SEC v. Nova Labs, Inc., No. 1:25-CV-00539, Southern District of New York (Jan. 18, 2025) — Complaint

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE COMMISSION,

                                             Plaintiff,

                        -against-

NOVA LABS, INC.

                                             Defendant.

COMPLAINT

 No.  1:25-00539

 JURY TRIAL DEMANDED

Plaintiff Securities and Exchange Commission (the “Commission”), for its Complaint
against Defendant Nova Labs, Inc. (“Nova Labs” or “Defendant”), alleges as follows:
SUMMARY
1. This case concerns (1) Nova Labs’ unlawful unregistered offer and sale of
investment contracts involving electronic devices and a rewards program that generate returns in the
form of three Nova Labs crypto assets; and (2) Nova Labs’ materially false and misleading
statements in connection with its offer and sale of those investment contracts and in connection
with Nova Labs’ offer and sale of shares of its stock.
2. Since April 2019, Nova Labs has raised millions of dollars from investors through its
unregistered sales of securities in the form of “Hotspots”—electronic devices that “mine” one of
three Nova Labs crypto assets:  the Helium Network Token (“HNT”), the Helium Mobile Network
Token (“MOBILE”), and the Helium IoT Network Token (“IOT”)—and in the form of Nova
Labs’ “Discovery Mapping Program,” through which investors receive distributions of MOBILE.
These sales violated the registration requirements of the federal securities laws, which protect
investors by requiring securities sellers to provide investors with material information about, among
other things, the securities offering and the issuer’s business and financial condition, so that
investors can make informed investment decisions.

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3. Nova Labs offered and sold Hotspots and ran the Discovery Mapping Program as
investment contracts and, thus, securities.  Nova Labs promised investors that the Hotspots and the
Discovery Mapping Program would earn HNT, MOBILE, or IOT for investors, and that Nova
Labs would use its entrepreneurial efforts and expertise to build, run, and create demand for a
wireless network that relied on HNT, MOBILE, and IOT such that, if Nova Labs’ efforts were
successful, then demand for and value of HNT, MOBILE, and IOT would grow, and the investors
who acquired them would earn a profit.
4. Nova Labs also falsely told investors that three large entities—Nestlé, the food and
beverage conglomerate; Salesforce, the cloud-based software company; and Lime, the electric
scooter company—were using and relying on Nova Labs’ wireless network, thus falsely suggesting
to investors that those companies would create value for HNT, MOBILE, and IOT.  The fact that
three large, international companies were using Nova Labs’ nascent technology and network was an
important part of the total mix of information that investors considered when deciding to invest in
Nova Labs’ Hotspots and Nova Labs’ stock.
5. In fact, however, and as Nova Labs knew or recklessly disregarded, Nestlé,
Salesforce, and Lime were neither Nova Labs’ customers nor “users” of Nova Labs’ network.
Indeed, when Nestlé and Lime learned that Nova Labs was publicly touting their purported
relationships, each issued   Nova Labs a cease-and-desist letter.
6. Nova Labs’ false and misleading statements to potential investors touting business
relationships that did not exist violated the antifraud provisions of the federal securities laws.
VIOLATIONS
7. By virtue of the foregoing conduct and as alleged herein, Nova Labs engaged in and
is currently engaging in the unlawful offer and sale of securities in violation of Sections 5(a) and 5(c)
of the Securities Act of 1933 (“Securities Act”) [ 15 U.S.C. §§ 77e(a) , 77e(c)], and violated Securities

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Act Section 17(a)(2) [15 U.S.C. § 77q(a)(2)], Section 10(b) of the Securities Exchange Act of 1934
(“Exchange Act”) [15 U.S.C. § 78u(d)], and Rule 10b-5(b) thereunder [ 17 C.F.R. § 240.10b-5(b)].
8. Unless Nova Labs is restrained and enjoined, it 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 PROCEEDINGS AND RELIEF SOUGHT
9. The Commission brings this action pursuant to the authority conferred upon it by
Securities Act Sections 20(b) and (d) [15 U.S.C. §§ 77t(b) and (d)], and Exchange Act Sections
21(d) and (e) [15 U.S.C. §§ 78u(d) and (e)].
10. The Commission seeks a final judgment:  (i) ordering a permanent injunction
restraining and enjoining Nova Labs, directly or indirectly, from again violating the federal securities
laws described herein; (ii)   ordering Nova Labs to pay disgorgement with prejudgment interest;
(iii)    ordering Nova Labs to pay civil money penalties; (iv) prohibiting Nova Labs from participating,
directly or indirectly, in the purchase, offer, or sale of any crypto assets being offered or sold as
securities, or engaging in activities for purposes of inducing or attempting to induce the purchase,
offer, or sale of any crypto assets offered or sold as securities by others; and (v) imposing such other
and further relief as the Court may deem just and appropriate.
JURISDICTION AND VENUE
11. This Court has jurisdiction over this action under Securities Act Section 22(a)
[15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa].
12. Nova Labs, directly and indirectly, has made use of the means or instrumentalities of
interstate commerce or of the mails in connection with the transactions, acts, practices, and courses
of business alleged herein.

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13. This Court has personal jurisdiction over Nova Labs, and venue is proper in this
District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)] and Exchange Act Section 27(a)  [15
U.S.C. § 78aa(a) ], because certain of the transactions, acts, practices, and courses of business
constituting the violations alleged herein occurred in this District.  Among many other things, Nova
Labs engaged in marketing and business development efforts in this District related to its
unregistered offer and sale of investment contracts; offered and sold securities to investors located
in this District in unregistered transactions; promoted its offer and sale of Nova Labs’ stock in this
District; and offered and sold Nova Labs’ stock to investors located in this District.
DEFENDANT
14. Nova Labs (f/k/a Helium Systems, Inc. and f/k/a Skynet Phase 1 Inc.) is a private
company organized under the laws of Delaware and headquartered in San Francisco, California.
LEGAL AND TECHNICAL BACKGROUND
I. STATUTORY AND LEGAL FRAMEWORK
15. The Securities Act and the Exchange Act “form the backbone of American securities
laws.”  Slack Tech., LLC v. Pirani, 598 U.S. 759, 762 (2023).
16. Congress enacted the Securities Act in part to regulate the offer and sale of securities.
In contrast to the principle of caveat emptor, Congress established a regime of full and fair disclosure,
requiring those who offer and sell securities to the investing public to disclose sufficient, accurate
information to allow investors to make informed decisions before they invest.
17. The Securities Act and Exchange Act define “security” broadly to include a wide
range of assets, including “investment contracts.”  [15 U.S.C. §§ 77b(a), 78c(a)(10)].
18. Securities Act Sections 5(a) and 5(c), require that an issuer of securities, like Nova
Labs, register its offer and sale of securities with the Commission.  [15 U.S.C. §§ 77e(a), 77e(c)].

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19. Registration is intended to assure that the persons offering or selling the securities
give the investing public required information about the issuer, the securities, and the transaction.
With that information, investors can then make more informed investment decisions.
20. The Securities Act and the Exchange Act also contain antifraud provisions to,
among other things, prevent fraudulent conduct in the offer, sale, and purchase of securities.
Securities Act Section 17(a) and Exchange Act Section 10(b), for example, seek to ensure honest
behavior and fair dealing in securities transactions.
II. CRYPTO ASSETS
21. As used herein, the term “crypto asset” generally refers to an asset issued and/or
transferred using blockchain or distributed ledger technology, including assets commonly referred to
as cryptocurrencies, digital assets, digital coins, digital tokens, and virtual currencies.
22. A blockchain or distributed ledger is a peer-to -peer database spread across a network
of computing devices—often called nodes—that record all transactions occurring on the blockchain
or distributed ledger in theoretically unchangeable, digitally recorded data packages.  The system
relies on cryptographic techniques for securely recording those transactions.
23. Crypto assets may be traded on crypto asset trading platforms in exchange for other
crypto assets or fiat currency (i.e., legal tender issued by a country).
24. Persons and entities have offered and sold crypto assets to investors in capital-raising
events in exchange for consideration, including but not limited to, through so-called initial coin
offerings (or, ICOs), crowd sales, or public token sales.
25. On July 25, 2017, the Commission issued the Report of Investigation Pursuant to Section
21(a) of the Securities Exchange Act of 1934:  The DAO (the “DAO Report”), advising “those who
would use . . . distributed ledger or blockchain-enabled means for capital raising[] to take appropriate

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steps to ensure compliance with the U.S. federal securities laws,” and finding that the offering of
crypto assets at issue in the DAO Report were offerings of securities.
26. On April 3, 2019, the Commission published additional guidelines, titled Framework
for “Investment Contract” Analysis of Digital Assets, that advised those “engaging in the offer, sale, or
distribution of a digital asset” to consider “whether the digital asset is a security” that would trigger
the application of the “federal securities laws.”  These guidelines provided “a framework for
analyzing whether a digital asset is an investment contract,” and a non-exhaustive list of
characteristics that, if present in a given digital asset, would suggest that the asset is a “security.”
FACTS
I. NOVA LABS’ PIVOT TO BLOCKCHAIN AND CRYPTO ASSETS.
27. Nova Labs was founded in May 2013 and has had several business models.
28. Initially, Nova Labs designed and manufactured hardware components that third
parties incorporated into low-power devices—such as smart water meters or asset trackers—to
allow those devices to send and receive small bits of information via little-used radio frequencies
other than Wi-Fi and cellular frequencies.  Under this business model, Nova Labs earned little to no
revenue.
29. In 2014, Nova Labs pivoted from manufacturing hardware components to selling an
“end-to -end solution” for low-power devices.  Nova Labs manufactured   and sold internet-
connected sensors that collected data and could be monitored via Nova Labs’ hardware and
software.  Under this business model, Nova Labs also earned little-to -no revenue and incurred tens
of millions of dollars in losses.
30. By late 2017, Nova Labs’ business models of building or supporting networks for
low-power devices had failed for several reasons, including that it was expensive to build a
sufficiently large wireless network within particular geographies (or across geographies) to which

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devices could connect, and because Nova Labs had been unable to persuade a critical mass of users
to form such a network.  In addition, Nova Labs needed more cash to continue its operations.
31. At that same time, Nova Labs understood that blockchain technology and sales of
crypto assets to investors were receiving a lot of public attention, and Nova Labs’ Chief Executive
Officer (“CEO”) told a member of Nova Labs’ Board of Directors that Nova Labs could “capitalize
on the current [] hype to generate some significant capital . . . .”
32. So, Nova Labs pivoted again, this time to selling crypto assets.  As Nova Labs’ CEO
later put it publicly, Nova Labs “abandoned the whole idea of trying to make money on the network
itself” and instead became an “economic model for building decentralized wireless networks.”  This
meant creating and selling devices that “mined” Nova Labs’ crypto assets  and then using the
proceeds from those sales and the value of Nova Labs’ crypto assets as a primary source of funds
for Nova Labs’ operations.
II. NOVA LABS KNEW OFFERING AND SELLING CRYPTO ASSETS
AS SECURITIES WITHOUT REGISTRATION VIOLATED THE LAW.
33. Nova Labs considered multiple structures by which it might offer and sell crypto
assets to investors, understood that offers and sales of securities required registration with the
Commission, and knowingly and deliberately chose to take the risk that unregistered offers and sales
of investment contracts in the form of electronic devices—i.e., Hotspots—that mined crypto assets
could result in a Commission enforcement action against it.
34. Nova Labs first considered offering and selling crypto assets as securities through an
unregistered “initial coin offering,” or ICO, in which it would sell crypto assets directly to investors
and pool the funds received to fund its operations.
35. After its Board of Directors raised questions about the legality of an unregistered
ICO, and Nova Labs sought legal advice regarding it, Nova Labs decided that selling crypto assets
directly to investors in an ICO was likely to be an unlawful unregistered securities offering.

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36. Nova Labs then considered offering and selling crypto assets as securities to
investors in a registered offering.  In June 2018, Nova Labs’ CEO remarked in an internal
communication, “Aside from the paperwork required, it seems like a potentially decent path.”
37. Nova Labs believed, however, that a registered securities offering would be time
consuming.  It viewed an offer and sale without registration as faster but “risky” because it might
violate the federal securities laws.
38. Instead, Nova Labs chose to structure its offer and sale of crypto assets in a manner
that, it hoped, would escape the federal securities laws.  Rather than offering and selling crypto
assets directly to investors in an unregistered ICO or similar offering—which Nova Labs knew
would violate the securities laws—Nova Labs decided to interpose an intermediate step, which
required that investors instead of buying the assets directly, procure them by buying an electronic
device, the “Hotspot,” and having those investors “mine” (i.e., receive distributions of) Nova Labs’
crypto assets through the Hotspot.
39. To others within Nova Labs, Nova Labs’ CEO described this scheme as an attempt
to end-run—literally, to “cheat”—the securities laws, saying, “I think of buying a [Hotspot] as a
proxy for buying tokens[, ] it’s like a token generation machine . . .  I could kind of think[] of the
[Hotspot] as a cheat for an ICO . . .  no other project lets you buy a token printing machine.”
40. Nova Labs sought and obtained legal advice regarding this structure, too, and was
advised of a significant risk that its offer and sale of devices that “mined” Nova Labs’ crypto assets
could constitute an unregistered offering under the federal securities laws.
III. NOVA LABS CREATED THE “HELIUM NETWORK” AND THREE INITIAL
CRYPTO ASSETS.
41. Nova Labs’ offer and sale of investment contracts in the form of Hotspot devices
that mine crypto assets occur through an ecosystem called the “Helium Network,” which Nova Labs
launched in July 2019.

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42. When Nova Labs designed the Helium Network, it had three primary components:
(i) computer code comprising a blockchain; (ii) crypto assets created, transferred, and destroyed on
that blockchain; and (i  ii) a version of the Hotspot mining device called an IoT Hotspot.
1

43. An IoT Hotspot has two purposes:  one, it connects to the internet, acts as a node
running the Nova Labs blockchain, and receives periodic distributions of (i.e., “mines”) one of Nova
Labs’ crypto assets; and, t wo, it is fixed with and operates as an antenna that can connect to low-
power electronic devices with wireless capability allowing those devices to send small bits of data to
the internet via the IoT Hotspot’s internet connection.
44. In this Complaint, the portion of the Helium Network consisting of the blockchain
and the nodes running it is called the “Helium Network Blockchain” and the portion of the Helium
Network consisting of the Hotspots’ antennas—and the ability for certain types of electronic
devices to transmit data to and from the internet via the Hotspots’ antennas and internet
connection—is called the “Helium Wireless Network.”
A. The Helium Network Blockchain and the Helium Wireless Network
45. Nova Labs employs software engineers expert in developing computer code and
software protocols.  Between late 2017 and mid-2019, Nova Labs used that expertise to create its
own bespoke blockchain, the Helium Network Blockchain, and three crypto assets running on that
blockchain:  (i) the Helium Network Token or “HNT,” (ii) the Helium Security Token or “HST,”
and (iii) Data Credits.

1
 “IoT” refers to “Internet of Things,” which is, among other things, a network of physical
devices—such as appliances, vehicles, trackers, or other objects—embedded with hardware or
software that allows those devices to connect and exchange data.

10
46. At the same time, Nova Labs engineers designed and manufactured the “IoT
Hotspot,” an electronic device that connected to the internet, acted as a node running the Helium
Network Blockchain, and verified transactions of HNT, HST, and Data Credits on that blockchain.
47. Nova Labs also designed the IoT Hotspot to act as an antenna to transmit small
amounts of data to and receive small amounts of data from certain low-power devices physically
proximate to the IoT Hotspot.  The IoT Hotspot could, in turn, send that data to and receive data
from the internet via its internet connection.  The wireless coverage for low-power devices
collectively created by all IoT Hotspots was the initial iteration of the Helium Wireless Network.
48. Nova Labs did not expect many individual IoT Hotspot purchasers to use the
Helium Wireless Network for low-power devices and it said publicly that individual IoT Hotspot
purchasers did not use the Helium Wireless Network.  Rather, Nova Labs touted its ability to
persuade third party companies to deploy large numbers of low-power devices to use the Helium
Wireless Network.
49. Accordingly, to induce investors to buy IoT Hotspots, Nova Labs coded the Helium
Network Blockchain so that IoT Hotspot owners received daily distributions of HNT, and Nova
Labs promised to use its entrepreneurial and managerial efforts to create demand and value for that
HNT.  This included, for example, through Nova Labs’ extensive software engineering, business
development, and marketing work, its creation of secondary markets for selling and buying its crypto
assets, and its other efforts to attract customers to and create demand for the Helium Wireless
Network, described infra ¶¶ 159 to 231.
B. Nova Labs Initially Created Three Crypto Assets and Offered and Sold
Investors IoT Hotspots That Mine One of Those Three Crypto Assets.
50. Nova Labs’ initial iteration of the Helium Network Blockchain used three crypto
assets.  The primary crypto asset was the Helium Network Token or HNT, and it was “mined” by
the IoT Hotspots that Nova Labs offered and sold.  The second crypto asset was the Helium

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Security Token or HST, and it was used as an additional way for Nova Labs to distribute HNT.  The
third crypto asset was the Data Credit and it was used as a means of paying transaction fees related
to the Helium Network and to influence the total supply and value of HNT.
1. Nova Labs Created HNT.
51. HNT is the primary native crypto asset on the Helium Network Blockchain.
52. Nova Labs initially designed the Helium Network Blockchain to create more than
160,000 new HNT each day, totaling approximately five million new HNT each month.
53. HNT serves two primary purposes:  (i) as an asset with speculative value that can be
sold to others for cash or other crypto assets, such as dollars or Bitcoin, including sales on secondary
markets; and (ii) as a means to obtain Data Credits, which are used to pay fees on the Helium
Network.
54. During the relevant period, the overwhelming majority of all HNT that investors
obtained was either sold for consideration (e.g., dollars) or held for potential price appreciation, and
it was not used by investors to buy Data Credits to pay to use the Helium Wireless Network.
55. Because HNT are fungible with each other, the price of each HNT is the same as the
price of all HNT and the price of all HNT goes up or down together.
2. Nova Labs Designed and Manufactured IoT Hotspots and
Offe re d a nd  Sold H N T to Investors via the IoT H otspots.
56. Nova Labs offered and sold HNT to investors by offering and selling them IoT
Hotspots that mined (i.e., received distributions of) HNT each day.
57. Between at least April 2019 and March 2022, Nova Labs offered and sold thousands
of IoT Hotspots directly to investors.  Between approximately October 2020 and the present, Nova
Labs has offered and sold at least tens of thousands of IoT Hotspots to investors through Nova
Labs’ partnerships with third-party IoT Hotspot manufacturers.

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58. Through its offers and sales of IoT Hotspots, Nova Labs has distributed tens of
millions of HNT to the general public.
59. Nova Labs designed and manufactured the initial IoT Hotspots and created the
firmware that ran on them.  Nova Labs designed the IoT Hotspots to act as nodes running the
Helium Network Blockchain.
60. Nova Labs offered and sold these IoT Hotspots via its website.  Investors paid
approximately $500 (or the equivalent amount of Bitcoin) for each IoT Hotspot and an investor
could purchase as many IoT Hotspots as they desired.
61. Anyone could buy an IoT Hotspot, and Nova Labs pooled IoT Hotspot investor
funds and used them to develop and promote the network, including to pay Nova Labs’ software
engineers, business development professionals, and marketing staff.
62. To “mine” HNT—i.e., receive distributions of HNT from Nova Labs via the Helium
Network Blockchain—an IoT Hotspot purchaser needed only to connect the IoT Hotspot to
electricity and the internet.  Nova Labs did not require the investor to do anything more.
63. Throughout the relevant period, Nova Labs’ repeatedly and frequently emphasized
publicly that obtaining HNT from the IoT Hotspot required little to no efforts by the investors.
That is, Nova Labs did not sell the IoT Hotspot only to those interested in running a wireless
network let along using one, and an IoT Hotspot did not require any particular specialization or
efforts of the purchasers.
64. As Nova Labs’ CEO told potential investors in January 2019, “You simply buy a
Hotspot device, give it an internet connection and it will begin mining.”  Nova Labs’ Chief
Operating Officer (“COO”) said similarly in December 2019, “There is not a whole lot for the user
to do.  If you buy a Hotspot, it’s as simple as plugging something into the wall.”  In June 2020,
Nova Labs’ CEO publicly emphasized the Hotspot’s ease of use, saying:  “We made the Hotspot

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because we wanted to make it easy to use and so that everyone could grab it.  You didn’t need to be
an IoT enthusiast.  You didn’t have to be a crypto specialist.  Literally anyone could get this and use
it.”
65. Through a mobile telephone application created and maintained by Nova Labs
(“Nova Labs App”), an IoT Hotspot investor could link the investor’s “wallet” on the Helium
Network Blockchain (i.e., the investor’s repository for receiving and holding crypto assets), and the
Helium Network Blockchain would distribute HNT to that wallet each day.
66. Nova Labs designed the Helium Network Blockchain so that investors in
IoT Hotspots collectively shared at least 65% of all new HNT that the Helium Network Blockchain
created each day.  Nova Labs also created an algorithm and set a fixed distribution schedule that
determined how many HNT an investor received by purchasing and plugging in an IoT Hotspot.
67. Nova Labs publicly promised to create value and demand for HNT, such that
investors reasonably expected   to profit from their investment in the IoT Hotspot and the resulting
distributions of HNT.  Nova Labs’ promises and efforts are discussed infra ¶¶ 159 to 260.
68. Investors bought IoT Hotspots as a way to invest in the growth of the Helium
Wireless Network through their HNT holdings (given the relationship between HNT and demand
for the network that Nova Labs created and touted).  Indeed, many investors purchased multiple
IoT Hotspots to increase the number of HNT they would receive.
69. In addition to running the Helium Network Blockchain and “mining” (i.e., receiving
distributions of) HNT, IoT Hotspots have a second functionality.  They have a built-in antenna that
can receive data from and send data to low-power devices that have wireless capability and are in
physical proximity (e.g., within a mile or more) and, in turn, the IoT Hotspots can transmit that data
to and receive data from the internet via the IoT Hotspot’s internet connection.

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70. Between April 2019 and March 2022, Nova Labs designed, manufactured, and sold
to the general public more than 12,000 IoT Hotspots.
71. Between August 2019 and October 2020, those IoT Hotspots “mined” more than
25 million HNT for the investors who owned the IoT Hotspots.  Thereafter, the IoT Hotspots
continued to “mine,” and IoT Hotspot investors have continued to receive distributions of, tens of
millions of additional HNT from Nova Labs via the Helium Network Blockchain.
72. Between about September 2019 and the present, Nova Labs also oversaw,
coordinated, and controlled the manufacture and offer and sale of at least tens of thousands of
additional IoT Hotspots by third parties acting on Nova Labs’ behalf or in partnership with Nova
Labs.  These third parties were an extension of Nova Labs, which played a critical role in the
operational and financial decisions necessary to offer and sell those IoT Hotspots to investors.
73. Nova Labs designed the security features of the Helium Network so that no third
party c ould build Hotspots without obtaining permission from Nova Labs.  Third parties have relied
almost entirely on partnerships with and support from Nova Labs to build, offer, and sell IoT
Hotspots and have done so on Nova Labs’ behalf.
74. For example, between around September 2019 and September 2020, Nova Labs
negotiated and entered into a partnership (the “IoT Hotspot Partnership”) with a third-party
electronic component manufacturer and a third-party distributor (“  IoT Manufacturer” and “IoT
Distributor”) under which the IoT Manufacturer would build 10,000 IoT Hotspots in partnership
with Nova Labs, and the IoT Distributor would offer and sell those IoT Hotspots to investors in
partnership with Nova Labs.
75. Under the IoT Hotspot Partnership, Nova Labs provided the IoT Manufacturer with
intellectual property, software, firmware, and financial support necessary for it to build IoT
Hotspots.  Nova Labs also controlled and/or oversaw design, specifications, and production

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parameters for the IoT Manufacturer’s manufacture of IoT Hotspots and provided ongoing
technical expertise and consulting services—including sending a Nova Labs engineer to the IoT
Manufacturer’s overseas headquarters—necessary to ensure that those IoT Hotspots functioned as
nodes for the Helium Network Blockchain, transmitted a wireless signal via the IoT Hotspots’
antenna to allow low-power devices to transmit data, and received daily distributions of HNT.
Nova Labs provided the IoT Manufacturer with more than $2 million in financial support related to
the IoT Hotspots, and the IoT Manufacturer paid over $3 million to Nova Labs related to the IoT
Hotspots.  Without Nova Labs’ technical permissions and support, the IoT Manufacturer could not
build IoT Hotspots.
76. Under the IoT Hotspot Partnership, Nova Labs also contracted with the IoT
Distributor to sell IoT Hotspots built by the IoT Manufacturer.  Under that agreement, Nova Labs
determined pricing for those IoT Hotspots; provided marketing support for the IoT Distributor’s
efforts to promote, offer, and sell those IoT Hotspots; directed investors to buy those IoT Hotspots
from the IoT Distributor, including through Nova Labs’ own website and social media posts; and
provided customer support to investors who bought IoT Hotspots from the IoT Distributor.  The
IoT Distributor then paid over $500,000 in “kickbacks” (as the IoT Distributor described the
payments) to Nova Labs for IoT Hotspots it sold.
77. Nova Labs pooled the funds received from the IoT Manufacturer and the IoT
Distributor and used them to develop and promote the Helium Network, including to pay Nova
Labs’ software engineers, business development professionals, and marketing staff.
78. During the relevant period, Nova Labs has entered into similar formal and informal
partnerships with several other third parties pursuant to which Nova Labs and those third parties
have manufactured and sold IoT Hotspots that mine Nova Labs’ speculative crypto asset, HNT.

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3. Nova Labs Created H ST.
79. Nova Labs created the Helium Security Token or HST as a second crypto asset on
the Helium Network Blockchain.  HST’s sole purpose is to entitle its holder to daily distributions of
HNT in perpetuity.  As such, the value of HST is derivative of the value of HNT.
80. Nova Labs created only 10,300 HST and designed the Helium Network Blockchain
so that holders of those HST collectively share, on a pro rata basis, up to 35% of all HNT that the
Helium Network Blockchain creates.  Thus, during the period that the Helium Network Blockchain
created approximately five million HNT each month, each HST entitled its holder to a pro rata
share of nearly 170 HNT per month and more than 2,000 HNT per year.
81. Nova Labs has offered and sold HST to a select group of investors, including
venture capital firms, to allow them to obtain perpetual distributions of HNT.  This includes Nova
Labs’ sale of 6,800 HST coupled with preferred equity shares to investors in May 2019 for
approximately $15 million.  Nova Labs understood, and multiple investors confirmed, that these
transactions’ main purpose was to obtain HST.
2

82. Nova Labs kept approximately 2,000 of the 10,300 HST for itself to receive
perpetual distributions of HNT from that HST, benefit from the potential price appreciation of
HNT, and sell that HNT to fund its operations.  Indeed, Nova Labs has sold millions of dollars of
HNT to fund its business.  Nova Labs thus aligned its financial interests in HNT’s price
appreciation with those of investors in IoT Hotspots that mined HNT (and later, with investors in
Nova Labs’ Mobile Hotspot, and two additional Nova Labs crypto assets, IOT and MOBILE,
whose value is also based on the value of HNT, infra ¶¶ 105 to 158).

2
 Nova Labs does not dispute that HST is a security under the federal securities laws.  Rather, Nova
Labs contends that its offers and sales of HST were exempt from the Securities Act’s registration
requirements.  The Commission’s claim under Securities Act Section 5(a) and 5(c), infra ¶¶ 299 to
301, is not based on Nova Labs’ offer and sale of HST.

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83. As Nova Labs’ CEO explained to one of the outside investors who invested in HST,
“pretty much all of our activities will be related to [HNT] earned via those [HST].”  Nova Labs’
CEO echoed that sentiment in a public statement in August 2020, saying “Our business model is
HNT.  We are all in.  We have no other revenue streams nor any plan to create any.”
84. During the period that the Helium Network Blockchain created approximately five
million HNT each month, the approximately 2,000 HST held by Nova Labs’ entitled it to
distributions of more than 339,000 HNT per month and more than four million HNT per year.
85. Nova Labs also used approximately 1,500 HST as compensation for its employees.
86. By compensating employees with HST, Nova Labs provided them with perpetual
distributions of HNT, ensuring that they too benefitted   financially from Nova Labs’ efforts to
increase the value of HNT, and aligning their financial interests with those of investors in the IoT
Hotspot that mined HNT (and later, with the fortunes of investors in the Mobile Hotspot, IOT and
MOBILE).
87. As Nova Labs’ CEO explained to several Nova Labs’ equity investors
contemporaneous to the creation of HST, “One thing I really like about the inflation model”—i.e.,
the way in which HST distributes HNT to its holder in perpetuity—“is that all participants are sort
of vesting in to their [HNT] ownership over long periods, which should encourage everyone to do
work to increase value.”
88. Nova Labs also marketed how the HST structure aligned the interests of Nova Labs
and its employees with all investors in IoT Hotspots and HNT.  For example, in a May 2021 public
appearance Nova Labs’ COO said,
We have [HNT] from the distribution model that we created, 35% of
mining rewards, which aligns our interest with everybody else’s
interest.  People want to mine cryptocurrency.  We want a network
built.  We both win.  Everybody wins when it happens.  We get a
network.  Everybody gets tokens.  We’re all happy.  That’s how the
system is built.

18
89. As another example, in a May 2022 public appearance, Nova Labs’ CEO said,
These networks take years and tens of millions of dollars to build, . . .
If there isn’t a reward for those investors and those teams that build
these networks then no one would ever build the networks. . . .  You
could never build this without some [HST] structure. . . .  It would
never have been built.  We would never have been funded.  We
would have gone out of business.  None of this would exist.
90. Also, by receiving and owning HST, Nova Labs’ employees have received tens of
millions of HNT and, as Nova Labs has worked to increase the value of HNT, those employees
have sold large portions of their HNT to the general public for millions of dollars.
4. Nova Labs Created the Data Credit.
91. The third crypto asset that Nova Labs created on the Helium Network Blockchain is
the Data Credit, which Nova Labs designed as a mechanism for paying fees associated with the
Helium Network and as a means to influence the value of HNT.
92. When Nova Labs launched the Helium Network in July 2019, it did not charge fees
to transact on the Helium Network Blockchain or to send data from low-power devices via the
Helium Wireless Network.  Nova Labs emphasized publicly, however, that it was further developing
the Helium Network to integrate a fee structure based on Data Credits.
93. IoT Hotspot investors relied entirely on Nova Labs’ efforts to implement that fee
structure, which was important to investors’ expectations of profit because Nova Labs designed the
value of HNT to be influenced by and linked to the demand for and usage of Data Credits.
94. In August 2020, Nova Labs modified the Helium Network to require the payment of
fees.  For example, Nova Labs began to require payment of fees for transfers of HNT via the
Helium Network Blockchain and for data transfers on the Helium Wireless Network by owners of
low-power devices (i.e., sending data from those devices to the internet via an IoT Hotspot’s
antenna and internet connection).

19
95. Fees related to the Helium Network can be paid only with Data Credits and Data
Credits can be acquired only with HNT.  Nova Labs designed Data Credits to function as follows:
a. To acquire Data Credits, a user must first acquire HNT (such as by buying it
from an IoT Hotspot investor) and then “burning” that HNT—that is,
transferring the HNT to a Helium Network Blockchain address that destroys
the HNT and removes it from circulation.  When the HNT is “burned,” the
Helium Network Blockchain creates and distributes Data Credits to the user.
b. One Data Credit has a fixed price in U.S. dollars of $0.00001.
c. The number of Data Credits created and acquired in exchange for burning
one HNT is equal to the prevailing market value of HNT in U.S. dollars at
the time of the burn transaction divided by $0.00001 (the fixed price for one
Data Credit).
d. Data Credits are non-transferrable, cannot be traded or sold, and can be used
only to pay fees associated with the Helium Network.
e. A user who burns HNT to acquire Data Credits can instruct the Helium
Network Blockchain to distribute the resulting Data Credits to a third party
blockchain address instead of to the user.
96. Accordingly, a user who wants to acquire Data Credits to pay fees when the
prevailing price of one HNT is $1.00 must first acquire one HNT (such as by paying $1.00 for HNT
on a secondary market) and then “burn” that HNT, which, in turn, prompts the Helium Network
Blockchain to transfer 100,000 Data Credits to the user (i.e., $1.00 HNT value divided by the per
Data Credit cost of $0.00001).

20
97. Nova Labs has explained frequently, including in public statements, that it designed
the economics of acquiring Data Credits to be inextricably intertwined with the value of HNT and
to influence the price of HNT.
98. Specifically, Nova Labs designed the Helium Network Blockchain and Data Credits
so that the process of acquiring and using Data Credits requires HNT to be burned and removed
from circulation, a mechanism that is intended to (and, in fact, does) reduce the number of HNT
available for purchase and increase the value of the remaining HNT held by investors.
99. When asked about the relationship between Data Credits and the value of HNT,
Nova Labs’ COO explained,
[The] more Data Credits are needed, you have to burn HNT to get to
the Data Credits.  When you burn HNT, it’s burned forever.  That
reduces the supply of HNT.  And so the more demand there is on
HNT through Data Credits, then the less HNT is available in totality.
Because it’s a finite supply.  And so the laws of physics means that
if more people, more devices, need HNT to operate, then the
cost of per HNT would increase naturally.
100. As Nova Labs also said frequently, including in public statements, if it succeeded in
promoting and causing a greater number of Data Credits to be acquired and used—e.g., to pay fees
for data transfers via the Helium Wireless Network—the impact on the value of HNT would
increase:  more HNT would be demanded for Data Credits, causing the supply of HNT to decrease
(as HNT is burned), thus making each remaining HNT more valuable.
101. In an internal Nova Labs’ document titled, “The Helium Manifesto,” Nova Labs’
CEO explained the relationship between Data Credits and the value of HNT and emphasized that
Nova Labs’ primary business purpose was to cause users to consume Data Credits to push up the
value of HNT, even if that meant failing to earn revenues from other activities.  He wrote,
Due to the design of the token economics, more utility on the
network will drive increased value in tokens.  The only way [Nova
Labs] becomes wildly successful is if there is an enormous amount of
network usage and the value of the tokens increases accordingly.  As

21
a result, everything we do as a business from this point forward
should be focused on maximizing the utility of the network, which is
the usage of data credits. . . .  Many of these decisions will be directly
at odds with potential revenue or profit generating activities – such as
partnering with Hotspot integrators or selling Hotspots at or below
margin – but because our goal is to maximize utility and demand for
data credits, we will be OK with these decisions as long as we believe
they are likely to increase adoption.
102. Nova Labs also determined the number of Data Credits required to perform various
actions on the Helium Network Blockchain or related to the Helium Wireless Network.  The
amount in fees (in the form of Data Credits) required to use the Helium Wireless Network was
relatively small, as the below examples illustrate, but investors were and are permitted to purchase
any amount of HNT (including by acquiring and using IoT Hotspots) in any amount, irrespective of
any desire or need they may have to use the HNT to obtain Data Credits.  For example, under the
fee schedule set by Nova Labs:
a. For every 24 bytes of data transferred by a low-power device to the internet
via an IoT Hotspot, a user of the low-power device paid a fee of
one Data Credit (i.e., the user must burn and remove from circulation
$0.00001 worth of HNT for every 24 bytes of data sent).
3

b. To transfer HNT from one Helium Network Blockchain address to another,
the transferor paid a fee of 35,000 Data Credits (i.e., the user must burn and
remove from circulation $0.35 worth of HNT for each transaction).
c. To add an IoT Hotspot to the Helium Network Blockchain, the IoT
Hotspot owner was required to pay a fee of four million Data Credits (i.e.,

3
 As an example, to transfer one kilobyte of data (1 kB), approximately the amount of data
associated with half a page of unformatted text, a low-power device would be required to pay
approximately 1,000 Data Credits—or the equivalent of approximately $0.01 worth of HNT that
would need to be burned and removed from circulation.

22
the user must burn and remove from circulation $40 worth of HNT to add
the IoT Hotspot).
d. To verify an IoT Hotspot’s geographic location—a task that the Helium
Network periodically performs—an IoT Hotspot (or its owner) was required
to pay a fee of one million Data Credits (i.e., the user must burn and remove
from circulation $10 worth of HNT to verify location).
103. Nova Labs also sold Data Credits directly to customers by taking payments in U.S.
dollars, burning HNT that Nova Labs itself held, and instructing the Helium Network Blockchain to
issue the resulting Data Credits to the customer.
104. As discussed in detail below, ¶¶ 206 to 220, Nova Labs has engaged in significant
efforts—including by marketing and promoting the Helium Network Blockchain and Helium
Wireless Network, and by attempting to persuade companies to use each of them—to increase Data
Credits consumption thereby increasing HNT’s value and speculative investment in HNT.
IV. NOVA LABS EXPANDED ITS OFFER AND SALE OF INVESTMENT
CONTRACTS TO A NEW DEVICE AND TWO NEW CRYPTO ASSETS.
105. Not later than April 2022, Nova Labs expanded the Helium Wireless Network from
IoT Hotspots to a second type of Hotspot, the “Mobile Hotspot,” which provides wireless
connectivity for cellular devices.  Like the IoT Hotspot, the Mobile Hotspot also receives daily
distributions of Nova Labs’ crypto assets.
106. Although Nova Labs made technical changes to the Helium Network related to
Mobile Hotspots, the value proposition to investors stayed the same:  Nova Labs offered and sold a
device to investors through which the investor obtained Nova Labs crypto assets, Nova Labs
promised to create value and demand for th ose crypto assets by building and creating demand for
the wireless network, and investors in the device and the crypto assets reasonably expected to profit
from Nova Labs’ entrepreneurial efforts.

23
107. Soon after adding Mobile Hotspots to the Helium Wireless Network, Nova Labs
made three important changes to the Helium Network’s economics and structure:  (i) Nova Labs
created two new crypto assets, MOBILE (the Helium Mobile Network Token) and IOT (the
Helium IOT Network Token); (ii) Nova Labs modified all Hotspots so that they no longer “mined”
(i.e., received distributions of) HNT—as they had for more than three years—and instead they
mined one or other of Nova Labs’ new crypto assets, MOBILE and IOT; and, (iii) Nova Labs made
MOBILE and IOT exchangeable for HNT on the Helium Network Blockchain at exchange rates
set by Nova Labs.  Thus, the value of both MOBILE and IOT is derivative of HNT.
108. Nova Labs continued to promise to use its efforts and expertise to create value and
demand for the expanded Helium Network and HNT, as well as for MOBILE and IOT.
109. These changes essentially added another layer (and layer of complexity) to the
Helium Network.  In the Helium Network’s initial iteration, described above, supra ¶¶ 45 to 99,
investors bought IoT Hotspots to obtain HNT reasonably expecting Nova Labs to create value for
the HNT resulting in investor profits.  Now, investors bought Mobile or IoT Hotspots to obtain
either MOBILE or IOT, respectively, both of which can be exchanged for HNT; and investors
reasonably expect Nova Labs to create value for the HNT, MOBILE, and IOT, resulting in investor
profits.
A. Nova Labs Created the Mobile Hotspot, MOBILE, and IOT.
110. In general, low-power devices that connect to the internet via IoT Hotspots transmit
small amounts of data and, as a result, use relatively small numbers of Data Credits.
111. Nova Labs wanted to expand the Helium Wireless Network to provide coverage to
cellular devices, such as smartphones, that transmit far larger amounts of data and, as a result,
consume far larger amounts of Data Credits to use the network, creating more value for HNT.

24
112. By no later than April 2020, Nova Labs began exploring how to expand the Helium
Wireless Network to include a type of Hotspot, called a Mobile Hotspot, that would receive
(i.e., “mine”) HNT from the Helium Network Blockchain and feature an antenna that could provide
wireless internet connectivity to cellular devices in exchange for Data Credits.
113. From October to December 2020, Nova Labs negotiated a contract with a third-
party manufacturer (“Mobile Hotspot Partner”) to try to create a Mobile Hotspot.
114. From at least January to April 2021, Nova Labs provided funding, technical,
marketing, and other support to the Mobile Hotspot Partner necessary to design and manufacture
the new device.  Among other things, Nova Labs funded a $100,000 payment to the Mobile Hotspot
Partner and Nova Labs’ engineering team worked with the Mobile Hotspot Partner, providing
technical expertise necessary for the device to run on the Helium Network Blockchain, receive
distributions of HNT, and consume Data Credits.
115. By April 2021, Nova Labs determined that the technology being developed in
partnership with the Mobile Hotspot Partner was promising, and Nova Labs’ CEO began discussing
how Nova Labs could acquire the Mobile Hotspot Partner, ensuring that Nova Labs, and not any
independent party, would be the leading designer, manufacturer, and seller of Mobile Hotspots.
116. In April 2021, Nova Labs publicly announced its partnership with the Mobile
Hotspot Partner and began to offer and sell Mobile Hotspots in partnership with and through the
Mobile Hotspot Partner.
117. Between December 2021 and February 2022, Nova Labs raised approximately $200
million from the offer and sale of its own preferred equity shares to investors in a private placement.
This capital raise—which valued Nova Labs at more than $1 billion—funded, in part, Nova Labs’
work to expand the Helium Wireless Network to run the Mobile Hotspot, offer wireless
connectivity to cellular devices, and allow cellular devices to consume Data Credits.

25
118. In March 2022, Nova Labs agreed to acquire the Mobile Hotspot Partner for more
than $30 million.  That transaction closed in August 2022.
119. Nova Labs, in partnership with and then as owner of the Mobile Hotspot Partner,
performed all work necessary to design, manufacture, and sell Mobile Hotspots, and Nova Labs
performed all work necessary to modify the Helium Network Blockchain to allow Mobile Hotspots
to receive distributions of Nova Labs’ crypto assets via the Helium Network Blockchain.
120. Shortly after creating Mobile Hotspots and beginning its offer and sale of Mobile
Hotspots that “mined” HNT, Nova Labs modified the economics of the Helium Network.
121. Until then, the Helium Network Blockchain had created between approximately two
and a half and five million HNT per month, the majority of which were distributed to owners of
Hotspots, as described above ¶¶ 51 to 68.
122. After Nova Labs expanded the Helium Network to include Mobile Hotspots,
investors in both IoT and Mobile Hotspots no longer received daily distributions of (i.e., they no
longer  “mined”) HNT from the Helium Network Blockchain.  Instead, the Hotspots mined one of
Nova Labs’ two new crypto assets, IOT or MOBILE, which were exchangeable for HNT.
123. Nova Labs performed all work necessary to create and validate the computer code
comprising IOT and MOBILE, including governing the characteristics and purposes of each of
these crypto assets; how IOT and MOBILE could be created or transferred on the Helium Network
Blockchain; when and how many IOT and MOBILE would be distributed to Hotspots and their
owners; and how transactions involving IOT and MOBILE would be recorded on the Helium
Network Blockchain.
124. Nova Labs offered and sold IoT and Mobile Hotspots to investors as a way for
those investors to invest money in exchange for receiving, via th eir    IoT and Mobile Hotspots, IOT

26
and MOBILE, with the investors’ reasonably expecting to profit from Nova Labs’ entrepreneurial
efforts to create value for IOT and MOBILE.
125. The first MOBILE was created on the Helium Network Blockchain in August 2022,
at which point Mobile Hotspots began to “mine” (i.e., receive daily distributions of) MOBILE.  The
first IOT was created on the Helium Network Blockchain in April 2023, at which point
IoT Hotspots began to “mine” (i.e., receive daily distributions of) IOT.
126. After Nova Labs introduced MOBILE and IOT, the Helium Network’s economics
worked as follows:
a. The Helium Wireless Network was divided into two “subnetworks,” one for
the IoT Hotspots and the low-power devices that transmitted data to and
received data from them (“IoT Wireless Network”) and one for the Mobile
Hotspots and the cellular devices that transmitted data to and received data
from them (“Mobile Wireless Network”).  A separate “treasury”—i.e., an
escrow for crypto assets—was established for each subnetwork.
b. Pursuant to an algorithm also designed and implemented by Nova Labs, at
least 65% of all HNT created by the Helium Network Blockchain each day
were divided between the two subnetworks, and those HNT were then
deposited into the two subnetwork treasuries.  The division of HNT between
the subnetworks was based, in part, on the amount of fees paid in Data
Credits on each subnetwork.  For example, if during a particular period, the
number of IoT Hotspots on and Data Credits consumed by the IoT Wireless
Network subnetwork was greater than the number of Mobile Hotspots on
and Data Credits consumed by the Mobile Wireless Network subnetwork
then a larger portion of the newly created HNT for that period would likely

27
be allocated to the IoT Wireless Network treasury as compared to HNT
allocated to the Mobile Wireless Network treasury.
4

c. Next, Nova Labs modified the Helium Network Blockchain so that IoT
Hotspots received daily distributions of (i.e., “mined”) IOT and so that
Mobile Hotspots received daily distributions of MOBILE, rather than HNT,
as they had each done previously.  As with HNT, an algorithm created by
Nova Labs determined the amount of IOT or MOBILE mined by any
Hotspot and received by the investor who owned it.  (Also as with HNT,
IOT are fungible and the price of all IOT goes up or down together, and
MOBILE are fungible and the price of all MOBILE goes up or down
together.)
d. Investors in IoT Hotspots who mined IOT could tender those IOT to the
IoT Wireless Network treasury in exchange for a portion of the HNT held in
that treasury.  The number of HNT received for each IOT tendered was
determined under a floating exchange rate created by Nova Labs.
e. Similarly, investors in Mobile Hotspots who mined MOBILE could tender
those MOBILE to the Mobile Wireless Network treasury in exchange for a
portion of the HNT held in that treasury.  The number of HNT received for
each MOBILE tendered was determined under a floating exchange rate
created by Nova Labs.

4
 This modified the prior process under which investors in IoT Hotspots collectively shared a
majority of all newly created HNT, supra ¶ 66.  However, HST holders, like Nova Labs and its
employees and equity investors, continued to share up to 35% of all newly created HNT, supra ¶ 80.

28
127. Investors used the Nova Labs App to tender IOT and/or MOBILE to the
respective subnetwork treasury and to exchange IOT and/or MOBILE for HNT from that treasury.
128. Both IOT and MOBILE are speculative assets that can be sold to others for cash or
other crypto   assets, such as dollars or Bitcoin, including sales on secondary markets.
129. In a June 2022 public appearance, Nova Labs’ CEO explained why Nova Labs had
modified the Helium Network so that Hotspots received (i.e., “mined”) IOT and MOBILE (rather
than HNT) and were then exchangeable for HNT under a floating exchange rate related to the
subnetworks.  He said:
Some of it [is] just to allow the economies [of each subnetwork] to
exist on their own – like people might – you know, speculators or
investors in those networks, I think want to speculate in different
ways depending on what the network is, or they might have different
desires or different visions for how this is going to go.  And so,
having separate tokens allows for all of that activity, but still accrues
value back to HNT, and sort of like, HNT is sort of the preserve
currency.
In other words, MOBILE and IOT and Nova Labs’ implementation of subnetwork treasuries,
provided additional avenues for investors to speculate on the value of the Helium Network.
130. During the relevant period, the overwhelming majority of IOT and MOBILE
obtained by investors in Hotspots was either sold for consideration (e.g., dollars), held for potential
price appreciation, or converted to HNT and subsequently sold for consideration or held for
potential price appreciation, and it was not used by investors to buy Data Credits to pay to use the
Helium Wireless Network.

29
B. Nova Labs Offered and Sold Investment Contracts Involving Hotspots and
the HNT, MOBILE, and IOT They Mined.
1. Nova Labs Offered and Sold Mobile H otspots as Securities.
131. Since April 2021, both under Nova Labs’ partnership with and after acquiring the
Mobile Hotspot Partner, Nova Labs has offered and sold investment contracts involving Mobile
Hotspots that have mined millions of HNT and/or MOBILE.
132. Nova Labs offered and sold Mobile Hotspots via its own website and through the
Mobile Hotspot Partner’s website.
133. Investors paid between approximately $250 and more than $1,000 for each Mobile
Hotspot, and an investor could purchase as many Mobile Hotspots as they desired.
134. Funds paid by investors in Mobile Hotspots were pooled by Nova Labs and used to
develop and promote the Helium Network, including to pay Nova Labs’ software engineers,
business development professionals, and marketing staff.
135. As with the IoT Hotspots, once an investor bought a Mobile Hotspot, the investor
needed only to connect the Mobile Hotspot to electricity and the internet to start receiving
distributions of HNT (and, later, MOBILE) from Nova Labs via the Helium Network Blockchain.
Throughout the relevant period, Nova Labs’ repeatedly and frequently emphasized publicly that
obtaining HNT (and, later MOBILE) from the Mobile Hotspot required little to no efforts by the
investors.
136. Nova Labs did not sell the Mobile Hotspot only to those interested in running a
wireless network let along using one, and a Mobile Hotspot generally did not require any particular
specialization or efforts of the purchaser.  Nova Labs’ publicly touted this fact.  For example, in a
May 2023 statement in a public forum, Nova Labs’ CEO wrote, “I mean, you just plug it in and turn
it on
� ������.”

30
137. Thereafter, through the Nova Labs App, a Mobile Hotspot investor could link the
investor’s “wallet” to the Helium Network Blockchain, and the Helium Network Blockchain would
distribute HNT (and, later, MOBILE) to that wallet each day.
138. Beginning no later than August 2022, Nova Labs partnered with additional third
parties to manufacture and then offer and sell Mobile Hotspots, together with the MOBILE
obtained through those Mobile Hotspots, as investment contracts.  Nova Labs oversaw,
coordinated, and controlled the sale of these Mobile Hotspots, while outsourcing the manufacturing
and shipping functions to these third parties.  In connection with these offers and sales, the third
parties made payments to Nova Labs.
139. Nova Labs promised to create value and demand for MOBILE—and for the HNT
for which MOBILE can be exchanged—such that investors continued to reasonably expect to profit
by investing in a Mobile Hotspot and obtaining the resulting distributions of MOBILE.
2. Nova Labs Continued to Offer and Sell IoT Hotspots as Securities.
140. After Nova Labs expanded the Helium Network to include Mobile Hotspots and
MOBILE, it continued to offer and sell IoT Hotspots through formal and informal partnerships
with third-party manufacturers.
141. When Nova Labs introduced IOT in April 2023, it modified IoT Hotspots so that
they no longer received daily distributions of (i.e., they no longer “mined”) HNT, and instead began
to mine IOT.
142. Between April 2023 and the present, IoT Hotspots have “mined” at least tens of
billions of IOT for IoT Hotspot investors, and IoT Hotspot investors continue to receive
distributions of IOT from Nova Labs via the Helium Network Blockchain.
143. Nova Labs has continued to promise that it will create value and demand for IOT—
and for the HNT for which both IOT and MOBILE can be exchanged—such that investors

31
continue to reasonably expect to profit by investing in an IOT Hotspot and obtaining the resulting
distributions of IOT.
C. Nova Labs Formed a Cellular Service Provider Operating on the Helium
Wireless Network and Offered Its Discovery Mapping Program as a Security.
144. In September 2022, in furtherance of its efforts to create demand for Data Credits
and, accordingly, for HNT, Nova Labs began offering a service that allowed Nova Labs to be the
largest consumer of Data Credits and a significant influence on the demand for HNT.
145. That month, Nova Labs launched Helium Mobile, a cellular phone service provider
that offers cellular phone service plans and operates, in part, by transferring its subscribers’ cellular
phone data via the Helium Wireless Network and Mobile Hotspots.
146. Helium Mobile offers cellular phone service primarily through an agreement with a
well-known national cellular service provider (the “National Provider”).  Subscribers to Helium
Mobile thus rely largely on cellular service from the National Provider, under the Helium Mobile
brand name, to send and receive voice, text, and other data on their cellular phones.
147. If, however, a Helium Mobile cellular subscriber is in range of a Mobile Hotspot, the
subscriber’s cellular phone will preferentially connect to the Mobile Hotspot to send and receive
voice, text, and other data on the cellular phone instead of using connectivity from the National
Provider.
148. When a Helium Mobile subscriber is connected to and transmits data via a Mobile
Hotspot, then Nova Labs acquires and consumes Data Credits on behalf of the subscriber to pay for
the data transfer via the Mobile Hotspot.  As a result of its Helium Mobile business, Nova Labs is
the largest consumer of Data Credits on the Helium Network.
149. Helium Mobile is the only cellular service provider operating directly on the Helium
Network and anyone can subscribe to a Helium Mobile cellular phone plan via Nova Labs’ website

32
for approximately $20 per phone line per month.  Nova Labs has sold Helium Mobile cellular phone
plans to at least 100,000 subscribers.
150. Since July 2023, and under the Helium Mobile brand, Nova Labs has offered and
sold investment contracts consisting of the Discovery Mapping Program, through which investors
obtain distributions of MOBILE.  These offers and sales of securities have not been registered.
151. Specifically, under the Discovery Mapping P rogram, an investor (“Discovery
Mapper”) purchases a Helium Mobile phone plan and agrees to tender valuable personal data to
Nova Labs—including, for example, the Discovery Mapper’s geographic location and information
concerning their usage of the Helium Wireless Network—in exchange for periodic distributions of
MOBILE.
152. The number of MOBILE that a Discovery Mapper receives from the Discovery
Mapping Program is determined by a fixed schedule and algorithm created by Nova Labs.
153. When the Discovery Mapping Program was introduced in July 2023, Discovery
Mappers did not need to do anything to obtain distributions of MOBILE other than opt into the
program using the Nova Labs App.  Moreover, the amount of MOBILE distributed to Discovery
Mappers did not depend on any action by the Discovery Mapper.  Rather, the MOBILE periodically
allotted to the Discovery Mapping Program were divided equally among all Discovery Mappers.
The size of that allotment was and continues to be set under a fixed schedule and algorithm
designed by Nova Labs.
154. Nova Labs has frequently characterized the Discovery Mapping Program as
requiring little to no effort for the Discovery Mapper.  During an August 2023 public event
promoting the Discovery Mapping Program, for example, Nova Labs’ Director of Protocol
Management said that Discovery Mapping is “super easy to enable.  All you have to do is be a

33
subscriber, get into the app, turn it on, accept the permissions, and go about your day. . . .  It’s
meant to be just always on in the background, and you shouldn’t even notice it.”
155. Discovery Mappers purchase a Helium Mobile cellular phone plan and tender their
valuable personal data to Nova Labs with the reasonable belief that they will profit from the
MOBILE they receive in exchange, including due to Nova Labs’ efforts to create demand and value
for MOBILE and the HNT for which MOBILE may be exchanged on the Helium Network
Blockchain.
156. Nova Labs aggregates and analyzes the subscriber personal data it receives from
Discovery Mappers, which gives Nova Labs a singular view of usage of the Helium Network and
allows it to make strategic decisions about geographies that Nova Labs’ believes are underserved by
Mobile Hotspots.  Nova Labs then creates economic incentives for existing and potential investors
to purchase and/or deploy Mobile Hotspots in those areas.
157. Nova Labs pools the funds paid by Discovery Mappers and uses them to promote
and run the Helium Network, including related to Helium Mobile’s Data Credit consumption.
158. Between July 2023 and the present, more than 45,000 Helium Mobile subscribers
have been Discovery Mappers who participate in the Discovery Mapping Program, and they have
“mined” at least tens of millions of MOBILE.
5

V. NOVA LABS LED INVESTORS TO REASONABLY EXPECT TO PROFIT
FROM HOTSPOTS AND DISCOVERY MAPPING.
159. Given the information Nova Labs publicly disseminated, Hotspot investors and
Discovery Mappers who obtained HNT, IOT, and MOBILE (collectively, “Investors”), reasonably

5
 Nova Labs has recently said that the economics of the Helium Network may change again soon,
including to remove IOT and MOBILE and focus only on HNT

34
expected that, due to Nova Labs’ efforts, the Investors would profit from their purchases,
participation, and the resulting crypto assets.
160. Nova Labs marketed extensively its own entrepreneurial, managerial, and operational
efforts to create demand for the Helium Network and further marketed how those efforts would
increase demand for and value of HNT; emphasized the economic returns that Investors could
reasonably expect by buying IoT and Mobile Hotspots and participating in Discovery Mapping;
promoted a secondary trading market in which Investors could monetize their HNT, MOBILE, and
IOT; and touted its efforts to maintain, modify, and market the Helium Network.
A. Nova Labs Emphasized that HNT Was Designed to Increase in Value
Through Nova Labs’ Entrepreneurial Efforts.
161. Since April 2019, Nova Labs has frequently said publicly that it designed the Helium
Network to use and rely on HNT, and that HNT’s value would and did increase as Nova Labs built
and created demand for the Helium Wireless Network.
162. In those statements, Nova Labs has often referred to a so-called “Burn-Mint
Equilibrium” mechanism that it built into the Helium Network and said that under this mechanism:
a. A user transferring data via the Helium Wireless Network must pay fees in
Data Credits, in amounts that increase as the amount of data increases;
b. The user can only obtain Data Credits to pay those fees by first buying HNT
and then “burning” that HNT in exchange for Data Credits (i.e., destroying
the HNT and removing it from circulation).
c. If demand for Data Credits increases to pay for increased data transfer via
the Helium Wireless Network, demand for HNT increases and supply of
HNT simultaneously decreases, pushing up the price for HNT.
d. If demand for Data Credits recedes, demand for HNT also recedes and,
because the Helium Network Blockchain creates new HNT each day under a

35
fixed schedule, the supply of HNT increases, creating an excess supply of
HNT that depresses the price for HNT.
163. Nova Labs and its business development employees are responsible for sales,
partnerships, marketing, and technology integration for large enterprise customers who might deploy
significant numbers of devices across the Helium Wireless Network and, by deploying those devices,
consume Data Credits and burn HNT.  (By contrast, investors have no practical ability to engage in
business development activities with large enterprise customers, nor the expertise and funds
necessary to do so.  Instead, they depend entirely on Nova Labs’ entrepreneurial and managerial
skills and efforts in attracting those customers.)
164. Additionally, when Nova Labs created Helium Mobile, Helium Mobile became the
largest acquirer and consumer of Data Credits by orders of magnitude.
165. Thus, the Helium Wireless Network relies heavily, if not totally, on Nova Labs for
the amount of data flowing through the Helium Wireless Network, the number of Data Credits
needed to pay for that data, and the number of HNT demanded and destroyed for the Data Credits.
166. Under the Burn-Mint Equilibrium mechanism, if Nova Labs persuades large
enterprises to use the Helium Wireless Network or attracts customers to its Helium Mobile service,
then data usage increases, more Data Credits are needed, and more HNT are demanded and also
burned, pushing up the price of HNT—equally for each HNT holder.  By contrast, if Nova Labs
fails to persuade large enterprises to use the Helium Wireless Network or to attract customers to its
Helium Mobile service, then fewer users adopt the Helium Wireless Network, data usage is limited,
fewer Data Credits are purchased, fewer HNT are demanded and burned, and the value of HNT
decreases—equally for each HNT holder.
167. Thus, the Burn-Mint Equilibrium links the value of HNT (and IOT and MOBILE,
which can be exchanged for HNT) to Nova Labs’ entrepreneurial efforts in creating demand for the

36
Helium Wireless Network and Data Credits, and, with it, the financial fortunes of Investors, defined
supra ¶ 159.
168. As Nova Labs’ CEO explained internally, Nova Labs’ primary focus as a business is
driving “usage of data credits,” even if Nova Labs fails to earn revenue or loses   money on its sales
of Hotspots, because increased demand for Data Credits increases HNT’s value.
169. Nova Labs’ executives frequently made public statements about the effect of the
Burn-Mint Equilibrium and Nova Labs’ efforts to drive usage of the Helium Wireless Network and
create demand for Data Credits.  These statements, and the structure of the economics of the
Helium Network more generally, led Investors reasonably to view their investments as having the
potential for profit.
170. For example, in June 2019, Nova Labs’ COO said publicly that Nova Labs was
“focus[ed] on usage of the network,” adding, “Get Data Credits to flow in mass volumes equates to
high usage of the network. . . .  [Nova Labs] is only focused on that.”  He added that Nova Labs was
“maniacally focused on working with large enterprises on use cases” on the Helium Wireless
Network—i.e., persuading large businesses to use the Helium Wireless Network, acquire and
consume large amounts of Data Credits, and create buy-side demand for HNT.
171. Also in June 2019, Nova Labs’ CEO published a blog post saying Nova Labs is
“actively working with companies who are trying to solve problems with [the Helium Network] . . .
we need to continue moving forward by providing nationwide coverage for the US [and] partnering
with customers to drive demand for network usage . . . .”
172. In a September 2019 post to a public Telegram channel, a cloud-based messaging
program and broadcasting tool, devoted to the Helium Network, Nova Labs’ CEO explained that,
“as more [HNT] is burned to turn in to [Data Credits], we’d expect the market value of [HNT] to
increase.”

37
173. In a December 2019 public appearance, Nova Labs’ CEO reiterated that demand for
Data Credits influenced the price of HNT and could be profitable for IoT Hotspot investors,
And so the demand for Data Credits will ultimately act as sort of a
bigger and bigger sync for [HNT], right?  As more devices use the
network, more [HNT] have to be burned on a regular basis in order
to create Data Credits that get used on the network. . . .  And so our
model tries to sort of like – basically, if no one’s using the network,
there’s going to be a ton of inflation and [HNT’s] going to be less
valuable.  If a lot of people are using the network, there’s going to be
deflationary pressure and that should increase the value of [HNT].
174. In April 2020, Nova Labs’ COO explained during a public appearance that Nova
Labs uses its entrepreneurial efforts to create demand for the Helium Wireless Network among
enterprise customers by “helping enterprises stand up their capability, . . . leveraging blockchain,
leveraging the network”; and the COO further highlighted   that Nova Labs “can provide engineering
work needed to customize certain parts” of customer products to use the Helium Network.
175. In June 2020, Nova Labs’ CEO echoed that Nova Labs’ was using its entrepreneurial
efforts to create demand for Data Credits, saying that Nova Labs’ “primary purpose is to promote
usage on the network in the form of wireless data transfer and Data Credits.”
176. During an April 2021 public appearance, Nova Labs’ COO highlighted that Nova
Labs has a “dedicated business development team” who are “all focused on getting usage, getting
users on the network.”
177. In May 2021, Nova Labs’ COO publicly promoted Nova Labs’ business
development and marketing efforts and their effect on the demand for Data Credits:
Most of [my work] is outbound go-to -market, sales, marketing,
business development. . .  The usage [of the Helium Wireless
Network] is crucial. . . .  We do things like webinars, we do blogs, we
talk about and we highlight customers that join the network and use
the network. . . .  We track that very closely, we have an amazing
team of people doing that . . . to go after this to go and increase our
usage of the network. . . .   As more and more users pile on, the Data
Credit piece will start going up and then it will just tip the scales
where passing data is more important.

38
178. During a November 2021 public appearance, Nova Labs’ COO emphasized that
Nova Labs had designed HNT to be an asset with speculative value tied to Data Credits and usage
of the Helium Wireless Network, saying,
Part of why we built a two-token model [i.e., HNT and Data Credits]
is because the mined cryptocurrency, HNT, we expected that to be
highly volatile.  As much as it can go up, we understand that it can go
down just as much. . . .  For this bootstrap of a network [to a crypto
asset] to work, there has to be value, the incentive has to exist and so
in the early days, it’s highly speculative and it i s dependent on the
value of HNT. . . .  But as time goes on and as usage [of the Helium
Wireless Network] comes, Data Credit demand will grow, and as data
demand grows, Data Credit demand grows, HNT has to be burned.
That means the supply of HNT will become scarcer and scarcer. . . .
That should drive HNT value over time purely based on utility.
179. In June 2022, on Nova Labs’ public Discord channel, a communications platform
with topic-based conversation spaces, Nova Labs’ CEO again emphasized that increased usage of
the Helium Network would increase investment returns to IoT Hotspot owners:  “Ultimately the
network needs usage, it will drive the value of HNT up which benefits everyone.”
180. When Nova Labs added Mobile Hotspots, created and began issuing IOT and
MOBILE, and created its Helium Mobile cellular service provider, see supra ¶¶ 144 to 158, its
executives emphasized   that these developments increase demand for and usage of Data Credits.
181. For example, in a November 2022 public appearance, Nova Labs’ CEO explained
why Helium Wireless Network usage and the resulting destruction of HNT would benefit holders of
HNT, IOT, and MOBILE,
[IOT and MOBILE] can be redeemed for HNT. . . .  The reason that
that makes sense or that works is that every single network on
Helium . . . requires Data Credits to use. . . .  The only way to acquire
Data Credits is to destroy HNT, so as more and more data is used on
the network, more and more HNT is destroyed.  So as the circulating
supply of HNT decreases, we expect that the value of the network
increases. . . .  So it doesn’t matter if you’re an IOT holder.  It doesn’t
matter if you’re an HNT holder. . . .  Ultimately, what you want to
see on the network is utility and growth and usage because it results
in more HNT being destroyed. . . .

39
It is literally the cliché which I don’t love of rising tides lift all boats.
That’s really what it’s all about.  It’s like how do we increase utility
and usage of the network all across the board because it will benefit
everyone that’s involved in the Helium ecosystem.
182. Similarly, during a public appearance in September 2022, Nova Labs’ COO said,
Building out usage and ecosystem.  That’s crucial, and that’s
something that [Nova Labs’ CEO] and I and the rest of the team at
Nova Labs now, we’ve been really thinking about is how do you get
that usage up, how do you get the Data Credits going.  How do you
get, not like thousands of sensors, but how do you get usage in the
form of millions of devices.  That’s why 5G, cellular, LTE is so
attractive to us because we believe if we can get millions of users to
use their phones on top of the Helium Network, that creates a
massive usage of Data Credits, that’s burning HNT . . . that’s where
the value comes from.
B. Nova Labs Promoted the Investment Returns Hotspot Buyers Earned.
183. Even before Nova Labs’ launched the Helium Network in July 2019, it understood
that potential investors in IoT Hotspots were focused on the investment return they would obtain
from the purchase.
184. For example, in a May 2019 internal communication, Nova Labs’ CEO said to other
Nova Labs executives, “[T]here’s no way to escape from the obvious ROI questions,” i.e., investors’
questions about the “return on investment” they would earn by buying an IoT Hotspot to get HNT.
185. Nova Labs’ executives frequently told potential investors that investment returns on
purchases of IoT or Mobile Hotspots—and the resulting HNT, IOT, and MOBILE—could be
substantial, and underscored   for those potential investors that it was reasonable to believe that they
could profit by investing in IoT and Mobile Hotspots and participating in Discovery Mapping and
thereby obtaining HNT, IOT, and MOBILE.
186. In a July 2019 public appearance, Nova Labs’ CEO explained why an investor
should be interested in buying an IoT Hotspot:  “The potential of owning a piece of [Nova Labs’]
network or being your own network operator”—i.e., owning an IoT Hotspot—“is potentially very

40
lucrative.”  He added that Nova Labs’ internal “economic models” show that “the opportunity to
participate is substantial, and that’s sort of the rationale for really doing any of this.”
187. In a January 2020 public appearance, Nova Labs’ CEO explained to potential IoT
Hotspot investors that “if the network succeeds in a huge way, you should be rewarded in a huge
way for helping making that happen.  Tokens are a great way to enable a new type of capital
formation that is tied to the value put in, and the long-term success.”
188. In a July 2020 e-mail to a potential investor, Nova Labs’ CEO characterized IoT
Hotspots as a speculative investment in IoT technology and the Helium Wireless Network,
[Nova Labs] earned approximately 600,000 HNT every month –
today those HNT are trading around $0.50/ea., but we’d expect
substantial growth in the value as the network is more utilized. . . .
One way of thinking about HNT is an IoT ETF [Exchange Traded
Fund] – effectively an underlying asset that should appreciate in value
as IoT activity increases, and even more so as that activity occurs on
the Helium Network.
189. In March 2021, Nova Labs directed participants in Nova Labs’ public Discord
channel to review an investment analysis of the IoT Hotspot by a well-known crypto asset
investment firm.  That analysis says,
On average, at the current $6.92 market price for HNT, a new
hotspot pays for itself in about 10 days. . . .  This average payback
period is very attractive, and that is why the network is growing so
fast. . . .  What if we assume the network grows to 100,000 hotspots
in 2021?  Then the average hotspot would earn 1.1 HNT per day. . . .
We believe it is reasonable to assume the HNT price will be higher in
the world of [100,000 hotspots] as the Helium Network gains more
awareness and becomes more useful.  This higher price will mean
better ROI for Helium hotspot owners, which will further drive
network growth.
Nova Labs’ CEO told participants in that public Discord channel that the analysis was “fine work.”
190. In a November 2021 statement on Nova Labs’ public Discord channel, Nova Labs’
CEO highlighted the investment returns earned by IoT Hotspot investors:  “The current returns are
already insanely high.  The only thing that will keep happening is that unrealistic hosts [sell] to

41
realistic hosts. . . .  [P]eople who think 0.2/HNT [per] day is ‘terrible’ will sell to people who realize
it’s like 200% APR [annual percentage yield].”
191. In a March 2022 public appearance, Nova Labs’ CEO characterized IoT Hotspots as
a good financial investment, saying, “Early hotspot hosts by today’s HNT value made an absurd
amount of money,” adding that “HNT mining is still one of the most high ROI [return on
investment] miners that you can participate in.”
192. In a July 2023 statement on Nova Labs’ public Discord channel, Nova Labs’ CEO
again emphasized investment returns earned by IoT and Mobile Hotspot investors, saying, “I just
try and remind people that getting 10% APY [annual percentage yield] on anything is a ridiculously
good return.”
193. In December 2023, Nova Labs’ CEO and its COO each publicly posted on social
media video clips of Discovery Mappers touting their investment returns from the Discovery
Mapping Program.  Also in December 2023, Nova Labs’ CEO reposted on social media a statement
saying, that Nova Labs “unveiled an unlimited $20 per month phone plan yesterday . . . [The price
of t]he Network’s $HNT token, which incentivizes infrastructure providers, is up 40% in
anticipation that this may be the network’s mainstream moment.”
C. Nova Labs Promoted Secondary Trading of HNT, IOT, and MOBILE,
and Actively Created a Secondary Trading Market.
194. Since at least July 2019, Nova Labs has undertaken significant efforts to create and
promote secondary trading markets for HNT, IOT, and MOBILE.
195. Given Nova Labs’ secondary market efforts, and its promotion of them, Investors
further reasonably expected to profit from investing in IoT and Mobile Hotspots and buying phone
plans and tendering personal data to participate in Discovery Mapping, and thus obtaining HNT,
IOT, and MOBILE.  Indeed, the ability to sell investments in liquid secondary markets is an

42
important consideration for investors determining whether to buy securities because it represents
one way in which they can realize profits from their investments.
196. In the months after Nova Labs launched the Helium Network, its executives and
personnel emphasized in public statements that HNT could be sold, and HNT holdings monetized,
via over-the-counter trading groups in messaging applications, such as Telegram.  Nova Labs also
highlighted to investors that it had designed the Helium Network Blockchain to allow an HNT
holder to burn some or all of their HNT in exchange for Data Credits and simultaneously assign
those Data Credits to a third party.  Nova Labs explained that this feature allowed an HNT holder
to monetize their HNT by charging for the assignment.  That is, the holder of HNT could obtain
consideration from a third party (e.g., dollars or Bitcoin) in exchange for the HNT holder agreeing to
burn some portion of their HNT holdings and instructing the Helium Network Blockchain to assign
the resulting Data Credits to the third party.
197. By 2020, Nova Labs began extensive efforts to cause HNT to be listed and available
for secondary trading on multiple crypto asset trading platforms.
198. In early 2020, Nova Labs management told its Board of Directors that it was
negotiating with three large crypto asset trading platforms to list HNT for trading and that such
listings would be a “watershed event” for investors in IoT Hotspots.  This is because the ability to
trade HNT on such platforms would allow investors to profit by selling their HNT.
199. For example, between February and June 2020, Nova Labs’ CEO negotiated an
agreement to list HNT for trading on two well-known crypto asset trading platforms.
200. As preconditions for such listings, the trading platforms required technical assistance
and information necessary to make HNT available to trade; substantial payments of cash; transfer of
100 HST; and promises that the market for HNT would not be manipulated.  Nova Labs provided

43
th at technical assistance and HST (which, in turn, would provide HNT in perpetuity, and funded at
least $130,000 in payments.
201. Nova Labs then publicized that HNT had been listed for trading on those two
crypto asset trading platforms.
202. In addition to causing HNT to be listed on crypto asset trading platforms, Nova
Labs paid well-known crypto marketers, influencers, and websites to promote HNT, IOT, and
MOBILE to the public.
203. For example, between July and October 2020, Nova Labs’ COO negotiated an
agreement with a popular website focused on crypto asset markets under which the website agreed
to feature HNT prominently and pay rewards to its users in exchange for their engagement with
HNT-related website content.  Nova Labs paid the website approximately $100,000 worth of HNT
for this promotional service.
204. In September 2020, Nova Labs signed a contract with a market maker—a trading
firm that provides continuous liquidity for an asset on the secondary market by quoting both buy
and sell orders—to create liquidity in the secondary trading market for HNT, allowing investors to
monetize the HNT that they received via their IoT Hotspots.
205. Under that contract, Nova Labs provided the market maker with 200 HST and
millions of additional HNT to facilitate the market making and the market maker agreed to provide
liquidity for HNT on all crypto asset trading platforms for a more than two-year period.

44
D. Nova Labs Devoted Substantial Resources to Maintaining, Modifying, and
Marketing the Helium Network and It Touted Those Efforts.
1. Nova Labs Engaged in Extensive Software Engineering Work
to Ensure That the Helium Network Operates.
206. Investors understood that the success of their investments depended entirely on
Nova Labs’ efforts to develop and maintain the Helium Network—including the Helium Network
Blockchain and Helium Wireless Network—so that it functioned reliably.
207. Between at least July 2019 and April 2023, the Helium Network ran on Nova Labs’
bespoke blockchain, the Helium Network Blockchain.  During that time, for example, all
distributions of and transactions in HNT occurred via that blockchain.
208. Nova Labs employed at least thirty software engineers and other staff to monitor the
functionality of the Helium Network Blockchain and to fix technical issues that regularly arose in the
blockchain, including by writing, validating, and deploying computer code, among other things.
209. Nova Labs routinely emphasized that Investors were dependent on Nova Labs’
engineering team to ensure that the Helium Network, Helium Network Blockchain, and Helium
Wireless Network continued to operate.
210. For example, during a public appearance in February 2021, Nova Labs’ CEO
explained that only Nova Labs’ software engineers had the ability and security permissions to make
technical changes to the Helium Network Blockchain and that “in all of these projects”—i.e.,
blockchain projects like the Helium Network—“the core engineering team really, that’s who runs
this” and that Nova Labs’ engineering team “happen to be the only people who know how the hell
this thing works, because we built it.”
211. As another example, in April 2021, Nova Labs’ CEO reaffirmed Nova Labs’
engineering expertise, which was necessary to work on and upkeep the Helium Network generally,
saying publicly, “We’ve been hiring a little bit, the kind of expertise that we need is extremely hard to

45
find, both on the programming language we chose, but in general developing, like, layer one
blockchain things requires a certain level of distributed systems experience and knowledge that’s
generally in pretty short supply.”
212. In a January 2022 public appearance, Nova Labs’ COO reaffirmed the need for the
expertise of Nova Labs’ engineering personnel to keep the Helium Network afloat,
[Nova Labs] is always open-minded about what we could do and how
we can advance and evolve the [Helium Network] blockchain. . . .
Believe it or not, it’s pretty hard to do that with 50 people in the
company, 30 of whom are engineers, right?  We literally have 30
engineers, so it’s a lot to take on for 30 people.  We’re trying [to hire
more] but it’s just a very specific skill set and we have a very highly
specialized language that we use in Erlang, so it’s tough because
there’s only so many out there that can do this.
213. In May 2022, one of Nova Labs’ equity investors (who was also one of the largest
HNT investors) observed, “The network is valuable because there are people who are writing the
code to make this possible.”  The “people” writing the code were Nova Labs’ employees.
214. During a public appearance in September 2022, Nova Labs’ CEO described the
substantial work necessary to ensure that the Helium Network Blockchain (and, thus, the Helium
Network) continued to operate:
It takes an enormous amount of our engineering resources, we spend,
I don’t know—it’s got to be 70% plus of our engineering time to date
has been firefighting what I would call problems with the [ Helium
Network Blockchain] just because we made some design decisions
that I think were good ones, at the time, but didn’t scale at all.
215. Nova Labs was solely responsible for the software engineering work necessary to
modify and fix the Helium Network Blockchain, without which, the blockchain would have halted
or failed.
216. Nova Labs also controlled modifications to the Helium Network, including the
Helium Network Blockchain.  Since the launch of the Helium Network, Nova Labs proposed nearly

46
all changes to the Helium Network Blockchain, played the central (and often sole) role in approving
those changes, and then performed all work necessary to implement the modifications.
217. Among many other things, Nova Labs repeatedly changed the number of HNT that
a Hotspot investor would receive; determined the value of Data Credits and the sources of
information used to determine the Data Credit-HNT exchange rate; created MOBILE and IOT as
part of the Helium Network; added new types of devices, called “validators,” that could act as nodes
running the Helium Blockchain; determined how validators were compensated for providing this
service; determined which third parties were permitted to manufacture Hotspots; and, in April 2023,
migrated   Nova Labs’ bespoke Helium Network Blockchain (and all data comprising that blockchain)
to run on a third-party blockchain (“Third-Party Blockchain”).
218. After each such change, of which the above are merely a few examples, Nova Labs
publicly touted the change to Investors as work Nova Labs had done.
219. Even after Nova Labs migrated its bespoke Helium Network Blockchain (and all
data comprising that blockchain) to run on a Third-Party Blockchain, Nova Labs continued to be
the central actor maintaining and modifying the computer code comprising the Helium Network.
As Nova Labs’ CEO said at the time of the migration:  “We’re still extremely committed to being
the core development team for the Helium network, that’s never going to change.”
220. Until very recently, no one outside of Nova Labs has had security permissions
necessary to make any technical changes to the Helium Network.  Thus, through at least the end of
2022, Nova Labs and its employees wrote nearly all computer code necessary to maintain, update,
and modify the Helium Network.  Nova Labs and its employees continue to be the core
development team for the Helium Network.

47
2. Nova Labs Engaged in Extensive Business Development and
Marketing  Work to Promote the Helium Network.
221. Nova Labs has engaged in substantial entrepreneurial efforts to market and promote
the Helium Network and to attempt to persuade enterprise customers to adopt the Helium Network
technology.  Nova Labs has also touted these efforts to Investors.
222. The value of Investors’ investments depended on Nova Labs’ efforts to develop a
user base for the Helium Wireless Network, including in the form of large enterprise customers who
would adopt the Helium Network, create demand for Data Credits, and drive up the demand for,
and price of, HNT—as Nova Labs publicly explained to potential investors.
223. For example, in October 2019, Nova Labs’ COO described on Nova Labs’ blog how
Nova Labs was trying to develop relationships with, and use cases for, large enterprise customers
and to persuade them to adopt the Helium Network:
We’re continually performing real-world tests under a broad range of
conditions to provide insights about the network, including [the]
range [of IoT Hotspot wireless coverage].  The range is specifically
essential for companies who want to track assets.  This use case is in
high demand as it allows companies to accurately track their fleets (of
trucks, scooters, etc.) in real-time without cellular. . . .  We continued
the internal tests but expanded to working with customers to
demonstrate the range and stability of the network in a wide range of
conditions specific to their use cases.
224. In a December 2019 public social media post, Nova Labs’ COO touted that Nova
Labs was “spending money on ads to recruit more hotspot hosts and to generate awareness” and
that the “combo of our online efforts, along with PR, and content is working.  If it wasn’t working,
we would not be doing it.”  He added that “[g]etting users on the network is a long lead time effort.
We actually started the effort about 1 year ago, before the network even existed.”
225. In a public appearance in June 2020, Nova Labs’ Business Development VP
emphasized its extensive work to persuade large enterprise customers to use the Helium Network,

48
The demand side, which are enterprises, companies like, Nestle, for
example, that use the Helium network as an alternative to cellular
networks to send data. . . .  2020, for us, is the year of sort of building
out the demand.  We’re doing pretty much every effort possible to do
this.  We’ve got a full Enterprise sales team that’s doing all sorts of
enterprise sales things like outbound communications, going after
companies. . . .  In the last 45 days alone, we’ve closed 15 enterprise
customers, people who are using the network and have every
intention of building real products. . . .  On the enterprise names, by
the way, our marketing team is about to start just a fairly consistent
blitz of putting names out there, actual companies with stories and
really nice narratives of around why they’re using Helium.
226. In March 2021, Nova Labs’ Business Development VP again emphasized publicly its
marketing and business development work, saying that his role is to get “big companies” to put
devices on the Helium Wireless Network and further highlighting Nova Labs’ focus on working
with those companies:
We have a dedicated team of what we call BDRs or Business
Development Representatives who actually go out and do active
outbound prospecting for network users, so if you’re a customer of
[Nova Labs] . . . we’ll put together outbound campaigns and we’ll do
cold calling for you, going after a target and try to find the person
that might buy your product. . . .
227. In September 2021, Nova Labs’ Business Development VP said publicly that it
“continues to bring these massive companies into the ecosystem” and promised potential investors
that “thousands more companies like this are going to be deploying trillions of sensors” on the
Helium Wireless Network.
228. Investors reasonably expect to profit from Nova Labs’ entrepreneurial engineering,
business development, and marketing efforts.
229. While Nova Labs formed a non-profit entity, the Helium Foundation, that it
purportedly intended to eventually be an “independent” third-party that could perform engineering,
business development, and marketing work related to the Helium Network, to the extent the Helium
Foundation has performed any such work, it has been limited.

49
230. The Helium Foundation did not exist for nearly one year after Nova Labs launched
the Helium Network.  Then, for more than two years after the Helium Foundation was formed, it
had no employees or operations and performed no work maintaining or improving the Helium
Network.  Even after the Helium Foundation began to hire employees, it continued to rely on Nova
Labs to perform all or nearly all software engineering and marketing work for the Helium Network.
231. In any event, the Helium Foundation is not and has never been independent from
Nova Labs.  Through at least mid-2024, the Helium Foundation had no meaningful sources of
revenue other than grants from Nova Labs, and Nova Labs has effectively controlled it.
VI. NOVA LABS MADE FALSE AND MISLEADING STATEMENTS TO
INVESTORS IN IOT HOTSPOTS AND NOVA LABS’ EQUITY.
232. Nova Labs also made materially false and misleading statements, both to those who
invested in IoT Hotspots and those who purchased Nova Labs’ preferred equity shares, about large
enterprise customers that Nova Labs claimed were using Nova Labs’ Helium Network that, if true,
would increase Nova Labs’ value and the value of HNT.
233. In truth, however, those enterprise customers were not using the Helium Network.
A. Nova Labs’ Acquisition of Large Enterprise Customers Was Central to the
Value Proposition of Nova Labs and HNT.
234. As described above, Nova Labs emphasized publicly that a focus of its business was
driving usage of the Helium Wireless Network and creating demand for Data Credits.  As Nova
Labs explained, by driving that usage and creating that demand, Nova Labs would simultaneously
create demand for HNT (which are necessary to acquire Data Credits) and reduce supply of HNT
(which must be destroyed to acquire Data Credits), causing HNT’s value to increase.
235. To drive wireless usage and demand for Data Credits, Nova Labs tasked its
marketing and business development teams with persuading large enterprise customers—referred to

50
within Nova Labs as “Logos”—to use the Helium Wireless Network, acquire and “burn” HNT, and
consume Data Credits.
236. Nova Labs also believed it would benefit from associating with well-known Logos.
Such association would differentiate Nova Labs from other crypto asset- and blockchain-based
projects, give a sense of legitimacy to it and its nascent technology, persuade other enterprise
customers to use the Helium Wireless Network, and obtain publicity for Nova Labs.
237. Nova Labs knew that Logos were important to actual and potential investors,
including potential IoT Hotspot investors and potential investors in Nova Labs’ equity shares.
238. In a September 2019 discussion between Nova Labs’ CEO and its COO, its CEO
explained that “smart” investors would consider which, if any, Logos were using the Helium
Network, saying that Nova Labs is “definitely going to need either logos or utility or both soon,
although I’d expect [IoT Hotspot investors] to be more rabid about [secondary trading on
exchanges] in the short term . . . the smart ones will be thinking long term and that means logos
then utility.”
239. In a subsequent discussion between Nova Labs’ COO and two of Nova Labs’
business development executives, the COO emphasized the importance of Logos to Nova Labs’
value proposition:  “[W]e need to see more logos and more usage of the network.  This is really it
for [Nova Labs].  It’s get it done or go home.”
240. Then, Nova Labs’ COO created an incentive compensation structure for Nova Labs’
business development team that was tied directly to whether the team persuaded Logos to use the
Helium Network and acquire and consume Data Credits.
241. Nova Labs used Logos to promote its offering and sale of IoT Hotspots and the
Helium Network generally.

51
242. Nova Labs also used its purported relationships with Logos to persuade institutional
and other accredited investors to buy $200 million of Nova Labs’ preferred equity shares as part of a
private placement between December 2021 and February 2022 (“Series D Fundraise”).
243. In connection with its offer and sale of IoT Hotspots and in its pitches to potential
investors in the Series D Fundraise, Nova Labs repeatedly represented that three particular large and
established companies were associated with Nova Labs:  Swiss multinational food conglomerate
Nestlé S.A. (“Nestlé”); American transportation company Lime, formerly known as LimeBike
(“Lime”); and American software company Salesforce, Inc. (“Salesforce”).
244. Specifically, between mid-2019 and 2022, Nova Labs and its executives repeatedly
told actual and potential investors that Nestlé, Lime, and/or Salesforce were “currently using,” were
“users” of, or “relied on” the Helium Network, and Nova Labs used those companies’ names and
corporate imagery throughout its website and in its promotional materials.
245. Nova Labs’ and its executives’ repeated use of Nestlé’s, Lime’s, and Salesforce’s
names and corporate imagery suggested to actual and potential investors that those companies’
adoption of and/or trust in the Helium Network would inure to the investors’ benefit, including
because those companies would deploy sensors on the Helium Wireless Network and acquire and
destroy HNT to obtain Data Credits to do so.
246. Nova Labs’  and its executives’ representations concerning Nestlé, Lime, or
Salesforce were materially false and misleading.  None of those companies were then “users” of or
were then “currently using” the Helium Network, which Nova Labs and its executives knew or
recklessly disregarded.
247. As explained below—and as Nova Labs and its executives knew or recklessly
disregarded—each of Nestlé, Lime, and Salesforce had only conducted very limited tests of certain
Nova Labs component hardware; those tests largely occurred months and years before the launch of

52
the Helium Network; and none of these limited tests resulted in any of the companies adopting any
Nova Labs technology or becoming “users” of the Helium Network.  Both Nestlé and Lime
ultimately issued cease-and-desist letters to Nova Labs demanding that it stop using their names.
B. Nova Labs’ Actual Contact with Nestlé, Lime, and Salesforce Was Limited.
248. Nova Labs’ actual interactions with each of Nestlé, Lime, and Salesforce was limited.
249. Nova Labs interacted with Nestlé in 2018.  This was before Nova Labs had pivoted
its business to blockchain technology and crypto assets, before it had manufactured IoT Hotspots,
and before it had launched the Helium Network Blockchain.
250. That year, Nestlé ReadyFresh, a division of Nestlé that delivers water to consumers,
tested certain Nova Labs component hardware in a small subset of its water coolers as a possible
way to monitor consumers’ water levels and anticipate their water delivery needs.
251. Nestlé’s test of Nova Labs component parts—something wholly different than the
Helium Network Blockchain and Helium Wireless Network—ended no later than 2018.  After that
test, Nestlé did not enter into any deal with Nova Labs and did not adopt or use Nova Labs’
technology, which Nova Labs and its executives knew or recklessly disregarded.
252. Nova Labs’ interactions with Lime were similarly short-lived, limited in scope, and
occurred before the launch of the Helium Network.  Those interactions consisted of a
demonstration, on one day in February 2019 and a second day in March 2019, during which Nova
Labs showed two Lime employees that certain Nova Labs component hardware could be strapped
to Lime scooters to track those scooters’ locations within a few blocks in San Francisco.
253. Nova Labs’ relationship with Lime ended with that demonstration.  Lime did not
enter into any deal with Nova Labs and did not adopt or use Nova Labs’ technology, as Nova Labs
and its executives knew or recklessly disregarded.  In fact, by July 2019, Nova Labs’ COO
complained to one of Nova Labs equity investors that his contact at Lime was no longer at the

53
company, that Nova Labs had been “lost in the shuffle,” and that the attempt at business
development had hit a dead end.
254. Like Nestlé and Lime, Salesforce conducted a limited test of Nova Labs’ technology,
which it never adopted.
255. In early 2020, Nova Labs provided one of Salesforce’s more than 50,000 employees
with Nova Labs component hardware and that Salesforce employee built a prototype employee
badge scanner incorporating that hardware.  That employee then tested the prototype to show that it
could scan Salesforce employee badges and transmit badge information to the internet using the
component hardware.  When the Covid pandemic began in March 2020, however, that testing
stopped.  As did Nova Labs’ relationship with Salesforce.
256. Salesforce never became a user or customer of Nova Labs, and never relied on or
adopted Nova Labs’ technology, as Nova Labs and its executives knew or recklessly disregarded.
257. Nova Labs and its executives knew or recklessly disregarded that Nova Labs had
never entered into any deal with Nestlé, Lime, or Salesforce to purchase or use a Hotspot, acquire
HNT, buy or use Data Credits, or to use the Helium Wireless Network.
258. Nova Labs’ internal documents confirm its understanding that none of Nestlé, Lime,
or Salesforce were Nova Labs clients or “users.”  For example, by October 2019, internal Nova
Labs reports detailing its potential deal pipeline—received and reviewed by Nova Labs’ CEO, COO,
and Business Development VP—assessed its likelihood of converting Salesforce to be a Nova Labs’
customer in a future deal at fifty percent, the likelihood of converting Lime at five percent, and
completely omitted Nestlé.  In other words, Nova Labs’ executives knew that none were then
customers, or relying on   or using Nova Labs’ technology, including the Helium Wireless Network.
259. In June 2020, when Nova Labs’ COO suggested to Nova Labs’ CEO that they use
Nestlé’s and Lime’s names to promote the Helium Network because those companies were

54
“marquee names,” Nova Labs’ CEO responded, “Yea, although the challenge is going to be no one
has deployed anything yet.”  Around the same time, Nova Labs’ COO told Nova Labs’ CEO that
the risk of improperly using Lime’s name to promote the Helium Network was low because the
people at Lime who knew what had or had not happened between Nova Labs and Lime were no
longer employed at Lime, saying, “they also fired all their PR people so no one will challenge us.”
260. Although Nova Labs and its CEO, COO, and Business Development VP knew or
recklessly disregarded that Nestlé, Lime, and Salesforce had not adopted and had not become
“users” of Nova Labs’ technology, they repeatedly said the opposite.
C. Nova Labs’ Repeated False and Misleading Public Statements
About Nestlé, Lime, and Salesforce
261. Nova Labs repeatedly made false and misleading statements concerning its and the
Helium Network’s relationships with Nestlé, Lime, and Salesforce on its website, in press releases
and marketing materials, in interviews, and in public appearances.  Nova Labs and Nova Labs’
executives knew or recklessly disregarded that these statements were false and misleading.
1. Nova Labs’ False and Misleading Statements on Its Website
262. Nova Labs’ webpage was regularly reviewed and/or updated by Nova Labs’ CEO, its
COO, and its Business Development VP, who knew or recklessly disregarded that it featured false
and misleading statements.
263. For example, for at least large parts of 2019 and 2020, Nova Labs used the logos of
Nestlé and Lime under the text, “What uses the People’s Network?” (the “People’s Network” is
another name for the Helium Network):

55

Likewise, on other pages of its website during that same period, Nova Labs listed the logos of
Nestlé, Salesforce, and Lime under the heading “Helium Is Used By.”
264. Although Nova Labs’ website listed companies other than Nestlé, Salesforce, and
Lime as “using” the Helium Network, those companies were small, local companies with few
employees and were relatively unknown compared to Nestlé, Salesforce, and Lime, which are
prominent, large entities with the potential to create substantial demand on the Helium Network.
265. Nova Labs’ website also excerpted and posted false and misleading headlines from
magazines and online publications, such as, “Forbes:  [Nova Labs] Makes Wireless Internet Cheaper,
Lands Lime Scooters and Nestle As Clients.”
266. Another page on Nova Labs’ website said, in relevant part, “[Nova Labs] helps
companies solve connectivity challenges without worrying about expensive phone plans or worrying
about building and maintain [sic] wireless infrastructure.”  This statement was followed by Nestlé’s
logo and the claim that Nova Labs had created for Nestlé a “capability” that “delivers a real-time
view of fill levels extending the level of service they can offer to customers.”
267. Yet another page on Nova Labs’ website featured Salesforce’s name and logo as a
user of the Helium Network and said,

56
A core value at Salesforce is trust – Helium allows them to focus on
innovation for their application knowing that messages from devices
are securely sent across the Helium network.
268. Contrary to its use of the logos and names of Nestlé, Lime, and Salesforce on its
website, Nova Labs and its executives knew or recklessly disregarded that the companies were not
users of the Helium Network or Nova Labs’ technology, that Nova Labs was not supporting those
companies’ operations in any way, and that Nova Labs had not “landed” any of the three companies
as “clients.”
2. Nova Labs’ Additional False and Misleading Statements
269. Nova Labs’ CEO, COO, and Business Development VP also made false and
misleading statements about Nestlé, Lime, and Salesforce in press releases, news articles, and public
appearances, which they knew or recklessly disregarded were false and misleading.
270. Between July and December 2019, Nova Labs’ CEO and its COO made several
statements that they knew or recklessly disregarded were false and misleading:
a. During a public appearance in July 2019, Nova Labs’ CEO said, “I think, as
you know, this [i.e., the Helium Network] starts to develop and people start
to use it and more applications come on board and we’ve already got some
good ones like Lime, and . . . Nestlé.  A bunch of good companies and good
use cases that intend to use the network immediately.”
b. During an October 2019 public presentation, Nova Labs’ COO said,
“So, today we have companies like Lime Bike using our technology to track
their scooters in the City of Austin.”
c. During a public appearance in December 2019, Nova Labs’ CEO described
how Nestlé consumed Data Credits related to the Helium Wireless Network,
saying, “the other type of token on our network is called the ‘Data Credit,’

57
and that’s what customers of the network use, right?  So if you are a device-
maker of some kind – let’s say Nestlé, who’s building devices on the network
– you transact in the form of Data Credits.”
In truth, neither Nestlé nor Lime were “on board” with Nova Labs, Lime was not using the Helium
Network to track scooters in Austin, and Nestlé was not building devices on the Helium Network,
all of which Nova Labs’ CEO and its COO knew or recklessly disregarded.
271. In fact, in November 2019, two Nova Labs employees highlighted to Nova Labs’
COO that Nova Labs was using Lime’s name and corporate imagery as promotion on its website,
even though “we are NOT working with them.”
272. In response, Nova Labs’ COO admitted that Nova Labs was “not currently”
working with Lime, but instructed the Nova Labs employees to “leave” Lime’s name on the website.
273. Nova Labs’ misrepresentations continued throughout 2020 and 2021, as Nova Labs’
Business Development VP (and other Nova Labs executives) made frequent presentations on
Helium’s public YouTube channel promoting Nestlé, Lime, and Salesforce as companies that Nova
Labs had persuaded to “use” the Helium Network, that were ongoing “users” of the Helium
Network, and that purportedly “rely on Helium,” including the repeated use of these two slides
during those presentations:

58

None of Nestlé, Lime, or Salesforce “relied on” Helium or were “users” of the Helium Network,
which Nova Labs’ Business Development VP and other executives knew or recklessly disregarded.
274. Although Nova Labs’ presentations listed other companies as “relying on” or
“users” of the Helium Network, those companies were much smaller and less well known than
Nestlé, Salesforce, and Lime.
275. During that same time period, Nova Labs’ CEO and its COO made similar public
statements that they knew or recklessly disregarded were false and misleading.  For example:
a. In June 2020, Nova Labs issued a press release claiming that Nestlé was one
of three “key brands that use the Helium Network.”
b. In a July 2020 interview with the online publication TechRadar, Nova Labs’
CEO touted Nova Labs’ relationship with Nestlé saying, “Some examples of
companies who are already enjoying the benefits of our network include the
beverage delivery service company Nestle’s ReadyRefresh . . . .”
c. In February 2021, during a public appearance, Nova Labs’ CEO was asked,
“It looked like you had some partnerships with Salesforce and Lime—I
know them as scooters, I’m sure they’re doing other stuff too—did I get that
right?”  Nova Labs’ CEO responded, “Yeah, that’s exactly right,” adding,

59
“companies like Salesforce and Lime, they’re people who are actually
building the sensors, the products that take advantage of the network.”
d. In May 2021, Nova Labs published a tweet that continued the misimpression
it had created, saying that the Helium Wireless Network “is trusted by users”
that include Lime and Salesforce.  Although the tweet mentioned other
companies as purported users, none were as prominent or well-known as
Lime and Salesforce.
e. In November 2021, during a public appearance, Nova Labs’ COO touted the
adoption of the Helium Network by “very large customers,” and said
unequivocally, “Lime Scooter is a customer.”
276. Nova Labs’ misstatements continued in 2022.  In a public appearance in March 2022,
Nova Labs’ CEO described the “users” of the Helium Wireless Network and the financial benefit of
those users to IoT Hotspot investors:
So they’re companies like Salesforce, and [Car Company A], and
[Retail Company A], and [Car Company B], and like, companies that
actually run sensors on the Helium network are the other sort of
participant in the network and they – they have to spend HNT in
order to actually use the network, right, and that money goes to the –
that HNT goes to the Hotspots.
277. In a public appearance in June 2022, Nova Labs’ CEO again described Salesforce as
a “user” of the Helium Network.  In response to a question about the purpose and usage of the
Helium Wireless Network, Nova Labs’ CEO named industries that could use the network including
agriculture and drone delivery, and then named a single specific company:  “I think Salesforce is
using it to track employee badges.”
278. Nova Labs’ CEO knew or recklessly disregarded that these statements—which
suggested that Nova Labs had ongoing relationships with those companies and that those
companies were using or were planning to use the Helium Network—were not accurate.

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3.    Nestlé and Lime Issued Cease-and-Desist Letters to Nova Labs.
279. The falsity of Nova Labs’ statements was ultimately revealed.
280. Following TechRadar’s July 2020, publication of its interview with Nova Labs’ CEO,
in which he claimed that Nestlé was using the Helium Network, Nestlé sent Nova Labs a cease-and-
desist letter demanding that Nova Labs stop “discussing [Nestlé] immediately.”
281. Nestlé’s cease-and-desist letter recited facts that Nova Labs already knew, saying:
“Nestle Waters North America has not engaged in conversations with Helium for well over a year,”
adding that if Nova Labs “continue[s] to reference NWNA as a customer, user or potential partners
of Helium, we reserve our rights to pursue all other legal remedies.”
282. In response to Nestlé’s cease and desist letter, Nova Labs’ Business Development
VP wrote to others within Nova Labs that he, “ [c]an’t believe we made it this long without them
calling us out.”
283. After Nestlé’s cease and desist letter, Nova Labs quietly removed Nestlé’s logo from
its website, but did not correct its misrepresentations about its relationship with Nestlé.  Nova Labs
also continued to use the names and logos of Lime and Salesforce until July 2022.
284. In July 2022, Lime issued a public statement that it was not and had never been a
user of the Helium Network or partner with Nova Labs.  Lime acknowledged that it had briefly
tested Nova Labs’ hardware in early 2019 but said the “test had fizzled.”  With respect to Nova
Labs’ claims that Lime was a user of the Helium Network, Lime said, “Helium has been making this
claim for years and it is a false claim.”
285. That same day, Lime’s General Counsel sent a cease-and-desist letter to Nova Labs
making clear that “Lime employees engaged in exploratory conversations with [Nova Labs] in 2019”
and nothing more, and instructed   Nova Labs to “immediately cease and desist from using Lime’s
name and trademark on Helium’s website, Helium’s blog, and in other channels controlled by

61
Helium (e.g., social media platforms), and from claiming that Lime is, or was, a customer and/or
partner of Helium.”
286. In response to Lime’s cease-and-desist letter, Nova Labs’ Business Development VP
said in an internal message, “Please make sure [Nova Labs’ COO] weighs in on the Lime piece
specifically.  He’s insisted that we continue to use their logo for as long as we have. . . .  I don’t think
they ever deployed anything.”
287. Nova Labs removed Lime’s logo and name from its website.
288. After Lime’s July 2022 public denial of any relationship with Nova Labs, journalists
began to question whether Nova Labs’ relationship with Salesforce was real.  Nova Labs knew it was
not.  As Nova Labs’ COO said in an internal discussion regarding reporter inquiries, “Salesforce was
a project prior to Covid”—i.e., more than 26 months earlier—“but that detail got lost.”
289. In short, Nova Labs knowingly made false and misleading statements about the
relationship between its burgeoning business and wireless network with three well-established
companies in order to promote and legitimize itself and its network, and Nova Labs only stopped
making those statements when two of the companies threatened legal action.
4. Nova Labs’ Purported Relationships with Nestlé, Lime, and
Salesforce Were Important to Investors
290. That Nestlé, Lime, and Salesforce were purportedly using the Helium Network was
part of the total mix of information that investors in both Nova Labs stock and Hotspot investors
considered in deciding whether to invest.
291. For example, between October 2021 and March 2022, Nova Labs marketed its
Series D Fundraise and, between December 2021 and March 2022, sold preferred equity shares to
33 investors in exchange for approximately $200 million.
292. During that fundraise, Nova Labs personnel told prospective investors that Lime
was currently using the Helium Network and internal documents from multiple entities that

62
ultimately invested in the Series D Fundraise show that Nova Labs’ purported relationships with
Nestlé, Lime, and/or Salesforce were important to their decisions to invest.  Those documents,
including memoranda recommending investments in Nova Labs equity, specifically referred to the
fact that Nova Labs had “top tier” “customers” like Nestlé, Lime, and/or Salesforce.
293. Nova Labs’ purported relationships with Nestlé, Lime, or Salesforce was an
important consideration in the Nova Labs’ Series D Fundraise investors’ decisions to buy Nova
Labs’ equity shares.
294. Nova Labs and its executives made the statements about Nestlé, Lime, and
Salesforce detailed above at the same time that Nova Labs was selling IoT and Mobile Hotspots and
in furtherance of persuading investors to buy those Hotspots.
295. IoT and Mobile Hotspot investors considered Nova Labs’ purported relationships
with Nestlé, Lime, and Salesforce as an important part of the total mix of information when
deciding to invest in those Hotspots.  This is unsurprising.  Nova Labs had deliberately linked the
value of HNT to usage of the Helium Wireless Network and then promoted Nestlé, Lime, and
Salesforce as well-known companies using that network, suggesting that those customers endorsed
Nova Labs’ technology and that they would consume Data Credits and increase demand for HNT.
296. Actual and/or prospective investors in Hotspots repeatedly referred to Nova Labs’
purported relationships with Nestlé, Lime, and Salesforce in social media postings.  By way of
example, the following posts were made by members of the general public on Nova Labs-focused
online communities:  (i) “Lime being a customer was honestly a reason I got involved.”; (ii) “[Nova
Labs] had a whole case study for the Salesforce scanning system which is what sold me to start
mining.”; (iii) “The only reason I got into Helium was because of the partnerships.”; (iv) “That’s why
I started mining HNT, cause lime scooters came into [a] small town.”; and (v) “HNT can be
‘burned’ as data credits.  This crypto has a limited total supply so ideally that should bring up the

63
price as well.  I suggest reading about what companies are using the Helium Network, like the cities
putting sensors in the ground to track parking spots/meters, Nestle water cooler refills, lime
scooters/bikes, smart mouse traps, etc.”
297. When the truth about Nestlé, Lime, and Salesforce was revealed, investors said in
online posts that they felt misled, making statements including, “That’s a pretty bold lie to make”
and “This is starting to sound like an MLM—where the money is being made off of coin holders
and folks buying the overpriced equipment with a hope that they make money from nonexistent
customers.”
TOLLING AGREEMENTS
298. Nova Labs and the Commission entered into tolling agreements suspending the
running of any applicable statute of limitations from September 22, 2023 to December 21, 2023,
from January 22, 2024 to April 21, 2024, from September 25, 2024 to November 24, 2024, and from
November 25, 2024 to January 24, 2025.
FIRST CLAIM FOR RELIEF
Violations of Securities Act Section 5(a) and 5(b)
299. The Commission re-alleges and incorporates by reference here the allegations in
Paragraphs 1 through 231.
300. By virtue of the foregoing, Nova Labs, through its offers and sales of the Helium
Network Token (or HNT), the Helium Mobile Network Token (or MOBILE), and the Helium IoT
Network Token (or IOT) directly and indirectly:  (a) without a registration statement in effect as to
those securities, (1) made use of means or instruments of transportation or communication in
interstate commerce or of the mails to sell securities through the use or medium of any prospectus
or otherwise, and (2) carried or caused to be carried through the mails or in interstate commerce, by
any means or instruments of transportation, securities for the purpose of sale or for delivery after
sale; and (b) made use of means or instruments of transportation or communication in interstate

64
commerce or of the mails to offer to sell or offer to buy, through the use or medium of a prospectus
or otherwise, securities as to which no registration statement had been filed.
301. By reason of the conduct described above, Nova Labs violated, is violating, and,
unless enjoined, will continue to violate Securities Act Sections 5(a) and 5(c) [15 U.S.C. §§ 77e(a) and
77e(c)].
SECOND CLAIM FOR RELIEF
Violations of Securities Act Section 17(a)(2)
302.  The Commission re-alleges and incorporates by reference here the allegations in
Paragraphs 1 through 297.
303. Nova Labs, directly or indirectly, singly or in concert, in the offer or sale of securities
and by the use of the means or instruments of transportation or communication in interstate
commerce or the mails, knowingly, recklessly, or negligently has obtained money or property by
means of one or more 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.
304. By reason of the foregoing, Nova Labs, directly or indirectly, has violated and, unless
enjoined, will again violate Securities Act Section 17(a)(2) [15 U.S.C. § 77q(a)(2)].
THIRD CLAIM FOR RELIEF
Violations of Exchange Act Section 10(b) and Rule 10b-5(b) Thereunder
305. The Commission re-alleges and incorporates by reference here the allegations in
Paragraphs 1 through 297.
306.  Nova Labs, directly or indirectly, in connection with the purchase or sale of
securities and by the use of means or instrumentalities of interstate commerce, or the mails, or the
facilities of a national securities exchange, knowingly or recklessly has (i) employed one or more
devices, schemes, or artifices to defraud, (ii) made one or more untrue statements of a material fact

65
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 (iii) engaged in one
or more acts, practices, or courses of business which operated or would operate as a fraud or deceit
upon other persons.
307. By reason of the foregoing, Nova Labs, 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(b)
thereunder [17 C.F.R. § 240.10b-5].
PRAYER FOR RELIEF

 WHEREFORE, the Commission respectfully requests that the Court enter a Final
Judgment:
I.
Permanently enjoining Defendant from violating, directly or indirectly, Securities Act Section
5(a) and 5(c) [15 U.S.C. §§ 77e(a), 77e(c)], Securities Act Section 17(a)(2) [15 U.S.C. § 77q(a)(2)],
Exchange Act Section 10(b) [15 U.S.C. § 78j(b)], and Rule 10b-5(b) thereunder [17 C.F.R. § 240.10b-
5(b)];

II.
Ordering Defendant to disgorge all ill-gotten gains obtained within the statute of limitations,
within prejudgment interest thereon, under Exchange Act Section 21(d)(5) [15 U.S.C. § 78u(d)(5)];
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.
Prohibiting Defendant from participating, directly or indirectly, in the purchase, offer, or sale
of any crypto assets being offered or sold as securities under Exchange Act Section 21(d)(5)

66
[15 U.S.C. § 78u(d)(5)], or engaging in activities for purposes of inducing or attempting to induce the
purchase offer, or sale of any crypto assets being offered or sold as securities by others under
Exchange Act Section 21(d)(5) [15 U.S.C. § 78u(d)(5)]; and
V.
Granting any other and further relief this Court may deem just and proper.
JURY DEMAND
The Commission demands a trial by jury.

Dated:  New York, New York
January 17, 2025
/s/ Christopher M. Colorado       .
Jorge Tenreiro
Antonia Apps
Sheldon L. Pollock
Judith A. Weinstock
Christopher M. Colorado
Peter Mancuso
Emmy Rush
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
100 Pearl Street
Suite 20-100
New York, NY 10004-2616
212-336-9143 (Colorado)
[email protected]

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 

 
SECURITIES AND EXCHANGE COMMISSION, 
 
                                             Plaintiff, 
 
                        -against- 
 
NOVA LABS, INC. 
 
                                             Defendant.  

 
 
 
  
COMPLAINT      
  
 No.  1:25-00539 

 
 JURY TRIAL DEMANDED 
 

 
Plaintiff Securities and Exchange Commission (the “Commission”), for its Complaint 

against Defendant Nova Labs, Inc. (“Nova Labs” or “Defendant”), alleges as follows: 

SUMMARY 

1. This case concerns (1) Nova Labs’ unlawful unregistered offer and sale of 

investment contracts involving electronic devices and a rewards program that generate returns in the 

form of three Nova Labs crypto assets; and (2) Nova Labs’ materially false and misleading 

statements in connection with its offer and sale of those investment contracts and in connection 

with Nova Labs’ offer and sale of shares of its stock. 

2. Since April 2019, Nova Labs has raised millions of dollars from investors through its 

unregistered sales of securities in the form of “Hotspots”—electronic devices that “mine” one of 

three Nova Labs crypto assets:  the Helium Network Token (“HNT”), the Helium Mobile Network 

Token (“MOBILE”), and the Helium IoT Network Token (“IOT”)—and in the form of Nova 

Labs’ “Discovery Mapping Program,” through which investors receive distributions of MOBILE.  

These sales violated the registration requirements of the federal securities laws, which protect 

investors by requiring securities sellers to provide investors with material information about, among 

other things, the securities offering and the issuer’s business and financial condition, so that 

investors can make informed investment decisions. 

Case 1:25-cv-00539     Document 1     Filed 01/17/25     Page 1 of 66



 2 

3. Nova Labs offered and sold Hotspots and ran the Discovery Mapping Program as 

investment contracts and, thus, securities.  Nova Labs promised investors that the Hotspots and the 

Discovery Mapping Program would earn HNT, MOBILE, or IOT for investors, and that Nova 

Labs would use its entrepreneurial efforts and expertise to build, run, and create demand for a 

wireless network that relied on HNT, MOBILE, and IOT such that, if Nova Labs’ efforts were 

successful, then demand for and value of HNT, MOBILE, and IOT would grow, and the investors 

who acquired them would earn a profit. 

4. Nova Labs also falsely told investors that three large entities—Nestlé, the food and 

beverage conglomerate; Salesforce, the cloud-based software company; and Lime, the electric 

scooter company—were using and relying on Nova Labs’ wireless network, thus falsely suggesting 

to investors that those companies would create value for HNT, MOBILE, and IOT.  The fact that 

three large, international companies were using Nova Labs’ nascent technology and network was an 

important part of the total mix of information that investors considered when deciding to invest in 

Nova Labs’ Hotspots and Nova Labs’ stock. 

5. In fact, however, and as Nova Labs knew or recklessly disregarded, Nestlé, 

Salesforce, and Lime were neither Nova Labs’ customers nor “users” of Nova Labs’ network.  

Indeed, when Nestlé and Lime learned that Nova Labs was publicly touting their purported 

relationships, each issued Nova Labs a cease-and-desist letter. 

6. Nova Labs’ false and misleading statements to potential investors touting business 

relationships that did not exist violated the antifraud provisions of the federal securities laws. 

VIOLATIONS 

7. By virtue of the foregoing conduct and as alleged herein, Nova Labs engaged in and 

is currently engaging in the unlawful offer and sale of securities in violation of Sections 5(a) and 5(c) 

of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77e(a), 77e(c)], and violated Securities 

Case 1:25-cv-00539     Document 1     Filed 01/17/25     Page 2 of 66



 3 

Act Section 17(a)(2) [15 U.S.C. § 77q(a)(2)], Section 10(b) of the Securities Exchange Act of 1934 

(“Exchange Act”) [15 U.S.C. § 78u(d)], and Rule 10b-5(b) thereunder [17 C.F.R. § 240.10b-5(b)]. 

8. Unless Nova Labs is restrained and enjoined, it 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 PROCEEDINGS AND RELIEF SOUGHT 

9. The Commission brings this action pursuant to the authority conferred upon it by 

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

21(d) and (e) [15 U.S.C. §§ 78u(d) and (e)]. 

10. The Commission seeks a final judgment:  (i) ordering a permanent injunction 

restraining and enjoining Nova Labs, directly or indirectly, from again violating the federal securities 

laws described herein; (ii) ordering Nova Labs to pay disgorgement with prejudgment interest; 

(iii) ordering Nova Labs to pay civil money penalties; (iv) prohibiting Nova Labs from participating, 

directly or indirectly, in the purchase, offer, or sale of any crypto assets being offered or sold as 

securities, or engaging in activities for purposes of inducing or attempting to induce the purchase, 

offer, or sale of any crypto assets offered or sold as securities by others; and (v) imposing such other 

and further relief as the Court may deem just and appropriate. 

JURISDICTION AND VENUE 

11. This Court has jurisdiction over this action under Securities Act Section 22(a) 

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

12. Nova Labs, directly and indirectly, has made use of the means or instrumentalities of 

interstate commerce or of the mails in connection with the transactions, acts, practices, and courses 

of business alleged herein. 

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13. This Court has personal jurisdiction over Nova Labs, and venue is proper in this 

District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)] and Exchange Act Section 27(a) [15 

U.S.C. § 78aa(a)], because certain of the transactions, acts, practices, and courses of business 

constituting the violations alleged herein occurred in this District.  Among many other things, Nova 

Labs engaged in marketing and business development efforts in this District related to its 

unregistered offer and sale of investment contracts; offered and sold securities to investors located 

in this District in unregistered transactions; promoted its offer and sale of Nova Labs’ stock in this 

District; and offered and sold Nova Labs’ stock to investors located in this District. 

DEFENDANT 

14. Nova Labs (f/k/a Helium Systems, Inc. and f/k/a Skynet Phase 1 Inc.) is a private 

company organized under the laws of Delaware and headquartered in San Francisco, California. 

LEGAL AND TECHNICAL BACKGROUND 

I. STATUTORY AND LEGAL FRAMEWORK  

15. The Securities Act and the Exchange Act “form the backbone of American securities 

laws.”  Slack Tech., LLC v. Pirani, 598 U.S. 759, 762 (2023). 

16. Congress enacted the Securities Act in part to regulate the offer and sale of securities.  

In contrast to the principle of caveat emptor, Congress established a regime of full and fair disclosure, 

requiring those who offer and sell securities to the investing public to disclose sufficient, accurate 

information to allow investors to make informed decisions before they invest. 

17. The Securities Act and Exchange Act define “security” broadly to include a wide 

range of assets, including “investment contracts.”  [15 U.S.C. §§ 77b(a), 78c(a)(10)]. 

18. Securities Act Sections 5(a) and 5(c), require that an issuer of securities, like Nova 

Labs, register its offer and sale of securities with the Commission.  [15 U.S.C. §§ 77e(a), 77e(c)]. 

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19. Registration is intended to assure that the persons offering or selling the securities 

give the investing public required information about the issuer, the securities, and the transaction. 

With that information, investors can then make more informed investment decisions.  

20. The Securities Act and the Exchange Act also contain antifraud provisions to, 

among other things, prevent fraudulent conduct in the offer, sale, and purchase of securities.  

Securities Act Section 17(a) and Exchange Act Section 10(b), for example, seek to ensure honest 

behavior and fair dealing in securities transactions. 

II. CRYPTO ASSETS 

21. As used herein, the term “crypto asset” generally refers to an asset issued and/or 

transferred using blockchain or distributed ledger technology, including assets commonly referred to 

as cryptocurrencies, digital assets, digital coins, digital tokens, and virtual currencies. 

22. A blockchain or distributed ledger is a peer-to-peer database spread across a network 

of computing devices—often called nodes—that record all transactions occurring on the blockchain 

or distributed ledger in theoretically unchangeable, digitally recorded data packages.  The system 

relies on cryptographic techniques for securely recording those transactions. 

23. Crypto assets may be traded on crypto asset trading platforms in exchange for other 

crypto assets or fiat currency (i.e., legal tender issued by a country). 

24. Persons and entities have offered and sold crypto assets to investors in capital-raising 

events in exchange for consideration, including but not limited to, through so-called initial coin 

offerings (or, ICOs), crowd sales, or public token sales. 

25. On July 25, 2017, the Commission issued the Report of Investigation Pursuant to Section 

21(a) of the Securities Exchange Act of 1934:  The DAO (the “DAO Report”), advising “those who 

would use . . . distributed ledger or blockchain-enabled means for capital raising[] to take appropriate 

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steps to ensure compliance with the U.S. federal securities laws,” and finding that the offering of 

crypto assets at issue in the DAO Report were offerings of securities. 

26. On April 3, 2019, the Commission published additional guidelines, titled Framework 

for “Investment Contract” Analysis of Digital Assets, that advised those “engaging in the offer, sale, or 

distribution of a digital asset” to consider “whether the digital asset is a security” that would trigger 

the application of the “federal securities laws.”  These guidelines provided “a framework for 

analyzing whether a digital asset is an investment contract,” and a non-exhaustive list of 

characteristics that, if present in a given digital asset, would suggest that the asset is a “security.” 

FACTS 

I. NOVA LABS’ PIVOT TO BLOCKCHAIN AND CRYPTO ASSETS. 

27. Nova Labs was founded in May 2013 and has had several business models. 

28. Initially, Nova Labs designed and manufactured hardware components that third 

parties incorporated into low-power devices—such as smart water meters or asset trackers—to 

allow those devices to send and receive small bits of information via little-used radio frequencies 

other than Wi-Fi and cellular frequencies.  Under this business model, Nova Labs earned little to no 

revenue. 

29. In 2014, Nova Labs pivoted from manufacturing hardware components to selling an 

“end-to-end solution” for low-power devices.  Nova Labs manufactured and sold internet-

connected sensors that collected data and could be monitored via Nova Labs’ hardware and 

software.  Under this business model, Nova Labs also earned little-to-no revenue and incurred tens 

of millions of dollars in losses. 

30. By late 2017, Nova Labs’ business models of building or supporting networks for 

low-power devices had failed for several reasons, including that it was expensive to build a 

sufficiently large wireless network within particular geographies (or across geographies) to which 

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devices could connect, and because Nova Labs had been unable to persuade a critical mass of users 

to form such a network.  In addition, Nova Labs needed more cash to continue its operations. 

31. At that same time, Nova Labs understood that blockchain technology and sales of 

crypto assets to investors were receiving a lot of public attention, and Nova Labs’ Chief Executive 

Officer (“CEO”) told a member of Nova Labs’ Board of Directors that Nova Labs could “capitalize 

on the current [] hype to generate some significant capital . . . .” 

32. So, Nova Labs pivoted again, this time to selling crypto assets.  As Nova Labs’ CEO  

later put it publicly, Nova Labs “abandoned the whole idea of trying to make money on the network 

itself” and instead became an “economic model for building decentralized wireless networks.”  This 

meant creating and selling devices that “mined” Nova Labs’ crypto assets and then using the 

proceeds from those sales and the value of Nova Labs’ crypto assets as a primary source of funds 

for Nova Labs’ operations. 

II. NOVA LABS KNEW OFFERING AND SELLING CRYPTO ASSETS  
AS SECURITIES WITHOUT REGISTRATION VIOLATED THE LAW. 

33. Nova Labs considered multiple structures by which it might offer and sell crypto 

assets to investors, understood that offers and sales of securities required registration with the 

Commission, and knowingly and deliberately chose to take the risk that unregistered offers and sales 

of investment contracts in the form of electronic devices—i.e., Hotspots—that mined crypto assets 

could result in a Commission enforcement action against it. 

34. Nova Labs first considered offering and selling crypto assets as securities through an 

unregistered “initial coin offering,” or ICO, in which it would sell crypto assets directly to investors 

and pool the funds received to fund its operations. 

35. After its Board of Directors raised questions about the legality of an unregistered 

ICO, and Nova Labs sought legal advice regarding it, Nova Labs decided that selling crypto assets 

directly to investors in an ICO was likely to be an unlawful unregistered securities offering. 

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36. Nova Labs then considered offering and selling crypto assets as securities to 

investors in a registered offering.  In June 2018, Nova Labs’ CEO remarked in an internal 

communication, “Aside from the paperwork required, it seems like a potentially decent path.” 

37. Nova Labs believed, however, that a registered securities offering would be time 

consuming.  It viewed an offer and sale without registration as faster but “risky” because it might 

violate the federal securities laws. 

38. Instead, Nova Labs chose to structure its offer and sale of crypto assets in a manner 

that, it hoped, would escape the federal securities laws.  Rather than offering and selling crypto 

assets directly to investors in an unregistered ICO or similar offering—which Nova Labs knew 

would violate the securities laws—Nova Labs decided to interpose an intermediate step, which 

required that investors instead of buying the assets directly, procure them by buying an electronic 

device, the “Hotspot,” and having those investors “mine” (i.e., receive distributions of) Nova Labs’ 

crypto assets through the Hotspot.   

39. To others within Nova Labs, Nova Labs’ CEO described this scheme as an attempt 

to end-run—literally, to “cheat”—the securities laws, saying, “I think of buying a [Hotspot] as a 

proxy for buying tokens[, ] it’s like a token generation machine . . .  I could kind of think[] of the 

[Hotspot] as a cheat for an ICO . . .  no other project lets you buy a token printing machine.” 

40. Nova Labs sought and obtained legal advice regarding this structure, too, and was 

advised of a significant risk that its offer and sale of devices that “mined” Nova Labs’ crypto assets 

could constitute an unregistered offering under the federal securities laws. 

III. NOVA LABS CREATED THE “HELIUM NETWORK” AND THREE INITIAL 
CRYPTO ASSETS. 

41. Nova Labs’ offer and sale of investment contracts in the form of Hotspot devices 

that mine crypto assets occur through an ecosystem called the “Helium Network,” which Nova Labs 

launched in July 2019. 

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42. When Nova Labs designed the Helium Network, it had three primary components:  

(i) computer code comprising a blockchain; (ii) crypto assets created, transferred, and destroyed on 

that blockchain; and (iii) a version of the Hotspot mining device called an IoT Hotspot.1   

43. An IoT Hotspot has two purposes:  one, it connects to the internet, acts as a node 

running the Nova Labs blockchain, and receives periodic distributions of (i.e., “mines”) one of Nova 

Labs’ crypto assets; and, two, it is fixed with and operates as an antenna that can connect to low-

power electronic devices with wireless capability allowing those devices to send small bits of data to 

the internet via the IoT Hotspot’s internet connection. 

44. In this Complaint, the portion of the Helium Network consisting of the blockchain 

and the nodes running it is called the “Helium Network Blockchain” and the portion of the Helium 

Network consisting of the Hotspots’ antennas—and the ability for certain types of electronic 

devices to transmit data to and from the internet via the Hotspots’ antennas and internet 

connection—is called the “Helium Wireless Network.” 

A. The Helium Network Blockchain and the Helium Wireless Network 

45. Nova Labs employs software engineers expert in developing computer code and 

software protocols.  Between late 2017 and mid-2019, Nova Labs used that expertise to create its 

own bespoke blockchain, the Helium Network Blockchain, and three crypto assets running on that 

blockchain:  (i) the Helium Network Token or “HNT,” (ii) the Helium Security Token or “HST,” 

and (iii) Data Credits. 

 
1 “IoT” refers to “Internet of Things,” which is, among other things, a network of physical 
devices—such as appliances, vehicles, trackers, or other objects—embedded with hardware or 
software that allows those devices to connect and exchange data.   

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46. At the same time, Nova Labs engineers designed and manufactured the “IoT 

Hotspot,” an electronic device that connected to the internet, acted as a node running the Helium 

Network Blockchain, and verified transactions of HNT, HST, and Data Credits on that blockchain. 

47. Nova Labs also designed the IoT Hotspot to act as an antenna to transmit small 

amounts of data to and receive small amounts of data from certain low-power devices physically 

proximate to the IoT Hotspot.  The IoT Hotspot could, in turn, send that data to and receive data 

from the internet via its internet connection.  The wireless coverage for low-power devices 

collectively created by all IoT Hotspots was the initial iteration of the Helium Wireless Network. 

48. Nova Labs did not expect many individual IoT Hotspot purchasers to use the 

Helium Wireless Network for low-power devices and it said publicly that individual IoT Hotspot 

purchasers did not use the Helium Wireless Network.  Rather, Nova Labs touted its ability to 

persuade third party companies to deploy large numbers of low-power devices to use the Helium 

Wireless Network. 

49. Accordingly, to induce investors to buy IoT Hotspots, Nova Labs coded the Helium 

Network Blockchain so that IoT Hotspot owners received daily distributions of HNT, and Nova 

Labs promised to use its entrepreneurial and managerial efforts to create demand and value for that 

HNT.  This included, for example, through Nova Labs’ extensive software engineering, business 

development, and marketing work, its creation of secondary markets for selling and buying its crypto 

assets, and its other efforts to attract customers to and create demand for the Helium Wireless 

Network, described infra ¶¶ 159 to 231. 

B. Nova Labs Initially Created Three Crypto Assets and Offered and Sold 
Investors IoT Hotspots That Mine One of Those Three Crypto Assets. 

50. Nova Labs’ initial iteration of the Helium Network Blockchain used three crypto 

assets.  The primary crypto asset was the Helium Network Token or HNT, and it was “mined” by 

the IoT Hotspots that Nova Labs offered and sold.  The second crypto asset was the Helium 

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Security Token or HST, and it was used as an additional way for Nova Labs to distribute HNT.  The 

third crypto asset was the Data Credit and it was used as a means of paying transaction fees related 

to the Helium Network and to influence the total supply and value of HNT. 

1. Nova Labs Created HNT. 

51. HNT is the primary native crypto asset on the Helium Network Blockchain. 

52. Nova Labs initially designed the Helium Network Blockchain to create more than 

160,000 new HNT each day, totaling approximately five million new HNT each month. 

53. HNT serves two primary purposes:  (i) as an asset with speculative value that can be 

sold to others for cash or other crypto assets, such as dollars or Bitcoin, including sales on secondary 

markets; and (ii) as a means to obtain Data Credits, which are used to pay fees on the Helium 

Network. 

54. During the relevant period, the overwhelming majority of all HNT that investors 

obtained was either sold for consideration (e.g., dollars) or held for potential price appreciation, and 

it was not used by investors to buy Data Credits to pay to use the Helium Wireless Network. 

55. Because HNT are fungible with each other, the price of each HNT is the same as the 

price of all HNT and the price of all HNT goes up or down together. 

2. Nova Labs Designed and Manufactured IoT Hotspots and  
Offered and Sold HNT to Investors via the IoT Hotspots. 

56. Nova Labs offered and sold HNT to investors by offering and selling them IoT 

Hotspots that mined (i.e., received distributions of) HNT each day.   

57. Between at least April 2019 and March 2022, Nova Labs offered and sold thousands 

of IoT Hotspots directly to investors.  Between approximately October 2020 and the present, Nova 

Labs has offered and sold at least tens of thousands of IoT Hotspots to investors through Nova 

Labs’ partnerships with third-party IoT Hotspot manufacturers. 

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58. Through its offers and sales of IoT Hotspots, Nova Labs has distributed tens of 

millions of HNT to the general public. 

59. Nova Labs designed and manufactured the initial IoT Hotspots and created the 

firmware that ran on them.  Nova Labs designed the IoT Hotspots to act as nodes running the 

Helium Network Blockchain. 

60. Nova Labs offered and sold these IoT Hotspots via its website.  Investors paid 

approximately $500 (or the equivalent amount of Bitcoin) for each IoT Hotspot and an investor 

could purchase as many IoT Hotspots as they desired. 

61. Anyone could buy an IoT Hotspot, and Nova Labs pooled IoT Hotspot investor 

funds and used them to develop and promote the network, including to pay Nova Labs’ software 

engineers, business development professionals, and marketing staff. 

62. To “mine” HNT—i.e., receive distributions of HNT from Nova Labs via the Helium 

Network Blockchain—an IoT Hotspot purchaser needed only to connect the IoT Hotspot to 

electricity and the internet.  Nova Labs did not require the investor to do anything more. 

63. Throughout the relevant period, Nova Labs’ repeatedly and frequently emphasized 

publicly that obtaining HNT from the IoT Hotspot required little to no efforts by the investors.  

That is, Nova Labs did not sell the IoT Hotspot only to those interested in running a wireless 

network let along using one, and an IoT Hotspot did not require any particular specialization or 

efforts of the purchasers. 

64. As Nova Labs’ CEO told potential investors in January 2019, “You simply buy a 

Hotspot device, give it an internet connection and it will begin mining.”  Nova Labs’ Chief 

Operating Officer (“COO”) said similarly in December 2019, “There is not a whole lot for the user 

to do.  If you buy a Hotspot, it’s as simple as plugging something into the wall.”  In June 2020, 

Nova Labs’ CEO publicly emphasized the Hotspot’s ease of use, saying:  “We made the Hotspot 

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because we wanted to make it easy to use and so that everyone could grab it.  You didn’t need to be 

an IoT enthusiast.  You didn’t have to be a crypto specialist.  Literally anyone could get this and use 

it.” 

65. Through a mobile telephone application created and maintained by Nova Labs 

(“Nova Labs App”), an IoT Hotspot investor could link the investor’s “wallet” on the Helium 

Network Blockchain (i.e., the investor’s repository for receiving and holding crypto assets), and the 

Helium Network Blockchain would distribute HNT to that wallet each day.   

66. Nova Labs designed the Helium Network Blockchain so that investors in 

IoT Hotspots collectively shared at least 65% of all new HNT that the Helium Network Blockchain 

created each day.  Nova Labs also created an algorithm and set a fixed distribution schedule that 

determined how many HNT an investor received by purchasing and plugging in an IoT Hotspot. 

67. Nova Labs publicly promised to create value and demand for HNT, such that 

investors reasonably expected to profit from their investment in the IoT Hotspot and the resulting 

distributions of HNT.  Nova Labs’ promises and efforts are discussed infra ¶¶ 159 to 260. 

68. Investors bought IoT Hotspots as a way to invest in the growth of the Helium 

Wireless Network through their HNT holdings (given the relationship between HNT and demand 

for the network that Nova Labs created and touted).  Indeed, many investors purchased multiple 

IoT Hotspots to increase the number of HNT they would receive. 

69. In addition to running the Helium Network Blockchain and “mining” (i.e., receiving 

distributions of) HNT, IoT Hotspots have a second functionality.  They have a built-in antenna that 

can receive data from and send data to low-power devices that have wireless capability and are in 

physical proximity (e.g., within a mile or more) and, in turn, the IoT Hotspots can transmit that data 

to and receive data from the internet via the IoT Hotspot’s internet connection. 

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70. Between April 2019 and March 2022, Nova Labs designed, manufactured, and sold 

to the general public more than 12,000 IoT Hotspots. 

71. Between August 2019 and October 2020, those IoT Hotspots “mined” more than 

25 million HNT for the investors who owned the IoT Hotspots.  Thereafter, the IoT Hotspots 

continued to “mine,” and IoT Hotspot investors have continued to receive distributions of, tens of 

millions of additional HNT from Nova Labs via the Helium Network Blockchain. 

72. Between about September 2019 and the present, Nova Labs also oversaw, 

coordinated, and controlled the manufacture and offer and sale of at least tens of thousands of 

additional IoT Hotspots by third parties acting on Nova Labs’ behalf or in partnership with Nova 

Labs.  These third parties were an extension of Nova Labs, which played a critical role in the 

operational and financial decisions necessary to offer and sell those IoT Hotspots to investors. 

73. Nova Labs designed the security features of the Helium Network so that no third 

party could build Hotspots without obtaining permission from Nova Labs.  Third parties have relied 

almost entirely on partnerships with and support from Nova Labs to build, offer, and sell IoT 

Hotspots and have done so on Nova Labs’ behalf. 

74. For example, between around September 2019 and September 2020, Nova Labs 

negotiated and entered into a partnership (the “IoT Hotspot Partnership”) with a third-party 

electronic component manufacturer and a third-party distributor (“IoT Manufacturer” and “IoT 

Distributor”) under which the IoT Manufacturer would build 10,000 IoT Hotspots in partnership 

with Nova Labs, and the IoT Distributor would offer and sell those IoT Hotspots to investors in 

partnership with Nova Labs. 

75. Under the IoT Hotspot Partnership, Nova Labs provided the IoT Manufacturer with 

intellectual property, software, firmware, and financial support necessary for it to build IoT 

Hotspots.  Nova Labs also controlled and/or oversaw design, specifications, and production 

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parameters for the IoT Manufacturer’s manufacture of IoT Hotspots and provided ongoing 

technical expertise and consulting services—including sending a Nova Labs engineer to the IoT 

Manufacturer’s overseas headquarters—necessary to ensure that those IoT Hotspots functioned as 

nodes for the Helium Network Blockchain, transmitted a wireless signal via the IoT Hotspots’ 

antenna to allow low-power devices to transmit data, and received daily distributions of HNT.  

Nova Labs provided the IoT Manufacturer with more than $2 million in financial support related to 

the IoT Hotspots, and the IoT Manufacturer paid over $3 million to Nova Labs related to the IoT 

Hotspots.  Without Nova Labs’ technical permissions and support, the IoT Manufacturer could not 

build IoT Hotspots. 

76. Under the IoT Hotspot Partnership, Nova Labs also contracted with the IoT 

Distributor to sell IoT Hotspots built by the IoT Manufacturer.  Under that agreement, Nova Labs 

determined pricing for those IoT Hotspots; provided marketing support for the IoT Distributor’s 

efforts to promote, offer, and sell those IoT Hotspots; directed investors to buy those IoT Hotspots 

from the IoT Distributor, including through Nova Labs’ own website and social media posts; and 

provided customer support to investors who bought IoT Hotspots from the IoT Distributor.  The 

IoT Distributor then paid over $500,000 in “kickbacks” (as the IoT Distributor described the 

payments) to Nova Labs for IoT Hotspots it sold.  

77. Nova Labs pooled the funds received from the IoT Manufacturer and the IoT 

Distributor and used them to develop and promote the Helium Network, including to pay Nova 

Labs’ software engineers, business development professionals, and marketing staff. 

78. During the relevant period, Nova Labs has entered into similar formal and informal 

partnerships with several other third parties pursuant to which Nova Labs and those third parties 

have manufactured and sold IoT Hotspots that mine Nova Labs’ speculative crypto asset, HNT. 

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3. Nova Labs Created HST. 

79. Nova Labs created the Helium Security Token or HST as a second crypto asset on 

the Helium Network Blockchain.  HST’s sole purpose is to entitle its holder to daily distributions of 

HNT in perpetuity.  As such, the value of HST is derivative of the value of HNT. 

80. Nova Labs created only 10,300 HST and designed the Helium Network Blockchain 

so that holders of those HST collectively share, on a pro rata basis, up to 35% of all HNT that the 

Helium Network Blockchain creates.  Thus, during the period that the Helium Network Blockchain 

created approximately five million HNT each month, each HST entitled its holder to a pro rata 

share of nearly 170 HNT per month and more than 2,000 HNT per year. 

81. Nova Labs has offered and sold HST to a select group of investors, including 

venture capital firms, to allow them to obtain perpetual distributions of HNT.  This includes Nova 

Labs’ sale of 6,800 HST coupled with preferred equity shares to investors in May 2019 for 

approximately $15 million.  Nova Labs understood, and multiple investors confirmed, that these 

transactions’ main purpose was to obtain HST.2 

82. Nova Labs kept approximately 2,000 of the 10,300 HST for itself to receive 

perpetual distributions of HNT from that HST, benefit from the potential price appreciation of 

HNT, and sell that HNT to fund its operations.  Indeed, Nova Labs has sold millions of dollars of 

HNT to fund its business.  Nova Labs thus aligned its financial interests in HNT’s price 

appreciation with those of investors in IoT Hotspots that mined HNT (and later, with investors in 

Nova Labs’ Mobile Hotspot, and two additional Nova Labs crypto assets, IOT and MOBILE, 

whose value is also based on the value of HNT, infra ¶¶ 105 to 158). 

 
2 Nova Labs does not dispute that HST is a security under the federal securities laws.  Rather, Nova 
Labs contends that its offers and sales of HST were exempt from the Securities Act’s registration 
requirements.  The Commission’s claim under Securities Act Section 5(a) and 5(c), infra ¶¶ 299 to 
301, is not based on Nova Labs’ offer and sale of HST.  

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83. As Nova Labs’ CEO explained to one of the outside investors who invested in HST, 

“pretty much all of our activities will be related to [HNT] earned via those [HST].”  Nova Labs’ 

CEO echoed that sentiment in a public statement in August 2020, saying “Our business model is 

HNT.  We are all in.  We have no other revenue streams nor any plan to create any.” 

84. During the period that the Helium Network Blockchain created approximately five 

million HNT each month, the approximately 2,000 HST held by Nova Labs’ entitled it to 

distributions of more than 339,000 HNT per month and more than four million HNT per year. 

85. Nova Labs also used approximately 1,500 HST as compensation for its employees.   

86. By compensating employees with HST, Nova Labs provided them with perpetual 

distributions of HNT, ensuring that they too benefitted financially from Nova Labs’ efforts to 

increase the value of HNT, and aligning their financial interests with those of investors in the IoT 

Hotspot that mined HNT (and later, with the fortunes of investors in the Mobile Hotspot, IOT and 

MOBILE). 

87. As Nova Labs’ CEO explained to several Nova Labs’ equity investors 

contemporaneous to the creation of HST, “One thing I really like about the inflation model”—i.e., 

the way in which HST distributes HNT to its holder in perpetuity—“is that all participants are sort 

of vesting in to their [HNT] ownership over long periods, which should encourage everyone to do 

work to increase value.”   

88. Nova Labs also marketed how the HST structure aligned the interests of Nova Labs 

and its employees with all investors in IoT Hotspots and HNT.  For example, in a May 2021 public 

appearance Nova Labs’ COO said,  

We have [HNT] from the distribution model that we created, 35% of 
mining rewards, which aligns our interest with everybody else’s 
interest.  People want to mine cryptocurrency.  We want a network 
built.  We both win.  Everybody wins when it happens.  We get a 
network.  Everybody gets tokens.  We’re all happy.  That’s how the 
system is built. 

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89. As another example, in a May 2022 public appearance, Nova Labs’ CEO said, 

These networks take years and tens of millions of dollars to build, . . . 
If there isn’t a reward for those investors and those teams that build 
these networks then no one would ever build the networks. . . .  You 
could never build this without some [HST] structure. . . .  It would 
never have been built.  We would never have been funded.  We 
would have gone out of business.  None of this would exist. 

90. Also, by receiving and owning HST, Nova Labs’ employees have received tens of 

millions of HNT and, as Nova Labs has worked to increase the value of HNT, those employees 

have sold large portions of their HNT to the general public for millions of dollars. 

4. Nova Labs Created the Data Credit. 

91. The third crypto asset that Nova Labs created on the Helium Network Blockchain is 

the Data Credit, which Nova Labs designed as a mechanism for paying fees associated with the 

Helium Network and as a means to influence the value of HNT. 

92. When Nova Labs launched the Helium Network in July 2019, it did not charge fees 

to transact on the Helium Network Blockchain or to send data from low-power devices via the 

Helium Wireless Network.  Nova Labs emphasized publicly, however, that it was further developing 

the Helium Network to integrate a fee structure based on Data Credits. 

93. IoT Hotspot investors relied entirely on Nova Labs’ efforts to implement that fee 

structure, which was important to investors’ expectations of profit because Nova Labs designed the 

value of HNT to be influenced by and linked to the demand for and usage of Data Credits. 

94. In August 2020, Nova Labs modified the Helium Network to require the payment of 

fees.  For example, Nova Labs began to require payment of fees for transfers of HNT via the 

Helium Network Blockchain and for data transfers on the Helium Wireless Network by owners of 

low-power devices (i.e., sending data from those devices to the internet via an IoT Hotspot’s 

antenna and internet connection).   

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95. Fees related to the Helium Network can be paid only with Data Credits and Data 

Credits can be acquired only with HNT.  Nova Labs designed Data Credits to function as follows: 

a. To acquire Data Credits, a user must first acquire HNT (such as by buying it 

from an IoT Hotspot investor) and then “burning” that HNT—that is, 

transferring the HNT to a Helium Network Blockchain address that destroys 

the HNT and removes it from circulation.  When the HNT is “burned,” the 

Helium Network Blockchain creates and distributes Data Credits to the user. 

b. One Data Credit has a fixed price in U.S. dollars of $0.00001. 

c. The number of Data Credits created and acquired in exchange for burning 

one HNT is equal to the prevailing market value of HNT in U.S. dollars at 

the time of the burn transaction divided by $0.00001 (the fixed price for one 

Data Credit). 

d. Data Credits are non-transferrable, cannot be traded or sold, and can be used 

only to pay fees associated with the Helium Network.   

e. A user who burns HNT to acquire Data Credits can instruct the Helium 

Network Blockchain to distribute the resulting Data Credits to a third party 

blockchain address instead of to the user. 

96. Accordingly, a user who wants to acquire Data Credits to pay fees when the 

prevailing price of one HNT is $1.00 must first acquire one HNT (such as by paying $1.00 for HNT 

on a secondary market) and then “burn” that HNT, which, in turn, prompts the Helium Network 

Blockchain to transfer 100,000 Data Credits to the user (i.e., $1.00 HNT value divided by the per 

Data Credit cost of $0.00001). 

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97. Nova Labs has explained frequently, including in public statements, that it designed 

the economics of acquiring Data Credits to be inextricably intertwined with the value of HNT and 

to influence the price of HNT. 

98. Specifically, Nova Labs designed the Helium Network Blockchain and Data Credits 

so that the process of acquiring and using Data Credits requires HNT to be burned and removed 

from circulation, a mechanism that is intended to (and, in fact, does) reduce the number of HNT 

available for purchase and increase the value of the remaining HNT held by investors.   

99. When asked about the relationship between Data Credits and the value of HNT, 

Nova Labs’ COO explained, 

[The] more Data Credits are needed, you have to burn HNT to get to 
the Data Credits.  When you burn HNT, it’s burned forever.  That 
reduces the supply of HNT.  And so the more demand there is on 
HNT through Data Credits, then the less HNT is available in totality.  
Because it’s a finite supply.  And so the laws of physics means that 
if more people, more devices, need HNT to operate, then the 
cost of per HNT would increase naturally. 

100. As Nova Labs also said frequently, including in public statements, if it succeeded in 

promoting and causing a greater number of Data Credits to be acquired and used—e.g., to pay fees 

for data transfers via the Helium Wireless Network—the impact on the value of HNT would 

increase:  more HNT would be demanded for Data Credits, causing the supply of HNT to decrease 

(as HNT is burned), thus making each remaining HNT more valuable. 

101. In an internal Nova Labs’ document titled, “The Helium Manifesto,” Nova Labs’ 

CEO explained the relationship between Data Credits and the value of HNT and emphasized that 

Nova Labs’ primary business purpose was to cause users to consume Data Credits to push up the 

value of HNT, even if that meant failing to earn revenues from other activities.  He wrote, 

Due to the design of the token economics, more utility on the 
network will drive increased value in tokens.  The only way [Nova 
Labs] becomes wildly successful is if there is an enormous amount of 
network usage and the value of the tokens increases accordingly.  As 

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a result, everything we do as a business from this point forward 
should be focused on maximizing the utility of the network, which is 
the usage of data credits. . . .  Many of these decisions will be directly 
at odds with potential revenue or profit generating activities – such as 
partnering with Hotspot integrators or selling Hotspots at or below 
margin – but because our goal is to maximize utility and demand for 
data credits, we will be OK with these decisions as long as we believe 
they are likely to increase adoption. 

102. Nova Labs also determined the number of Data Credits required to perform various 

actions on the Helium Network Blockchain or related to the Helium Wireless Network.  The 

amount in fees (in the form of Data Credits) required to use the Helium Wireless Network was 

relatively small, as the below examples illustrate, but investors were and are permitted to purchase 

any amount of HNT (including by acquiring and using IoT Hotspots) in any amount, irrespective of 

any desire or need they may have to use the HNT to obtain Data Credits.  For example, under the 

fee schedule set by Nova Labs: 

a. For every 24 bytes of data transferred by a low-power device to the internet 

via an IoT Hotspot, a user of the low-power device paid a fee of 

one Data Credit (i.e., the user must burn and remove from circulation 

$0.00001 worth of HNT for every 24 bytes of data sent).3 

b. To transfer HNT from one Helium Network Blockchain address to another, 

the transferor paid a fee of 35,000 Data Credits (i.e., the user must burn and 

remove from circulation $0.35 worth of HNT for each transaction). 

c. To add an IoT Hotspot to the Helium Network Blockchain, the IoT 

Hotspot owner was required to pay a fee of four million Data Credits (i.e., 

 
3 As an example, to transfer one kilobyte of data (1 kB), approximately the amount of data 
associated with half a page of unformatted text, a low-power device would be required to pay 
approximately 1,000 Data Credits—or the equivalent of approximately $0.01 worth of HNT that 
would need to be burned and removed from circulation. 

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the user must burn and remove from circulation $40 worth of HNT to add 

the IoT Hotspot). 

d. To verify an IoT Hotspot’s geographic location—a task that the Helium 

Network periodically performs—an IoT Hotspot (or its owner) was required 

to pay a fee of one million Data Credits (i.e., the user must burn and remove 

from circulation $10 worth of HNT to verify location).  

103. Nova Labs also sold Data Credits directly to customers by taking payments in U.S. 

dollars, burning HNT that Nova Labs itself held, and instructing the Helium Network Blockchain to 

issue the resulting Data Credits to the customer. 

104. As discussed in detail below, ¶¶ 206 to 220, Nova Labs has engaged in significant 

efforts—including by marketing and promoting the Helium Network Blockchain and Helium 

Wireless Network, and by attempting to persuade companies to use each of them—to increase Data 

Credits consumption thereby increasing HNT’s value and speculative investment in HNT. 

IV. NOVA LABS EXPANDED ITS OFFER AND SALE OF INVESTMENT 
CONTRACTS TO A NEW DEVICE AND TWO NEW CRYPTO ASSETS. 

105. Not later than April 2022, Nova Labs expanded the Helium Wireless Network from 

IoT Hotspots to a second type of Hotspot, the “Mobile Hotspot,” which provides wireless 

connectivity for cellular devices.  Like the IoT Hotspot, the Mobile Hotspot also receives daily 

distributions of Nova Labs’ crypto assets.  

106. Although Nova Labs made technical changes to the Helium Network related to 

Mobile Hotspots, the value proposition to investors stayed the same:  Nova Labs offered and sold a 

device to investors through which the investor obtained Nova Labs crypto assets, Nova Labs 

promised to create value and demand for those crypto assets by building and creating demand for 

the wireless network, and investors in the device and the crypto assets reasonably expected to profit 

from Nova Labs’ entrepreneurial efforts. 

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107. Soon after adding Mobile Hotspots to the Helium Wireless Network, Nova Labs 

made three important changes to the Helium Network’s economics and structure:  (i) Nova Labs 

created two new crypto assets, MOBILE (the Helium Mobile Network Token) and IOT (the 

Helium IOT Network Token); (ii) Nova Labs modified all Hotspots so that they no longer “mined” 

(i.e., received distributions of) HNT—as they had for more than three years—and instead they 

mined one or other of Nova Labs’ new crypto assets, MOBILE and IOT; and, (iii) Nova Labs made 

MOBILE and IOT exchangeable for HNT on the Helium Network Blockchain at exchange rates 

set by Nova Labs.  Thus, the value of both MOBILE and IOT is derivative of HNT. 

108. Nova Labs continued to promise to use its efforts and expertise to create value and 

demand for the expanded Helium Network and HNT, as well as for MOBILE and IOT. 

109. These changes essentially added another layer (and layer of complexity) to the 

Helium Network.  In the Helium Network’s initial iteration, described above, supra ¶¶ 45 to 99, 

investors bought IoT Hotspots to obtain HNT reasonably expecting Nova Labs to create value for 

the HNT resulting in investor profits.  Now, investors bought Mobile or IoT Hotspots to obtain 

either MOBILE or IOT, respectively, both of which can be exchanged for HNT; and investors 

reasonably expect Nova Labs to create value for the HNT, MOBILE, and IOT, resulting in investor 

profits. 

A. Nova Labs Created the Mobile Hotspot, MOBILE, and IOT.  

110. In general, low-power devices that connect to the internet via IoT Hotspots transmit 

small amounts of data and, as a result, use relatively small numbers of Data Credits.   

111. Nova Labs wanted to expand the Helium Wireless Network to provide coverage to 

cellular devices, such as smartphones, that transmit far larger amounts of data and, as a result, 

consume far larger amounts of Data Credits to use the network, creating more value for HNT. 

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112. By no later than April 2020, Nova Labs began exploring how to expand the Helium 

Wireless Network to include a type of Hotspot, called a Mobile Hotspot, that would receive 

(i.e., “mine”) HNT from the Helium Network Blockchain and feature an antenna that could provide 

wireless internet connectivity to cellular devices in exchange for Data Credits. 

113. From October to December 2020, Nova Labs negotiated a contract with a third-

party manufacturer (“Mobile Hotspot Partner”) to try to create a Mobile Hotspot.   

114. From at least January to April 2021, Nova Labs provided funding, technical, 

marketing, and other support to the Mobile Hotspot Partner necessary to design and manufacture 

the new device.  Among other things, Nova Labs funded a $100,000 payment to the Mobile Hotspot 

Partner and Nova Labs’ engineering team worked with the Mobile Hotspot Partner, providing 

technical expertise necessary for the device to run on the Helium Network Blockchain, receive 

distributions of HNT, and consume Data Credits. 

115. By April 2021, Nova Labs determined that the technology being developed in 

partnership with the Mobile Hotspot Partner was promising, and Nova Labs’ CEO began discussing 

how Nova Labs could acquire the Mobile Hotspot Partner, ensuring that Nova Labs, and not any 

independent party, would be the leading designer, manufacturer, and seller of Mobile Hotspots.   

116. In April 2021, Nova Labs publicly announced its partnership with the Mobile 

Hotspot Partner and began to offer and sell Mobile Hotspots in partnership with and through the 

Mobile Hotspot Partner. 

117. Between December 2021 and February 2022, Nova Labs raised approximately $200 

million from the offer and sale of its own preferred equity shares to investors in a private placement.  

This capital raise—which valued Nova Labs at more than $1 billion—funded, in part, Nova Labs’ 

work to expand the Helium Wireless Network to run the Mobile Hotspot, offer wireless 

connectivity to cellular devices, and allow cellular devices to consume Data Credits. 

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118. In March 2022, Nova Labs agreed to acquire the Mobile Hotspot Partner for more 

than $30 million.  That transaction closed in August 2022. 

119. Nova Labs, in partnership with and then as owner of the Mobile Hotspot Partner, 

performed all work necessary to design, manufacture, and sell Mobile Hotspots, and Nova Labs 

performed all work necessary to modify the Helium Network Blockchain to allow Mobile Hotspots 

to receive distributions of Nova Labs’ crypto assets via the Helium Network Blockchain. 

120. Shortly after creating Mobile Hotspots and beginning its offer and sale of Mobile 

Hotspots that “mined” HNT, Nova Labs modified the economics of the Helium Network.   

121. Until then, the Helium Network Blockchain had created between approximately two 

and a half and five million HNT per month, the majority of which were distributed to owners of 

Hotspots, as described above ¶¶ 51 to 68. 

122. After Nova Labs expanded the Helium Network to include Mobile Hotspots, 

investors in both IoT and Mobile Hotspots no longer received daily distributions of (i.e., they no 

longer  “mined”) HNT from the Helium Network Blockchain.  Instead, the Hotspots mined one of 

Nova Labs’ two new crypto assets, IOT or MOBILE, which were exchangeable for HNT. 

123. Nova Labs performed all work necessary to create and validate the computer code 

comprising IOT and MOBILE, including governing the characteristics and purposes of each of 

these crypto assets; how IOT and MOBILE could be created or transferred on the Helium Network 

Blockchain; when and how many IOT and MOBILE would be distributed to Hotspots and their 

owners; and how transactions involving IOT and MOBILE would be recorded on the Helium 

Network Blockchain. 

124. Nova Labs offered and sold IoT and Mobile Hotspots to investors as a way for 

those investors to invest money in exchange for receiving, via their IoT and Mobile Hotspots, IOT 

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and MOBILE, with the investors’ reasonably expecting to profit from Nova Labs’ entrepreneurial 

efforts to create value for IOT and MOBILE. 

125. The first MOBILE was created on the Helium Network Blockchain in August 2022, 

at which point Mobile Hotspots began to “mine” (i.e., receive daily distributions of) MOBILE.  The 

first IOT was created on the Helium Network Blockchain in April 2023, at which point 

IoT Hotspots began to “mine” (i.e., receive daily distributions of) IOT. 

126. After Nova Labs introduced MOBILE and IOT, the Helium Network’s economics 

worked as follows: 

a. The Helium Wireless Network was divided into two “subnetworks,” one for 

the IoT Hotspots and the low-power devices that transmitted data to and 

received data from them (“IoT Wireless Network”) and one for the Mobile 

Hotspots and the cellular devices that transmitted data to and received data 

from them (“Mobile Wireless Network”).  A separate “treasury”—i.e., an 

escrow for crypto assets—was established for each subnetwork. 

b. Pursuant to an algorithm also designed and implemented by Nova Labs, at 

least 65% of all HNT created by the Helium Network Blockchain each day 

were divided between the two subnetworks, and those HNT were then 

deposited into the two subnetwork treasuries.  The division of HNT between 

the subnetworks was based, in part, on the amount of fees paid in Data 

Credits on each subnetwork.  For example, if during a particular period, the 

number of IoT Hotspots on and Data Credits consumed by the IoT Wireless 

Network subnetwork was greater than the number of Mobile Hotspots on 

and Data Credits consumed by the Mobile Wireless Network subnetwork 

then a larger portion of the newly created HNT for that period would likely 

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be allocated to the IoT Wireless Network treasury as compared to HNT 

allocated to the Mobile Wireless Network treasury.4 

c. Next, Nova Labs modified the Helium Network Blockchain so that IoT 

Hotspots received daily distributions of (i.e., “mined”) IOT and so that 

Mobile Hotspots received daily distributions of MOBILE, rather than HNT, 

as they had each done previously.  As with HNT, an algorithm created by 

Nova Labs determined the amount of IOT or MOBILE mined by any 

Hotspot and received by the investor who owned it.  (Also as with HNT, 

IOT are fungible and the price of all IOT goes up or down together, and 

MOBILE are fungible and the price of all MOBILE goes up or down 

together.) 

d. Investors in IoT Hotspots who mined IOT could tender those IOT to the 

IoT Wireless Network treasury in exchange for a portion of the HNT held in 

that treasury.  The number of HNT received for each IOT tendered was 

determined under a floating exchange rate created by Nova Labs. 

e. Similarly, investors in Mobile Hotspots who mined MOBILE could tender 

those MOBILE to the Mobile Wireless Network treasury in exchange for a 

portion of the HNT held in that treasury.  The number of HNT received for 

each MOBILE tendered was determined under a floating exchange rate 

created by Nova Labs. 

 
4 This modified the prior process under which investors in IoT Hotspots collectively shared a 
majority of all newly created HNT, supra ¶ 66.  However, HST holders, like Nova Labs and its 
employees and equity investors, continued to share up to 35% of all newly created HNT, supra ¶ 80. 

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127. Investors used the Nova Labs App to tender IOT and/or MOBILE to the 

respective subnetwork treasury and to exchange IOT and/or MOBILE for HNT from that treasury. 

128. Both IOT and MOBILE are speculative assets that can be sold to others for cash or 

other crypto assets, such as dollars or Bitcoin, including sales on secondary markets. 

129. In a June 2022 public appearance, Nova Labs’ CEO explained why Nova Labs had 

modified the Helium Network so that Hotspots received (i.e., “mined”) IOT and MOBILE (rather 

than HNT) and were then exchangeable for HNT under a floating exchange rate related to the 

subnetworks.  He said: 

Some of it [is] just to allow the economies [of each subnetwork] to 
exist on their own – like people might – you know, speculators or 
investors in those networks, I think want to speculate in different 
ways depending on what the network is, or they might have different 
desires or different visions for how this is going to go.  And so, 
having separate tokens allows for all of that activity, but still accrues 
value back to HNT, and sort of like, HNT is sort of the preserve 
currency. 

In other words, MOBILE and IOT and Nova Labs’ implementation of subnetwork treasuries, 

provided additional avenues for investors to speculate on the value of the Helium Network. 

130. During the relevant period, the overwhelming majority of IOT and MOBILE 

obtained by investors in Hotspots was either sold for consideration (e.g., dollars), held for potential 

price appreciation, or converted to HNT and subsequently sold for consideration or held for 

potential price appreciation, and it was not used by investors to buy Data Credits to pay to use the 

Helium Wireless Network. 

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B. Nova Labs Offered and Sold Investment Contracts Involving Hotspots and 
the HNT, MOBILE, and IOT They Mined. 

1. Nova Labs Offered and Sold Mobile Hotspots as Securities. 

131. Since April 2021, both under Nova Labs’ partnership with and after acquiring the 

Mobile Hotspot Partner, Nova Labs has offered and sold investment contracts involving Mobile 

Hotspots that have mined millions of HNT and/or MOBILE. 

132. Nova Labs offered and sold Mobile Hotspots via its own website and through the 

Mobile Hotspot Partner’s website. 

133. Investors paid between approximately $250 and more than $1,000 for each Mobile 

Hotspot, and an investor could purchase as many Mobile Hotspots as they desired. 

134. Funds paid by investors in Mobile Hotspots were pooled by Nova Labs and used to 

develop and promote the Helium Network, including to pay Nova Labs’ software engineers, 

business development professionals, and marketing staff. 

135. As with the IoT Hotspots, once an investor bought a Mobile Hotspot, the investor 

needed only to connect the Mobile Hotspot to electricity and the internet to start receiving 

distributions of HNT (and, later, MOBILE) from Nova Labs via the Helium Network Blockchain.  

Throughout the relevant period, Nova Labs’ repeatedly and frequently emphasized publicly that 

obtaining HNT (and, later MOBILE) from the Mobile Hotspot required little to no efforts by the 

investors.   

136. Nova Labs did not sell the Mobile Hotspot only to those interested in running a 

wireless network let along using one, and a Mobile Hotspot generally did not require any particular 

specialization or efforts of the purchaser.  Nova Labs’ publicly touted this fact.  For example, in a 

May 2023 statement in a public forum, Nova Labs’ CEO wrote, “I mean, you just plug it in and turn 

it on 
�������.” 

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137. Thereafter, through the Nova Labs App, a Mobile Hotspot investor could link the 

investor’s “wallet” to the Helium Network Blockchain, and the Helium Network Blockchain would 

distribute HNT (and, later, MOBILE) to that wallet each day. 

138. Beginning no later than August 2022, Nova Labs partnered with additional third 

parties to manufacture and then offer and sell Mobile Hotspots, together with the MOBILE 

obtained through those Mobile Hotspots, as investment contracts.  Nova Labs oversaw, 

coordinated, and controlled the sale of these Mobile Hotspots, while outsourcing the manufacturing 

and shipping functions to these third parties.  In connection with these offers and sales, the third 

parties made payments to Nova Labs. 

139. Nova Labs promised to create value and demand for MOBILE—and for the HNT 

for which MOBILE can be exchanged—such that investors continued to reasonably expect to profit 

by investing in a Mobile Hotspot and obtaining the resulting distributions of MOBILE. 

2. Nova Labs Continued to Offer and Sell IoT Hotspots as Securities. 

140. After Nova Labs expanded the Helium Network to include Mobile Hotspots and 

MOBILE, it continued to offer and sell IoT Hotspots through formal and informal partnerships 

with third-party manufacturers.   

141. When Nova Labs introduced IOT in April 2023, it modified IoT Hotspots so that 

they no longer received daily distributions of (i.e., they no longer “mined”) HNT, and instead began 

to mine IOT.   

142. Between April 2023 and the present, IoT Hotspots have “mined” at least tens of 

billions of IOT for IoT Hotspot investors, and IoT Hotspot investors continue to receive 

distributions of IOT from Nova Labs via the Helium Network Blockchain. 

143. Nova Labs has continued to promise that it will create value and demand for IOT—

and for the HNT for which both IOT and MOBILE can be exchanged—such that investors 

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continue to reasonably expect to profit by investing in an IOT Hotspot and obtaining the resulting 

distributions of IOT. 

C. Nova Labs Formed a Cellular Service Provider Operating on the Helium 
Wireless Network and Offered Its Discovery Mapping Program as a Security. 

144. In September 2022, in furtherance of its efforts to create demand for Data Credits 

and, accordingly, for HNT, Nova Labs began offering a service that allowed Nova Labs to be the 

largest consumer of Data Credits and a significant influence on the demand for HNT.  

145. That month, Nova Labs launched Helium Mobile, a cellular phone service provider 

that offers cellular phone service plans and operates, in part, by transferring its subscribers’ cellular 

phone data via the Helium Wireless Network and Mobile Hotspots. 

146. Helium Mobile offers cellular phone service primarily through an agreement with a 

well-known national cellular service provider (the “National Provider”).  Subscribers to Helium 

Mobile thus rely largely on cellular service from the National Provider, under the Helium Mobile 

brand name, to send and receive voice, text, and other data on their cellular phones. 

147. If, however, a Helium Mobile cellular subscriber is in range of a Mobile Hotspot, the 

subscriber’s cellular phone will preferentially connect to the Mobile Hotspot to send and receive 

voice, text, and other data on the cellular phone instead of using connectivity from the National 

Provider. 

148. When a Helium Mobile subscriber is connected to and transmits data via a Mobile 

Hotspot, then Nova Labs acquires and consumes Data Credits on behalf of the subscriber to pay for 

the data transfer via the Mobile Hotspot.  As a result of its Helium Mobile business, Nova Labs is 

the largest consumer of Data Credits on the Helium Network. 

149. Helium Mobile is the only cellular service provider operating directly on the Helium 

Network and anyone can subscribe to a Helium Mobile cellular phone plan via Nova Labs’ website 

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for approximately $20 per phone line per month.  Nova Labs has sold Helium Mobile cellular phone 

plans to at least 100,000 subscribers. 

150. Since July 2023, and under the Helium Mobile brand, Nova Labs has offered and 

sold investment contracts consisting of the Discovery Mapping Program, through which investors 

obtain distributions of MOBILE.  These offers and sales of securities have not been registered. 

151. Specifically, under the Discovery Mapping Program, an investor (“Discovery 

Mapper”) purchases a Helium Mobile phone plan and agrees to tender valuable personal data to 

Nova Labs—including, for example, the Discovery Mapper’s geographic location and information 

concerning their usage of the Helium Wireless Network—in exchange for periodic distributions of 

MOBILE. 

152. The number of MOBILE that a Discovery Mapper receives from the Discovery 

Mapping Program is determined by a fixed schedule and algorithm created by Nova Labs.   

153. When the Discovery Mapping Program was introduced in July 2023, Discovery 

Mappers did not need to do anything to obtain distributions of MOBILE other than opt into the 

program using the Nova Labs App.  Moreover, the amount of MOBILE distributed to Discovery 

Mappers did not depend on any action by the Discovery Mapper.  Rather, the MOBILE periodically 

allotted to the Discovery Mapping Program were divided equally among all Discovery Mappers.  

The size of that allotment was and continues to be set under a fixed schedule and algorithm 

designed by Nova Labs. 

154. Nova Labs has frequently characterized the Discovery Mapping Program as 

requiring little to no effort for the Discovery Mapper.  During an August 2023 public event 

promoting the Discovery Mapping Program, for example, Nova Labs’ Director of Protocol 

Management said that Discovery Mapping is “super easy to enable.  All you have to do is be a 

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subscriber, get into the app, turn it on, accept the permissions, and go about your day. . . .  It’s 

meant to be just always on in the background, and you shouldn’t even notice it.”  

155. Discovery Mappers purchase a Helium Mobile cellular phone plan and tender their 

valuable personal data to Nova Labs with the reasonable belief that they will profit from the 

MOBILE they receive in exchange, including due to Nova Labs’ efforts to create demand and value 

for MOBILE and the HNT for which MOBILE may be exchanged on the Helium Network 

Blockchain.  

156. Nova Labs aggregates and analyzes the subscriber personal data it receives from 

Discovery Mappers, which gives Nova Labs a singular view of usage of the Helium Network and 

allows it to make strategic decisions about geographies that Nova Labs’ believes are underserved by 

Mobile Hotspots.  Nova Labs then creates economic incentives for existing and potential investors 

to purchase and/or deploy Mobile Hotspots in those areas. 

157. Nova Labs pools the funds paid by Discovery Mappers and uses them to promote 

and run the Helium Network, including related to Helium Mobile’s Data Credit consumption. 

158. Between July 2023 and the present, more than 45,000 Helium Mobile subscribers 

have been Discovery Mappers who participate in the Discovery Mapping Program, and they have 

“mined” at least tens of millions of MOBILE.5 

V. NOVA LABS LED INVESTORS TO REASONABLY EXPECT TO PROFIT 
FROM HOTSPOTS AND DISCOVERY MAPPING. 

159. Given the information Nova Labs publicly disseminated, Hotspot investors and 

Discovery Mappers who obtained HNT, IOT, and MOBILE (collectively, “Investors”), reasonably 

 
5 Nova Labs has recently said that the economics of the Helium Network may change again soon, 
including to remove IOT and MOBILE and focus only on HNT 

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expected that, due to Nova Labs’ efforts, the Investors would profit from their purchases, 

participation, and the resulting crypto assets. 

160. Nova Labs marketed extensively its own entrepreneurial, managerial, and operational 

efforts to create demand for the Helium Network and further marketed how those efforts would 

increase demand for and value of HNT; emphasized the economic returns that Investors could 

reasonably expect by buying IoT and Mobile Hotspots and participating in Discovery Mapping; 

promoted a secondary trading market in which Investors could monetize their HNT, MOBILE, and 

IOT; and touted its efforts to maintain, modify, and market the Helium Network. 

A. Nova Labs Emphasized that HNT Was Designed to Increase in Value 
Through Nova Labs’ Entrepreneurial Efforts. 

161. Since April 2019, Nova Labs has frequently said publicly that it designed the Helium 

Network to use and rely on HNT, and that HNT’s value would and did increase as Nova Labs built 

and created demand for the Helium Wireless Network. 

162. In those statements, Nova Labs has often referred to a so-called “Burn-Mint 

Equilibrium” mechanism that it built into the Helium Network and said that under this mechanism: 

a. A user transferring data via the Helium Wireless Network must pay fees in 

Data Credits, in amounts that increase as the amount of data increases; 

b. The user can only obtain Data Credits to pay those fees by first buying HNT 

and then “burning” that HNT in exchange for Data Credits (i.e., destroying 

the HNT and removing it from circulation). 

c. If demand for Data Credits increases to pay for increased data transfer via 

the Helium Wireless Network, demand for HNT increases and supply of 

HNT simultaneously decreases, pushing up the price for HNT. 

d. If demand for Data Credits recedes, demand for HNT also recedes and, 

because the Helium Network Blockchain creates new HNT each day under a 

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fixed schedule, the supply of HNT increases, creating an excess supply of 

HNT that depresses the price for HNT. 

163. Nova Labs and its business development employees are responsible for sales, 

partnerships, marketing, and technology integration for large enterprise customers who might deploy 

significant numbers of devices across the Helium Wireless Network and, by deploying those devices, 

consume Data Credits and burn HNT.  (By contrast, investors have no practical ability to engage in 

business development activities with large enterprise customers, nor the expertise and funds 

necessary to do so.  Instead, they depend entirely on Nova Labs’ entrepreneurial and managerial 

skills and efforts in attracting those customers.) 

164. Additionally, when Nova Labs created Helium Mobile, Helium Mobile became the 

largest acquirer and consumer of Data Credits by orders of magnitude. 

165. Thus, the Helium Wireless Network relies heavily, if not totally, on Nova Labs for 

the amount of data flowing through the Helium Wireless Network, the number of Data Credits 

needed to pay for that data, and the number of HNT demanded and destroyed for the Data Credits. 

166. Under the Burn-Mint Equilibrium mechanism, if Nova Labs persuades large 

enterprises to use the Helium Wireless Network or attracts customers to its Helium Mobile service, 

then data usage increases, more Data Credits are needed, and more HNT are demanded and also 

burned, pushing up the price of HNT—equally for each HNT holder.  By contrast, if Nova Labs 

fails to persuade large enterprises to use the Helium Wireless Network or to attract customers to its 

Helium Mobile service, then fewer users adopt the Helium Wireless Network, data usage is limited, 

fewer Data Credits are purchased, fewer HNT are demanded and burned, and the value of HNT 

decreases—equally for each HNT holder. 

167. Thus, the Burn-Mint Equilibrium links the value of HNT (and IOT and MOBILE, 

which can be exchanged for HNT) to Nova Labs’ entrepreneurial efforts in creating demand for the 

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Helium Wireless Network and Data Credits, and, with it, the financial fortunes of Investors, defined 

supra ¶ 159. 

168. As Nova Labs’ CEO explained internally, Nova Labs’ primary focus as a business is 

driving “usage of data credits,” even if Nova Labs fails to earn revenue or loses money on its sales 

of Hotspots, because increased demand for Data Credits increases HNT’s value. 

169. Nova Labs’ executives frequently made public statements about the effect of the 

Burn-Mint Equilibrium and Nova Labs’ efforts to drive usage of the Helium Wireless Network and 

create demand for Data Credits.  These statements, and the structure of the economics of the 

Helium Network more generally, led Investors reasonably to view their investments as having the 

potential for profit. 

170. For example, in June 2019, Nova Labs’ COO said publicly that Nova Labs was 

“focus[ed] on usage of the network,” adding, “Get Data Credits to flow in mass volumes equates to 

high usage of the network. . . .  [Nova Labs] is only focused on that.”  He added that Nova Labs was 

“maniacally focused on working with large enterprises on use cases” on the Helium Wireless 

Network—i.e., persuading large businesses to use the Helium Wireless Network, acquire and 

consume large amounts of Data Credits, and create buy-side demand for HNT. 

171. Also in June 2019, Nova Labs’ CEO published a blog post saying Nova Labs is 

“actively working with companies who are trying to solve problems with [the Helium Network] . . . 

we need to continue moving forward by providing nationwide coverage for the US [and] partnering 

with customers to drive demand for network usage . . . .” 

172. In a September 2019 post to a public Telegram channel, a cloud-based messaging 

program and broadcasting tool, devoted to the Helium Network, Nova Labs’ CEO explained that, 

“as more [HNT] is burned to turn in to [Data Credits], we’d expect the market value of [HNT] to 

increase.” 

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173. In a December 2019 public appearance, Nova Labs’ CEO reiterated that demand for 

Data Credits influenced the price of HNT and could be profitable for IoT Hotspot investors, 

And so the demand for Data Credits will ultimately act as sort of a 
bigger and bigger sync for [HNT], right?  As more devices use the 
network, more [HNT] have to be burned on a regular basis in order 
to create Data Credits that get used on the network. . . .  And so our 
model tries to sort of like – basically, if no one’s using the network, 
there’s going to be a ton of inflation and [HNT’s] going to be less 
valuable.  If a lot of people are using the network, there’s going to be 
deflationary pressure and that should increase the value of [HNT]. 

174. In April 2020, Nova Labs’ COO explained during a public appearance that Nova 

Labs uses its entrepreneurial efforts to create demand for the Helium Wireless Network among 

enterprise customers by “helping enterprises stand up their capability, . . . leveraging blockchain, 

leveraging the network”; and the COO further highlighted that Nova Labs “can provide engineering 

work needed to customize certain parts” of customer products to use the Helium Network. 

175. In June 2020, Nova Labs’ CEO echoed that Nova Labs’ was using its entrepreneurial 

efforts to create demand for Data Credits, saying that Nova Labs’ “primary purpose is to promote 

usage on the network in the form of wireless data transfer and Data Credits.” 

176. During an April 2021 public appearance, Nova Labs’ COO highlighted that Nova 

Labs has a “dedicated business development team” who are “all focused on getting usage, getting 

users on the network.” 

177. In May 2021, Nova Labs’ COO publicly promoted Nova Labs’ business 

development and marketing efforts and their effect on the demand for Data Credits: 

Most of [my work] is outbound go-to-market, sales, marketing, 
business development. . .  The usage [of the Helium Wireless 
Network] is crucial. . . .  We do things like webinars, we do blogs, we 
talk about and we highlight customers that join the network and use 
the network. . . .  We track that very closely, we have an amazing 
team of people doing that . . . to go after this to go and increase our 
usage of the network. . . .   As more and more users pile on, the Data 
Credit piece will start going up and then it will just tip the scales 
where passing data is more important. 

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178. During a November 2021 public appearance, Nova Labs’ COO emphasized that 

Nova Labs had designed HNT to be an asset with speculative value tied to Data Credits and usage 

of the Helium Wireless Network, saying,  

Part of why we built a two-token model [i.e., HNT and Data Credits] 
is because the mined cryptocurrency, HNT, we expected that to be 
highly volatile.  As much as it can go up, we understand that it can go 
down just as much. . . .  For this bootstrap of a network [to a crypto 
asset] to work, there has to be value, the incentive has to exist and so 
in the early days, it’s highly speculative and it is dependent on the 
value of HNT. . . .  But as time goes on and as usage [of the Helium 
Wireless Network] comes, Data Credit demand will grow, and as data 
demand grows, Data Credit demand grows, HNT has to be burned.  
That means the supply of HNT will become scarcer and scarcer. . . .  
That should drive HNT value over time purely based on utility. 

179. In June 2022, on Nova Labs’ public Discord channel, a communications platform 

with topic-based conversation spaces, Nova Labs’ CEO again emphasized that increased usage of 

the Helium Network would increase investment returns to IoT Hotspot owners:  “Ultimately the 

network needs usage, it will drive the value of HNT up which benefits everyone.” 

180. When Nova Labs added Mobile Hotspots, created and began issuing IOT and 

MOBILE, and created its Helium Mobile cellular service provider, see supra ¶¶ 144 to 158, its 

executives emphasized that these developments increase demand for and usage of Data Credits. 

181. For example, in a November 2022 public appearance, Nova Labs’ CEO explained 

why Helium Wireless Network usage and the resulting destruction of HNT would benefit holders of 

HNT, IOT, and MOBILE, 

[IOT and MOBILE] can be redeemed for HNT. . . .  The reason that 
that makes sense or that works is that every single network on 
Helium . . . requires Data Credits to use. . . .  The only way to acquire 
Data Credits is to destroy HNT, so as more and more data is used on 
the network, more and more HNT is destroyed.  So as the circulating 
supply of HNT decreases, we expect that the value of the network 
increases. . . .  So it doesn’t matter if you’re an IOT holder.  It doesn’t 
matter if you’re an HNT holder. . . .  Ultimately, what you want to 
see on the network is utility and growth and usage because it results 
in more HNT being destroyed. . . .   

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It is literally the cliché which I don’t love of rising tides lift all boats.  
That’s really what it’s all about.  It’s like how do we increase utility 
and usage of the network all across the board because it will benefit 
everyone that’s involved in the Helium ecosystem. 

182. Similarly, during a public appearance in September 2022, Nova Labs’ COO said,   

Building out usage and ecosystem.  That’s crucial, and that’s 
something that [Nova Labs’ CEO] and I and the rest of the team at 
Nova Labs now, we’ve been really thinking about is how do you get 
that usage up, how do you get the Data Credits going.  How do you 
get, not like thousands of sensors, but how do you get usage in the 
form of millions of devices.  That’s why 5G, cellular, LTE is so 
attractive to us because we believe if we can get millions of users to 
use their phones on top of the Helium Network, that creates a  
massive usage of Data Credits, that’s burning HNT . . . that’s where 
the value comes from. 

B. Nova Labs Promoted the Investment Returns Hotspot Buyers Earned. 

183. Even before Nova Labs’ launched the Helium Network in July 2019, it understood 

that potential investors in IoT Hotspots were focused on the investment return they would obtain 

from the purchase.   

184. For example, in a May 2019 internal communication, Nova Labs’ CEO said to other 

Nova Labs executives, “[T]here’s no way to escape from the obvious ROI questions,” i.e., investors’ 

questions about the “return on investment” they would earn by buying an IoT Hotspot to get HNT. 

185. Nova Labs’ executives frequently told potential investors that investment returns on 

purchases of IoT or Mobile Hotspots—and the resulting HNT, IOT, and MOBILE—could be 

substantial, and underscored for those potential investors that it was reasonable to believe that they 

could profit by investing in IoT and Mobile Hotspots and participating in Discovery Mapping and 

thereby obtaining HNT, IOT, and MOBILE. 

186. In a July 2019 public appearance, Nova Labs’ CEO explained why an investor 

should be interested in buying an IoT Hotspot:  “The potential of owning a piece of [Nova Labs’] 

network or being your own network operator”—i.e., owning an IoT Hotspot—“is potentially very 

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lucrative.”  He added that Nova Labs’ internal “economic models” show that “the opportunity to 

participate is substantial, and that’s sort of the rationale for really doing any of this.” 

187. In a January 2020 public appearance, Nova Labs’ CEO explained to potential IoT 

Hotspot investors that “if the network succeeds in a huge way, you should be rewarded in a huge 

way for helping making that happen.  Tokens are a great way to enable a new type of capital 

formation that is tied to the value put in, and the long-term success.” 

188. In a July 2020 e-mail to a potential investor, Nova Labs’ CEO characterized IoT 

Hotspots as a speculative investment in IoT technology and the Helium Wireless Network, 

[Nova Labs] earned approximately 600,000 HNT every month – 
today those HNT are trading around $0.50/ea., but we’d expect 
substantial growth in the value as the network is more utilized. . . .  
One way of thinking about HNT is an IoT ETF [Exchange Traded 
Fund] – effectively an underlying asset that should appreciate in value 
as IoT activity increases, and even more so as that activity occurs on 
the Helium Network. 

189. In March 2021, Nova Labs directed participants in Nova Labs’ public Discord 

channel to review an investment analysis of the IoT Hotspot by a well-known crypto asset 

investment firm.  That analysis says, 

On average, at the current $6.92 market price for HNT, a new 
hotspot pays for itself in about 10 days. . . .  This average payback 
period is very attractive, and that is why the network is growing so 
fast. . . .  What if we assume the network grows to 100,000 hotspots 
in 2021?  Then the average hotspot would earn 1.1 HNT per day. . . . 
We believe it is reasonable to assume the HNT price will be higher in 
the world of [100,000 hotspots] as the Helium Network gains more 
awareness and becomes more useful.  This higher price will mean 
better ROI for Helium hotspot owners, which will further drive 
network growth. 

Nova Labs’ CEO told participants in that public Discord channel that the analysis was “fine work.” 

190. In a November 2021 statement on Nova Labs’ public Discord channel, Nova Labs’ 

CEO highlighted the investment returns earned by IoT Hotspot investors:  “The current returns are 

already insanely high.  The only thing that will keep happening is that unrealistic hosts [sell] to 

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realistic hosts. . . .  [P]eople who think 0.2/HNT [per] day is ‘terrible’ will sell to people who realize 

it’s like 200% APR [annual percentage yield].” 

191. In a March 2022 public appearance, Nova Labs’ CEO characterized IoT Hotspots as 

a good financial investment, saying, “Early hotspot hosts by today’s HNT value made an absurd 

amount of money,” adding that “HNT mining is still one of the most high ROI [return on 

investment] miners that you can participate in.” 

192. In a July 2023 statement on Nova Labs’ public Discord channel, Nova Labs’ CEO 

again emphasized investment returns earned by IoT and Mobile Hotspot investors, saying, “I just 

try and remind people that getting 10% APY [annual percentage yield] on anything is a ridiculously 

good return.” 

193. In December 2023, Nova Labs’ CEO and its COO each publicly posted on social 

media video clips of Discovery Mappers touting their investment returns from the Discovery 

Mapping Program.  Also in December 2023, Nova Labs’ CEO reposted on social media a statement 

saying, that Nova Labs “unveiled an unlimited $20 per month phone plan yesterday . . . [The price 

of t]he Network’s $HNT token, which incentivizes infrastructure providers, is up 40% in 

anticipation that this may be the network’s mainstream moment.” 

C. Nova Labs Promoted Secondary Trading of HNT, IOT, and MOBILE,  
and Actively Created a Secondary Trading Market. 

194. Since at least July 2019, Nova Labs has undertaken significant efforts to create and 

promote secondary trading markets for HNT, IOT, and MOBILE. 

195. Given Nova Labs’ secondary market efforts, and its promotion of them, Investors 

further reasonably expected to profit from investing in IoT and Mobile Hotspots and buying phone 

plans and tendering personal data to participate in Discovery Mapping, and thus obtaining HNT, 

IOT, and MOBILE.  Indeed, the ability to sell investments in liquid secondary markets is an 

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important consideration for investors determining whether to buy securities because it represents 

one way in which they can realize profits from their investments. 

196. In the months after Nova Labs launched the Helium Network, its executives and 

personnel emphasized in public statements that HNT could be sold, and HNT holdings monetized, 

via over-the-counter trading groups in messaging applications, such as Telegram.  Nova Labs also 

highlighted to investors that it had designed the Helium Network Blockchain to allow an HNT 

holder to burn some or all of their HNT in exchange for Data Credits and simultaneously assign 

those Data Credits to a third party.  Nova Labs explained that this feature allowed an HNT holder 

to monetize their HNT by charging for the assignment.  That is, the holder of HNT could obtain 

consideration from a third party (e.g., dollars or Bitcoin) in exchange for the HNT holder agreeing to 

burn some portion of their HNT holdings and instructing the Helium Network Blockchain to assign 

the resulting Data Credits to the third party. 

197. By 2020, Nova Labs began extensive efforts to cause HNT to be listed and available 

for secondary trading on multiple crypto asset trading platforms. 

198. In early 2020, Nova Labs management told its Board of Directors that it was 

negotiating with three large crypto asset trading platforms to list HNT for trading and that such 

listings would be a “watershed event” for investors in IoT Hotspots.  This is because the ability to 

trade HNT on such platforms would allow investors to profit by selling their HNT. 

199. For example, between February and June 2020, Nova Labs’ CEO negotiated an 

agreement to list HNT for trading on two well-known crypto asset trading platforms.   

200. As preconditions for such listings, the trading platforms required technical assistance 

and information necessary to make HNT available to trade; substantial payments of cash; transfer of 

100 HST; and promises that the market for HNT would not be manipulated.  Nova Labs provided 

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that technical assistance and HST (which, in turn, would provide HNT in perpetuity, and funded at 

least $130,000 in payments. 

201. Nova Labs then publicized that HNT had been listed for trading on those two 

crypto asset trading platforms. 

202. In addition to causing HNT to be listed on crypto asset trading platforms, Nova 

Labs paid well-known crypto marketers, influencers, and websites to promote HNT, IOT, and 

MOBILE to the public.   

203. For example, between July and October 2020, Nova Labs’ COO negotiated an 

agreement with a popular website focused on crypto asset markets under which the website agreed 

to feature HNT prominently and pay rewards to its users in exchange for their engagement with 

HNT-related website content.  Nova Labs paid the website approximately $100,000 worth of HNT 

for this promotional service. 

204. In September 2020, Nova Labs signed a contract with a market maker—a trading 

firm that provides continuous liquidity for an asset on the secondary market by quoting both buy 

and sell orders—to create liquidity in the secondary trading market for HNT, allowing investors to 

monetize the HNT that they received via their IoT Hotspots. 

205. Under that contract, Nova Labs provided the market maker with 200 HST and 

millions of additional HNT to facilitate the market making and the market maker agreed to provide 

liquidity for HNT on all crypto asset trading platforms for a more than two-year period.   

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D. Nova Labs Devoted Substantial Resources to Maintaining, Modifying, and 
Marketing the Helium Network and It Touted Those Efforts. 

1. Nova Labs Engaged in Extensive Software Engineering Work 
to Ensure That the Helium Network Operates. 

206. Investors understood that the success of their investments depended entirely on 

Nova Labs’ efforts to develop and maintain the Helium Network—including the Helium Network 

Blockchain and Helium Wireless Network—so that it functioned reliably. 

207. Between at least July 2019 and April 2023, the Helium Network ran on Nova Labs’ 

bespoke blockchain, the Helium Network Blockchain.  During that time, for example, all 

distributions of and transactions in HNT occurred via that blockchain.   

208. Nova Labs employed at least thirty software engineers and other staff to monitor the 

functionality of the Helium Network Blockchain and to fix technical issues that regularly arose in the 

blockchain, including by writing, validating, and deploying computer code, among other things.   

209. Nova Labs routinely emphasized that Investors were dependent on Nova Labs’ 

engineering team to ensure that the Helium Network, Helium Network Blockchain, and Helium 

Wireless Network continued to operate. 

210. For example, during a public appearance in February 2021, Nova Labs’ CEO 

explained that only Nova Labs’ software engineers had the ability and security permissions to make 

technical changes to the Helium Network Blockchain and that “in all of these projects”—i.e., 

blockchain projects like the Helium Network—“the core engineering team really, that’s who runs 

this” and that Nova Labs’ engineering team “happen to be the only people who know how the hell 

this thing works, because we built it.” 

211. As another example, in April 2021, Nova Labs’ CEO reaffirmed Nova Labs’ 

engineering expertise, which was necessary to work on and upkeep the Helium Network generally, 

saying publicly, “We’ve been hiring a little bit, the kind of expertise that we need is extremely hard to 

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find, both on the programming language we chose, but in general developing, like, layer one 

blockchain things requires a certain level of distributed systems experience and knowledge that’s 

generally in pretty short supply.” 

212. In a January 2022 public appearance, Nova Labs’ COO reaffirmed the need for the 

expertise of Nova Labs’ engineering personnel to keep the Helium Network afloat,  

[Nova Labs] is always open-minded about what we could do and how 
we can advance and evolve the [Helium Network] blockchain. . . . 
Believe it or not, it’s pretty hard to do that with 50 people in the 
company, 30 of whom are engineers, right?  We literally have 30 
engineers, so it’s a lot to take on for 30 people.  We’re trying [to hire 
more] but it’s just a very specific skill set and we have a very highly 
specialized language that we use in Erlang, so it’s tough because 
there’s only so many out there that can do this. 

213. In May 2022, one of Nova Labs’ equity investors (who was also one of the largest 

HNT investors) observed, “The network is valuable because there are people who are writing the 

code to make this possible.”  The “people” writing the code were Nova Labs’ employees. 

214. During a public appearance in September 2022, Nova Labs’ CEO described the 

substantial work necessary to ensure that the Helium Network Blockchain (and, thus, the Helium 

Network) continued to operate: 

It takes an enormous amount of our engineering resources, we spend, 
I don’t know—it’s got to be 70% plus of our engineering time to date 
has been firefighting what I would call problems with the [Helium 
Network Blockchain] just because we made some design decisions 
that I think were good ones, at the time, but didn’t scale at all. 

215. Nova Labs was solely responsible for the software engineering work necessary to 

modify and fix the Helium Network Blockchain, without which, the blockchain would have halted 

or failed. 

216. Nova Labs also controlled modifications to the Helium Network, including the 

Helium Network Blockchain.  Since the launch of the Helium Network, Nova Labs proposed nearly 

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all changes to the Helium Network Blockchain, played the central (and often sole) role in approving 

those changes, and then performed all work necessary to implement the modifications.   

217. Among many other things, Nova Labs repeatedly changed the number of HNT that 

a Hotspot investor would receive; determined the value of Data Credits and the sources of 

information used to determine the Data Credit-HNT exchange rate; created MOBILE and IOT as 

part of the Helium Network; added new types of devices, called “validators,” that could act as nodes 

running the Helium Blockchain; determined how validators were compensated for providing this 

service; determined which third parties were permitted to manufacture Hotspots; and, in April 2023, 

migrated Nova Labs’ bespoke Helium Network Blockchain (and all data comprising that blockchain) 

to run on a third-party blockchain (“Third-Party Blockchain”). 

218. After each such change, of which the above are merely a few examples, Nova Labs 

publicly touted the change to Investors as work Nova Labs had done. 

219. Even after Nova Labs migrated its bespoke Helium Network Blockchain (and all 

data comprising that blockchain) to run on a Third-Party Blockchain, Nova Labs continued to be 

the central actor maintaining and modifying the computer code comprising the Helium Network.  

As Nova Labs’ CEO said at the time of the migration:  “We’re still extremely committed to being 

the core development team for the Helium network, that’s never going to change.” 

220. Until very recently, no one outside of Nova Labs has had security permissions 

necessary to make any technical changes to the Helium Network.  Thus, through at least the end of 

2022, Nova Labs and its employees wrote nearly all computer code necessary to maintain, update, 

and modify the Helium Network.  Nova Labs and its employees continue to be the core 

development team for the Helium Network. 

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2. Nova Labs Engaged in Extensive Business Development and 
Marketing Work to Promote the Helium Network. 

221. Nova Labs has engaged in substantial entrepreneurial efforts to market and promote 

the Helium Network and to attempt to persuade enterprise customers to adopt the Helium Network 

technology.  Nova Labs has also touted these efforts to Investors. 

222. The value of Investors’ investments depended on Nova Labs’ efforts to develop a 

user base for the Helium Wireless Network, including in the form of large enterprise customers who 

would adopt the Helium Network, create demand for Data Credits, and drive up the demand for, 

and price of, HNT—as Nova Labs publicly explained to potential investors. 

223. For example, in October 2019, Nova Labs’ COO described on Nova Labs’ blog how 

Nova Labs was trying to develop relationships with, and use cases for, large enterprise customers 

and to persuade them to adopt the Helium Network:  

We’re continually performing real-world tests under a broad range of 
conditions to provide insights about the network, including [the] 
range [of IoT Hotspot wireless coverage].  The range is specifically 
essential for companies who want to track assets.  This use case is in 
high demand as it allows companies to accurately track their fleets (of 
trucks, scooters, etc.) in real-time without cellular. . . .  We continued 
the internal tests but expanded to working with customers to 
demonstrate the range and stability of the network in a wide range of 
conditions specific to their use cases. 

224. In a December 2019 public social media post, Nova Labs’ COO touted that Nova 

Labs was “spending money on ads to recruit more hotspot hosts and to generate awareness” and 

that the “combo of our online efforts, along with PR, and content is working.  If it wasn’t working, 

we would not be doing it.”  He added that “[g]etting users on the network is a long lead time effort.  

We actually started the effort about 1 year ago, before the network even existed.” 

225. In a public appearance in June 2020, Nova Labs’ Business Development VP 

emphasized its extensive work to persuade large enterprise customers to use the Helium Network, 

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The demand side, which are enterprises, companies like, Nestle, for 
example, that use the Helium network as an alternative to cellular 
networks to send data. . . .  2020, for us, is the year of sort of building 
out the demand.  We’re doing pretty much every effort possible to do 
this.  We’ve got a full Enterprise sales team that’s doing all sorts of 
enterprise sales things like outbound communications, going after 
companies. . . .  In the last 45 days alone, we’ve closed 15 enterprise 
customers, people who are using the network and have every 
intention of building real products. . . .  On the enterprise names, by 
the way, our marketing team is about to start just a fairly consistent 
blitz of putting names out there, actual companies with stories and 
really nice narratives of around why they’re using Helium. 

226. In March 2021, Nova Labs’ Business Development VP again emphasized publicly its 

marketing and business development work, saying that his role is to get “big companies” to put 

devices on the Helium Wireless Network and further highlighting Nova Labs’ focus on working 

with those companies: 

We have a dedicated team of what we call BDRs or Business 
Development Representatives who actually go out and do active 
outbound prospecting for network users, so if you’re a customer of 
[Nova Labs] . . . we’ll put together outbound campaigns and we’ll do 
cold calling for you, going after a target and try to find the person 
that might buy your product. . . .  

227. In September 2021, Nova Labs’ Business Development VP said publicly that it 

“continues to bring these massive companies into the ecosystem” and promised potential investors 

that “thousands more companies like this are going to be deploying trillions of sensors” on the 

Helium Wireless Network. 

228. Investors reasonably expect to profit from Nova Labs’ entrepreneurial engineering, 

business development, and marketing efforts. 

229. While Nova Labs formed a non-profit entity, the Helium Foundation, that it 

purportedly intended to eventually be an “independent” third-party that could perform engineering, 

business development, and marketing work related to the Helium Network, to the extent the Helium 

Foundation has performed any such work, it has been limited. 

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230. The Helium Foundation did not exist for nearly one year after Nova Labs launched 

the Helium Network.  Then, for more than two years after the Helium Foundation was formed, it 

had no employees or operations and performed no work maintaining or improving the Helium 

Network.  Even after the Helium Foundation began to hire employees, it continued to rely on Nova 

Labs to perform all or nearly all software engineering and marketing work for the Helium Network. 

231. In any event, the Helium Foundation is not and has never been independent from 

Nova Labs.  Through at least mid-2024, the Helium Foundation had no meaningful sources of 

revenue other than grants from Nova Labs, and Nova Labs has effectively controlled it. 

VI. NOVA LABS MADE FALSE AND MISLEADING STATEMENTS TO 
INVESTORS IN IOT HOTSPOTS AND NOVA LABS’ EQUITY. 

232. Nova Labs also made materially false and misleading statements, both to those who 

invested in IoT Hotspots and those who purchased Nova Labs’ preferred equity shares, about large 

enterprise customers that Nova Labs claimed were using Nova Labs’ Helium Network that, if true, 

would increase Nova Labs’ value and the value of HNT.  

233. In truth, however, those enterprise customers were not using the Helium Network. 

A. Nova Labs’ Acquisition of Large Enterprise Customers Was Central to the 
Value Proposition of Nova Labs and HNT. 

234. As described above, Nova Labs emphasized publicly that a focus of its business was 

driving usage of the Helium Wireless Network and creating demand for Data Credits.  As Nova 

Labs explained, by driving that usage and creating that demand, Nova Labs would simultaneously 

create demand for HNT (which are necessary to acquire Data Credits) and reduce supply of HNT 

(which must be destroyed to acquire Data Credits), causing HNT’s value to increase. 

235. To drive wireless usage and demand for Data Credits, Nova Labs tasked its 

marketing and business development teams with persuading large enterprise customers—referred to 

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within Nova Labs as “Logos”—to use the Helium Wireless Network, acquire and “burn” HNT, and 

consume Data Credits. 

236. Nova Labs also believed it would benefit from associating with well-known Logos.  

Such association would differentiate Nova Labs from other crypto asset- and blockchain-based 

projects, give a sense of legitimacy to it and its nascent technology, persuade other enterprise 

customers to use the Helium Wireless Network, and obtain publicity for Nova Labs. 

237. Nova Labs knew that Logos were important to actual and potential investors, 

including potential IoT Hotspot investors and potential investors in Nova Labs’ equity shares.   

238. In a September 2019 discussion between Nova Labs’ CEO and its COO, its CEO 

explained that “smart” investors would consider which, if any, Logos were using the Helium 

Network, saying that Nova Labs is “definitely going to need either logos or utility or both soon, 

although I’d expect [IoT Hotspot investors] to be more rabid about [secondary trading on 

exchanges] in the short term . . . the smart ones will be thinking long term and that means logos 

then utility.” 

239. In a subsequent discussion between Nova Labs’ COO and two of Nova Labs’ 

business development executives, the COO emphasized the importance of Logos to Nova Labs’ 

value proposition:  “[W]e need to see more logos and more usage of the network.  This is really it 

for [Nova Labs].  It’s get it done or go home.” 

240. Then, Nova Labs’ COO created an incentive compensation structure for Nova Labs’ 

business development team that was tied directly to whether the team persuaded Logos to use the 

Helium Network and acquire and consume Data Credits. 

241. Nova Labs used Logos to promote its offering and sale of IoT Hotspots and the 

Helium Network generally.  

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242. Nova Labs also used its purported relationships with Logos to persuade institutional 

and other accredited investors to buy $200 million of Nova Labs’ preferred equity shares as part of a 

private placement between December 2021 and February 2022 (“Series D Fundraise”). 

243. In connection with its offer and sale of IoT Hotspots and in its pitches to potential 

investors in the Series D Fundraise, Nova Labs repeatedly represented that three particular large and 

established companies were associated with Nova Labs:  Swiss multinational food conglomerate 

Nestlé S.A. (“Nestlé”); American transportation company Lime, formerly known as LimeBike 

(“Lime”); and American software company Salesforce, Inc. (“Salesforce”). 

244. Specifically, between mid-2019 and 2022, Nova Labs and its executives repeatedly 

told actual and potential investors that Nestlé, Lime, and/or Salesforce were “currently using,” were 

“users” of, or “relied on” the Helium Network, and Nova Labs used those companies’ names and 

corporate imagery throughout its website and in its promotional materials.   

245. Nova Labs’ and its executives’ repeated use of Nestlé’s, Lime’s, and Salesforce’s 

names and corporate imagery suggested to actual and potential investors that those companies’ 

adoption of and/or trust in the Helium Network would inure to the investors’ benefit, including 

because those companies would deploy sensors on the Helium Wireless Network and acquire and 

destroy HNT to obtain Data Credits to do so. 

246. Nova Labs’ and its executives’ representations concerning Nestlé, Lime, or 

Salesforce were materially false and misleading.  None of those companies were then “users” of or 

were then “currently using” the Helium Network, which Nova Labs and its executives knew or 

recklessly disregarded.   

247. As explained below—and as Nova Labs and its executives knew or recklessly 

disregarded—each of Nestlé, Lime, and Salesforce had only conducted very limited tests of certain 

Nova Labs component hardware; those tests largely occurred months and years before the launch of 

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the Helium Network; and none of these limited tests resulted in any of the companies adopting any 

Nova Labs technology or becoming “users” of the Helium Network.  Both Nestlé and Lime 

ultimately issued cease-and-desist letters to Nova Labs demanding that it stop using their names. 

B. Nova Labs’ Actual Contact with Nestlé, Lime, and Salesforce Was Limited. 

248. Nova Labs’ actual interactions with each of Nestlé, Lime, and Salesforce was limited. 

249. Nova Labs interacted with Nestlé in 2018.  This was before Nova Labs had pivoted 

its business to blockchain technology and crypto assets, before it had manufactured IoT Hotspots, 

and before it had launched the Helium Network Blockchain. 

250. That year, Nestlé ReadyFresh, a division of Nestlé that delivers water to consumers, 

tested certain Nova Labs component hardware in a small subset of its water coolers as a possible 

way to monitor consumers’ water levels and anticipate their water delivery needs. 

251. Nestlé’s test of Nova Labs component parts—something wholly different than the 

Helium Network Blockchain and Helium Wireless Network—ended no later than 2018.  After that 

test, Nestlé did not enter into any deal with Nova Labs and did not adopt or use Nova Labs’ 

technology, which Nova Labs and its executives knew or recklessly disregarded.  

252. Nova Labs’ interactions with Lime were similarly short-lived, limited in scope, and 

occurred before the launch of the Helium Network.  Those interactions consisted of a 

demonstration, on one day in February 2019 and a second day in March 2019, during which Nova 

Labs showed two Lime employees that certain Nova Labs component hardware could be strapped 

to Lime scooters to track those scooters’ locations within a few blocks in San Francisco.   

253. Nova Labs’ relationship with Lime ended with that demonstration.  Lime did not 

enter into any deal with Nova Labs and did not adopt or use Nova Labs’ technology, as Nova Labs 

and its executives knew or recklessly disregarded.  In fact, by July 2019, Nova Labs’ COO 

complained to one of Nova Labs equity investors that his contact at Lime was no longer at the 

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company, that Nova Labs had been “lost in the shuffle,” and that the attempt at business 

development had hit a dead end. 

254. Like Nestlé and Lime, Salesforce conducted a limited test of Nova Labs’ technology, 

which it never adopted.  

255. In early 2020, Nova Labs provided one of Salesforce’s more than 50,000 employees 

with Nova Labs component hardware and that Salesforce employee built a prototype employee 

badge scanner incorporating that hardware.  That employee then tested the prototype to show that it 

could scan Salesforce employee badges and transmit badge information to the internet using the 

component hardware.  When the Covid pandemic began in March 2020, however, that testing 

stopped.  As did Nova Labs’ relationship with Salesforce. 

256. Salesforce never became a user or customer of Nova Labs, and never relied on or 

adopted Nova Labs’ technology, as Nova Labs and its executives knew or recklessly disregarded. 

257. Nova Labs and its executives knew or recklessly disregarded that Nova Labs had 

never entered into any deal with Nestlé, Lime, or Salesforce to purchase or use a Hotspot, acquire 

HNT, buy or use Data Credits, or to use the Helium Wireless Network. 

258. Nova Labs’ internal documents confirm its understanding that none of Nestlé, Lime, 

or Salesforce were Nova Labs clients or “users.”  For example, by October 2019, internal Nova 

Labs reports detailing its potential deal pipeline—received and reviewed by Nova Labs’ CEO, COO, 

and Business Development VP—assessed its likelihood of converting Salesforce to be a Nova Labs’ 

customer in a future deal at fifty percent, the likelihood of converting Lime at five percent, and 

completely omitted Nestlé.  In other words, Nova Labs’ executives knew that none were then 

customers, or relying on or using Nova Labs’ technology, including the Helium Wireless Network. 

259. In June 2020, when Nova Labs’ COO suggested to Nova Labs’ CEO that they use 

Nestlé’s and Lime’s names to promote the Helium Network because those companies were 

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“marquee names,” Nova Labs’ CEO responded, “Yea, although the challenge is going to be no one 

has deployed anything yet.”  Around the same time, Nova Labs’ COO told Nova Labs’ CEO that 

the risk of improperly using Lime’s name to promote the Helium Network was low because the 

people at Lime who knew what had or had not happened between Nova Labs and Lime were no 

longer employed at Lime, saying, “they also fired all their PR people so no one will challenge us.” 

260. Although Nova Labs and its CEO, COO, and Business Development VP knew or 

recklessly disregarded that Nestlé, Lime, and Salesforce had not adopted and had not become 

“users” of Nova Labs’ technology, they repeatedly said the opposite. 

C. Nova Labs’ Repeated False and Misleading Public Statements  
About Nestlé, Lime, and Salesforce 

261. Nova Labs repeatedly made false and misleading statements concerning its and the 

Helium Network’s relationships with Nestlé, Lime, and Salesforce on its website, in press releases 

and marketing materials, in interviews, and in public appearances.  Nova Labs and Nova Labs’ 

executives knew or recklessly disregarded that these statements were false and misleading. 

1. Nova Labs’ False and Misleading Statements on Its Website 

262. Nova Labs’ webpage was regularly reviewed and/or updated by Nova Labs’ CEO, its 

COO, and its Business Development VP, who knew or recklessly disregarded that it featured false 

and misleading statements. 

263. For example, for at least large parts of 2019 and 2020, Nova Labs used the logos of 

Nestlé and Lime under the text, “What uses the People’s Network?” (the “People’s Network” is 

another name for the Helium Network): 

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Likewise, on other pages of its website during that same period, Nova Labs listed the logos of 

Nestlé, Salesforce, and Lime under the heading “Helium Is Used By.”   

264. Although Nova Labs’ website listed companies other than Nestlé, Salesforce, and 

Lime as “using” the Helium Network, those companies were small, local companies with few 

employees and were relatively unknown compared to Nestlé, Salesforce, and Lime, which are 

prominent, large entities with the potential to create substantial demand on the Helium Network. 

265. Nova Labs’ website also excerpted and posted false and misleading headlines from 

magazines and online publications, such as, “Forbes:  [Nova Labs] Makes Wireless Internet Cheaper, 

Lands Lime Scooters and Nestle As Clients.” 

266. Another page on Nova Labs’ website said, in relevant part, “[Nova Labs] helps 

companies solve connectivity challenges without worrying about expensive phone plans or worrying 

about building and maintain [sic] wireless infrastructure.”  This statement was followed by Nestlé’s 

logo and the claim that Nova Labs had created for Nestlé a “capability” that “delivers a real-time 

view of fill levels extending the level of service they can offer to customers.”  

267. Yet another page on Nova Labs’ website featured Salesforce’s name and logo as a 

user of the Helium Network and said, 

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A core value at Salesforce is trust – Helium allows them to focus on 
innovation for their application knowing that messages from devices 
are securely sent across the Helium network. 

268. Contrary to its use of the logos and names of Nestlé, Lime, and Salesforce on its 

website, Nova Labs and its executives knew or recklessly disregarded that the companies were not 

users of the Helium Network or Nova Labs’ technology, that Nova Labs was not supporting those 

companies’ operations in any way, and that Nova Labs had not “landed” any of the three companies 

as “clients.” 

2. Nova Labs’ Additional False and Misleading Statements  

269. Nova Labs’ CEO, COO, and Business Development VP also made false and 

misleading statements about Nestlé, Lime, and Salesforce in press releases, news articles, and public 

appearances, which they knew or recklessly disregarded were false and misleading. 

270. Between July and December 2019, Nova Labs’ CEO and its COO made several 

statements that they knew or recklessly disregarded were false and misleading: 

a. During a public appearance in July 2019, Nova Labs’ CEO said, “I think, as 

you know, this [i.e., the Helium Network] starts to develop and people start 

to use it and more applications come on board and we’ve already got some 

good ones like Lime, and . . . Nestlé.  A bunch of good companies and good 

use cases that intend to use the network immediately.” 

b. During an October 2019 public presentation, Nova Labs’ COO said, 

“So, today we have companies like Lime Bike using our technology to track 

their scooters in the City of Austin.” 

c. During a public appearance in December 2019, Nova Labs’ CEO described 

how Nestlé consumed Data Credits related to the Helium Wireless Network, 

saying, “the other type of token on our network is called the ‘Data Credit,’ 

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and that’s what customers of the network use, right?  So if you are a device-

maker of some kind – let’s say Nestlé, who’s building devices on the network 

– you transact in the form of Data Credits.” 

In truth, neither Nestlé nor Lime were “on board” with Nova Labs, Lime was not using the Helium 

Network to track scooters in Austin, and Nestlé was not building devices on the Helium Network, 

all of which Nova Labs’ CEO and its COO knew or recklessly disregarded. 

271. In fact, in November 2019, two Nova Labs employees highlighted to Nova Labs’ 

COO that Nova Labs was using Lime’s name and corporate imagery as promotion on its website, 

even though “we are NOT working with them.” 

272. In response, Nova Labs’ COO admitted that Nova Labs was “not currently” 

working with Lime, but instructed the Nova Labs employees to “leave” Lime’s name on the website. 

273. Nova Labs’ misrepresentations continued throughout 2020 and 2021, as Nova Labs’ 

Business Development VP (and other Nova Labs executives) made frequent presentations on 

Helium’s public YouTube channel promoting Nestlé, Lime, and Salesforce as companies that Nova 

Labs had persuaded to “use” the Helium Network, that were ongoing “users” of the Helium 

Network, and that purportedly “rely on Helium,” including the repeated use of these two slides 

during those presentations: 

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None of Nestlé, Lime, or Salesforce “relied on” Helium or were “users” of the Helium Network, 

which Nova Labs’ Business Development VP and other executives knew or recklessly disregarded.  

274. Although Nova Labs’ presentations listed other companies as “relying on” or 

“users” of the Helium Network, those companies were much smaller and less well known than 

Nestlé, Salesforce, and Lime. 

275. During that same time period, Nova Labs’ CEO and its COO made similar public 

statements that they knew or recklessly disregarded were false and misleading.  For example: 

a. In June 2020, Nova Labs issued a press release claiming that Nestlé was one 

of three “key brands that use the Helium Network.” 

b. In a July 2020 interview with the online publication TechRadar, Nova Labs’ 

CEO touted Nova Labs’ relationship with Nestlé saying, “Some examples of 

companies who are already enjoying the benefits of our network include the 

beverage delivery service company Nestle’s ReadyRefresh . . . .” 

c. In February 2021, during a public appearance, Nova Labs’ CEO was asked, 

“It looked like you had some partnerships with Salesforce and Lime—I 

know them as scooters, I’m sure they’re doing other stuff too—did I get that 

right?”  Nova Labs’ CEO responded, “Yeah, that’s exactly right,” adding, 

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“companies like Salesforce and Lime, they’re people who are actually 

building the sensors, the products that take advantage of the network.” 

d. In May 2021, Nova Labs published a tweet that continued the misimpression 

it had created, saying that the Helium Wireless Network “is trusted by users” 

that include Lime and Salesforce.  Although the tweet mentioned other 

companies as purported users, none were as prominent or well-known as 

Lime and Salesforce. 

e. In November 2021, during a public appearance, Nova Labs’ COO touted the 

adoption of the Helium Network by “very large customers,” and said 

unequivocally, “Lime Scooter is a customer.” 

276. Nova Labs’ misstatements continued in 2022.  In a public appearance in March 2022, 

Nova Labs’ CEO described the “users” of the Helium Wireless Network and the financial benefit of 

those users to IoT Hotspot investors: 

So they’re companies like Salesforce, and [Car Company A], and 
[Retail Company A], and [Car Company B], and like, companies that 
actually run sensors on the Helium network are the other sort of 
participant in the network and they – they have to spend HNT in 
order to actually use the network, right, and that money goes to the – 
that HNT goes to the Hotspots. 

277. In a public appearance in June 2022, Nova Labs’ CEO again described Salesforce as 

a “user” of the Helium Network.  In response to a question about the purpose and usage of the 

Helium Wireless Network, Nova Labs’ CEO named industries that could use the network including 

agriculture and drone delivery, and then named a single specific company:  “I think Salesforce is 

using it to track employee badges.” 

278. Nova Labs’ CEO knew or recklessly disregarded that these statements—which 

suggested that Nova Labs had ongoing relationships with those companies and that those 

companies were using or were planning to use the Helium Network—were not accurate. 

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3.    Nestlé and Lime Issued Cease-and-Desist Letters to Nova Labs. 

279. The falsity of Nova Labs’ statements was ultimately revealed.  

280. Following TechRadar’s July 2020, publication of its interview with Nova Labs’ CEO, 

in which he claimed that Nestlé was using the Helium Network, Nestlé sent Nova Labs a cease-and-

desist letter demanding that Nova Labs stop “discussing [Nestlé] immediately.” 

281. Nestlé’s cease-and-desist letter recited facts that Nova Labs already knew, saying:  

“Nestle Waters North America has not engaged in conversations with Helium for well over a year,” 

adding that if Nova Labs “continue[s] to reference NWNA as a customer, user or potential partners 

of Helium, we reserve our rights to pursue all other legal remedies.” 

282. In response to Nestlé’s cease and desist letter, Nova Labs’ Business Development 

VP wrote to others within Nova Labs that he, “[c]an’t believe we made it this long without them 

calling us out.” 

283. After Nestlé’s cease and desist letter, Nova Labs quietly removed Nestlé’s logo from 

its website, but did not correct its misrepresentations about its relationship with Nestlé.  Nova Labs 

also continued to use the names and logos of Lime and Salesforce until July 2022. 

284. In July 2022, Lime issued a public statement that it was not and had never been a 

user of the Helium Network or partner with Nova Labs.  Lime acknowledged that it had briefly 

tested Nova Labs’ hardware in early 2019 but said the “test had fizzled.”  With respect to Nova 

Labs’ claims that Lime was a user of the Helium Network, Lime said, “Helium has been making this 

claim for years and it is a false claim.” 

285. That same day, Lime’s General Counsel sent a cease-and-desist letter to Nova Labs 

making clear that “Lime employees engaged in exploratory conversations with [Nova Labs] in 2019” 

and nothing more, and instructed Nova Labs to “immediately cease and desist from using Lime’s 

name and trademark on Helium’s website, Helium’s blog, and in other channels controlled by 

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Helium (e.g., social media platforms), and from claiming that Lime is, or was, a customer and/or 

partner of Helium.” 

286. In response to Lime’s cease-and-desist letter, Nova Labs’ Business Development VP 

said in an internal message, “Please make sure [Nova Labs’ COO] weighs in on the Lime piece 

specifically.  He’s insisted that we continue to use their logo for as long as we have. . . .  I don’t think 

they ever deployed anything.”  

287. Nova Labs removed Lime’s logo and name from its website. 

288. After Lime’s July 2022 public denial of any relationship with Nova Labs, journalists 

began to question whether Nova Labs’ relationship with Salesforce was real.  Nova Labs knew it was 

not.  As Nova Labs’ COO said in an internal discussion regarding reporter inquiries, “Salesforce was 

a project prior to Covid”—i.e., more than 26 months earlier—“but that detail got lost.” 

289. In short, Nova Labs knowingly made false and misleading statements about the 

relationship between its burgeoning business and wireless network with three well-established 

companies in order to promote and legitimize itself and its network, and Nova Labs only stopped 

making those statements when two of the companies threatened legal action. 

4. Nova Labs’ Purported Relationships with Nestlé, Lime, and 
Salesforce Were Important to Investors 

290. That Nestlé, Lime, and Salesforce were purportedly using the Helium Network was 

part of the total mix of information that investors in both Nova Labs stock and Hotspot investors 

considered in deciding whether to invest. 

291. For example, between October 2021 and March 2022, Nova Labs marketed its 

Series D Fundraise and, between December 2021 and March 2022, sold preferred equity shares to 

33 investors in exchange for approximately $200 million. 

292. During that fundraise, Nova Labs personnel told prospective investors that Lime 

was currently using the Helium Network and internal documents from multiple entities that 

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ultimately invested in the Series D Fundraise show that Nova Labs’ purported relationships with 

Nestlé, Lime, and/or Salesforce were important to their decisions to invest.  Those documents, 

including memoranda recommending investments in Nova Labs equity, specifically referred to the 

fact that Nova Labs had “top tier” “customers” like Nestlé, Lime, and/or Salesforce. 

293. Nova Labs’ purported relationships with Nestlé, Lime, or Salesforce was an 

important consideration in the Nova Labs’ Series D Fundraise investors’ decisions to buy Nova 

Labs’ equity shares. 

294. Nova Labs and its executives made the statements about Nestlé, Lime, and 

Salesforce detailed above at the same time that Nova Labs was selling IoT and Mobile Hotspots and 

in furtherance of persuading investors to buy those Hotspots. 

295. IoT and Mobile Hotspot investors considered Nova Labs’ purported relationships 

with Nestlé, Lime, and Salesforce as an important part of the total mix of information when 

deciding to invest in those Hotspots.  This is unsurprising.  Nova Labs had deliberately linked the 

value of HNT to usage of the Helium Wireless Network and then promoted Nestlé, Lime, and 

Salesforce as well-known companies using that network, suggesting that those customers endorsed 

Nova Labs’ technology and that they would consume Data Credits and increase demand for HNT. 

296. Actual and/or prospective investors in Hotspots repeatedly referred to Nova Labs’ 

purported relationships with Nestlé, Lime, and Salesforce in social media postings.  By way of 

example, the following posts were made by members of the general public on Nova Labs-focused 

online communities:  (i) “Lime being a customer was honestly a reason I got involved.”; (ii) “[Nova 

Labs] had a whole case study for the Salesforce scanning system which is what sold me to start 

mining.”; (iii) “The only reason I got into Helium was because of the partnerships.”; (iv) “That’s why 

I started mining HNT, cause lime scooters came into [a] small town.”; and (v) “HNT can be 

‘burned’ as data credits.  This crypto has a limited total supply so ideally that should bring up the 

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price as well.  I suggest reading about what companies are using the Helium Network, like the cities 

putting sensors in the ground to track parking spots/meters, Nestle water cooler refills, lime 

scooters/bikes, smart mouse traps, etc.” 

297. When the truth about Nestlé, Lime, and Salesforce was revealed, investors said in 

online posts that they felt misled, making statements including, “That’s a pretty bold lie to make” 

and “This is starting to sound like an MLM—where the money is being made off of coin holders 

and folks buying the overpriced equipment with a hope that they make money from nonexistent 

customers.” 

TOLLING AGREEMENTS 

298. Nova Labs and the Commission entered into tolling agreements suspending the 

running of any applicable statute of limitations from September 22, 2023 to December 21, 2023, 

from January 22, 2024 to April 21, 2024, from September 25, 2024 to November 24, 2024, and from 

November 25, 2024 to January 24, 2025. 

FIRST CLAIM FOR RELIEF 
Violations of Securities Act Section 5(a) and 5(b) 

299. The Commission re-alleges and incorporates by reference here the allegations in 

Paragraphs 1 through 231. 

300. By virtue of the foregoing, Nova Labs, through its offers and sales of the Helium 

Network Token (or HNT), the Helium Mobile Network Token (or MOBILE), and the Helium IoT 

Network Token (or IOT) directly and indirectly:  (a) without a registration statement in effect as to 

those securities, (1) made use of means or instruments of transportation or communication in 

interstate commerce or of the mails to sell securities through the use or medium of any prospectus 

or otherwise, and (2) carried or caused to be carried through the mails or in interstate commerce, by 

any means or instruments of transportation, securities for the purpose of sale or for delivery after 

sale; and (b) made use of means or instruments of transportation or communication in interstate 

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 64 

commerce or of the mails to offer to sell or offer to buy, through the use or medium of a prospectus 

or otherwise, securities as to which no registration statement had been filed. 

301. By reason of the conduct described above, Nova Labs violated, is violating, and, 

unless enjoined, will continue to violate Securities Act Sections 5(a) and 5(c) [15 U.S.C. §§ 77e(a) and 

77e(c)]. 

SECOND CLAIM FOR RELIEF 
Violations of Securities Act Section 17(a)(2) 

302.  The Commission re-alleges and incorporates by reference here the allegations in 

Paragraphs 1 through 297. 

303. Nova Labs, directly or indirectly, singly or in concert, in the offer or sale of securities 

and by the use of the means or instruments of transportation or communication in interstate 

commerce or the mails, knowingly, recklessly, or negligently has obtained money or property by 

means of one or more 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. 

304. By reason of the foregoing, Nova Labs, directly or indirectly, has violated and, unless 

enjoined, will again violate Securities Act Section 17(a)(2) [15 U.S.C. § 77q(a)(2)]. 

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

305. The Commission re-alleges and incorporates by reference here the allegations in 

Paragraphs 1 through 297. 

306.  Nova Labs, directly or indirectly, in connection with the purchase or sale of 

securities and by the use of means or instrumentalities of interstate commerce, or the mails, or the 

facilities of a national securities exchange, knowingly or recklessly has (i) employed one or more 

devices, schemes, or artifices to defraud, (ii) made one or more untrue statements of a material fact 

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 65 

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 (iii) engaged in one 

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

upon other persons.  

307. By reason of the foregoing, Nova Labs, 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(b) 

thereunder [17 C.F.R. § 240.10b-5].  

PRAYER FOR RELIEF 
 

 WHEREFORE, the Commission respectfully requests that the Court enter a Final 

Judgment: 

I. 

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

5(a) and 5(c) [15 U.S.C. §§ 77e(a), 77e(c)], Securities Act Section 17(a)(2) [15 U.S.C. § 77q(a)(2)], 

Exchange Act Section 10(b) [15 U.S.C. § 78j(b)], and Rule 10b-5(b) thereunder [17 C.F.R. § 240.10b-

5(b)]; 

 
II. 

Ordering Defendant to disgorge all ill-gotten gains obtained within the statute of limitations, 

within prejudgment interest thereon, under Exchange Act Section 21(d)(5) [15 U.S.C. § 78u(d)(5)];  

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. 

Prohibiting Defendant from participating, directly or indirectly, in the purchase, offer, or sale 

of any crypto assets being offered or sold as securities under Exchange Act Section 21(d)(5) 

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 66 

[15 U.S.C. § 78u(d)(5)], or engaging in activities for purposes of inducing or attempting to induce the 

purchase offer, or sale of any crypto assets being offered or sold as securities by others under 

Exchange Act Section 21(d)(5) [15 U.S.C. § 78u(d)(5)]; and 

V. 

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

JURY DEMAND 

The Commission demands a trial by jury. 
 
Dated: New York, New York 

January 17, 2025 
/s/ Christopher M. Colorado       . 
Jorge Tenreiro 
Antonia Apps 
Sheldon L. Pollock 
Judith A. Weinstock 
Christopher M. Colorado 
Peter Mancuso 
Emmy Rush 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
100 Pearl Street 
Suite 20-100 
New York, NY 10004-2616 
212-336-9143 (Colorado) 
[email protected] 

Case 1:25-cv-00539     Document 1     Filed 01/17/25     Page 66 of 66


	UNITED STATES DISTRICT COURT
	Plaintiff Securities and Exchange Commission (the “Commission”), for its Complaint against Defendant Nova Labs, Inc. (“Nova Labs” or “Defendant”), alleges as follows:
	SUMMARY
	1. This case concerns (1) Nova Labs’ unlawful unregistered offer and sale of investment contracts involving electronic devices and a rewards program that generate returns in the form of three Nova Labs crypto assets; and (2) Nova Labs’ materially fals...
	2. Since April 2019, Nova Labs has raised millions of dollars from investors through its unregistered sales of securities in the form of “Hotspots”—electronic devices that “mine” one of three Nova Labs crypto assets:  the Helium Network Token (“HNT”),...
	3. Nova Labs offered and sold Hotspots and ran the Discovery Mapping Program as investment contracts and, thus, securities.  Nova Labs promised investors that the Hotspots and the Discovery Mapping Program would earn HNT, MOBILE, or IOT for investors,...
	4. Nova Labs also falsely told investors that three large entities—Nestlé, the food and beverage conglomerate; Salesforce, the cloud-based software company; and Lime, the electric scooter company—were using and relying on Nova Labs’ wireless network, ...
	5. In fact, however, and as Nova Labs knew or recklessly disregarded, Nestlé, Salesforce, and Lime were neither Nova Labs’ customers nor “users” of Nova Labs’ network.  Indeed, when Nestlé and Lime learned that Nova Labs was publicly touting their pur...
	6. Nova Labs’ false and misleading statements to potential investors touting business relationships that did not exist violated the antifraud provisions of the federal securities laws.
	VIOLATIONS
	7. By virtue of the foregoing conduct and as alleged herein, Nova Labs engaged in and is currently engaging in the unlawful offer and sale of securities in violation of Sections 5(a) and 5(c) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C....
	8. Unless Nova Labs is restrained and enjoined, it 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 PROCEEDINGS AND RELIEF SOUGHT
	9. The Commission brings this action pursuant to the authority conferred upon it by Securities Act Sections 20(b) and (d) [15 U.S.C. §§ 77t(b) and (d)], and Exchange Act Sections 21(d) and (e) [15 U.S.C. §§ 78u(d) and (e)].
	10. The Commission seeks a final judgment:  (i) ordering a permanent injunction restraining and enjoining Nova Labs, directly or indirectly, from again violating the federal securities laws described herein; (ii) ordering Nova Labs to pay disgorgement...
	JURISDICTION AND VENUE
	11. This Court has jurisdiction over this action under Securities Act Section 22(a) [15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa].
	12. Nova Labs, directly and indirectly, has made use of the means or instrumentalities of interstate commerce or of the mails in connection with the transactions, acts, practices, and courses of business alleged herein.
	13. This Court has personal jurisdiction over Nova Labs, and venue is proper in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)] and Exchange Act Section 27(a) [15 U.S.C. § 78aa(a)], because certain of the transactions, acts, prac...
	14. Nova Labs (f/k/a Helium Systems, Inc. and f/k/a Skynet Phase 1 Inc.) is a private company organized under the laws of Delaware and headquartered in San Francisco, California.
	I. STATUTORY AND LEGAL FRAMEWORK
	15. The Securities Act and the Exchange Act “form the backbone of American securities laws.”  Slack Tech., LLC v. Pirani, 598 U.S. 759, 762 (2023).
	16. Congress enacted the Securities Act in part to regulate the offer and sale of securities.  In contrast to the principle of caveat emptor, Congress established a regime of full and fair disclosure, requiring those who offer and sell securities to t...
	17. The Securities Act and Exchange Act define “security” broadly to include a wide range of assets, including “investment contracts.”  [15 U.S.C. §§ 77b(a), 78c(a)(10)].
	18. Securities Act Sections 5(a) and 5(c), require that an issuer of securities, like Nova Labs, register its offer and sale of securities with the Commission.  [15 U.S.C. §§ 77e(a), 77e(c)].
	19. Registration is intended to assure that the persons offering or selling the securities
	give the investing public required information about the issuer, the securities, and the transaction. With that information, investors can then make more informed investment decisions.
	20. The Securities Act and the Exchange Act also contain antifraud provisions to, among other things, prevent fraudulent conduct in the offer, sale, and purchase of securities.  Securities Act Section 17(a) and Exchange Act Section 10(b), for example,...
	II. CRYPTO ASSETS
	21. As used herein, the term “crypto asset” generally refers to an asset issued and/or transferred using blockchain or distributed ledger technology, including assets commonly referred to as cryptocurrencies, digital assets, digital coins, digital tok...
	22. A blockchain or distributed ledger is a peer-to-peer database spread across a network of computing devices—often called nodes—that record all transactions occurring on the blockchain or distributed ledger in theoretically unchangeable, digitally r...
	23. Crypto assets may be traded on crypto asset trading platforms in exchange for other crypto assets or fiat currency (i.e., legal tender issued by a country).
	24. Persons and entities have offered and sold crypto assets to investors in capital-raising events in exchange for consideration, including but not limited to, through so-called initial coin offerings (or, ICOs), crowd sales, or public token sales.
	25. On July 25, 2017, the Commission issued the Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934:  The DAO (the “DAO Report”), advising “those who would use . . . distributed ledger or blockchain-enabled means f...
	26. On April 3, 2019, the Commission published additional guidelines, titled Framework for “Investment Contract” Analysis of Digital Assets, that advised those “engaging in the offer, sale, or distribution of a digital asset” to consider “whether the ...
	I. NOVA LABS’ PIVOT TO BLOCKCHAIN AND CRYPTO ASSETS.
	27. Nova Labs was founded in May 2013 and has had several business models.
	28. Initially, Nova Labs designed and manufactured hardware components that third parties incorporated into low-power devices—such as smart water meters or asset trackers—to allow those devices to send and receive small bits of information via little-...
	29. In 2014, Nova Labs pivoted from manufacturing hardware components to selling an “end-to-end solution” for low-power devices.  Nova Labs manufactured and sold internet-connected sensors that collected data and could be monitored via Nova Labs’ hard...
	30. By late 2017, Nova Labs’ business models of building or supporting networks for low-power devices had failed for several reasons, including that it was expensive to build a sufficiently large wireless network within particular geographies (or acro...
	31. At that same time, Nova Labs understood that blockchain technology and sales of crypto assets to investors were receiving a lot of public attention, and Nova Labs’ Chief Executive Officer (“CEO”) told a member of Nova Labs’ Board of Directors that...
	32. So, Nova Labs pivoted again, this time to selling crypto assets.  As Nova Labs’ CEO  later put it publicly, Nova Labs “abandoned the whole idea of trying to make money on the network itself” and instead became an “economic model for building decen...
	II. NOVA LABS KNEW OFFERING AND SELLING CRYPTO ASSETS  AS SECURITIES WITHOUT REGISTRATION VIOLATED THE LAW.
	33. Nova Labs considered multiple structures by which it might offer and sell crypto assets to investors, understood that offers and sales of securities required registration with the Commission, and knowingly and deliberately chose to take the risk t...
	34. Nova Labs first considered offering and selling crypto assets as securities through an unregistered “initial coin offering,” or ICO, in which it would sell crypto assets directly to investors and pool the funds received to fund its operations.
	35. After its Board of Directors raised questions about the legality of an unregistered ICO, and Nova Labs sought legal advice regarding it, Nova Labs decided that selling crypto assets directly to investors in an ICO was likely to be an unlawful unre...
	36. Nova Labs then considered offering and selling crypto assets as securities to investors in a registered offering.  In June 2018, Nova Labs’ CEO remarked in an internal communication, “Aside from the paperwork required, it seems like a potentially ...
	37. Nova Labs believed, however, that a registered securities offering would be time consuming.  It viewed an offer and sale without registration as faster but “risky” because it might violate the federal securities laws.
	38. Instead, Nova Labs chose to structure its offer and sale of crypto assets in a manner that, it hoped, would escape the federal securities laws.  Rather than offering and selling crypto assets directly to investors in an unregistered ICO or similar...
	39. To others within Nova Labs, Nova Labs’ CEO described this scheme as an attempt to end-run—literally, to “cheat”—the securities laws, saying, “I think of buying a [Hotspot] as a proxy for buying tokens[, ] it’s like a token generation machine . . ....
	40. Nova Labs sought and obtained legal advice regarding this structure, too, and was advised of a significant risk that its offer and sale of devices that “mined” Nova Labs’ crypto assets could constitute an unregistered offering under the federal se...
	III. NOVA LABS CREATED THE “HELIUM NETWORK” AND THREE INITIAL CRYPTO ASSETS.
	41. Nova Labs’ offer and sale of investment contracts in the form of Hotspot devices that mine crypto assets occur through an ecosystem called the “Helium Network,” which Nova Labs launched in July 2019.
	42. When Nova Labs designed the Helium Network, it had three primary components:  (i) computer code comprising a blockchain; (ii) crypto assets created, transferred, and destroyed on that blockchain; and (iii) a version of the Hotspot mining device ca...
	43. An IoT Hotspot has two purposes:  one, it connects to the internet, acts as a node running the Nova Labs blockchain, and receives periodic distributions of (i.e., “mines”) one of Nova Labs’ crypto assets; and, two, it is fixed with and operates as...
	44. In this Complaint, the portion of the Helium Network consisting of the blockchain and the nodes running it is called the “Helium Network Blockchain” and the portion of the Helium Network consisting of the Hotspots’ antennas—and the ability for cer...
	a. The Helium Network Blockchain and the Helium Wireless Network

	45. Nova Labs employs software engineers expert in developing computer code and software protocols.  Between late 2017 and mid-2019, Nova Labs used that expertise to create its own bespoke blockchain, the Helium Network Blockchain, and three crypto as...
	46. At the same time, Nova Labs engineers designed and manufactured the “IoT Hotspot,” an electronic device that connected to the internet, acted as a node running the Helium Network Blockchain, and verified transactions of HNT, HST, and Data Credits ...
	47. Nova Labs also designed the IoT Hotspot to act as an antenna to transmit small amounts of data to and receive small amounts of data from certain low-power devices physically proximate to the IoT Hotspot.  The IoT Hotspot could, in turn, send that ...
	48. Nova Labs did not expect many individual IoT Hotspot purchasers to use the Helium Wireless Network for low-power devices and it said publicly that individual IoT Hotspot purchasers did not use the Helium Wireless Network.  Rather, Nova Labs touted...
	49. Accordingly, to induce investors to buy IoT Hotspots, Nova Labs coded the Helium Network Blockchain so that IoT Hotspot owners received daily distributions of HNT, and Nova Labs promised to use its entrepreneurial and managerial efforts to create ...
	b. Nova Labs Initially Created Three Crypto Assets and Offered and Sold Investors IoT Hotspots That Mine One of Those Three Crypto Assets.

	50. Nova Labs’ initial iteration of the Helium Network Blockchain used three crypto assets.  The primary crypto asset was the Helium Network Token or HNT, and it was “mined” by the IoT Hotspots that Nova Labs offered and sold.  The second crypto asset...
	1. Nova Labs Created HNT.

	51. HNT is the primary native crypto asset on the Helium Network Blockchain.
	52. Nova Labs initially designed the Helium Network Blockchain to create more than 160,000 new HNT each day, totaling approximately five million new HNT each month.
	53. HNT serves two primary purposes:  (i) as an asset with speculative value that can be sold to others for cash or other crypto assets, such as dollars or Bitcoin, including sales on secondary markets; and (ii) as a means to obtain Data Credits, whic...
	54. During the relevant period, the overwhelming majority of all HNT that investors obtained was either sold for consideration (e.g., dollars) or held for potential price appreciation, and it was not used by investors to buy Data Credits to pay to use...
	55. Because HNT are fungible with each other, the price of each HNT is the same as the price of all HNT and the price of all HNT goes up or down together.
	2. Nova Labs Designed and Manufactured IoT Hotspots and  Offered and Sold HNT to Investors via the IoT Hotspots.

	56. Nova Labs offered and sold HNT to investors by offering and selling them IoT Hotspots that mined (i.e., received distributions of) HNT each day.
	57. Between at least April 2019 and March 2022, Nova Labs offered and sold thousands of IoT Hotspots directly to investors.  Between approximately October 2020 and the present, Nova Labs has offered and sold at least tens of thousands of IoT Hotspots ...
	58. Through its offers and sales of IoT Hotspots, Nova Labs has distributed tens of millions of HNT to the general public.
	59. Nova Labs designed and manufactured the initial IoT Hotspots and created the firmware that ran on them.  Nova Labs designed the IoT Hotspots to act as nodes running the Helium Network Blockchain.
	60. Nova Labs offered and sold these IoT Hotspots via its website.  Investors paid approximately $500 (or the equivalent amount of Bitcoin) for each IoT Hotspot and an investor could purchase as many IoT Hotspots as they desired.
	61. Anyone could buy an IoT Hotspot, and Nova Labs pooled IoT Hotspot investor funds and used them to develop and promote the network, including to pay Nova Labs’ software engineers, business development professionals, and marketing staff.
	62. To “mine” HNT—i.e., receive distributions of HNT from Nova Labs via the Helium Network Blockchain—an IoT Hotspot purchaser needed only to connect the IoT Hotspot to electricity and the internet.  Nova Labs did not require the investor to do anythi...
	63. Throughout the relevant period, Nova Labs’ repeatedly and frequently emphasized publicly that obtaining HNT from the IoT Hotspot required little to no efforts by the investors.  That is, Nova Labs did not sell the IoT Hotspot only to those interes...
	64. As Nova Labs’ CEO told potential investors in January 2019, “You simply buy a Hotspot device, give it an internet connection and it will begin mining.”  Nova Labs’ Chief Operating Officer (“COO”) said similarly in December 2019, “There is not a wh...
	65. Through a mobile telephone application created and maintained by Nova Labs (“Nova Labs App”), an IoT Hotspot investor could link the investor’s “wallet” on the Helium Network Blockchain (i.e., the investor’s repository for receiving and holding cr...
	66. Nova Labs designed the Helium Network Blockchain so that investors in IoT Hotspots collectively shared at least 65% of all new HNT that the Helium Network Blockchain created each day.  Nova Labs also created an algorithm and set a fixed distributi...
	67. Nova Labs publicly promised to create value and demand for HNT, such that investors reasonably expected to profit from their investment in the IoT Hotspot and the resulting distributions of HNT.  Nova Labs’ promises and efforts are discussed infra...
	68. Investors bought IoT Hotspots as a way to invest in the growth of the Helium Wireless Network through their HNT holdings (given the relationship between HNT and demand for the network that Nova Labs created and touted).  Indeed, many investors pur...
	69. In addition to running the Helium Network Blockchain and “mining” (i.e., receiving distributions of) HNT, IoT Hotspots have a second functionality.  They have a built-in antenna that can receive data from and send data to low-power devices that ha...
	70. Between April 2019 and March 2022, Nova Labs designed, manufactured, and sold to the general public more than 12,000 IoT Hotspots.
	71. Between August 2019 and October 2020, those IoT Hotspots “mined” more than 25 million HNT for the investors who owned the IoT Hotspots.  Thereafter, the IoT Hotspots continued to “mine,” and IoT Hotspot investors have continued to receive distribu...
	72. Between about September 2019 and the present, Nova Labs also oversaw, coordinated, and controlled the manufacture and offer and sale of at least tens of thousands of additional IoT Hotspots by third parties acting on Nova Labs’ behalf or in partne...
	73. Nova Labs designed the security features of the Helium Network so that no third party could build Hotspots without obtaining permission from Nova Labs.  Third parties have relied almost entirely on partnerships with and support from Nova Labs to b...
	74. For example, between around September 2019 and September 2020, Nova Labs negotiated and entered into a partnership (the “IoT Hotspot Partnership”) with a third-party electronic component manufacturer and a third-party distributor (“IoT Manufacture...
	75. Under the IoT Hotspot Partnership, Nova Labs provided the IoT Manufacturer with intellectual property, software, firmware, and financial support necessary for it to build IoT Hotspots.  Nova Labs also controlled and/or oversaw design, specificatio...
	76. Under the IoT Hotspot Partnership, Nova Labs also contracted with the IoT Distributor to sell IoT Hotspots built by the IoT Manufacturer.  Under that agreement, Nova Labs determined pricing for those IoT Hotspots; provided marketing support for th...
	77. Nova Labs pooled the funds received from the IoT Manufacturer and the IoT Distributor and used them to develop and promote the Helium Network, including to pay Nova Labs’ software engineers, business development professionals, and marketing staff.
	78. During the relevant period, Nova Labs has entered into similar formal and informal partnerships with several other third parties pursuant to which Nova Labs and those third parties have manufactured and sold IoT Hotspots that mine Nova Labs’ specu...
	3. Nova Labs Created HST.

	79. Nova Labs created the Helium Security Token or HST as a second crypto asset on the Helium Network Blockchain.  HST’s sole purpose is to entitle its holder to daily distributions of HNT in perpetuity.  As such, the value of HST is derivative of the...
	80. Nova Labs created only 10,300 HST and designed the Helium Network Blockchain so that holders of those HST collectively share, on a pro rata basis, up to 35% of all HNT that the Helium Network Blockchain creates.  Thus, during the period that the H...
	81. Nova Labs has offered and sold HST to a select group of investors, including venture capital firms, to allow them to obtain perpetual distributions of HNT.  This includes Nova Labs’ sale of 6,800 HST coupled with preferred equity shares to investo...
	82. Nova Labs kept approximately 2,000 of the 10,300 HST for itself to receive perpetual distributions of HNT from that HST, benefit from the potential price appreciation of HNT, and sell that HNT to fund its operations.  Indeed, Nova Labs has sold mi...
	83. As Nova Labs’ CEO explained to one of the outside investors who invested in HST, “pretty much all of our activities will be related to [HNT] earned via those [HST].”  Nova Labs’ CEO echoed that sentiment in a public statement in August 2020, sayin...
	84. During the period that the Helium Network Blockchain created approximately five million HNT each month, the approximately 2,000 HST held by Nova Labs’ entitled it to distributions of more than 339,000 HNT per month and more than four million HNT p...
	85. Nova Labs also used approximately 1,500 HST as compensation for its employees.
	86. By compensating employees with HST, Nova Labs provided them with perpetual distributions of HNT, ensuring that they too benefitted financially from Nova Labs’ efforts to increase the value of HNT, and aligning their financial interests with those ...
	87. As Nova Labs’ CEO explained to several Nova Labs’ equity investors contemporaneous to the creation of HST, “One thing I really like about the inflation model”—i.e., the way in which HST distributes HNT to its holder in perpetuity—“is that all part...
	88. Nova Labs also marketed how the HST structure aligned the interests of Nova Labs and its employees with all investors in IoT Hotspots and HNT.  For example, in a May 2021 public appearance Nova Labs’ COO said,
	89. As another example, in a May 2022 public appearance, Nova Labs’ CEO said,
	90. Also, by receiving and owning HST, Nova Labs’ employees have received tens of millions of HNT and, as Nova Labs has worked to increase the value of HNT, those employees have sold large portions of their HNT to the general public for millions of do...
	4. Nova Labs Created the Data Credit.

	91. The third crypto asset that Nova Labs created on the Helium Network Blockchain is the Data Credit, which Nova Labs designed as a mechanism for paying fees associated with the Helium Network and as a means to influence the value of HNT.
	92. When Nova Labs launched the Helium Network in July 2019, it did not charge fees to transact on the Helium Network Blockchain or to send data from low-power devices via the Helium Wireless Network.  Nova Labs emphasized publicly, however, that it w...
	93. IoT Hotspot investors relied entirely on Nova Labs’ efforts to implement that fee structure, which was important to investors’ expectations of profit because Nova Labs designed the value of HNT to be influenced by and linked to the demand for and ...
	94. In August 2020, Nova Labs modified the Helium Network to require the payment of fees.  For example, Nova Labs began to require payment of fees for transfers of HNT via the Helium Network Blockchain and for data transfers on the Helium Wireless Net...
	95. Fees related to the Helium Network can be paid only with Data Credits and Data Credits can be acquired only with HNT.  Nova Labs designed Data Credits to function as follows:
	a. To acquire Data Credits, a user must first acquire HNT (such as by buying it from an IoT Hotspot investor) and then “burning” that HNT—that is, transferring the HNT to a Helium Network Blockchain address that destroys the HNT and removes it from ci...
	b. One Data Credit has a fixed price in U.S. dollars of $0.00001.
	c. The number of Data Credits created and acquired in exchange for burning one HNT is equal to the prevailing market value of HNT in U.S. dollars at the time of the burn transaction divided by $0.00001 (the fixed price for one Data Credit).
	d. Data Credits are non-transferrable, cannot be traded or sold, and can be used only to pay fees associated with the Helium Network.
	e. A user who burns HNT to acquire Data Credits can instruct the Helium Network Blockchain to distribute the resulting Data Credits to a third party blockchain address instead of to the user.
	96. Accordingly, a user who wants to acquire Data Credits to pay fees when the prevailing price of one HNT is $1.00 must first acquire one HNT (such as by paying $1.00 for HNT on a secondary market) and then “burn” that HNT, which, in turn, prompts th...
	97. Nova Labs has explained frequently, including in public statements, that it designed the economics of acquiring Data Credits to be inextricably intertwined with the value of HNT and to influence the price of HNT.
	98. Specifically, Nova Labs designed the Helium Network Blockchain and Data Credits so that the process of acquiring and using Data Credits requires HNT to be burned and removed from circulation, a mechanism that is intended to (and, in fact, does) re...
	99. When asked about the relationship between Data Credits and the value of HNT, Nova Labs’ COO explained,
	100. As Nova Labs also said frequently, including in public statements, if it succeeded in promoting and causing a greater number of Data Credits to be acquired and used—e.g., to pay fees for data transfers via the Helium Wireless Network—the impact o...
	101. In an internal Nova Labs’ document titled, “The Helium Manifesto,” Nova Labs’ CEO explained the relationship between Data Credits and the value of HNT and emphasized that Nova Labs’ primary business purpose was to cause users to consume Data Cred...
	Due to the design of the token economics, more utility on the network will drive increased value in tokens.  The only way [Nova Labs] becomes wildly successful is if there is an enormous amount of network usage and the value of the tokens increases ac...
	102. Nova Labs also determined the number of Data Credits required to perform various actions on the Helium Network Blockchain or related to the Helium Wireless Network.  The amount in fees (in the form of Data Credits) required to use the Helium Wire...
	a. For every 24 bytes of data transferred by a low-power device to the internet via an IoT Hotspot, a user of the low-power device paid a fee of one Data Credit (i.e., the user must burn and remove from circulation $0.00001 worth of HNT for every 24 b...
	b. To transfer HNT from one Helium Network Blockchain address to another, the transferor paid a fee of 35,000 Data Credits (i.e., the user must burn and remove from circulation $0.35 worth of HNT for each transaction).
	c. To add an IoT Hotspot to the Helium Network Blockchain, the IoT Hotspot owner was required to pay a fee of four million Data Credits (i.e., the user must burn and remove from circulation $40 worth of HNT to add the IoT Hotspot).
	d. To verify an IoT Hotspot’s geographic location—a task that the Helium Network periodically performs—an IoT Hotspot (or its owner) was required to pay a fee of one million Data Credits (i.e., the user must burn and remove from circulation $10 worth ...
	103. Nova Labs also sold Data Credits directly to customers by taking payments in U.S. dollars, burning HNT that Nova Labs itself held, and instructing the Helium Network Blockchain to issue the resulting Data Credits to the customer.
	104. As discussed in detail below,  206 to 220, Nova Labs has engaged in significant efforts—including by marketing and promoting the Helium Network Blockchain and Helium Wireless Network, and by attempting to persuade companies to use each of them—...
	IV. NOVA LABS EXPANDED ITS OFFER AND SALE OF INVESTMENT CONTRACTS TO A NEW DEVICE AND TWO NEW CRYPTO ASSETS.
	105. Not later than April 2022, Nova Labs expanded the Helium Wireless Network from IoT Hotspots to a second type of Hotspot, the “Mobile Hotspot,” which provides wireless connectivity for cellular devices.  Like the IoT Hotspot, the Mobile Hotspot al...
	106. Although Nova Labs made technical changes to the Helium Network related to Mobile Hotspots, the value proposition to investors stayed the same:  Nova Labs offered and sold a device to investors through which the investor obtained Nova Labs crypto...
	107. Soon after adding Mobile Hotspots to the Helium Wireless Network, Nova Labs made three important changes to the Helium Network’s economics and structure:  (i) Nova Labs created two new crypto assets, MOBILE (the Helium Mobile Network Token) and I...
	108. Nova Labs continued to promise to use its efforts and expertise to create value and demand for the expanded Helium Network and HNT, as well as for MOBILE and IOT.
	109. These changes essentially added another layer (and layer of complexity) to the Helium Network.  In the Helium Network’s initial iteration, described above, supra  45 to 99, investors bought IoT Hotspots to obtain HNT reasonably expecting Nova L...
	a. Nova Labs Created the Mobile Hotspot, MOBILE, and IOT.

	110. In general, low-power devices that connect to the internet via IoT Hotspots transmit small amounts of data and, as a result, use relatively small numbers of Data Credits.
	111. Nova Labs wanted to expand the Helium Wireless Network to provide coverage to cellular devices, such as smartphones, that transmit far larger amounts of data and, as a result, consume far larger amounts of Data Credits to use the network, creatin...
	112. By no later than April 2020, Nova Labs began exploring how to expand the Helium Wireless Network to include a type of Hotspot, called a Mobile Hotspot, that would receive (i.e., “mine”) HNT from the Helium Network Blockchain and feature an antenn...
	113. From October to December 2020, Nova Labs negotiated a contract with a third-party manufacturer (“Mobile Hotspot Partner”) to try to create a Mobile Hotspot.
	114. From at least January to April 2021, Nova Labs provided funding, technical, marketing, and other support to the Mobile Hotspot Partner necessary to design and manufacture the new device.  Among other things, Nova Labs funded a $100,000 payment to...
	115. By April 2021, Nova Labs determined that the technology being developed in partnership with the Mobile Hotspot Partner was promising, and Nova Labs’ CEO began discussing how Nova Labs could acquire the Mobile Hotspot Partner, ensuring that Nova L...
	116. In April 2021, Nova Labs publicly announced its partnership with the Mobile Hotspot Partner and began to offer and sell Mobile Hotspots in partnership with and through the Mobile Hotspot Partner.
	117. Between December 2021 and February 2022, Nova Labs raised approximately $200 million from the offer and sale of its own preferred equity shares to investors in a private placement.  This capital raise—which valued Nova Labs at more than $1 billio...
	118. In March 2022, Nova Labs agreed to acquire the Mobile Hotspot Partner for more than $30 million.  That transaction closed in August 2022.
	119. Nova Labs, in partnership with and then as owner of the Mobile Hotspot Partner, performed all work necessary to design, manufacture, and sell Mobile Hotspots, and Nova Labs performed all work necessary to modify the Helium Network Blockchain to a...
	120. Shortly after creating Mobile Hotspots and beginning its offer and sale of Mobile Hotspots that “mined” HNT, Nova Labs modified the economics of the Helium Network.
	121. Until then, the Helium Network Blockchain had created between approximately two and a half and five million HNT per month, the majority of which were distributed to owners of Hotspots, as described above  51 to 68.
	122. After Nova Labs expanded the Helium Network to include Mobile Hotspots, investors in both IoT and Mobile Hotspots no longer received daily distributions of (i.e., they no longer  “mined”) HNT from the Helium Network Blockchain.  Instead, the Hots...
	123. Nova Labs performed all work necessary to create and validate the computer code comprising IOT and MOBILE, including governing the characteristics and purposes of each of these crypto assets; how IOT and MOBILE could be created or transferred on ...
	124. Nova Labs offered and sold IoT and Mobile Hotspots to investors as a way for those investors to invest money in exchange for receiving, via their IoT and Mobile Hotspots, IOT and MOBILE, with the investors’ reasonably expecting to profit from Nov...
	125. The first MOBILE was created on the Helium Network Blockchain in August 2022, at which point Mobile Hotspots began to “mine” (i.e., receive daily distributions of) MOBILE.  The first IOT was created on the Helium Network Blockchain in April 2023,...
	126. After Nova Labs introduced MOBILE and IOT, the Helium Network’s economics worked as follows:
	a. The Helium Wireless Network was divided into two “subnetworks,” one for the IoT Hotspots and the low-power devices that transmitted data to and received data from them (“IoT Wireless Network”) and one for the Mobile Hotspots and the cellular device...
	b. Pursuant to an algorithm also designed and implemented by Nova Labs, at least 65% of all HNT created by the Helium Network Blockchain each day were divided between the two subnetworks, and those HNT were then deposited into the two subnetwork treas...
	c. Next, Nova Labs modified the Helium Network Blockchain so that IoT Hotspots received daily distributions of (i.e., “mined”) IOT and so that Mobile Hotspots received daily distributions of MOBILE, rather than HNT, as they had each done previously.  ...
	d. Investors in IoT Hotspots who mined IOT could tender those IOT to the IoT Wireless Network treasury in exchange for a portion of the HNT held in that treasury.  The number of HNT received for each IOT tendered was determined under a floating exchan...
	e. Similarly, investors in Mobile Hotspots who mined MOBILE could tender those MOBILE to the Mobile Wireless Network treasury in exchange for a portion of the HNT held in that treasury.  The number of HNT received for each MOBILE tendered was determin...
	127. Investors used the Nova Labs App to tender IOT and/or MOBILE to the respective subnetwork treasury and to exchange IOT and/or MOBILE for HNT from that treasury.
	128. Both IOT and MOBILE are speculative assets that can be sold to others for cash or other crypto assets, such as dollars or Bitcoin, including sales on secondary markets.
	129. In a June 2022 public appearance, Nova Labs’ CEO explained why Nova Labs had modified the Helium Network so that Hotspots received (i.e., “mined”) IOT and MOBILE (rather than HNT) and were then exchangeable for HNT under a floating exchange rate ...
	130. During the relevant period, the overwhelming majority of IOT and MOBILE obtained by investors in Hotspots was either sold for consideration (e.g., dollars), held for potential price appreciation, or converted to HNT and subsequently sold for cons...
	b. Nova Labs Offered and Sold Investment Contracts Involving Hotspots and the HNT, MOBILE, and IOT They Mined.

	1. Nova Labs Offered and Sold Mobile Hotspots as Securities.
	131. Since April 2021, both under Nova Labs’ partnership with and after acquiring the Mobile Hotspot Partner, Nova Labs has offered and sold investment contracts involving Mobile Hotspots that have mined millions of HNT and/or MOBILE.
	132. Nova Labs offered and sold Mobile Hotspots via its own website and through the Mobile Hotspot Partner’s website.
	133. Investors paid between approximately $250 and more than $1,000 for each Mobile Hotspot, and an investor could purchase as many Mobile Hotspots as they desired.
	134. Funds paid by investors in Mobile Hotspots were pooled by Nova Labs and used to develop and promote the Helium Network, including to pay Nova Labs’ software engineers, business development professionals, and marketing staff.
	135. As with the IoT Hotspots, once an investor bought a Mobile Hotspot, the investor needed only to connect the Mobile Hotspot to electricity and the internet to start receiving distributions of HNT (and, later, MOBILE) from Nova Labs via the Helium ...
	136. Nova Labs did not sell the Mobile Hotspot only to those interested in running a wireless network let along using one, and a Mobile Hotspot generally did not require any particular specialization or efforts of the purchaser.  Nova Labs’ publicly t...
	137. Thereafter, through the Nova Labs App, a Mobile Hotspot investor could link the investor’s “wallet” to the Helium Network Blockchain, and the Helium Network Blockchain would distribute HNT (and, later, MOBILE) to that wallet each day.
	138. Beginning no later than August 2022, Nova Labs partnered with additional third parties to manufacture and then offer and sell Mobile Hotspots, together with the MOBILE obtained through those Mobile Hotspots, as investment contracts.  Nova Labs ov...
	139. Nova Labs promised to create value and demand for MOBILE—and for the HNT for which MOBILE can be exchanged—such that investors continued to reasonably expect to profit by investing in a Mobile Hotspot and obtaining the resulting distributions of ...
	2. Nova Labs Continued to Offer and Sell IoT Hotspots as Securities.

	140. After Nova Labs expanded the Helium Network to include Mobile Hotspots and MOBILE, it continued to offer and sell IoT Hotspots through formal and informal partnerships with third-party manufacturers.
	141. When Nova Labs introduced IOT in April 2023, it modified IoT Hotspots so that they no longer received daily distributions of (i.e., they no longer “mined”) HNT, and instead began to mine IOT.
	142. Between April 2023 and the present, IoT Hotspots have “mined” at least tens of billions of IOT for IoT Hotspot investors, and IoT Hotspot investors continue to receive distributions of IOT from Nova Labs via the Helium Network Blockchain.
	143. Nova Labs has continued to promise that it will create value and demand for IOT—and for the HNT for which both IOT and MOBILE can be exchanged—such that investors continue to reasonably expect to profit by investing in an IOT Hotspot and obtainin...
	c. Nova Labs Formed a Cellular Service Provider Operating on the Helium Wireless Network and Offered Its Discovery Mapping Program as a Security.

	144. In September 2022, in furtherance of its efforts to create demand for Data Credits and, accordingly, for HNT, Nova Labs began offering a service that allowed Nova Labs to be the largest consumer of Data Credits and a significant influence on the ...
	145. That month, Nova Labs launched Helium Mobile, a cellular phone service provider that offers cellular phone service plans and operates, in part, by transferring its subscribers’ cellular phone data via the Helium Wireless Network and Mobile Hotspots.
	146. Helium Mobile offers cellular phone service primarily through an agreement with a well-known national cellular service provider (the “National Provider”).  Subscribers to Helium Mobile thus rely largely on cellular service from the National Provi...
	147. If, however, a Helium Mobile cellular subscriber is in range of a Mobile Hotspot, the subscriber’s cellular phone will preferentially connect to the Mobile Hotspot to send and receive voice, text, and other data on the cellular phone instead of u...
	148. When a Helium Mobile subscriber is connected to and transmits data via a Mobile Hotspot, then Nova Labs acquires and consumes Data Credits on behalf of the subscriber to pay for the data transfer via the Mobile Hotspot.  As a result of its Helium...
	149. Helium Mobile is the only cellular service provider operating directly on the Helium Network and anyone can subscribe to a Helium Mobile cellular phone plan via Nova Labs’ website for approximately $20 per phone line per month.  Nova Labs has sol...
	150. Since July 2023, and under the Helium Mobile brand, Nova Labs has offered and sold investment contracts consisting of the Discovery Mapping Program, through which investors obtain distributions of MOBILE.  These offers and sales of securities hav...
	151. Specifically, under the Discovery Mapping Program, an investor (“Discovery Mapper”) purchases a Helium Mobile phone plan and agrees to tender valuable personal data to Nova Labs—including, for example, the Discovery Mapper’s geographic location a...
	152. The number of MOBILE that a Discovery Mapper receives from the Discovery Mapping Program is determined by a fixed schedule and algorithm created by Nova Labs.
	153. When the Discovery Mapping Program was introduced in July 2023, Discovery Mappers did not need to do anything to obtain distributions of MOBILE other than opt into the program using the Nova Labs App.  Moreover, the amount of MOBILE distributed t...
	154. Nova Labs has frequently characterized the Discovery Mapping Program as requiring little to no effort for the Discovery Mapper.  During an August 2023 public event promoting the Discovery Mapping Program, for example, Nova Labs’ Director of Proto...
	155. Discovery Mappers purchase a Helium Mobile cellular phone plan and tender their valuable personal data to Nova Labs with the reasonable belief that they will profit from the MOBILE they receive in exchange, including due to Nova Labs’ efforts to ...
	156. Nova Labs aggregates and analyzes the subscriber personal data it receives from Discovery Mappers, which gives Nova Labs a singular view of usage of the Helium Network and allows it to make strategic decisions about geographies that Nova Labs’ be...
	157. Nova Labs pools the funds paid by Discovery Mappers and uses them to promote and run the Helium Network, including related to Helium Mobile’s Data Credit consumption.
	158. Between July 2023 and the present, more than 45,000 Helium Mobile subscribers have been Discovery Mappers who participate in the Discovery Mapping Program, and they have “mined” at least tens of millions of MOBILE.4F
	V. NOVA LABS LED INVESTORS TO REASONABLY EXPECT TO PROFIT FROM HOTSPOTS AND DISCOVERY MAPPING.
	159. Given the information Nova Labs publicly disseminated, Hotspot investors and Discovery Mappers who obtained HNT, IOT, and MOBILE (collectively, “Investors”), reasonably expected that, due to Nova Labs’ efforts, the Investors would profit from the...
	160. Nova Labs marketed extensively its own entrepreneurial, managerial, and operational efforts to create demand for the Helium Network and further marketed how those efforts would increase demand for and value of HNT; emphasized the economic returns...
	a. Nova Labs Emphasized that HNT Was Designed to Increase in Value Through Nova Labs’ Entrepreneurial Efforts.

	161. Since April 2019, Nova Labs has frequently said publicly that it designed the Helium Network to use and rely on HNT, and that HNT’s value would and did increase as Nova Labs built and created demand for the Helium Wireless Network.
	162. In those statements, Nova Labs has often referred to a so-called “Burn-Mint Equilibrium” mechanism that it built into the Helium Network and said that under this mechanism:
	a. A user transferring data via the Helium Wireless Network must pay fees in Data Credits, in amounts that increase as the amount of data increases;
	b. The user can only obtain Data Credits to pay those fees by first buying HNT and then “burning” that HNT in exchange for Data Credits (i.e., destroying the HNT and removing it from circulation).
	c. If demand for Data Credits increases to pay for increased data transfer via the Helium Wireless Network, demand for HNT increases and supply of HNT simultaneously decreases, pushing up the price for HNT.
	d. If demand for Data Credits recedes, demand for HNT also recedes and, because the Helium Network Blockchain creates new HNT each day under a fixed schedule, the supply of HNT increases, creating an excess supply of HNT that depresses the price for HNT.
	163. Nova Labs and its business development employees are responsible for sales, partnerships, marketing, and technology integration for large enterprise customers who might deploy significant numbers of devices across the Helium Wireless Network and,...
	164. Additionally, when Nova Labs created Helium Mobile, Helium Mobile became the largest acquirer and consumer of Data Credits by orders of magnitude.
	165. Thus, the Helium Wireless Network relies heavily, if not totally, on Nova Labs for the amount of data flowing through the Helium Wireless Network, the number of Data Credits needed to pay for that data, and the number of HNT demanded and destroye...
	166. Under the Burn-Mint Equilibrium mechanism, if Nova Labs persuades large enterprises to use the Helium Wireless Network or attracts customers to its Helium Mobile service, then data usage increases, more Data Credits are needed, and more HNT are d...
	167. Thus, the Burn-Mint Equilibrium links the value of HNT (and IOT and MOBILE, which can be exchanged for HNT) to Nova Labs’ entrepreneurial efforts in creating demand for the Helium Wireless Network and Data Credits, and, with it, the financial for...
	168. As Nova Labs’ CEO explained internally, Nova Labs’ primary focus as a business is driving “usage of data credits,” even if Nova Labs fails to earn revenue or loses money on its sales of Hotspots, because increased demand for Data Credits increase...
	169. Nova Labs’ executives frequently made public statements about the effect of the Burn-Mint Equilibrium and Nova Labs’ efforts to drive usage of the Helium Wireless Network and create demand for Data Credits.  These statements, and the structure of...
	170. For example, in June 2019, Nova Labs’ COO said publicly that Nova Labs was “focus[ed] on usage of the network,” adding, “Get Data Credits to flow in mass volumes equates to high usage of the network. . . .  [Nova Labs] is only focused on that.”  ...
	171. Also in June 2019, Nova Labs’ CEO published a blog post saying Nova Labs is “actively working with companies who are trying to solve problems with [the Helium Network] . . . we need to continue moving forward by providing nationwide coverage for ...
	172. In a September 2019 post to a public Telegram channel, a cloud-based messaging program and broadcasting tool, devoted to the Helium Network, Nova Labs’ CEO explained that, “as more [HNT] is burned to turn in to [Data Credits], we’d expect the mar...
	173. In a December 2019 public appearance, Nova Labs’ CEO reiterated that demand for Data Credits influenced the price of HNT and could be profitable for IoT Hotspot investors,
	174. In April 2020, Nova Labs’ COO explained during a public appearance that Nova Labs uses its entrepreneurial efforts to create demand for the Helium Wireless Network among enterprise customers by “helping enterprises stand up their capability, . . ...
	175. In June 2020, Nova Labs’ CEO echoed that Nova Labs’ was using its entrepreneurial efforts to create demand for Data Credits, saying that Nova Labs’ “primary purpose is to promote usage on the network in the form of wireless data transfer and Data...
	176. During an April 2021 public appearance, Nova Labs’ COO highlighted that Nova Labs has a “dedicated business development team” who are “all focused on getting usage, getting users on the network.”
	177. In May 2021, Nova Labs’ COO publicly promoted Nova Labs’ business development and marketing efforts and their effect on the demand for Data Credits:
	178. During a November 2021 public appearance, Nova Labs’ COO emphasized that Nova Labs had designed HNT to be an asset with speculative value tied to Data Credits and usage of the Helium Wireless Network, saying,
	179. In June 2022, on Nova Labs’ public Discord channel, a communications platform with topic-based conversation spaces, Nova Labs’ CEO again emphasized that increased usage of the Helium Network would increase investment returns to IoT Hotspot owners...
	180. When Nova Labs added Mobile Hotspots, created and began issuing IOT and MOBILE, and created its Helium Mobile cellular service provider, see supra  144 to 158, its executives emphasized that these developments increase demand for and usage of D...
	181. For example, in a November 2022 public appearance, Nova Labs’ CEO explained why Helium Wireless Network usage and the resulting destruction of HNT would benefit holders of HNT, IOT, and MOBILE,
	182. Similarly, during a public appearance in September 2022, Nova Labs’ COO said,
	b. Nova Labs Promoted the Investment Returns Hotspot Buyers Earned.

	183. Even before Nova Labs’ launched the Helium Network in July 2019, it understood that potential investors in IoT Hotspots were focused on the investment return they would obtain from the purchase.
	184. For example, in a May 2019 internal communication, Nova Labs’ CEO said to other Nova Labs executives, “[T]here’s no way to escape from the obvious ROI questions,” i.e., investors’ questions about the “return on investment” they would earn by buyi...
	185. Nova Labs’ executives frequently told potential investors that investment returns on purchases of IoT or Mobile Hotspots—and the resulting HNT, IOT, and MOBILE—could be substantial, and underscored for those potential investors that it was reason...
	186. In a July 2019 public appearance, Nova Labs’ CEO explained why an investor should be interested in buying an IoT Hotspot:  “The potential of owning a piece of [Nova Labs’] network or being your own network operator”—i.e., owning an IoT Hotspot—“i...
	187. In a January 2020 public appearance, Nova Labs’ CEO explained to potential IoT Hotspot investors that “if the network succeeds in a huge way, you should be rewarded in a huge way for helping making that happen.  Tokens are a great way to enable a...
	188. In a July 2020 e-mail to a potential investor, Nova Labs’ CEO characterized IoT Hotspots as a speculative investment in IoT technology and the Helium Wireless Network,
	189. In March 2021, Nova Labs directed participants in Nova Labs’ public Discord channel to review an investment analysis of the IoT Hotspot by a well-known crypto asset investment firm.  That analysis says,
	190. In a November 2021 statement on Nova Labs’ public Discord channel, Nova Labs’ CEO highlighted the investment returns earned by IoT Hotspot investors:  “The current returns are already insanely high.  The only thing that will keep happening is tha...
	191. In a March 2022 public appearance, Nova Labs’ CEO characterized IoT Hotspots as a good financial investment, saying, “Early hotspot hosts by today’s HNT value made an absurd amount of money,” adding that “HNT mining is still one of the most high ...
	192. In a July 2023 statement on Nova Labs’ public Discord channel, Nova Labs’ CEO again emphasized investment returns earned by IoT and Mobile Hotspot investors, saying, “I just try and remind people that getting 10% APY [annual percentage yield] on ...
	193. In December 2023, Nova Labs’ CEO and its COO each publicly posted on social media video clips of Discovery Mappers touting their investment returns from the Discovery Mapping Program.  Also in December 2023, Nova Labs’ CEO reposted on social medi...
	c. Nova Labs Promoted Secondary Trading of HNT, IOT, and MOBILE,  and Actively Created a Secondary Trading Market.

	194. Since at least July 2019, Nova Labs has undertaken significant efforts to create and promote secondary trading markets for HNT, IOT, and MOBILE.
	195. Given Nova Labs’ secondary market efforts, and its promotion of them, Investors further reasonably expected to profit from investing in IoT and Mobile Hotspots and buying phone plans and tendering personal data to participate in Discovery Mapping...
	196. In the months after Nova Labs launched the Helium Network, its executives and personnel emphasized in public statements that HNT could be sold, and HNT holdings monetized, via over-the-counter trading groups in messaging applications, such as Tel...
	197. By 2020, Nova Labs began extensive efforts to cause HNT to be listed and available for secondary trading on multiple crypto asset trading platforms.
	198. In early 2020, Nova Labs management told its Board of Directors that it was negotiating with three large crypto asset trading platforms to list HNT for trading and that such listings would be a “watershed event” for investors in IoT Hotspots.  Th...
	199. For example, between February and June 2020, Nova Labs’ CEO negotiated an agreement to list HNT for trading on two well-known crypto asset trading platforms.
	200. As preconditions for such listings, the trading platforms required technical assistance and information necessary to make HNT available to trade; substantial payments of cash; transfer of 100 HST; and promises that the market for HNT would not be...
	201. Nova Labs then publicized that HNT had been listed for trading on those two crypto asset trading platforms.
	202. In addition to causing HNT to be listed on crypto asset trading platforms, Nova Labs paid well-known crypto marketers, influencers, and websites to promote HNT, IOT, and MOBILE to the public.
	203. For example, between July and October 2020, Nova Labs’ COO negotiated an agreement with a popular website focused on crypto asset markets under which the website agreed to feature HNT prominently and pay rewards to its users in exchange for their...
	204. In September 2020, Nova Labs signed a contract with a market maker—a trading firm that provides continuous liquidity for an asset on the secondary market by quoting both buy and sell orders—to create liquidity in the secondary trading market for ...
	205. Under that contract, Nova Labs provided the market maker with 200 HST and millions of additional HNT to facilitate the market making and the market maker agreed to provide liquidity for HNT on all crypto asset trading platforms for a more than tw...
	d. Nova Labs Devoted Substantial Resources to Maintaining, Modifying, and Marketing the Helium Network and It Touted Those Efforts.
	1. Nova Labs Engaged in Extensive Software Engineering Work to Ensure That the Helium Network Operates.


	206. Investors understood that the success of their investments depended entirely on Nova Labs’ efforts to develop and maintain the Helium Network—including the Helium Network Blockchain and Helium Wireless Network—so that it functioned reliably.
	207. Between at least July 2019 and April 2023, the Helium Network ran on Nova Labs’ bespoke blockchain, the Helium Network Blockchain.  During that time, for example, all distributions of and transactions in HNT occurred via that blockchain.
	208. Nova Labs employed at least thirty software engineers and other staff to monitor the functionality of the Helium Network Blockchain and to fix technical issues that regularly arose in the blockchain, including by writing, validating, and deployin...
	209. Nova Labs routinely emphasized that Investors were dependent on Nova Labs’ engineering team to ensure that the Helium Network, Helium Network Blockchain, and Helium Wireless Network continued to operate.
	210. For example, during a public appearance in February 2021, Nova Labs’ CEO explained that only Nova Labs’ software engineers had the ability and security permissions to make technical changes to the Helium Network Blockchain and that “in all of the...
	211. As another example, in April 2021, Nova Labs’ CEO reaffirmed Nova Labs’ engineering expertise, which was necessary to work on and upkeep the Helium Network generally, saying publicly, “We’ve been hiring a little bit, the kind of expertise that we...
	212. In a January 2022 public appearance, Nova Labs’ COO reaffirmed the need for the expertise of Nova Labs’ engineering personnel to keep the Helium Network afloat,
	213. In May 2022, one of Nova Labs’ equity investors (who was also one of the largest HNT investors) observed, “The network is valuable because there are people who are writing the code to make this possible.”  The “people” writing the code were Nova ...
	214. During a public appearance in September 2022, Nova Labs’ CEO described the substantial work necessary to ensure that the Helium Network Blockchain (and, thus, the Helium Network) continued to operate:
	215. Nova Labs was solely responsible for the software engineering work necessary to modify and fix the Helium Network Blockchain, without which, the blockchain would have halted or failed.
	216. Nova Labs also controlled modifications to the Helium Network, including the Helium Network Blockchain.  Since the launch of the Helium Network, Nova Labs proposed nearly all changes to the Helium Network Blockchain, played the central (and often...
	217. Among many other things, Nova Labs repeatedly changed the number of HNT that a Hotspot investor would receive; determined the value of Data Credits and the sources of information used to determine the Data Credit-HNT exchange rate; created MOBILE...
	218. After each such change, of which the above are merely a few examples, Nova Labs publicly touted the change to Investors as work Nova Labs had done.
	219. Even after Nova Labs migrated its bespoke Helium Network Blockchain (and all data comprising that blockchain) to run on a Third-Party Blockchain, Nova Labs continued to be the central actor maintaining and modifying the computer code comprising t...
	220. Until very recently, no one outside of Nova Labs has had security permissions necessary to make any technical changes to the Helium Network.  Thus, through at least the end of 2022, Nova Labs and its employees wrote nearly all computer code neces...
	2. Nova Labs Engaged in Extensive Business Development and Marketing Work to Promote the Helium Network.

	221. Nova Labs has engaged in substantial entrepreneurial efforts to market and promote the Helium Network and to attempt to persuade enterprise customers to adopt the Helium Network technology.  Nova Labs has also touted these efforts to Investors.
	222. The value of Investors’ investments depended on Nova Labs’ efforts to develop a user base for the Helium Wireless Network, including in the form of large enterprise customers who would adopt the Helium Network, create demand for Data Credits, and...
	223. For example, in October 2019, Nova Labs’ COO described on Nova Labs’ blog how Nova Labs was trying to develop relationships with, and use cases for, large enterprise customers and to persuade them to adopt the Helium Network:
	224. In a December 2019 public social media post, Nova Labs’ COO touted that Nova Labs was “spending money on ads to recruit more hotspot hosts and to generate awareness” and that the “combo of our online efforts, along with PR, and content is working...
	225. In a public appearance in June 2020, Nova Labs’ Business Development VP emphasized its extensive work to persuade large enterprise customers to use the Helium Network,
	226. In March 2021, Nova Labs’ Business Development VP again emphasized publicly its marketing and business development work, saying that his role is to get “big companies” to put devices on the Helium Wireless Network and further highlighting Nova La...
	227. In September 2021, Nova Labs’ Business Development VP said publicly that it “continues to bring these massive companies into the ecosystem” and promised potential investors that “thousands more companies like this are going to be deploying trilli...
	228. Investors reasonably expect to profit from Nova Labs’ entrepreneurial engineering, business development, and marketing efforts.
	229. While Nova Labs formed a non-profit entity, the Helium Foundation, that it purportedly intended to eventually be an “independent” third-party that could perform engineering, business development, and marketing work related to the Helium Network, ...
	230. The Helium Foundation did not exist for nearly one year after Nova Labs launched the Helium Network.  Then, for more than two years after the Helium Foundation was formed, it had no employees or operations and performed no work maintaining or imp...
	231. In any event, the Helium Foundation is not and has never been independent from Nova Labs.  Through at least mid-2024, the Helium Foundation had no meaningful sources of revenue other than grants from Nova Labs, and Nova Labs has effectively contr...
	VI. NOVA LABS MADE FALSE AND MISLEADING STATEMENTS TO INVESTORS IN IOT HOTSPOTS AND NOVA LABS’ EQUITY.
	232. Nova Labs also made materially false and misleading statements, both to those who invested in IoT Hotspots and those who purchased Nova Labs’ preferred equity shares, about large enterprise customers that Nova Labs claimed were using Nova Labs’ H...
	233. In truth, however, those enterprise customers were not using the Helium Network.
	a. Nova Labs’ Acquisition of Large Enterprise Customers Was Central to the Value Proposition of Nova Labs and HNT.

	234. As described above, Nova Labs emphasized publicly that a focus of its business was driving usage of the Helium Wireless Network and creating demand for Data Credits.  As Nova Labs explained, by driving that usage and creating that demand, Nova La...
	235. To drive wireless usage and demand for Data Credits, Nova Labs tasked its marketing and business development teams with persuading large enterprise customers—referred to within Nova Labs as “Logos”—to use the Helium Wireless Network, acquire and ...
	236. Nova Labs also believed it would benefit from associating with well-known Logos.  Such association would differentiate Nova Labs from other crypto asset- and blockchain-based projects, give a sense of legitimacy to it and its nascent technology, ...
	237. Nova Labs knew that Logos were important to actual and potential investors, including potential IoT Hotspot investors and potential investors in Nova Labs’ equity shares.
	238. In a September 2019 discussion between Nova Labs’ CEO and its COO, its CEO explained that “smart” investors would consider which, if any, Logos were using the Helium Network, saying that Nova Labs is “definitely going to need either logos or util...
	239. In a subsequent discussion between Nova Labs’ COO and two of Nova Labs’ business development executives, the COO emphasized the importance of Logos to Nova Labs’ value proposition:  “[W]e need to see more logos and more usage of the network.  Thi...
	240. Then, Nova Labs’ COO created an incentive compensation structure for Nova Labs’ business development team that was tied directly to whether the team persuaded Logos to use the Helium Network and acquire and consume Data Credits.
	241. Nova Labs used Logos to promote its offering and sale of IoT Hotspots and the Helium Network generally.
	242. Nova Labs also used its purported relationships with Logos to persuade institutional and other accredited investors to buy $200 million of Nova Labs’ preferred equity shares as part of a private placement between December 2021 and February 2022 (...
	243. In connection with its offer and sale of IoT Hotspots and in its pitches to potential investors in the Series D Fundraise, Nova Labs repeatedly represented that three particular large and established companies were associated with Nova Labs:  Swi...
	244. Specifically, between mid-2019 and 2022, Nova Labs and its executives repeatedly told actual and potential investors that Nestlé, Lime, and/or Salesforce were “currently using,” were “users” of, or “relied on” the Helium Network, and Nova Labs us...
	245. Nova Labs’ and its executives’ repeated use of Nestlé’s, Lime’s, and Salesforce’s names and corporate imagery suggested to actual and potential investors that those companies’ adoption of and/or trust in the Helium Network would inure to the inve...
	246. Nova Labs’ and its executives’ representations concerning Nestlé, Lime, or Salesforce were materially false and misleading.  None of those companies were then “users” of or were then “currently using” the Helium Network, which Nova Labs and its e...
	247. As explained below—and as Nova Labs and its executives knew or recklessly disregarded—each of Nestlé, Lime, and Salesforce had only conducted very limited tests of certain Nova Labs component hardware; those tests largely occurred months and year...
	b. Nova Labs’ Actual Contact with Nestlé, Lime, and Salesforce Was Limited.

	248. Nova Labs’ actual interactions with each of Nestlé, Lime, and Salesforce was limited.
	249. Nova Labs interacted with Nestlé in 2018.  This was before Nova Labs had pivoted its business to blockchain technology and crypto assets, before it had manufactured IoT Hotspots, and before it had launched the Helium Network Blockchain.
	250. That year, Nestlé ReadyFresh, a division of Nestlé that delivers water to consumers, tested certain Nova Labs component hardware in a small subset of its water coolers as a possible way to monitor consumers’ water levels and anticipate their wate...
	251. Nestlé’s test of Nova Labs component parts—something wholly different than the Helium Network Blockchain and Helium Wireless Network—ended no later than 2018.  After that test, Nestlé did not enter into any deal with Nova Labs and did not adopt o...
	252. Nova Labs’ interactions with Lime were similarly short-lived, limited in scope, and occurred before the launch of the Helium Network.  Those interactions consisted of a demonstration, on one day in February 2019 and a second day in March 2019, du...
	253. Nova Labs’ relationship with Lime ended with that demonstration.  Lime did not enter into any deal with Nova Labs and did not adopt or use Nova Labs’ technology, as Nova Labs and its executives knew or recklessly disregarded.  In fact, by July 20...
	254. Like Nestlé and Lime, Salesforce conducted a limited test of Nova Labs’ technology, which it never adopted.
	255. In early 2020, Nova Labs provided one of Salesforce’s more than 50,000 employees with Nova Labs component hardware and that Salesforce employee built a prototype employee badge scanner incorporating that hardware.  That employee then tested the p...
	256. Salesforce never became a user or customer of Nova Labs, and never relied on or adopted Nova Labs’ technology, as Nova Labs and its executives knew or recklessly disregarded.
	257. Nova Labs and its executives knew or recklessly disregarded that Nova Labs had never entered into any deal with Nestlé, Lime, or Salesforce to purchase or use a Hotspot, acquire HNT, buy or use Data Credits, or to use the Helium Wireless Network.
	258. Nova Labs’ internal documents confirm its understanding that none of Nestlé, Lime, or Salesforce were Nova Labs clients or “users.”  For example, by October 2019, internal Nova Labs reports detailing its potential deal pipeline—received and revie...
	259. In June 2020, when Nova Labs’ COO suggested to Nova Labs’ CEO that they use Nestlé’s and Lime’s names to promote the Helium Network because those companies were “marquee names,” Nova Labs’ CEO responded, “Yea, although the challenge is going to b...
	260. Although Nova Labs and its CEO, COO, and Business Development VP knew or recklessly disregarded that Nestlé, Lime, and Salesforce had not adopted and had not become “users” of Nova Labs’ technology, they repeatedly said the opposite.
	c. Nova Labs’ Repeated False and Misleading Public Statements  About Nestlé, Lime, and Salesforce

	261. Nova Labs repeatedly made false and misleading statements concerning its and the Helium Network’s relationships with Nestlé, Lime, and Salesforce on its website, in press releases and marketing materials, in interviews, and in public appearances....
	1. Nova Labs’ False and Misleading Statements on Its Website

	262. Nova Labs’ webpage was regularly reviewed and/or updated by Nova Labs’ CEO, its COO, and its Business Development VP, who knew or recklessly disregarded that it featured false and misleading statements.
	263. For example, for at least large parts of 2019 and 2020, Nova Labs used the logos of Nestlé and Lime under the text, “What uses the People’s Network?” (the “People’s Network” is another name for the Helium Network):
	Likewise, on other pages of its website during that same period, Nova Labs listed the logos of Nestlé, Salesforce, and Lime under the heading “Helium Is Used By.”
	264. Although Nova Labs’ website listed companies other than Nestlé, Salesforce, and Lime as “using” the Helium Network, those companies were small, local companies with few employees and were relatively unknown compared to Nestlé, Salesforce, and Lim...
	265. Nova Labs’ website also excerpted and posted false and misleading headlines from magazines and online publications, such as, “Forbes:  [Nova Labs] Makes Wireless Internet Cheaper, Lands Lime Scooters and Nestle As Clients.”
	266. Another page on Nova Labs’ website said, in relevant part, “[Nova Labs] helps companies solve connectivity challenges without worrying about expensive phone plans or worrying about building and maintain [sic] wireless infrastructure.”  This state...
	267. Yet another page on Nova Labs’ website featured Salesforce’s name and logo as a user of the Helium Network and said,
	268. Contrary to its use of the logos and names of Nestlé, Lime, and Salesforce on its website, Nova Labs and its executives knew or recklessly disregarded that the companies were not users of the Helium Network or Nova Labs’ technology, that Nova Lab...
	2. Nova Labs’ Additional False and Misleading Statements

	269. Nova Labs’ CEO, COO, and Business Development VP also made false and misleading statements about Nestlé, Lime, and Salesforce in press releases, news articles, and public appearances, which they knew or recklessly disregarded were false and misle...
	270. Between July and December 2019, Nova Labs’ CEO and its COO made several statements that they knew or recklessly disregarded were false and misleading:
	a. During a public appearance in July 2019, Nova Labs’ CEO said, “I think, as you know, this [i.e., the Helium Network] starts to develop and people start to use it and more applications come on board and we’ve already got some good ones like Lime, an...
	b. During an October 2019 public presentation, Nova Labs’ COO said, “So, today we have companies like Lime Bike using our technology to track their scooters in the City of Austin.”
	c. During a public appearance in December 2019, Nova Labs’ CEO described how Nestlé consumed Data Credits related to the Helium Wireless Network, saying, “the other type of token on our network is called the ‘Data Credit,’ and that’s what customers of...
	In truth, neither Nestlé nor Lime were “on board” with Nova Labs, Lime was not using the Helium Network to track scooters in Austin, and Nestlé was not building devices on the Helium Network, all of which Nova Labs’ CEO and its COO knew or recklessly ...
	271. In fact, in November 2019, two Nova Labs employees highlighted to Nova Labs’ COO that Nova Labs was using Lime’s name and corporate imagery as promotion on its website, even though “we are NOT working with them.”
	272. In response, Nova Labs’ COO admitted that Nova Labs was “not currently” working with Lime, but instructed the Nova Labs employees to “leave” Lime’s name on the website.
	273. Nova Labs’ misrepresentations continued throughout 2020 and 2021, as Nova Labs’ Business Development VP (and other Nova Labs executives) made frequent presentations on Helium’s public YouTube channel promoting Nestlé, Lime, and Salesforce as comp...
	None of Nestlé, Lime, or Salesforce “relied on” Helium or were “users” of the Helium Network, which Nova Labs’ Business Development VP and other executives knew or recklessly disregarded.
	274. Although Nova Labs’ presentations listed other companies as “relying on” or “users” of the Helium Network, those companies were much smaller and less well known than Nestlé, Salesforce, and Lime.
	275. During that same time period, Nova Labs’ CEO and its COO made similar public statements that they knew or recklessly disregarded were false and misleading.  For example:
	a. In June 2020, Nova Labs issued a press release claiming that Nestlé was one of three “key brands that use the Helium Network.”
	b. In a July 2020 interview with the online publication TechRadar, Nova Labs’ CEO touted Nova Labs’ relationship with Nestlé saying, “Some examples of companies who are already enjoying the benefits of our network include the beverage delivery service...
	c. In February 2021, during a public appearance, Nova Labs’ CEO was asked, “It looked like you had some partnerships with Salesforce and Lime—I know them as scooters, I’m sure they’re doing other stuff too—did I get that right?”  Nova Labs’ CEO respon...
	d. In May 2021, Nova Labs published a tweet that continued the misimpression it had created, saying that the Helium Wireless Network “is trusted by users” that include Lime and Salesforce.  Although the tweet mentioned other companies as purported use...
	e. In November 2021, during a public appearance, Nova Labs’ COO touted the adoption of the Helium Network by “very large customers,” and said unequivocally, “Lime Scooter is a customer.”
	276. Nova Labs’ misstatements continued in 2022.  In a public appearance in March 2022, Nova Labs’ CEO described the “users” of the Helium Wireless Network and the financial benefit of those users to IoT Hotspot investors:
	277. In a public appearance in June 2022, Nova Labs’ CEO again described Salesforce as a “user” of the Helium Network.  In response to a question about the purpose and usage of the Helium Wireless Network, Nova Labs’ CEO named industries that could us...
	278. Nova Labs’ CEO knew or recklessly disregarded that these statements—which suggested that Nova Labs had ongoing relationships with those companies and that those companies were using or were planning to use the Helium Network—were not accurate.
	3.    Nestlé and Lime Issued Cease-and-Desist Letters to Nova Labs.

	279. The falsity of Nova Labs’ statements was ultimately revealed.
	280. Following TechRadar’s July 2020, publication of its interview with Nova Labs’ CEO, in which he claimed that Nestlé was using the Helium Network, Nestlé sent Nova Labs a cease-and-desist letter demanding that Nova Labs stop “discussing [Nestlé] im...
	281. Nestlé’s cease-and-desist letter recited facts that Nova Labs already knew, saying:  “Nestle Waters North America has not engaged in conversations with Helium for well over a year,” adding that if Nova Labs “continue[s] to reference NWNA as a cus...
	282. In response to Nestlé’s cease and desist letter, Nova Labs’ Business Development VP wrote to others within Nova Labs that he, “[c]an’t believe we made it this long without them calling us out.”
	283. After Nestlé’s cease and desist letter, Nova Labs quietly removed Nestlé’s logo from its website, but did not correct its misrepresentations about its relationship with Nestlé.  Nova Labs also continued to use the names and logos of Lime and Sale...
	284. In July 2022, Lime issued a public statement that it was not and had never been a user of the Helium Network or partner with Nova Labs.  Lime acknowledged that it had briefly tested Nova Labs’ hardware in early 2019 but said the “test had fizzled...
	285. That same day, Lime’s General Counsel sent a cease-and-desist letter to Nova Labs making clear that “Lime employees engaged in exploratory conversations with [Nova Labs] in 2019” and nothing more, and instructed Nova Labs to “immediately cease an...
	286. In response to Lime’s cease-and-desist letter, Nova Labs’ Business Development VP said in an internal message, “Please make sure [Nova Labs’ COO] weighs in on the Lime piece specifically.  He’s insisted that we continue to use their logo for as l...
	287. Nova Labs removed Lime’s logo and name from its website.
	288. After Lime’s July 2022 public denial of any relationship with Nova Labs, journalists began to question whether Nova Labs’ relationship with Salesforce was real.  Nova Labs knew it was not.  As Nova Labs’ COO said in an internal discussion regardi...
	289. In short, Nova Labs knowingly made false and misleading statements about the relationship between its burgeoning business and wireless network with three well-established companies in order to promote and legitimize itself and its network, and No...
	4. Nova Labs’ Purported Relationships with Nestlé, Lime, and Salesforce Were Important to Investors
	290. That Nestlé, Lime, and Salesforce were purportedly using the Helium Network was part of the total mix of information that investors in both Nova Labs stock and Hotspot investors considered in deciding whether to invest.
	291. For example, between October 2021 and March 2022, Nova Labs marketed its Series D Fundraise and, between December 2021 and March 2022, sold preferred equity shares to 33 investors in exchange for approximately $200 million.
	292. During that fundraise, Nova Labs personnel told prospective investors that Lime was currently using the Helium Network and internal documents from multiple entities that ultimately invested in the Series D Fundraise show that Nova Labs’ purported...
	293. Nova Labs’ purported relationships with Nestlé, Lime, or Salesforce was an important consideration in the Nova Labs’ Series D Fundraise investors’ decisions to buy Nova Labs’ equity shares.
	294. Nova Labs and its executives made the statements about Nestlé, Lime, and Salesforce detailed above at the same time that Nova Labs was selling IoT and Mobile Hotspots and in furtherance of persuading investors to buy those Hotspots.
	295. IoT and Mobile Hotspot investors considered Nova Labs’ purported relationships with Nestlé, Lime, and Salesforce as an important part of the total mix of information when deciding to invest in those Hotspots.  This is unsurprising.  Nova Labs had...
	296. Actual and/or prospective investors in Hotspots repeatedly referred to Nova Labs’ purported relationships with Nestlé, Lime, and Salesforce in social media postings.  By way of example, the following posts were made by members of the general publ...
	297. When the truth about Nestlé, Lime, and Salesforce was revealed, investors said in online posts that they felt misled, making statements including, “That’s a pretty bold lie to make” and “This is starting to sound like an MLM—where the money is be...
	298. Nova Labs and the Commission entered into tolling agreements suspending the running of any applicable statute of limitations from September 22, 2023 to December 21, 2023, from January 22, 2024 to April 21, 2024, from September 25, 2024 to Novembe...
	Violations of Securities Act Section 5(a) and 5(b)
	299. The Commission re-alleges and incorporates by reference here the allegations in
	Paragraphs 1 through 231.
	300. By virtue of the foregoing, Nova Labs, through its offers and sales of the Helium Network Token (or HNT), the Helium Mobile Network Token (or MOBILE), and the Helium IoT Network Token (or IOT) directly and indirectly:  (a) without a registration ...
	301. By reason of the conduct described above, Nova Labs violated, is violating, and, unless enjoined, will continue to violate Securities Act Sections 5(a) and 5(c) [15 U.S.C. §§ 77e(a) and 77e(c)].
	Violations of Securities Act Section 17(a)(2)
	302.  The Commission re-alleges and incorporates by reference here the allegations in Paragraphs 1 through 297.
	303. Nova Labs, directly or indirectly, singly or in concert, in the offer or sale of securities and by the use of the means or instruments of transportation or communication in interstate commerce or the mails, knowingly, recklessly, or negligently h...
	304. By reason of the foregoing, Nova Labs, directly or indirectly, has violated and, unless enjoined, will again violate Securities Act Section 17(a)(2) [15 U.S.C. § 77q(a)(2)].
	Violations of Exchange Act Section 10(b) and Rule 10b-5(b) Thereunder
	305. The Commission re-alleges and incorporates by reference here the allegations in Paragraphs 1 through 297.
	306.  Nova Labs, directly or indirectly, in connection with the purchase or sale of securities and by the use of means or instrumentalities of interstate commerce, or the mails, or the facilities of a national securities exchange, knowingly or reckles...
	307. By reason of the foregoing, Nova Labs, 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(b) thereunder [17 C.F.R. § 240.10b-5].
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