card charges directly out of Slync Bank Account B.
144. In total, Defendant misappropriated more than $26.2 million of investor funds
from the Series B Raise and the Series A Warrant Exercises.
145. The false and misleading disclosure concerning use of proceeds made in the
Series A SPA—claiming that investor funds would be used to fund Slync product development
and for other corporate purposes—failed to alert Investors 1 and 2 that Defendant would divert
Series A proceeds, including proceeds of the Series A Warrant Raises, to fund his personal
expenses. Had Investors 1 and 2 known that the proceeds of the Series A Warrant Raises would
be used in the manner or for the purposes described in paragraphs 139 to 143 above, they would
not have exercised their Warrants.
146. Likewise, the false and misleading disclosure concerning use of proceeds made in
the Series B SPA—claiming that investor funds would be used to repay a corporate loan owed by
Slync and to fund Slync product development and for other corporate purposes—failed to notify
Series B Investors that Defendant would divert a large portion of the proceeds of their
investments to fund his personal expenses as described in paragraphs 139 to 143. Had Series B
investors known Series B proceeds would be used in the manner or for the purposes described in
paragraphs 139 to 143 above, they would not have invested in the Series B Raise.
VI. Defendant Repeatedly Fails to Meet Payroll Deadlines for Slync Employees and is
Fired by the Board

147. Due in part to Defendant’s misappropriation of Slync investor funds described

 28
above, Slync was late in paying its U.S. or Canadian employees at least six times between April
and June 2022.
148. Defendant was responsible for timely coordinating the wire of payroll funds to
Slync’s outside payroll administrator each month, but failed to consistently to do so throughout
that period.
149. For at least one missed payroll cycle, Defendant forged a wire confirmation to
purportedly show that he had transferred the necessary funds for payroll disbursement.
150. On May 6, 2022, Defendant sent an email to Slync’s chief of staff and its outside
payroll administrator forwarding what he claimed was an email wire confirmation from Slync
Bank Account B to fund Slync’s May 5, 2022 employee payroll, reflecting a transfer of
$566,241.06 on May 5, 2022.
151. The purported wire confirmation was a forgery by Defendant. He doctored a prior
wire confirmation email from Slync Bank Account B by overlaying fake information for the
transfer amount, transfer date, and wire reference number, and he altered the date of the email.
He also failed to alter the recipient information on the confirmation to show that the wire went to
Slync’s payroll administrator and instead left in the recipient of the original legitimate
confirmation (which had been Slync Bank Account A).
152. In fact, Defendant had not wired $566,241.06 to Slync’s payroll administrator on
May 5, 2022.
153. It was not until several days later, after missing the payroll funding deadline, that
Defendant initiated wire transfers to Slync’s payroll administrator in the amounts of $500,000
and $66,241.06 to cover the May 5, 2022 payroll cycle.
154. Several media outlets subsequently published articles in June and July 2022

 29
concerning, among other things, allegations of payroll issues at Slync.
155. On July 24, 2022, the Board emailed Defendant a letter suspending Defendant
from Slync in his capacity as both an employee and officer in light of “missed payroll,
[Defendant’s] misrepresentations regarding payroll status, and public allegations” concerning the
Company, and placing Defendant on administrative leave. The letter further indicated that the
Board had engaged an outside consulting firm to investigate Slync’s cash and financial position
and requested Defendant’s cooperation in connection with the investigation.
156. On July 26, 2022, counsel for the Board emailed Defendant a letter alleging that
Defendant had attempted to delete certain electronic data in connection with the ongoing
investigation and the Board’s suspension of Defendant the prior day. The Board demanded that
Defendant immediately return all Slync records, hardware, and devices in his possession.
157. On or about July 27, 2022, the Board learned that Defendant had forged the email
confirmation described at paragraphs 150-151 above to show that he had wired sufficient funds
to fund U.S. employees’ May 5, 2022 payroll cycle.
158. On July 29, 2022, counsel for the Board emailed counsel for Defendant,
informing him that the Board had information concerning Defendant’s attempts to destroy, alter,
modify, or otherwise compromise Slync records.
159. On August 2, 2022, the Board terminated Defendant as an employee of Slync and
from all officer roles held by Defendant, including the office of CEO.
160. The Board notified Defendant of his termination on August 4, 2022.
FIRST CLAIM FOR RELIEF
Violations of Securities Act Section 17(a)
(Kirchner)
161. The SEC realleges and incorporates by reference here the allegations in
paragraphs 1 through 160.

 30
162. By engaging in the acts and conduct described in this Complaint, Defendant,
directly or indirectly, in the offer or sale of securities and by use of the means or instruments of
transportation or communication in interstate commerce or by use of the mails: (1) knowingly or
recklessly employed devices schemes, and artifices to defraud; (2) knowingly, recklessly, or
negligently obtained money or property by means of untrue statements of a material fact or
omissions of a material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading; and/or (3) knowingly, recklessly, or
negligently engaged in transactions, practices, or courses of business which operated or would
operate as a fraud or deceit upon purchasers of such securities.
163. By reason of the foregoing, Defendant, directly or indirectly, has violated and,
unless enjoined, will again violate, Securities Act Section 17(a) [15 U.S.C. § 77q(a)].
SECOND CLAIM FOR RELIEF
Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder
(Kirchner)
164. The SEC realleges and incorporates by reference here the allegations in
paragraphs 1 through 160.
165. By engaging in the acts and conduct described in this Complaint, Defendant,
directly or indirectly, in connection with the purchase or sale of securities and by the use of the
means or instrumentalities of interstate commerce, or the mails, or the facilities of a national
securities exchange, knowingly or recklessly (1) employed one or more devices, schemes, or
artifices to defraud; (2) made one or more untrue statements of a material fact or omitted to state
one or more material facts necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading; and/or (3) engaged in one or more
acts, practices, or courses of business which operated or would operate as a fraud or deceit upon
other persons.

 31
166. By reason of the foregoing, Defendant, directly or indirectly, has violated and,
unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule
10b-5 thereunder [17 C.F.R. § 240.10b-5].
THIRD CLAIM FOR RELIEF
Unjust Enrichment
(Relief Defendant KFIM)

167. The SEC realleges and incorporates by reference here the allegations in
paragraphs 1 through 160.
168. KFIM, directly or indirectly, received funds or assets, or benefitted from the use
of funds or assets, which were obtained as a result of, and are proceeds of, the securities law
violations alleged herein, including, but not limited to, at least $5.3 million of Series B investor
funds and Series A Warrant Exercise proceeds that Defendant fraudulently misappropriated from
Slync Bank Account B to a KFIM bank account.
169. KFIM has no legitimate claim to these ill-gotten gains.
170. KFIM has therefore been unjustly enriched.
PRAYER FOR RELIEF
 WHEREFORE, the SEC respectfully requests that the Court enter a Final Judgment:
I.
Permanently enjoining Defendant from violating, directly or indirectly, Securities Act
Section 17(a) [15 U.S.C. § 77q(a)] and Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and
Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5];
II.
Ordering Defendant to disgorge all ill-gotten gains he received or to which he was not
otherwise entitled, that he received directly or indirectly, with pre-judgment interest thereon, as a

 32
result of the alleged violations, pursuant to Exchange Act Sections 21(d)(3), 21(d)(5), and
21(d)(7) [15 U.S.C. §§78u(d)(3), 78u(d)(5), and 78u(d)(7)];
III.
Ordering Defendant to pay civil monetary penalties under Securities Act Section 20(d)
[15 U.S.C. § 77t(d)] and Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)];
IV.
Permanently prohibiting Defendant from serving as an officer or director of any company
that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. §78l] or that is
required to file reports under Exchange Act Section 15(d) [15 U.S.C. §78o(d)], pursuant to
Securities Act Section 20(e) [15 U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2) [15 U.S.C.
§ 78u(d)(2)];
V.
Ordering Relief Defendant to pay, with prejudgment interest, all ill-gotten gains by which
it was unjustly enriched, pursuant to Exchange Act Sections 21(d)(3), 21(d)(5), and 21(d)(7) [15
U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]; and
VI.
Granting any other and further relief this Court may deem just and proper.
JURY DEMAND
 The SEC demands a trial by jury.

Dated:  February 14, 2023

Respectfully submitted,

    /s/ Jessica T. Quinn

Jessica T. Quinn
New York Bar No. 5238571

 33
Mary Kay Dunning
New York Bar No. 4293262
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
      100 Pearl Street, Suite 20-100
      New York, New York 10004-2616
      (212) 336-0929 (Quinn)
      [email protected]

Of Counsel
Sheldon L. Pollock
Steven G. Rawlings
Securities and Exchange Commission
100 Pearl Street, Suite 20-100
New York, New York 10004-2616

Derek Kleinmann
Securities and Exchange Commission
801 Cherry Street, Suite 1900, Unit 18
Fort Worth, Texas 76102

UNITED STATES DISTRICT COURT 
NORTHERN DISTRICT OF TEXAS 

FORT WORTH DIVISION 
 

 
SECURITIES AND EXCHANGE 
COMMISSION, 
 
   Plaintiff, 
 
  v. 
 
CHRISTOPHER S. KIRCHNER, 
  
   Defendant,  
 

-and- 
 
KFIM LLC, 
 

Relief Defendant. 
 

 
 
 
 
 

 
C.A. No.: 4:23-cv-147 
 

 
Jury Trial Demanded 
  

 
  

 
COMPLAINT 

Plaintiff Securities and Exchange Commission (“SEC”) files this Complaint against 

Defendant Christopher S. Kirchner (“Kirchner” or “Defendant”) and Relief Defendant KFIM 

LLC (“KFIM” or “Relief Defendant”) and alleges as follows: 

SUMMARY 

1. This case concerns an offering fraud orchestrated by Kirchner, the co-founder and 

former Chief Executive Officer (“CEO”) of Slync, Inc. (“Slync” or the “Company”), involving 

his brazen theft of over $28 million of investor funds to fund his lavish lifestyle.  

2. From approximately January 2020 through May 2021, Defendant raised 

approximately $67 million for the Company from investors in connection with two rounds of 

capital fundraising—an initial offering of Slync Series A Preferred Stock (the “Series A Raise”) 

and a subsequent offering of Slync Series B Preferred Stock (the “Series B Raise,” and together 

with the Series A Raise, the “Capital Raises”)—through a series of deceptions ranging from 

Case 4:23-cv-00147-P   Document 1   Filed 02/14/23    Page 1 of 33   PageID 1



 2 

grossly inflating Slync’s revenue figures, to intentionally misrepresenting the number and nature 

of Slync’s customer contracts, to falsely claiming that investor proceeds would be used to fund 

product development and to support the Company’s growth. 

3. After luring investors to participate in the Capital Raises on the basis of these 

false promises, Defendant siphoned investor proceeds by diverting funds to his personal bank 

accounts and to a related entity he controlled, and by paying for personal expenses directly out of 

a Company bank account. Kirchner used investor funds to support his lavish lifestyle, including 

for the purchase of a private jet, payment of personal credit cards, and funding of Defendant’s 

personal investment accounts, all while continuing to lie to investors about Slync’s financial 

health and repeatedly failing to meet payroll deadlines for Company employees. 

4. All told, prior to his termination from Slync in August 2022, Defendant 

misappropriated more than $28 million of the $67 million of investor funds raised by Slync in 

connection with the Capital Raises. 

VIOLATIONS 

5. By virtue of the foregoing conduct and as alleged further herein, Defendant has 

violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)] and 

Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)], 

and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

6. Unless Defendant is restrained and enjoined, he will engage in the acts, practices, 

transactions, and courses of business set forth in this Complaint or in acts, practices, transactions, 

and courses of business of similar type and object. 

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

7. The SEC brings this action pursuant to the authority conferred upon it by 

Case 4:23-cv-00147-P   Document 1   Filed 02/14/23    Page 2 of 33   PageID 2



 3 

Securities Act Sections 20(b) and 20(d) [15 U.S.C. § 77t(b) and 77t(d)] and Exchange Act 

Section 21(d) [15 U.S.C. § 78u(d)]. 

8. The SEC seeks a final judgment: (a) permanently enjoining Defendant from 

violating the federal securities laws and rules this Complaint alleges he has violated; (b) ordering 

Defendant to disgorge all ill-gotten gains he received as a result of the violations alleged herein, 

pursuant to Exchange Act Sections 21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§78u(d)(3), 

78u(d)(5), and 78u(d)(7)], and to pay prejudgment interest thereon; (c) ordering Defendant to 

pay civil money penalties pursuant to Securities Act Section 20(d) [15 U.S.C. § 77t(d)] and 

Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]; (d) permanently prohibiting Defendant 

from serving as an officer or director of any company that has a class of securities registered 

under Exchange Act Section 12 [15 U.S.C. § 78l] or that is required to file reports under 

Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], pursuant to Securities Act Section 20(e) [15 

U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2) [15 U.S.C. § 78u(d)(2)]; (e) ordering Relief 

Defendant to disgorge all unjust enrichment it received as a result of the violations alleged 

herein, pursuant to Exchange Act Sections 21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. 

§§78u(d)(3), 78u(d)(5), and 78u(d)(7)], and to pay prejudgment interest thereon; and (f) ordering 

any other and further relief the Court may deem just and proper. 

JURISDICTION AND VENUE 

9. This Court has jurisdiction over this action pursuant to Securities Act Section 

22(a) [15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa]. 

10. Defendant has, directly and indirectly, made use of the means or instrumentalities 

of interstate commerce or of the mails or of any facility of any national securities exchange, 

and/or use of any means or instruments of transportation or communication in interstate 

Case 4:23-cv-00147-P   Document 1   Filed 02/14/23    Page 3 of 33   PageID 3



 4 

commerce in connection with the transactions, acts, practices, and courses of business alleged 

herein.  

11. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)] 

and Exchange Act Section 27 [15 U.S.C. § 78aa]. Defendant resides in the Northern District of 

Texas, and Slync’s principal place of business is in this District. In addition, certain of the acts, 

practices, transactions, and courses of business alleged herein occurred in this District, including, 

but not limited to, offers to investors.  

DEFENDANT 

12. Christopher S. Kirchner, age 35, is a resident of Westlake, Texas. Kirchner is 

the co-founder of Slync and served as the Company’s CEO from approximately June 2017 to 

August 4, 2022, when the Slync Board of Directors (the “Board”) terminated his employment.  

RELIEF DEFENDANT 

13. KFIM LLC is a Delaware limited liability company with its principal place of 

business in Westlake, Texas. Defendant formed KFIM in late November 2020 primarily to 

purchase a private jet for his personal use and to hold certain assets that Defendant 

misappropriated from investors in the Series B Raise. KFIM is wholly owned by its two 

members, Defendant and his wife, who bear a 51% ownership interest and a 49% ownership 

interest in the company respectively. Defendant is the sole manager of KFIM and maintains 

exclusive authority to manage KFIM’s affairs. KFIM conducts no business operations and has no 

employees. 

OTHER RELEVANT ENTITY 

14. Slync, Inc. (formerly known as SupplyLinc, Inc.) is a Delaware corporation with 

its principal place of business in Southlake, Texas. Slync develops and maintains an eponymous 

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process automation software system that facilitates global supply chain logistics for its 

customers, which include international shippers and service providers.  

FACTS 

I. Slync Background 

15. Defendant co-founded Slync as a start-up company in 2017 with four other 

individuals (collectively, the “Founders”). The Company was incorporated in Delaware in June 

2017 with headquarters located in California (later moved to Texas in 2020), and with Defendant 

as the sole director of the Company. 

16. In December 2017, the Board increased its size to two members, adding another 

Founder as a director. In April 2018, one additional director joined the Board, and a fourth 

director joined in July 2019.  

17. By January 2020 and continuing through early August 2022 (the “Relevant 

Period”), Slync maintained two bank accounts.  

18. The first bank account (“Slync Bank Account A”) was managed and controlled by 

Defendant, and the only Slync employees who had access to that account were Defendant and 

Slync’s chief of staff. In addition, any transfer out of Slync Bank Account A in excess of 

$100,000 required the signature of both Defendant and the chief of staff.  

19. Slync’s second bank account (“Slync Bank Account B”) was under the exclusive 

management and control of Defendant at all times. No other Slync employee was able to access 

that account. In addition, Defendant was not required to obtain any additional authorization to 

make transfers out of Slync Bank Account B, regardless of amount. 

20. Throughout the Relevant Period, Defendant maintained sole control over Slync’s 

financials and actively monitored the inflows and outflows of cash for Slync Bank Account A 

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and Slync Bank Account B, including the receipt of revenues and investor funds into those 

accounts. 

21. Between 2019 and August 2022, Slync earned and collected a combined revenue 

of approximately $1,726,883 from all customers. 

22. At all times prior to his termination in August 2022, Defendant oversaw, 

managed, and controlled all of Slync’s capital fundraising efforts, finances, banking, business 

operations, capital structure, and customer contracts and relationships. 

II. Defendant Orchestrates the Series A Raise and Fraudulently Solicits Investments 

23. Prior to January 2020, Slync had raised approximately $2 million from seed 

investors who were connected to Defendant and the Founders.  

24. By early 2020, the seed funding was mostly depleted, and Slync required 

additional capital to continue normal business operations.  

25. To address the Company’s liquidity needs, Kirchner coordinated and launched a 

round of capital fundraising in early 2020.  

26. Between approximately January 2020 and mid-May 2021, Slync conducted a 

private offering of Series A preferred stock to institutional and individual investors (the Series A 

Raise). 

27. Defendant had ultimate authority over all aspects of the Series A Raise, including 

outreach to and communications with potential and actual investors, and he oversaw the 

collection of Series A investor proceeds. 

28. In order to secure investments in the Series A Raise, Defendant deceived and 

defrauded prospective Series A investors by making numerous false representations concerning 

Slync’s actual revenue, annual recurring revenue (“ARR”) (a metric that estimated expected 

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revenue over the course of a year based upon existing customer contracts), and capital structure, 

and by materially misleading investors concerning the planned use of investment proceeds. 

A. Misrepresentations to Series A Investors Concerning Slync’s Financial 
Condition 
 

29. Throughout the Series A Raise, Defendant made statements to Series A investors 

concerning various Slync financial metrics that were materially false or misleading. 

30. For example, on January 30, 2020, Kirchner sent an unsolicited email to a 

potential institutional investor (“Investor 1”), representing, among other things, that: Slync’s 

ARR was approaching $3 million; Slync had signed a seven-figure ARR deal; there were two 

additional seven-figure deals currently in the latter stages of closing; and Slync’s customers 

included three of the top five global freight forwarders.  

31. Each of these statements to Investor 1 was false: Slync had no existing customer 

contracts and thus could not generate ARR of $3 million per year; it had not signed any seven-

figure ARR deal; and it did not have three freight forwarder customers, but rather two unsigned 

software pilot agreements with three freight forwarder companies worth a combined total of 

$75,000. 

32. Defendant knew the statements to Investor 1 were false when made because he 

managed and oversaw Slync’s relationships with potential and actual customers, including the 

solicitation of customer business and contract placement, and he was aware that Slync had no 

existing customer contracts in place as of the date of the email to Investor 1. 

33. Defendant also misled Investor 1 concerning the Company’s capital structure.  

34. In one such instance, on or about February 24, 2020, Defendant emailed Investor 

1 a copy of Slync’s capitalization table, a document that he prepared and controlled. The 

capitalization table showed $6,252,319.95 of “Cash Raised” as of February 24, 2020. 

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35. As Defendant knew from overseeing Slync’s fundraising efforts and managing 

Slync’s bank accounts into which raised funds were deposited, Slync had raised approximately 

$1.95 million as of that date, so the “Cash Raised” figure falsely inflated the actual amount of 

Slync’s raised capital by more than $4 million.   

36. On February 25, 2020, the day after receiving Slync’s capitalization table, the 

Chief Financial Officer of Investor 1 sent Defendant a proposed term sheet for a $4 million 

Series A investment. 

37. Defendant continued to make additional materially false and misleading 

representations to Investor 1 leading up to its investment. For example, on or about March 20, 

2020, Defendant sent a text message to an employee of Investor 1 representing that a current 

Slync customer who previously had a $288,000 deal in place with Slync told Defendant it 

intended to increase its commitment to $1.02 million per year, set to take effect in the second 

quarter of 2020.  

38. In reality, as Defendant was aware from managing the relationship with the 

referenced customer, there was no previous deal with the customer for $288,000 per year, nor 

any new commitment of $1.02 million per year. Slync ultimately earned and collected only 

$17,500 total from the customer in 2020, which it received months after Defendant’s text 

message to the employee of Investor 1.  

39. Defendant knew, or was at least severely reckless or negligent in not knowing, 

that the statements described in paragraphs 30 through 38 were false or misleading when he 

made them to Investor 1. 

40. The information Defendant provided to Investor 1 as described in paragraphs 30 

through 38 was material to Investor 1’s decision to invest in the Series A Raise. Investor 1 would 

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not have made its $4 million investment in Slync had it known Defendant misrepresented, 

among other things, Slync’s financial condition. 

41. In or around February 2020, Defendant made similar misrepresentations to 

another potential institutional investor (“Investor 2”) and knew, or was at least severely reckless 

or negligent in not knowing, that the subject statements were false or misleading. 

42. For example, on our around February 20, 2020, Defendant provided a slide deck 

to Investor 2 that he had prepared, which stated that Slync had a $2.2 million contract with a 

particular customer. In fact, as Defendant knew, as of this date, Slync had only three unsigned 

pilot agreements with the customer worth a combined total of $105,000. 

43. Defendant also told Investor 2 on or around February 24, 2020 that Slync 

currently had $3 million in ARR, when, in reality, Slync had no individual customer contract 

with annual recurring revenue of $3 million, nor customer contracts with an aggregate annual 

recurring revenue of $3 million, in place as of this date.  

44. The information Defendant provided to Investor 2 was material to Investor 2’s 

decision to invest in the Series A Raise. Investor 2 would not have made its approximately  

$2.8 million investment in Slync had it known Defendant misrepresented, among other things, 

Slync’s financial condition. 

B. Misrepresentations to Series A Investors Concerning Use of Proceeds 

45. Defendant also substantially misled all Series A investors concerning the use of 

investor funds generated in the Series A Raise.  

46. Each Series A investor executed an identical Series A Preferred Stock Purchase 

Agreement in connection with its investment in Slync (the “Series A SPA”), which was drafted 

under Defendant’s direction and review. Defendant was also the Slync signatory on each Series 

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A SPA executed with investors. 

47. The Series A SPA contained a section titled “Use of Proceeds” which, among 

other things, represented that, “the Company will use the proceeds from the sale of the Shares for 

product development and other general corporate purposes.” 

48. That representation was false and misleading because it stated that the proceeds 

collected from the offering would be spent on product development and corporate purposes and 

not used by Kirchner to fund his own personal expenses, as described further in Section V.A 

below. 

49. The misleading nature of the description of the use of Series A proceeds was 

material to each Series A investor in making its respective decision to invest, and Series A 

investors would not have invested in Slync had they known that Defendant would divert 

approximately $1.9 million in Series A investor funds for his personal use. 

50. For example, Investor 1 would not have wired nearly $4 million to Slync Bank 

Account A for its Series A investment on or about March 30, 2020 had it known that Defendant 

planned to use investment proceeds from the Series A Raise to also fund his own personal 

expenses, and not just for the purposes set forth in the “Use of Proceeds” section in the Series A 

SPA. 

51. Likewise, Investor 2 would not have wired approximately $2.8 million to Slync 

Bank Account A for its Series A investment on or about March 31, 2020 had it known that 

Defendant planned to use investment proceeds from the Series A Raise to also fund his own 

personal expenses, and not just for the purposes set forth in the “Use of Proceeds” section in the 

Series A SPA. 

52. In total, between approximately March 30, 2020 and May 13, 2020, Slync raised 

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at least $7.2 million in financing from at least five investors through the Series A Raise. None of 

the Series A investors would have invested in the Series A Raise had they known that known that 

Defendant planned to use investment proceeds from the Series A Raise to also fund his lifestyle, 

and not just for the purposes set forth in the “Use of Proceeds” section in the Series A SPA. 

III. Defendant Fraudulently Induces Two Series A Investors to Exercise Stock Purchase 
Warrants Issued In Connection with the Series A Raise  
 
53. Concurrent with their respective investments in the Series A Raise, Investors 1 

and 2 each also entered into a Stock Purchase Warrant with Slync, which entitled them to 

purchase a certain number of Series A preferred stock shares at a set price per share any time 

within two years of their respective initial Series A investments (collectively, the “Warrants”). 

54. The Warrants were issued pursuant and subject to the terms and conditions of the 

Series A SPA. 

55. Following the Series A Raise, Defendant continued to make false and misleading 

representations to Investors 1 and 2, including concerning Slync’s financial condition, which 

ultimately prompted Investors 1 and 2 to exercise their Warrants and collectively wire the 

Company an additional nearly $3.4 million (the “Series A Warrant Exercises”). 

56. At the first Board meeting after the close of the Series A Raise, on or about May 

20, 2020, Defendant provided Board members, including a representative of Investor 1, with a 

slide deck he had prepared. The deck included a “Financial Overview” section that stated that 

revenues for January, February, March, and April of 2020 were $74,583, $56,149, $78,642, and 

$94,125, respectively. In fact, as Defendant knew from his oversight of Slync’s bank accounts, 

total customer revenues earned and collected for those periods were $6,250, $25,000, $0, and 

$10,000, respectively. 

57. Later, on or about January 13, 2021, Defendant sent a slide deck he had drafted to 

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Investor 1, among other recipients, falsely stating that Slync’s total revenue for 2020 was 

$3,259,306—even though Defendant knew that figure was over eighteen times greater than the 

$175,715 in revenue the Company earned and collected in 2020. 

58. On or about April 14, 2021, Defendant sent another slide deck he had prepared to 

Investor 1, among other recipients, falsely reporting that Slync’s first quarter of 2021 revenue 

was $2,617,626. In reality, Slync’s total revenue earned and collected for the first quarter of 

2021 was $354,205. 

59. On or about July 16, 2021, Defendant circulated an email to the Board, including 

a representative of Investor 1, claiming that Slync had “doubled [its] quarterly revenue and did 

more revenue this quarter than all of last year.” Defendant knew this statement was false because 

he was aware that the Company had earned and collected $121,019 in customer revenue in the 

second quarter of 2021, compared with $354,205 in the first quarter of 2021, and that Slync’s 

total revenue earned and collected for 2020 was $175,714. 

60. Months later, shortly prior to the expiration date of Investor 1’s Warrant, on or 

about January 13, 2022, Defendant created a spreadsheet that was provided to Investor 1, which 

purported to show certain Slync financial metrics through the third quarter of 2021. Among other 

things, the metrics spreadsheet claimed that Slync’s total year-to-date revenue for 2021 was in 

excess of $15 million, that its 2021 third quarter revenue totaled over $7.3 million, and that the 

Company’s ARR in the third quarter of 2021 exceeded $14.2 million. 

61. Defendant knew at the time he prepared the spreadsheet, however, that those 

figures were false. Slync’s third quarter revenue earned and collected was approximately 

$146,000, and its year-to-date revenue earned and collected was approximately $500,000. In 

addition, Slync had not signed any customer contracts for which the annual recurring revenue 

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amounts exceeded $14.2 million (individually or collectively), contrary to the misleading ARR 

figure provided by Defendant. 

62. Defendant similarly continued to mislead Investor 2 concerning Slync’s financial 

condition by, among other things, emailing Investor 2 on or about January 20, 2022 and stating 

that Slync’s total revenue was $3.2 million in 2020 and $23.3 million in 2021, when he knew 

revenues earned and collected by Slync for those years were $175,714 and $667,778, 

respectively.  

63. The misinformation communicated by Defendant to each of Investors 1 and 2 was 

material to Investors 1 and 2 in making their decisions to exercise their respective Warrants. 

64. For example, Investor 1 ultimately exercised its Warrant on February 9, 2022 and 

wired nearly $2 million to Slync Bank Account A for its purchase of 1,516,760 shares of Series 

A preferred stock. Investor 1 would not have done so if it had known the truth about Slync’s 

actual financial condition. 

65. Investor 2 similarly exercised its Warrant on March 2, 2022 and wired nearly $1.4 

million to Slync Bank Account A for its purchase of 1,057,571 shares of Series A preferred 

stock. Like Investor 1, Investor 2 would not have done so if it had known the truth about Slync’s 

actual financial condition. 

IV. Defendant Orchestrates the Series B Raise and Fraudulently Solicits Investments 

66. Following the close of the Series A Raise in mid-May 2020, there was ongoing 

investor interest in Slync.  

67. By early summer 2020, Defendant began soliciting investments for a second 

round of fundraising (the Series B Raise). 

68. As had been the case with the Series A Raise, Defendant had ultimate authority 

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over all aspects of the Series B raise, including negotiating and communicating with investors on 

behalf of Slync and overseeing the flow of Series B investor proceeds into the Company 

throughout the offering. 

69. The Series B Raise was structured in two phases: an initial offering of Series B 

Preferred Stock (the “Series B Primary”), followed by a secondary sale once the Company had 

surpassed the issuance of a certain number of Series B preferred shares in the Series B Primary 

(the “Series B Secondary”). 

70. Slync offered Series B Primary investors preferred stock on terms similar to those 

governing the preferred stock ownership of Series A stockholders pursuant to a Series B Stock 

Purchase Agreement (“Series B SPA”).  

71. Investors in the Series B Secondary purchased preferred stock pursuant to a Stock 

Transfer Agreement, and each such investor also became a party to the Series B SPA by 

executing a counterparty signature page to that agreement. 

72. The entire Series B Raise was conducted from approximately summer 2020 

through spring 2021. 

A. Misrepresentations to Series B Investors Concerning Slync’s Financial 
Condition 
 

73. On or about June 9, 2020, an employee from an institutional investor (“Investor 

3”) contacted Defendant after identifying Slync as a possible investment opportunity. 

74. Defendant subsequently began negotiating with Investor 3, as well as with 

multiple other prospective investors, to participate in the Series B Primary, and later with other 

potential investors to participate in the Series B Secondary. 

75. In order to obtain investments in connection with the Series B Raise, Defendant 

serially lied to and misled investors concerning Slync’s financial condition, as he had done in the 

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previous fundraising round to secure investments from Series A investors.  

76. For example, during a telephone call between Defendant and an employee of 

Investor 3 on or about June 9, 2020, Defendant claimed that Slync had a current cash balance of 

$7 million, $6 million of ARR, and three customers with seven-figure signed deals. In reality, as 

Defendant knew from overseeing and monitoring Slync’s bank accounts, Slync did not have  

$7 million in cash—in part due to Defendant’s misappropriation of Series A investor funds 

(described further at Section V.A below). Moreover, Slync did not have $6 million worth of 

signed customer contracts whose revenue would recur annually, or three customers with seven-

figure signed deals, as Defendant was aware from managing the Company’s customer 

relationships. 

77. Defendant made numerous additional false statements to Investor 3. On or about 

July 14, 2020, Defendant provided Investor 3 with a profit and loss statement he had prepared 

showing that Slync’s year-to-date revenue as of June 1, 2020 was $351,230, despite that, as 

Defendant knew from his oversight of Slync bank records, the amount of revenue earned and 

collected during that period was $140,710. 

78. In addition, on or about August 4, 2020, Defendant prepared and sent to Investor 

3 a list of purported Slync customers that indicated nine customers had signed contracts with the 

Company as of June 2020, and that Slync’s then-current booked ARR was $6,397,300. Those 

statements were false, as Slync had no signed customer contracts as of June 2020 with annual 

recurring revenue valued at $6,397,300. 

79. Defendant emailed Investor 3 a similar list of customers on or about August 24, 

2020 that claimed total current ARR across all customers was $6,198,800. In fact, there were no 

signed customer contracts in place at that time with any of the listed companies that individually 

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or aggregately were valued at $6,198,800. 

80. On or about November 20, 2020, Kirchner emailed an accounting firm retained by 

Investor 3 to perform due diligence in connection with Investor 3’s potential Series B Primary 

investment attaching written responses to a series of inquiries the accounting firm had posed to 

Defendant concerning Slync’s finances and accounting. Among other things, the accounting firm 

asked Defendant whether Slync was “still on track to meet 2020 revenue forecast of  

$4.2 million,” and who Slync’s external service providers were for financial reporting.  

81. In response to the revenue question, Defendant wrote back, “Yes.” Defendant 

knew this statement was untrue because Slync’s 2020 year-to-date revenue earned and collected 

as of the date of this email exchange totaled approximately $175,000, as reflected in Slync’s 

bank accounts.  

82. In response to the service provider question, Defendant claimed that Slync was 

currently “moving to” a particular accounting and advisory company, when, in reality, Defendant 

was not in the process of engaging, and never did engage, the referenced company. 

83. Defendant knew, or was at least severely reckless or negligent in not knowing, 

that the statements described in paragraphs 76 through 82 were false or misleading when he 

made them to Investor 3 or Investor 3’s agents or representatives. 

84. On or around December 14, 2020, Investor 3 wired approximately $35 million to 

Slync Bank Account A for its Series B Primary investment.  

85. Investor 3 would not have made its investment in Slync had it known that 

Defendant had misrepresented, among other things, Slync’s financial condition. 

86. Defendant made similar false representations to another institutional investor 

(“Investor 4”) in connection with its Series B Primary investment.  

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87. On or about September 27, 2020, for example, Defendant provided Investor 4 

with a pitch deck he prepared that stated Slync had ten customers, including a $3 million contract 

in place with a particular customer. In reality, Slync only had six customers at this time, and 

there was no $3 million contract in place with the specified customer.   

88. On or about October 21, 2020, Defendant emailed Investor 4 a set of Slync 

historical financials that he had prepared, claiming that the Company’s revenue had increased 

from $18,750 to $488,210 between September 2019 and September 2020. This was false. The 

amount of revenue Slync had earned and collected by the end of September 2020 was less than 

$300,000. 

89. Defendant also told Investor 4 during a call on or about November 12, 2020 that 

Slync had twelve customers, including a contract with one customer for $3.8 million and with 

another for $1.9 million. In fact, Slync only had six customers as of that date, and neither of the 

two purported seven-figure customer contracts existed. And, ultimately, the amount earned and 

collected from the two customers in all of 2020 was $6,250 and $17,500, respectively, as 

Defendant knew from his oversight of Slync bank records. 

90. In addition, Defendant represented to Investor 4 in or around November 2020 that 

Slync would use the proceeds of Investor 4’s Series B Primary investment towards working 

capital and accelerating product, account management, and sales capabilities. Defendant failed to 

disclose that he would deploy Series B invested funds for his personal use and to fund his 

lifestyle, which he ultimately did, as described in Section V.B below. 

91. Based upon Defendant’s false representations to Investor through the end of 2020, 

Investor 4 wired nearly $7.5 million to Slync as an initial Series B Primary investment on 

December 28, 2020. 

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92. Defendant continued to make additional misrepresentations to Investor 4 that led 

to Investor 4’s second Series B Primary investment, as well as a subsequent Series B Secondary 

investment. 

93. For example, on or about January 28, 2021, Defendant sent an email to Investor 4 

stating, among other things, that Slync had a contract in place with a particular customer for 

$12.5 million. In fact, there was no such contract in place, and Slync had earned and collected 

approximately $127,000 in revenue from the referenced customer relationship as of that date. 

94. A month later, on or about February 24, 2021, Investor 4 emailed Defendant and 

asked him to confirm, among other things, Slync’s 2020 revenue, after noticing a discrepancy in 

revenue figures provided in two different documents prepared by Defendant—a January 2021 

Board deck that stated Slync’s 2020 revenue was $3.2 million, and an October 2020 profit and 

loss statement that projected $4.2 million in revenue for 2020.  

95. Both revenue figures provided by Defendant to Investor 4 were false. As of 

October 2020, Slync’s year-to-date revenue earned and collected was approximately $140,710. 

Ultimately, Slync’s total revenue earned and collected for 2020 was approximately $175,000. In 

addition, Defendant lied when responding to Investor 4 concerning the purported reason for the 

discrepancy, claiming it was due to a recognition change and movement of a certain customer 

revenue due back to Slync, when Defendant knew Slync had never received any revenue from 

that customer.  

96. In another instance, on or about April 14, 2021, Kirchner emailed Slync’s Board, 

including Investor 4 as a Board observer, a slide deck that Defendant had prepared, which stated 

that Slync’s revenue for the first quarter of 2021 was $2,617,626. In addition, the presentation 

represented that Slync had “Over $11MM in booked ARR.”  

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97. This information was false. In fact, Slync had earned and collected approximately 

$354,000 in revenue in the first quarter of 2021, and Defendant knew that Slync did not have 

customer contracts in place with annual recurring revenue in amounts to support $11 million in 

ARR. 

98. Following Defendant’s additional false and misleading representations to Investor 

4 throughout the first several months of 2021, on May 7, 2021, Investor 4 invested another 

approximately $5 million in the Series B Primary and more than $3.8 million in the Series B 

Secondary. 

99. Defendant knew, or was at least severely reckless or negligent in not knowing, 

that the statements described in paragraphs 87 through 97 were false or misleading when he 

made them to Investor 4. 

100. The information Defendant provided to Investor 4 as described in paragraphs 87 

through 97 was material to Investor 4’s decision to invest in the Series B Raise.  

B. Misrepresentations to Series B Investors Concerning Use of Proceeds 

101. In addition to making misrepresentations to Series B investors concerning Slync’s 

financial condition, Defendant also materially misled all Series B investors concerning the use of 

Series B investor proceeds.  

102. Each Series B SPA, which was drafted under Defendant’s direction and review 

and signed by Defendant on behalf of the Company, contained a section titled “Use of Proceeds” 

which, among other things, represented that, “the Company will use the proceeds from the sale 

of the Shares as follows: (i) $391,666 (plus interest accrued thereon) for full repayment of the 

outstanding balance owed by the Company in connection with [a preexisting loan] and (ii) the 

balance of the proceeds for product development and other general corporate purposes.” 

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103. That representation was false and misleading because it did not alert Series B 

investors that Kirchner would also use Series B investment proceeds to fund his own personal 

expenses, including, but not limited to, the purchase of a private jet for personal use, as described 

further in Section V.B below. 

104. The false and misleading “Use of Proceeds” disclosure was material to each 

Series B investor in making its respective decision to invest. Series B investors would not have 

invested in the Series B Raise had they known Defendant was also going to take a large 

percentage of the proceeds of their investments to fund his lifestyle. 

105. In total, between December 11, 2020 and May 7, 2021, Slync raised 

approximately $60 million in financing from thirteen investors across the Series B Primary and 

Series B Secondary. 

V. Defendant Misuses and Misappropriates More than $28 Million of Investor Funds 

106. After fraudulently deceiving Series A and Series B investors into making 

investments in connection with the Capital Raises, Defendant began to misappropriate investor 

funds from Slync’s bank accounts, often almost immediately after funds had been received by 

the Company (including, on multiple occasions, while the offerings were still ongoing), 

ultimately siphoning more than $28 million of investor funds for himself. 

107. As described in further detail below, Defendant’s misappropriations of investment 

proceeds from the Capital Raises and cash received from Investors 1 and 2 in connection with 

the Series A Warrant Exercises included depositing certain investor funds directly into his 

personal bank account and misdirecting investor funds to, among other things, purchase a private 

jet, pay for ongoing costs associated with the jet, and to fund purchases of other luxury goods 

and services to support Defendant’s lifestyle. 

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A. Defendant’s Misappropriation of Investor Funds from the Series A Raise 

108. In total, Slync obtained approximately $7.2 million in investor funds in 

connection with the Series A Raise. All of those proceeds were wired directly from the Series A 

investors to Slync Bank Account A. 

109. Defendant knew, or recklessly disregarded, that, in order to make any transfer in 

excess of $100,000 out of Slync Bank Account A, he would have to obtain the authorizing 

signature of Slync’s chief of staff. 

110. To avoid triggering the secondary authorization requirement for transfers over 

$100,000, Defendant executed a series of wire transfers out of Slync Bank Account A, each 

under the $100,000 threshold, to Slync Bank Account B, over which he maintained exclusive 

control and to which he had exclusive access. 

111. Specifically, between late March 2020 and late November 2020 (including on the 

same day the first Series A investor funds were wired to Slync), Defendant made at least 28 wire 

transfers from Slync Bank Account A to Slync Bank Account B, totaling approximately  

$2.2 million.  

112. Because Defendant was the only Slync employee with access to Slync Bank 

Account B, Defendant knew that, once investor funds had been moved to Slync Bank Account B, 

he could transfer them to his own personal bank accounts without anyone at the Company having 

visibility into those transfers. 

113. Between late March 2020 and late November 2020, Defendant transferred a total 

of approximately $1.3 million of Series A investor funds from Slync Bank Account B to his 

personal checking and savings accounts, including a $150,000 transfer that was marked “Cash 

Bonus” (despite that no cash bonus to Defendant in that amount had been authorized or issued by 

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the Board).  

114. In addition to fraudulently diverting Series A proceeds to his own bank accounts, 

between approximately April 2020 and August 2020, Defendant also paid for numerous personal 

expenses with Series A investor money directly out of Slync Bank Account B, including 

approximately $274,000 to a company that provides luxury concierge services for private jet 

aviation; $209,000 to a provider of “on demand” private aviation, including aircraft management 

services; and $75,000 for luxury items and experiences, including clothing purchases and 

expenditures at a golf club and vineyard.  

115. In all, Defendant misappropriated at least approximately $1.9 million of Series A 

investor funds.  

116. The false and misleading disclosure concerning use of proceeds made in the 

Series A SPA—claiming that proceeds would be used to fund Slync product development and 

for other corporate purposes—failed to alert Series A Investors that Defendant would also divert 

over a quarter of the proceeds of their investments to fund his personal expenses. Had Series A 

Investors known the proceeds of their investments would be used for that purpose, they would 

not have invested in the Series A Raise. 

B. Defendant’s Misappropriation of Investor Funds from the Series B Raise and 
the Series A Warrant Exercises 
 

117. Defendant undertook similar efforts to fraudulently misappropriate, for his 

personal benefit, more than $26.2 million of funds raised by Series B investors and paid in 

connection with the Series A Warrant Exercises. 

1. Defendant Diverts $20 Million of Investor 3 Investment Proceeds, 
Including for Purchase of a Private Jet for Personal Use 
 

118. Defendant’s primary misuse of Series B proceeds was to fund the purchase of a 

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$16.1 million private jet purely for Defendant’s personal use and enjoyment. 

119. On or about November 22, 2020, after the term sheet with Investor 3 had been 

signed, but a few weeks before Investor 3’s investment was funded, Defendant met with an 

aircraft sales broker to discuss purchasing a private jet for Defendant’s personal use.  

120. Defendant did not possess sufficient personal funds to afford the private jet, and 

instead intended to siphon incoming Series B investor proceeds to cover the purchase price in 

order to buy the private jet before year end.  

121. On December 11, 2020, Investor 3 wired $35 million to Slync Bank Account A in 

connection with the Series B Raise.  

122. Defendant knew, or recklessly disregarded, that, in order to transfer Investor 3 

funds in any amount greater than $100,000 out of Slync Bank Account A, he would be required 

to obtain authorization for the wire from Slync’s chief of staff. He was also aware that the Series 

B SPA he executed on behalf of Slync stated that Series B investment proceeds would be used to 

repay a preexisting loan owed by the Company and for product development and other corporate 

purposes.  

123. In order to induce Slync’s chief of staff to approve the intended wire of Investor 3 

investment proceeds out of Slync Bank Account A, Defendant lied to him concerning the 

logistics and rationale for the proposed transfer. 

124. On December 13, 2020, Defendant sent a text message to Slync’s chief of staff 

stating that there was a “big week coming up” for Slync and advised that, in light of those 

circumstances, Defendant was going to move money from Slync Bank Account A to Slync’s 

investment account and Slync Bank Account B.  

125. Defendant’s statements were knowingly false, as Defendant never intended to 

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transfer, and never did transfer, any of the subject Investor 3 funds to Slync Bank Account B or 

to a Slync investment account (—in fact, as Defendant knew, no investment account existed). In 

addition, the purpose of the transfer was to fund Defendant’s purchase of a personal private jet, 

not for any Slync corporate expense or approved business purpose. 

126. Based upon Defendant’s false representations, Slync’s chief of staff provided the 

necessary authorization for the transfer. 

127. The next day, on December 14, 2020, Defendant wired $20 million from Slync 

Bank Account A directly to Defendant’s personal bank account with the intention of using those 

proceeds to fund his purchase of the private jet.  

128. On that same day, as soon as the $20 million in Investor 3 funds from Slync Bank 

Account A became available in Defendant’s personal bank account, Defendant emailed a 

representative at his personal bank stating: “I took a distribution from my company today and am 

moving money out for a few things that I need to get taken care of before year end. One, is a 

wire for $5,000,000 to an escrow company for a plane that I am purchasing. I need this one 

completed ASAP as it’s very time sensitive in order to complete a transaction this month.  Could 

you make sure this one in particular is done as fast as possible?”  

129. Later that day, Defendant received confirmation from his personal bank and from 

the aircraft sales broker that the escrow company had received the $5 million wire from 

Defendant’s personal bank account as a deposit for the private jet he intended to purchase. 

130. A week later, on December 21, 2020, Defendant, through his company KFIM, 

executed an aircraft management agreement for the private jet. 

131. The next day, on December 22, 2020, Defendant wired another approximately 

$11.1 million of Investor 3 funds from his personal bank account to the escrow company for the 

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remaining payment for the private jet. 

132. On December 23, 2020, Defendant completed the purchase of the private jet for  

$16.1 million, with title to the aircraft in the name of KFIM. 

133. In addition to buying the private jet, Defendant also used Investor 3 investment 

proceeds toward the purchase of a suite at a National Football League stadium for $495,000 on 

December 14, 2020. He accomplished this by wiring funds out of his personal account directly to 

a bank account in the name of the company from which he purchased the suite. 

134. Defendant kept the remaining approximately $3.4 million of the $20 million of 

Investor 3 proceeds that he had misappropriated on December 14, 2020 and either retained those 

funds in his personal bank account(s) or used them for personal expenses (or both).  

135. Meanwhile, in the same month that Defendant fraudulently diverted funds from 

Investor 3’s investment to pay for the private jet and to fund his personal bank account, Slync 

was late on making payroll for its employees. 

136. At no time was Defendant authorized to use Series B investment funds to 

purchase the private jet or the stadium suite, or to direct those funds to his personal bank 

account, nor did he ever seek (or receive) approval from Slync’s Board to use investor proceeds 

for those purposes. 

137. In fact, with respect to the private jet, Defendant told Board members and some 

investors that the private jet was specifically not for business use and falsely claimed that the 

funds he used to purchase it came from successful cryptocurrency investments and sales he had 

made. 

2. Defendant Pays Other Personal Expenses With Series B Investor 
Funds and Series A Warrant Exercise Proceeds 
 

138. Over the several months following his purchase of the private jet, Defendant 

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continued to misappropriate additional Series B investor funds, as well as proceeds from the sale 

of Series A preferred stock to Investors 1 and 2 in connection with the Series A Warrant 

Exercises, which had all been paid into Slync Bank Account A. 

139. Using the same method he had employed to divert Series A investor proceeds 

without risking detection by anyone at Slync, Defendant concealed his misappropriation of 

millions of additional dollars of Series B and Series A Warrant Exercise proceeds by making 

serial individual wire transfers out of Slync Bank Account A in amounts less than $100,000. 

140. Between approximately January 15, 2021 and May 10, 2022, Defendant made 74 

wire transfers that included Series B investor funds and money received from the Series A 

Warrant Exercises from Slync Bank Account A to Slync Bank Account B—each of which was 

just under the $100,000 threshold that would otherwise trigger the requisite authorization by 

Slync’s chief of staff—amassing a total of more than $7.1 million of additional investor funds in 

Slync Bank Account B.  

141. Defendant then fraudulently diverted approximately $5.3 million of those 

proceeds by making an additional 29 transfers from Slync Bank Account B to a personal bank 

account in the name of KFIM (which Defendant owned, controlled, and managed, together with 

his wife, and to which no one at Slync had access) between approximately January 27, 2021 and 

May 3, 2022. 

142. Defendant used the $5.3 million of investor funds siphoned into the KFIM bank 

account to, among other things, pay for golf-related expenditures, ongoing costs associated with 

Defendant’s private jet, and other personal expenses, and to finance investment accounts in 

KFIM’s name through which Defendant traded equities securities and options using the 

misappropriated funds. 

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143. In addition to wrongfully diverting $25.3 million of funds from the Series B Raise 

and Series A Warrant Exercises to his personal bank account and the KFIM bank account as 

described in paragraphs 139 to 142 above, between approximately mid-February 2021 and early 

January 2022, Defendant also fraudulently misused Series B investor funds to pay over $902,000 

of personal credit card charges directly out of Slync Bank Account B. 

144. In total, Defendant misappropriated more than $26.2 million of investor funds 

from the Series B Raise and the Series A Warrant Exercises. 

145. The false and misleading disclosure concerning use of proceeds made in the 

Series A SPA—claiming that investor funds would be used to fund Slync product development 

and for other corporate purposes—failed to alert Investors 1 and 2 that Defendant would divert 

Series A proceeds, including proceeds of the Series A Warrant Raises, to fund his personal 

expenses. Had Investors 1 and 2 known that the proceeds of the Series A Warrant Raises would 

be used in the manner or for the purposes described in paragraphs 139 to 143 above, they would 

not have exercised their Warrants. 

146. Likewise, the false and misleading disclosure concerning use of proceeds made in 

the Series B SPA—claiming that investor funds would be used to repay a corporate loan owed by 

Slync and to fund Slync product development and for other corporate purposes—failed to notify 

Series B Investors that Defendant would divert a large portion of the proceeds of their 

investments to fund his personal expenses as described in paragraphs 139 to 143. Had Series B 

investors known Series B proceeds would be used in the manner or for the purposes described in 

paragraphs 139 to 143 above, they would not have invested in the Series B Raise. 

VI. Defendant Repeatedly Fails to Meet Payroll Deadlines for Slync Employees and is 
Fired by the Board 

 
147. Due in part to Defendant’s misappropriation of Slync investor funds described 

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above, Slync was late in paying its U.S. or Canadian employees at least six times between April 

and June 2022. 

148. Defendant was responsible for timely coordinating the wire of payroll funds to 

Slync’s outside payroll administrator each month, but failed to consistently to do so throughout 

that period. 

149. For at least one missed payroll cycle, Defendant forged a wire confirmation to 

purportedly show that he had transferred the necessary funds for payroll disbursement. 

150. On May 6, 2022, Defendant sent an email to Slync’s chief of staff and its outside 

payroll administrator forwarding what he claimed was an email wire confirmation from Slync 

Bank Account B to fund Slync’s May 5, 2022 employee payroll, reflecting a transfer of 

$566,241.06 on May 5, 2022. 

151. The purported wire confirmation was a forgery by Defendant. He doctored a prior 

wire confirmation email from Slync Bank Account B by overlaying fake information for the 

transfer amount, transfer date, and wire reference number, and he altered the date of the email. 

He also failed to alter the recipient information on the confirmation to show that the wire went to 

Slync’s payroll administrator and instead left in the recipient of the original legitimate 

confirmation (which had been Slync Bank Account A). 

152. In fact, Defendant had not wired $566,241.06 to Slync’s payroll administrator on 

May 5, 2022. 

153. It was not until several days later, after missing the payroll funding deadline, that 

Defendant initiated wire transfers to Slync’s payroll administrator in the amounts of $500,000 

and $66,241.06 to cover the May 5, 2022 payroll cycle. 

154. Several media outlets subsequently published articles in June and July 2022 

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concerning, among other things, allegations of payroll issues at Slync.  

155. On July 24, 2022, the Board emailed Defendant a letter suspending Defendant 

from Slync in his capacity as both an employee and officer in light of “missed payroll, 

[Defendant’s] misrepresentations regarding payroll status, and public allegations” concerning the 

Company, and placing Defendant on administrative leave. The letter further indicated that the 

Board had engaged an outside consulting firm to investigate Slync’s cash and financial position 

and requested Defendant’s cooperation in connection with the investigation. 

156. On July 26, 2022, counsel for the Board emailed Defendant a letter alleging that 

Defendant had attempted to delete certain electronic data in connection with the ongoing 

investigation and the Board’s suspension of Defendant the prior day. The Board demanded that 

Defendant immediately return all Slync records, hardware, and devices in his possession. 

157. On or about July 27, 2022, the Board learned that Defendant had forged the email 

confirmation described at paragraphs 150-151 above to show that he had wired sufficient funds 

to fund U.S. employees’ May 5, 2022 payroll cycle. 

158. On July 29, 2022, counsel for the Board emailed counsel for Defendant, 

informing him that the Board had information concerning Defendant’s attempts to destroy, alter, 

modify, or otherwise compromise Slync records. 

159. On August 2, 2022, the Board terminated Defendant as an employee of Slync and 

from all officer roles held by Defendant, including the office of CEO. 

160. The Board notified Defendant of his termination on August 4, 2022. 

FIRST CLAIM FOR RELIEF 
Violations of Securities Act Section 17(a) 

(Kirchner) 

161. The SEC realleges and incorporates by reference here the allegations in 

paragraphs 1 through 160. 

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162. By engaging in the acts and conduct described in this Complaint, Defendant, 

directly or indirectly, in the offer or sale of securities and by use of the means or instruments of 

transportation or communication in interstate commerce or by use of the mails: (1) knowingly or 

recklessly employed devices schemes, and artifices to defraud; (2) knowingly, recklessly, or 

negligently obtained money or property by means of untrue statements of a material fact or 

omissions of a material fact necessary in order to make the statements made, in light of the 

circumstances under which they were made, not misleading; and/or (3) knowingly, recklessly, or 

negligently engaged in transactions, practices, or courses of business which operated or would 

operate as a fraud or deceit upon purchasers of such securities. 

163. By reason of the foregoing, Defendant, directly or indirectly, has violated and, 

unless enjoined, will again violate, Securities Act Section 17(a) [15 U.S.C. § 77q(a)]. 

SECOND CLAIM FOR RELIEF 
Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder 

(Kirchner) 

164. The SEC realleges and incorporates by reference here the allegations in 

paragraphs 1 through 160. 

165. By engaging in the acts and conduct described in this Complaint, Defendant, 

directly or indirectly, in connection with the purchase or sale of securities and by the use of the 

means or instrumentalities of interstate commerce, or the mails, or the facilities of a national 

securities exchange, knowingly or recklessly (1) employed one or more devices, schemes, or 

artifices to defraud; (2) made one or more untrue statements of a material fact or omitted to state 

one or more material facts necessary in order to make the statements made, in light of the 

circumstances under which they were made, not misleading; and/or (3) engaged in one or more 

acts, practices, or courses of business which operated or would operate as a fraud or deceit upon 

other persons. 

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166. By reason of the foregoing, Defendant, directly or indirectly, has violated and, 

unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 

10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

THIRD CLAIM FOR RELIEF 
Unjust Enrichment 

(Relief Defendant KFIM) 
 

167. The SEC realleges and incorporates by reference here the allegations in 

paragraphs 1 through 160. 

168. KFIM, directly or indirectly, received funds or assets, or benefitted from the use 

of funds or assets, which were obtained as a result of, and are proceeds of, the securities law 

violations alleged herein, including, but not limited to, at least $5.3 million of Series B investor 

funds and Series A Warrant Exercise proceeds that Defendant fraudulently misappropriated from 

Slync Bank Account B to a KFIM bank account.  

169. KFIM has no legitimate claim to these ill-gotten gains. 

170. KFIM has therefore been unjustly enriched. 

PRAYER FOR RELIEF 

 WHEREFORE, the SEC respectfully requests that the Court enter a Final Judgment: 

I. 

Permanently enjoining Defendant from violating, directly or indirectly, Securities Act 

Section 17(a) [15 U.S.C. § 77q(a)] and Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and 

Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5];  

II. 

Ordering Defendant to disgorge all ill-gotten gains he received or to which he was not 

otherwise entitled, that he received directly or indirectly, with pre-judgment interest thereon, as a 

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result of the alleged violations, pursuant to Exchange Act Sections 21(d)(3), 21(d)(5), and 

21(d)(7) [15 U.S.C. §§78u(d)(3), 78u(d)(5), and 78u(d)(7)]; 

III. 

Ordering Defendant to pay civil monetary penalties under Securities Act Section 20(d) 

[15 U.S.C. § 77t(d)] and Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]; 

IV. 

Permanently prohibiting Defendant from serving as an officer or director of any company 

that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. §78l] or that is 

required to file reports under Exchange Act Section 15(d) [15 U.S.C. §78o(d)], pursuant to 

Securities Act Section 20(e) [15 U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2) [15 U.S.C. 

§ 78u(d)(2)];  

V. 

Ordering Relief Defendant to pay, with prejudgment interest, all ill-gotten gains by which 

it was unjustly enriched, pursuant to Exchange Act Sections 21(d)(3), 21(d)(5), and 21(d)(7) [15 

U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]; and 

VI. 

Granting any other and further relief this Court may deem just and proper. 

JURY DEMAND 

 The SEC demands a trial by jury.  
 
 
Dated: February 14, 2023 

    
Respectfully submitted, 

 
    /s/ Jessica T. Quinn       
Jessica T. Quinn 
New York Bar No. 5238571 

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Mary Kay Dunning 
New York Bar No. 4293262 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 

      100 Pearl Street, Suite 20-100 
      New York, New York 10004-2616 
      (212) 336-0929 (Quinn) 
      [email protected] 

 
 

Of Counsel 
Sheldon L. Pollock 
Steven G. Rawlings 
Securities and Exchange Commission 
100 Pearl Street, Suite 20-100 
New York, New York 10004-2616  
 
Derek Kleinmann 
Securities and Exchange Commission 
801 Cherry Street, Suite 1900, Unit 18 
Fort Worth, Texas 76102 

Case 4:23-cv-00147-P   Document 1   Filed 02/14/23    Page 33 of 33   PageID 33


	COMPLAINT
	Plaintiff Securities and Exchange Commission (“SEC”) files this Complaint against Defendant Christopher S. Kirchner (“Kirchner” or “Defendant”) and Relief Defendant KFIM LLC (“KFIM” or “Relief Defendant”) and alleges as follows:
	SUMMARY
	1. This case concerns an offering fraud orchestrated by Kirchner, the co-founder and former Chief Executive Officer (“CEO”) of Slync, Inc. (“Slync” or the “Company”), involving his brazen theft of over $28 million of investor funds to fund his lavish ...
	2. From approximately January 2020 through May 2021, Defendant raised approximately $67 million for the Company from investors in connection with two rounds of capital fundraising—an initial offering of Slync Series A Preferred Stock (the “Series A Ra...
	3. After luring investors to participate in the Capital Raises on the basis of these false promises, Defendant siphoned investor proceeds by diverting funds to his personal bank accounts and to a related entity he controlled, and by paying for persona...
	4. All told, prior to his termination from Slync in August 2022, Defendant misappropriated more than $28 million of the $67 million of investor funds raised by Slync in connection with the Capital Raises.
	VIOLATIONS
	5. By virtue of the foregoing conduct and as alleged further herein, Defendant has violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)] and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [...
	6. Unless Defendant is restrained and enjoined, he will engage in the acts, practices, transactions, and courses of business set forth in this Complaint or in acts, practices, transactions, and courses of business of similar type and object.
	NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
	7. The SEC brings this action pursuant to the authority conferred upon it by Securities Act Sections 20(b) and 20(d) [15 U.S.C. § 77t(b) and 77t(d)] and Exchange Act Section 21(d) [15 U.S.C. § 78u(d)].
	8. The SEC seeks a final judgment: (a) permanently enjoining Defendant from violating the federal securities laws and rules this Complaint alleges he has violated; (b) ordering Defendant to disgorge all ill-gotten gains he received as a result of the ...
	JURISDICTION AND VENUE
	10. Defendant has, directly and indirectly, made use of the means or instrumentalities of interstate commerce or of the mails or of any facility of any national securities exchange, and/or use of any means or instruments of transportation or communica...
	11. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa]. Defendant resides in the Northern District of Texas, and Slync’s principal place of business is in this District. I...
	DEFENDANT
	12. Christopher S. Kirchner, age 35, is a resident of Westlake, Texas. Kirchner is the co-founder of Slync and served as the Company’s CEO from approximately June 2017 to August 4, 2022, when the Slync Board of Directors (the “Board”) terminated his e...
	RELIEF DEFENDANT
	13. KFIM LLC is a Delaware limited liability company with its principal place of business in Westlake, Texas. Defendant formed KFIM in late November 2020 primarily to purchase a private jet for his personal use and to hold certain assets that Defendan...
	OTHER RELEVANT ENTITY
	14. Slync, Inc. (formerly known as SupplyLinc, Inc.) is a Delaware corporation with its principal place of business in Southlake, Texas. Slync develops and maintains an eponymous process automation software system that facilitates global supply chain ...
	FACTS
	I. Slync Background
	15. Defendant co-founded Slync as a start-up company in 2017 with four other individuals (collectively, the “Founders”). The Company was incorporated in Delaware in June 2017 with headquarters located in California (later moved to Texas in 2020), and ...
	16. In December 2017, the Board increased its size to two members, adding another Founder as a director. In April 2018, one additional director joined the Board, and a fourth director joined in July 2019.
	17. By January 2020 and continuing through early August 2022 (the “Relevant Period”), Slync maintained two bank accounts.
	18. The first bank account (“Slync Bank Account A”) was managed and controlled by Defendant, and the only Slync employees who had access to that account were Defendant and Slync’s chief of staff. In addition, any transfer out of Slync Bank Account A i...
	19. Slync’s second bank account (“Slync Bank Account B”) was under the exclusive management and control of Defendant at all times. No other Slync employee was able to access that account. In addition, Defendant was not required to obtain any additiona...
	20. Throughout the Relevant Period, Defendant maintained sole control over Slync’s financials and actively monitored the inflows and outflows of cash for Slync Bank Account A and Slync Bank Account B, including the receipt of revenues and investor fun...
	21. Between 2019 and August 2022, Slync earned and collected a combined revenue of approximately $1,726,883 from all customers.
	22. At all times prior to his termination in August 2022, Defendant oversaw, managed, and controlled all of Slync’s capital fundraising efforts, finances, banking, business operations, capital structure, and customer contracts and relationships.
	II. Defendant Orchestrates the Series A Raise and Fraudulently Solicits Investments
	23. Prior to January 2020, Slync had raised approximately $2 million from seed investors who were connected to Defendant and the Founders.
	24. By early 2020, the seed funding was mostly depleted, and Slync required additional capital to continue normal business operations.
	25. To address the Company’s liquidity needs, Kirchner coordinated and launched a round of capital fundraising in early 2020.
	26. Between approximately January 2020 and mid-May 2021, Slync conducted a private offering of Series A preferred stock to institutional and individual investors (the Series A Raise).
	27. Defendant had ultimate authority over all aspects of the Series A Raise, including outreach to and communications with potential and actual investors, and he oversaw the collection of Series A investor proceeds.
	28. In order to secure investments in the Series A Raise, Defendant deceived and defrauded prospective Series A investors by making numerous false representations concerning Slync’s actual revenue, annual recurring revenue (“ARR”) (a metric that estim...
	A. Misrepresentations to Series A Investors Concerning Slync’s Financial Condition
	29. Throughout the Series A Raise, Defendant made statements to Series A investors concerning various Slync financial metrics that were materially false or misleading.
	30. For example, on January 30, 2020, Kirchner sent an unsolicited email to a potential institutional investor (“Investor 1”), representing, among other things, that: Slync’s ARR was approaching $3 million; Slync had signed a seven-figure ARR deal; th...
	31. Each of these statements to Investor 1 was false: Slync had no existing customer contracts and thus could not generate ARR of $3 million per year; it had not signed any seven-figure ARR deal; and it did not have three freight forwarder customers, ...
	32. Defendant knew the statements to Investor 1 were false when made because he managed and oversaw Slync’s relationships with potential and actual customers, including the solicitation of customer business and contract placement, and he was aware tha...
	33. Defendant also misled Investor 1 concerning the Company’s capital structure.
	34. In one such instance, on or about February 24, 2020, Defendant emailed Investor 1 a copy of Slync’s capitalization table, a document that he prepared and controlled. The capitalization table showed $6,252,319.95 of “Cash Raised” as of February 24,...
	35. As Defendant knew from overseeing Slync’s fundraising efforts and managing Slync’s bank accounts into which raised funds were deposited, Slync had raised approximately $1.95 million as of that date, so the “Cash Raised” figure falsely inflated the...
	36. On February 25, 2020, the day after receiving Slync’s capitalization table, the Chief Financial Officer of Investor 1 sent Defendant a proposed term sheet for a $4 million Series A investment.
	37. Defendant continued to make additional materially false and misleading representations to Investor 1 leading up to its investment. For example, on or about March 20, 2020, Defendant sent a text message to an employee of Investor 1 representing tha...
	38. In reality, as Defendant was aware from managing the relationship with the referenced customer, there was no previous deal with the customer for $288,000 per year, nor any new commitment of $1.02 million per year. Slync ultimately earned and colle...
	39. Defendant knew, or was at least severely reckless or negligent in not knowing, that the statements described in paragraphs 30 through 38 were false or misleading when he made them to Investor 1.
	40. The information Defendant provided to Investor 1 as described in paragraphs 30 through 38 was material to Investor 1’s decision to invest in the Series A Raise. Investor 1 would not have made its $4 million investment in Slync had it known Defenda...
	41. In or around February 2020, Defendant made similar misrepresentations to another potential institutional investor (“Investor 2”) and knew, or was at least severely reckless or negligent in not knowing, that the subject statements were false or mis...
	42. For example, on our around February 20, 2020, Defendant provided a slide deck to Investor 2 that he had prepared, which stated that Slync had a $2.2 million contract with a particular customer. In fact, as Defendant knew, as of this date, Slync ha...
	43. Defendant also told Investor 2 on or around February 24, 2020 that Slync currently had $3 million in ARR, when, in reality, Slync had no individual customer contract with annual recurring revenue of $3 million, nor customer contracts with an aggre...
	44. The information Defendant provided to Investor 2 was material to Investor 2’s decision to invest in the Series A Raise. Investor 2 would not have made its approximately  $2.8 million investment in Slync had it known Defendant misrepresented, among...
	B. Misrepresentations to Series A Investors Concerning Use of Proceeds
	45. Defendant also substantially misled all Series A investors concerning the use of investor funds generated in the Series A Raise.
	46. Each Series A investor executed an identical Series A Preferred Stock Purchase Agreement in connection with its investment in Slync (the “Series A SPA”), which was drafted under Defendant’s direction and review. Defendant was also the Slync signat...
	47. The Series A SPA contained a section titled “Use of Proceeds” which, among other things, represented that, “the Company will use the proceeds from the sale of the Shares for product development and other general corporate purposes.”
	48. That representation was false and misleading because it stated that the proceeds collected from the offering would be spent on product development and corporate purposes and not used by Kirchner to fund his own personal expenses, as described furt...
	49. The misleading nature of the description of the use of Series A proceeds was material to each Series A investor in making its respective decision to invest, and Series A investors would not have invested in Slync had they known that Defendant woul...
	50. For example, Investor 1 would not have wired nearly $4 million to Slync Bank Account A for its Series A investment on or about March 30, 2020 had it known that Defendant planned to use investment proceeds from the Series A Raise to also fund his o...
	51. Likewise, Investor 2 would not have wired approximately $2.8 million to Slync Bank Account A for its Series A investment on or about March 31, 2020 had it known that Defendant planned to use investment proceeds from the Series A Raise to also fund...
	52. In total, between approximately March 30, 2020 and May 13, 2020, Slync raised at least $7.2 million in financing from at least five investors through the Series A Raise. None of the Series A investors would have invested in the Series A Raise had ...
	III. Defendant Fraudulently Induces Two Series A Investors to Exercise Stock Purchase Warrants Issued In Connection with the Series A Raise
	53. Concurrent with their respective investments in the Series A Raise, Investors 1 and 2 each also entered into a Stock Purchase Warrant with Slync, which entitled them to purchase a certain number of Series A preferred stock shares at a set price pe...
	54. The Warrants were issued pursuant and subject to the terms and conditions of the Series A SPA.
	55. Following the Series A Raise, Defendant continued to make false and misleading representations to Investors 1 and 2, including concerning Slync’s financial condition, which ultimately prompted Investors 1 and 2 to exercise their Warrants and colle...
	56. At the first Board meeting after the close of the Series A Raise, on or about May 20, 2020, Defendant provided Board members, including a representative of Investor 1, with a slide deck he had prepared. The deck included a “Financial Overview” sec...
	57. Later, on or about January 13, 2021, Defendant sent a slide deck he had drafted to Investor 1, among other recipients, falsely stating that Slync’s total revenue for 2020 was $3,259,306—even though Defendant knew that figure was over eighteen time...
	58. On or about April 14, 2021, Defendant sent another slide deck he had prepared to Investor 1, among other recipients, falsely reporting that Slync’s first quarter of 2021 revenue was $2,617,626. In reality, Slync’s total revenue earned and collecte...
	59. On or about July 16, 2021, Defendant circulated an email to the Board, including a representative of Investor 1, claiming that Slync had “doubled [its] quarterly revenue and did more revenue this quarter than all of last year.” Defendant knew this...
	60. Months later, shortly prior to the expiration date of Investor 1’s Warrant, on or about January 13, 2022, Defendant created a spreadsheet that was provided to Investor 1, which purported to show certain Slync financial metrics through the third qu...
	61. Defendant knew at the time he prepared the spreadsheet, however, that those figures were false. Slync’s third quarter revenue earned and collected was approximately $146,000, and its year-to-date revenue earned and collected was approximately $500...
	62. Defendant similarly continued to mislead Investor 2 concerning Slync’s financial condition by, among other things, emailing Investor 2 on or about January 20, 2022 and stating that Slync’s total revenue was $3.2 million in 2020 and $23.3 million i...
	63. The misinformation communicated by Defendant to each of Investors 1 and 2 was material to Investors 1 and 2 in making their decisions to exercise their respective Warrants.
	64. For example, Investor 1 ultimately exercised its Warrant on February 9, 2022 and wired nearly $2 million to Slync Bank Account A for its purchase of 1,516,760 shares of Series A preferred stock. Investor 1 would not have done so if it had known th...
	65. Investor 2 similarly exercised its Warrant on March 2, 2022 and wired nearly $1.4 million to Slync Bank Account A for its purchase of 1,057,571 shares of Series A preferred stock. Like Investor 1, Investor 2 would not have done so if it had known ...
	IV. Defendant Orchestrates the Series B Raise and Fraudulently Solicits Investments
	66. Following the close of the Series A Raise in mid-May 2020, there was ongoing investor interest in Slync.
	67. By early summer 2020, Defendant began soliciting investments for a second round of fundraising (the Series B Raise).
	68. As had been the case with the Series A Raise, Defendant had ultimate authority over all aspects of the Series B raise, including negotiating and communicating with investors on behalf of Slync and overseeing the flow of Series B investor proceeds ...
	69. The Series B Raise was structured in two phases: an initial offering of Series B Preferred Stock (the “Series B Primary”), followed by a secondary sale once the Company had surpassed the issuance of a certain number of Series B preferred shares in...
	70. Slync offered Series B Primary investors preferred stock on terms similar to those governing the preferred stock ownership of Series A stockholders pursuant to a Series B Stock Purchase Agreement (“Series B SPA”).
	71. Investors in the Series B Secondary purchased preferred stock pursuant to a Stock Transfer Agreement, and each such investor also became a party to the Series B SPA by executing a counterparty signature page to that agreement.
	72. The entire Series B Raise was conducted from approximately summer 2020 through spring 2021.
	A. Misrepresentations to Series B Investors Concerning Slync’s Financial Condition
	73. On or about June 9, 2020, an employee from an institutional investor (“Investor 3”) contacted Defendant after identifying Slync as a possible investment opportunity.
	74. Defendant subsequently began negotiating with Investor 3, as well as with multiple other prospective investors, to participate in the Series B Primary, and later with other potential investors to participate in the Series B Secondary.
	75. In order to obtain investments in connection with the Series B Raise, Defendant serially lied to and misled investors concerning Slync’s financial condition, as he had done in the previous fundraising round to secure investments from Series A inve...
	76. For example, during a telephone call between Defendant and an employee of Investor 3 on or about June 9, 2020, Defendant claimed that Slync had a current cash balance of $7 million, $6 million of ARR, and three customers with seven-figure signed d...
	77. Defendant made numerous additional false statements to Investor 3. On or about July 14, 2020, Defendant provided Investor 3 with a profit and loss statement he had prepared showing that Slync’s year-to-date revenue as of June 1, 2020 was $351,230,...
	78. In addition, on or about August 4, 2020, Defendant prepared and sent to Investor 3 a list of purported Slync customers that indicated nine customers had signed contracts with the Company as of June 2020, and that Slync’s then-current booked ARR wa...
	79. Defendant emailed Investor 3 a similar list of customers on or about August 24, 2020 that claimed total current ARR across all customers was $6,198,800. In fact, there were no signed customer contracts in place at that time with any of the listed ...
	80. On or about November 20, 2020, Kirchner emailed an accounting firm retained by Investor 3 to perform due diligence in connection with Investor 3’s potential Series B Primary investment attaching written responses to a series of inquiries the accou...
	81. In response to the revenue question, Defendant wrote back, “Yes.” Defendant knew this statement was untrue because Slync’s 2020 year-to-date revenue earned and collected as of the date of this email exchange totaled approximately $175,000, as refl...
	82. In response to the service provider question, Defendant claimed that Slync was currently “moving to” a particular accounting and advisory company, when, in reality, Defendant was not in the process of engaging, and never did engage, the referenced...
	83. Defendant knew, or was at least severely reckless or negligent in not knowing, that the statements described in paragraphs 76 through 82 were false or misleading when he made them to Investor 3 or Investor 3’s agents or representatives.
	84. On or around December 14, 2020, Investor 3 wired approximately $35 million to Slync Bank Account A for its Series B Primary investment.
	85. Investor 3 would not have made its investment in Slync had it known that Defendant had misrepresented, among other things, Slync’s financial condition.
	86. Defendant made similar false representations to another institutional investor (“Investor 4”) in connection with its Series B Primary investment.
	87. On or about September 27, 2020, for example, Defendant provided Investor 4 with a pitch deck he prepared that stated Slync had ten customers, including a $3 million contract in place with a particular customer. In reality, Slync only had six custo...
	88. On or about October 21, 2020, Defendant emailed Investor 4 a set of Slync historical financials that he had prepared, claiming that the Company’s revenue had increased from $18,750 to $488,210 between September 2019 and September 2020. This was fa...
	89. Defendant also told Investor 4 during a call on or about November 12, 2020 that Slync had twelve customers, including a contract with one customer for $3.8 million and with another for $1.9 million. In fact, Slync only had six customers as of that...
	90. In addition, Defendant represented to Investor 4 in or around November 2020 that Slync would use the proceeds of Investor 4’s Series B Primary investment towards working capital and accelerating product, account management, and sales capabilities....
	91. Based upon Defendant’s false representations to Investor through the end of 2020, Investor 4 wired nearly $7.5 million to Slync as an initial Series B Primary investment on December 28, 2020.
	92. Defendant continued to make additional misrepresentations to Investor 4 that led to Investor 4’s second Series B Primary investment, as well as a subsequent Series B Secondary investment.
	93. For example, on or about January 28, 2021, Defendant sent an email to Investor 4 stating, among other things, that Slync had a contract in place with a particular customer for $12.5 million. In fact, there was no such contract in place, and Slync ...
	94. A month later, on or about February 24, 2021, Investor 4 emailed Defendant and asked him to confirm, among other things, Slync’s 2020 revenue, after noticing a discrepancy in revenue figures provided in two different documents prepared by Defendan...
	95. Both revenue figures provided by Defendant to Investor 4 were false. As of October 2020, Slync’s year-to-date revenue earned and collected was approximately $140,710. Ultimately, Slync’s total revenue earned and collected for 2020 was approximatel...
	96. In another instance, on or about April 14, 2021, Kirchner emailed Slync’s Board, including Investor 4 as a Board observer, a slide deck that Defendant had prepared, which stated that Slync’s revenue for the first quarter of 2021 was $2,617,626. In...
	97. This information was false. In fact, Slync had earned and collected approximately $354,000 in revenue in the first quarter of 2021, and Defendant knew that Slync did not have customer contracts in place with annual recurring revenue in amounts to ...
	98. Following Defendant’s additional false and misleading representations to Investor 4 throughout the first several months of 2021, on May 7, 2021, Investor 4 invested another approximately $5 million in the Series B Primary and more than $3.8 millio...
	99. Defendant knew, or was at least severely reckless or negligent in not knowing, that the statements described in paragraphs 87 through 97 were false or misleading when he made them to Investor 4.
	100. The information Defendant provided to Investor 4 as described in paragraphs 87 through 97 was material to Investor 4’s decision to invest in the Series B Raise.
	B. Misrepresentations to Series B Investors Concerning Use of Proceeds
	101. In addition to making misrepresentations to Series B investors concerning Slync’s financial condition, Defendant also materially misled all Series B investors concerning the use of Series B investor proceeds.
	102. Each Series B SPA, which was drafted under Defendant’s direction and review and signed by Defendant on behalf of the Company, contained a section titled “Use of Proceeds” which, among other things, represented that, “the Company will use the proc...
	103. That representation was false and misleading because it did not alert Series B investors that Kirchner would also use Series B investment proceeds to fund his own personal expenses, including, but not limited to, the purchase of a private jet for...
	104. The false and misleading “Use of Proceeds” disclosure was material to each Series B investor in making its respective decision to invest. Series B investors would not have invested in the Series B Raise had they known Defendant was also going to ...
	105. In total, between December 11, 2020 and May 7, 2021, Slync raised approximately $60 million in financing from thirteen investors across the Series B Primary and Series B Secondary.
	V. Defendant Misuses and Misappropriates More than $28 Million of Investor Funds
	106. After fraudulently deceiving Series A and Series B investors into making investments in connection with the Capital Raises, Defendant began to misappropriate investor funds from Slync’s bank accounts, often almost immediately after funds had been...
	107. As described in further detail below, Defendant’s misappropriations of investment proceeds from the Capital Raises and cash received from Investors 1 and 2 in connection with the Series A Warrant Exercises included depositing certain investor fun...
	A. Defendant’s Misappropriation of Investor Funds from the Series A Raise
	108. In total, Slync obtained approximately $7.2 million in investor funds in connection with the Series A Raise. All of those proceeds were wired directly from the Series A investors to Slync Bank Account A.
	109. Defendant knew, or recklessly disregarded, that, in order to make any transfer in excess of $100,000 out of Slync Bank Account A, he would have to obtain the authorizing signature of Slync’s chief of staff.
	110. To avoid triggering the secondary authorization requirement for transfers over $100,000, Defendant executed a series of wire transfers out of Slync Bank Account A, each under the $100,000 threshold, to Slync Bank Account B, over which he maintain...
	111. Specifically, between late March 2020 and late November 2020 (including on the same day the first Series A investor funds were wired to Slync), Defendant made at least 28 wire transfers from Slync Bank Account A to Slync Bank Account B, totaling ...
	112. Because Defendant was the only Slync employee with access to Slync Bank Account B, Defendant knew that, once investor funds had been moved to Slync Bank Account B, he could transfer them to his own personal bank accounts without anyone at the Com...
	113. Between late March 2020 and late November 2020, Defendant transferred a total of approximately $1.3 million of Series A investor funds from Slync Bank Account B to his personal checking and savings accounts, including a $150,000 transfer that was...
	114. In addition to fraudulently diverting Series A proceeds to his own bank accounts, between approximately April 2020 and August 2020, Defendant also paid for numerous personal expenses with Series A investor money directly out of Slync Bank Account...
	115. In all, Defendant misappropriated at least approximately $1.9 million of Series A investor funds.
	116. The false and misleading disclosure concerning use of proceeds made in the Series A SPA—claiming that proceeds would be used to fund Slync product development and for other corporate purposes—failed to alert Series A Investors that Defendant woul...
	B. Defendant’s Misappropriation of Investor Funds from the Series B Raise and the Series A Warrant Exercises
	117. Defendant undertook similar efforts to fraudulently misappropriate, for his personal benefit, more than $26.2 million of funds raised by Series B investors and paid in connection with the Series A Warrant Exercises.
	1. Defendant Diverts $20 Million of Investor 3 Investment Proceeds, Including for Purchase of a Private Jet for Personal Use
	118. Defendant’s primary misuse of Series B proceeds was to fund the purchase of a $16.1 million private jet purely for Defendant’s personal use and enjoyment.
	119. On or about November 22, 2020, after the term sheet with Investor 3 had been signed, but a few weeks before Investor 3’s investment was funded, Defendant met with an aircraft sales broker to discuss purchasing a private jet for Defendant’s person...
	120. Defendant did not possess sufficient personal funds to afford the private jet, and instead intended to siphon incoming Series B investor proceeds to cover the purchase price in order to buy the private jet before year end.
	121. On December 11, 2020, Investor 3 wired $35 million to Slync Bank Account A in connection with the Series B Raise.
	122. Defendant knew, or recklessly disregarded, that, in order to transfer Investor 3 funds in any amount greater than $100,000 out of Slync Bank Account A, he would be required to obtain authorization for the wire from Slync’s chief of staff. He was ...
	123. In order to induce Slync’s chief of staff to approve the intended wire of Investor 3 investment proceeds out of Slync Bank Account A, Defendant lied to him concerning the logistics and rationale for the proposed transfer.
	124. On December 13, 2020, Defendant sent a text message to Slync’s chief of staff stating that there was a “big week coming up” for Slync and advised that, in light of those circumstances, Defendant was going to move money from Slync Bank Account A t...
	125. Defendant’s statements were knowingly false, as Defendant never intended to transfer, and never did transfer, any of the subject Investor 3 funds to Slync Bank Account B or to a Slync investment account (—in fact, as Defendant knew, no investment...
	126. Based upon Defendant’s false representations, Slync’s chief of staff provided the necessary authorization for the transfer.
	127. The next day, on December 14, 2020, Defendant wired $20 million from Slync Bank Account A directly to Defendant’s personal bank account with the intention of using those proceeds to fund his purchase of the private jet.
	128. On that same day, as soon as the $20 million in Investor 3 funds from Slync Bank Account A became available in Defendant’s personal bank account, Defendant emailed a representative at his personal bank stating: “I took a distribution from my comp...
	129. Later that day, Defendant received confirmation from his personal bank and from the aircraft sales broker that the escrow company had received the $5 million wire from Defendant’s personal bank account as a deposit for the private jet he intended...
	130. A week later, on December 21, 2020, Defendant, through his company KFIM, executed an aircraft management agreement for the private jet.
	131. The next day, on December 22, 2020, Defendant wired another approximately $11.1 million of Investor 3 funds from his personal bank account to the escrow company for the remaining payment for the private jet.
	132. On December 23, 2020, Defendant completed the purchase of the private jet for  $16.1 million, with title to the aircraft in the name of KFIM.
	133. In addition to buying the private jet, Defendant also used Investor 3 investment proceeds toward the purchase of a suite at a National Football League stadium for $495,000 on December 14, 2020. He accomplished this by wiring funds out of his pers...
	134. Defendant kept the remaining approximately $3.4 million of the $20 million of Investor 3 proceeds that he had misappropriated on December 14, 2020 and either retained those funds in his personal bank account(s) or used them for personal expenses ...
	135. Meanwhile, in the same month that Defendant fraudulently diverted funds from Investor 3’s investment to pay for the private jet and to fund his personal bank account, Slync was late on making payroll for its employees.
	136. At no time was Defendant authorized to use Series B investment funds to purchase the private jet or the stadium suite, or to direct those funds to his personal bank account, nor did he ever seek (or receive) approval from Slync’s Board to use inv...
	137. In fact, with respect to the private jet, Defendant told Board members and some investors that the private jet was specifically not for business use and falsely claimed that the funds he used to purchase it came from successful cryptocurrency inv...
	2. Defendant Pays Other Personal Expenses With Series B Investor Funds and Series A Warrant Exercise Proceeds
	138. Over the several months following his purchase of the private jet, Defendant continued to misappropriate additional Series B investor funds, as well as proceeds from the sale of Series A preferred stock to Investors 1 and 2 in connection with the...
	139. Using the same method he had employed to divert Series A investor proceeds without risking detection by anyone at Slync, Defendant concealed his misappropriation of millions of additional dollars of Series B and Series A Warrant Exercise proceeds...
	140. Between approximately January 15, 2021 and May 10, 2022, Defendant made 74 wire transfers that included Series B investor funds and money received from the Series A Warrant Exercises from Slync Bank Account A to Slync Bank Account B—each of which...
	141. Defendant then fraudulently diverted approximately $5.3 million of those proceeds by making an additional 29 transfers from Slync Bank Account B to a personal bank account in the name of KFIM (which Defendant owned, controlled, and managed, toget...
	142. Defendant used the $5.3 million of investor funds siphoned into the KFIM bank account to, among other things, pay for golf-related expenditures, ongoing costs associated with Defendant’s private jet, and other personal expenses, and to finance in...
	143. In addition to wrongfully diverting $25.3 million of funds from the Series B Raise and Series A Warrant Exercises to his personal bank account and the KFIM bank account as described in paragraphs 139 to 142 above, between approximately mid-Februa...
	144. In total, Defendant misappropriated more than $26.2 million of investor funds from the Series B Raise and the Series A Warrant Exercises.
	145. The false and misleading disclosure concerning use of proceeds made in the Series A SPA—claiming that investor funds would be used to fund Slync product development and for other corporate purposes—failed to alert Investors 1 and 2 that Defendant...
	146. Likewise, the false and misleading disclosure concerning use of proceeds made in the Series B SPA—claiming that investor funds would be used to repay a corporate loan owed by Slync and to fund Slync product development and for other corporate pur...
	VI. Defendant Repeatedly Fails to Meet Payroll Deadlines for Slync Employees and is Fired by the Board
	147. Due in part to Defendant’s misappropriation of Slync investor funds described above, Slync was late in paying its U.S. or Canadian employees at least six times between April and June 2022.
	148. Defendant was responsible for timely coordinating the wire of payroll funds to Slync’s outside payroll administrator each month, but failed to consistently to do so throughout that period.
	149. For at least one missed payroll cycle, Defendant forged a wire confirmation to purportedly show that he had transferred the necessary funds for payroll disbursement.
	150. On May 6, 2022, Defendant sent an email to Slync’s chief of staff and its outside payroll administrator forwarding what he claimed was an email wire confirmation from Slync Bank Account B to fund Slync’s May 5, 2022 employee payroll, reflecting a...
	151. The purported wire confirmation was a forgery by Defendant. He doctored a prior wire confirmation email from Slync Bank Account B by overlaying fake information for the transfer amount, transfer date, and wire reference number, and he altered the...
	152. In fact, Defendant had not wired $566,241.06 to Slync’s payroll administrator on May 5, 2022.
	153. It was not until several days later, after missing the payroll funding deadline, that Defendant initiated wire transfers to Slync’s payroll administrator in the amounts of $500,000 and $66,241.06 to cover the May 5, 2022 payroll cycle.
	154. Several media outlets subsequently published articles in June and July 2022 concerning, among other things, allegations of payroll issues at Slync.
	155. On July 24, 2022, the Board emailed Defendant a letter suspending Defendant from Slync in his capacity as both an employee and officer in light of “missed payroll, [Defendant’s] misrepresentations regarding payroll status, and public allegations”...
	156. On July 26, 2022, counsel for the Board emailed Defendant a letter alleging that Defendant had attempted to delete certain electronic data in connection with the ongoing investigation and the Board’s suspension of Defendant the prior day. The Boa...
	157. On or about July 27, 2022, the Board learned that Defendant had forged the email confirmation described at paragraphs 150-151 above to show that he had wired sufficient funds to fund U.S. employees’ May 5, 2022 payroll cycle.
	158. On July 29, 2022, counsel for the Board emailed counsel for Defendant, informing him that the Board had information concerning Defendant’s attempts to destroy, alter, modify, or otherwise compromise Slync records.
	159. On August 2, 2022, the Board terminated Defendant as an employee of Slync and from all officer roles held by Defendant, including the office of CEO.
	160. The Board notified Defendant of his termination on August 4, 2022.
	Violations of Securities Act Section 17(a) (Kirchner)
	161. The SEC realleges and incorporates by reference here the allegations in paragraphs 1 through 160.
	162. By engaging in the acts and conduct described in this Complaint, Defendant, directly or indirectly, in the offer or sale of securities and by use of the means or instruments of transportation or communication in interstate commerce or by use of t...
	163. By reason of the foregoing, Defendant, directly or indirectly, has violated and, unless enjoined, will again violate, Securities Act Section 17(a) [15 U.S.C. § 77q(a)].
	Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder (Kirchner)
	164. The SEC realleges and incorporates by reference here the allegations in paragraphs 1 through 160.
	165. By engaging in the acts and conduct described in this Complaint, Defendant, directly or indirectly, in connection with the purchase or sale of securities and by the use of the means or instrumentalities of interstate commerce, or the mails, or th...
	166. By reason of the foregoing, Defendant, directly or indirectly, has violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
	Unjust Enrichment
	(Relief Defendant KFIM)
	167. The SEC realleges and incorporates by reference here the allegations in paragraphs 1 through 160.
	168. KFIM, directly or indirectly, received funds or assets, or benefitted from the use of funds or assets, which were obtained as a result of, and are proceeds of, the securities law violations alleged herein, including, but not limited to, at least ...
	169. KFIM has no legitimate claim to these ill-gotten gains.
	170. KFIM has therefore been unjustly enriched.
	PRAYER FOR RELIEF
	Dated: February 14, 2023