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Hello ReserveDAO community,
This has been a great week for us at ReserveDAO (RSRV) as we were able to read about the accomplishments thus far and the roadmap for the DAO as it gets ever closer to its launch. Now, it is time for the DAO to begin to take those steps towards a launch and building out our protocol.
We are eager to present to you the next proposal for community voting. As a follow-up to the DEV update article, we will be proposing a vote for a S.A.F.T (simple agreement for future tokens) to be performed on our website in order to finish objective 1 as outlined in our budget below, and to pursue all platforms as listed in the original launchpad article.
Table I: The Capital Raise Plan for ReserveDAO
- Duke Togo
Before we dive into the S.A.F.T vote proposal itself, we would like to outline what a S.A.F.T is to some of those who may be unfamiliar with this particular type of capital raise.
What is a S.A.F.T? (Simple Agreement for Future Tokens)
Simply put, a S.A.F.T is an agreement made between the investor and investee. This agreement allows the investee to use those funds as outlined in exchange for investor access to tokens upon creation of the protocol. Please note, when an investee and investor sign a S.A.F.T, the investee is accepting funds from that investor but does not sell, offer, or exchange a coin or token at the point of investment.
US Capital Raise and Security Listing
Capital raises in the U.S. are a very scrutinized process that require an exercise of due diligence from the investee and investor alike. Running afoul during this process can seriously hamper a projects long term goals (Helllooo XRP) and in some cases the project may receive a cease and desist order (R.I.P GRAMS). Obviously we want to avoid that and make sure we are doing everything we can to stay within the known SEC regulatory framework. A S.A.F.T provides us the ability to continue moving forward without stepping outside the Howey test guidelines and other SEC regulations.
We are not attorneys and you need to consult a financial advisor or lawyer before considering participation in a S.A.F.T. offering.
Now, with that being said, there are certain security listing exemptions. This can be done utilizing Regulation D offering Rule 504. Some examples of what the DAO will have to follow are outlined below. As long as the DAO follows the guidelines, we will be able to fall under many of these exemptions and that will allow us to move forward with greater confidence. From FourScoreLaw.com …
To provide clear avenues for companies to privately sell securities under 4(a)(2), the SEC passed certain regulations that operate as “safe harbors.” If a company conducts an offering in accordance with one of the safe harbors, that offering is deemed compliant with 4(a)(2). Compliant offerings are not subject to the multifactorial, flexible test generally applicable to private offerings, and companies do not need to register complaint offerings with the SEC. Instead, a company files a notice (called a “Form D”) informing the SEC of its compliant offering. These safe harbour offerings are commonly referred to as Regulation D offerings.
The three most common types of Regulation D offerings are Rule 504, Rule 506(b), and Rule 506(c) offerings, named after the section of Regulation D where the applicable provisions are outlined. Some key differences between these offerings are outlined in the list and table below.
Provided by www.FourScoreLaw.com in no way does this provide an attorney client privilege between ReserveDAO LLC. and FourScoreLaw INC. should not be taken as legal advice. All information above is subjected to review by a licensed and practicing attorney and regulatory officials.
- The number of investors and their relationship to each other and to the company. The more investors you offer securities to, the less likely the offering is private. Similarly, if you sell securities to investors you never knew prior to discussing or negotiating an investment, that looks like a public offering.
- The number of securities offered and the amount of money you raise. The more securities you offer and the more you raise, the more the offering looks public.
- How the offering is communicated and advertised. Broadly distributing information about the offering likely makes it public. Pitching your company’s offering at a conference also looks public. Having targeted conversations with knowledgeable investors and strategic partners appears private.
- Whether the investors are financially sophisticated and/or experienced investors. It’s usually sufficient that the investors have (a) general business knowledge and experience, (b) the financial ability to bear the risks of their investment, or © a special relationship with the company (i.e. a director or officer of the company).
- Information provided or made available to investors. If the company provides (or the investors have ready access to) information outlining the financials and risks of the company, the court might lean in your favor. Although this has nothing to do with the public or private nature of the financing, it aligns with the purpose of SEC regulations (discussed below).
- Actions taken to prevent resale of the securities. If investors can turn around and resell their securities to the public, your original offering looks public. In general, the securities must not be available for resale by the investors, and most purchase documents (along with any other documents certifying an investor’s ownership of the securities) usually include specific representations and disclaimers about restrictions on resale.
RSRV S.A.F.T Proposal for Vote
This proposal gives the DAO the right to pursue the creation of a S.A.F.T. The DAO itself will release an agreement outlining all terms that participants must agree upon before making an investment. The subsequent information is outlining the legal juxtaposition that the DAO has to address to create a legal S.A.F.T for all parties involved, in no way does it guarantee we are performing a S.A.F.T or advertising a S.A.F.T to the public. Only those who are part of the Residual Token, Inc. community and currently holding eRSDL, uneRSDL, or uneRSDL legacy may participate in the vote.
- The price we are proposing is $0.15 per token before awards are applied, application of rewards is dependent upon the level of whitelisting an investor has.
- No limit will be placed on the amount one can contribute towards the S.A.F.T
- Only a limit on the total amount of capital that is raised by the S.A.F.T, which will be placed as stated above at $1,000,000.
- The RSRV S.A.F.T will stay open until our initial capital raise goal of $500,000 or within the legal recommendation of 12 months.
- When the S.A.F.T reaches $500,000, we will close the S.A.F.T the following week.
- If the S.A.F.T reaches $1,000,000 or 12 months, ReserveDAO has the fiduciary responsibility to end the S.A.F.T immediately.
- Participants of the S.A.F.T will not be able to exchange their receipt of a token until an agreed upon date that will be outlined in the S.A.F.T Investor/Investee agreement itself, typically this is one year from the S.A.F.T end date. If holders were allowed to claim the S.A.F.T immediately and sell it upon market listing, it would take the S.A.F.T outside of the scope of Regulation D Rule 504.
- Participants of the S.A.F.T must be from the eRSDL community and have joined prior to the start of the S.A.F.T, or, an Accredited Investor that has had private conversations with our team about the S.A.F.T.
- The S.A.F.T will not be publicly advertised to anyone outside of our community or any community that has not had prior relationship with Residual Token, Inc.
- The S.A.F.T will NOT be advertised on any platform outside of our own communities Discord, Medium and Telegram (we will NOT be tweeting about the S.A.F.T), which are designated platforms that are utilized to educate and inform the Residual Token, Inc. community (eRSDL/RSRV). This does not bar discussion of the S.A.F.T from individuals engaging in conversation or that have had prior relationships with Residual Token, Inc.
*****Please note that any publication promoting the ReserveDAO S.A.F.T will be considered defamation or libel against Residual Token, Inc. and the parties involved may be subject to a legal inquiry*****
If someone you know is interested in joining the S.A.F.T make sure the aforementioned guidelines are followed and that they pursue the proper channels to be educated about participation. We will add another section to the whitelist, these wallets will be composed of hodlers outside of the whitelisting reward criteria, but either hold eRSDL prior to the start date of the S.A.F.T, or, are Accredited Investors that have been KYC’d and approved by our team. Only approved and KYC’d Accredited investors will be added to the S.A.F.T whitelist upon the start of the S.A.F.T. Approval of this vote gives me the permission as CEO to make decisions in order to complete the task mentioned above for the DAO to create a S.A.F.T event.
Pursuing Launch Pads
We wanted to finalize the subject of pursuing other Launch Pads as well. We believe it would be best for the DAO to pursue all the launch pads that were listed in the original launchpad article to achieve objective 2 in the budget. We do not think the DAO should limit itself to one launch pad, but the DAO should try to work with any and every launch pad that creates a mutually beneficial position for all parties involved. With the DAO’s vote, it will give the ReserveDAO team to make decisions in order to complete the necessary task mentioned above and give the ReserveDAO team permission to communicate and pursue all of the listed launchpads within the launchpad article on behalf of the DAO.
Summary of Vote
The outlined proposals above will give permission to the ReserveDAO team to pursue the creation of a S.A.F.T capital raise to obtain objective 1 as listed in the budget article. It will also give the ReserveDAO team the ability to pursue all launchpads listed in the launchpad article to obtain objective 2 as listed in the budget article.
Yes (For) = Approval of both proposals and allows the RSRV DAO team to move forward with actions outlined in the article to obtain objectives 1 and 2 in our budget by starting a S.A.F.T and pursuing multiple launchpads.
No (Against) = Disapproval of both or one proposal and a new proposal must be drafted for the community before we pursue a capital raise or multiple launchpads for Objective 1 and 2.
I’d like to once again thank you all for your continued patience and support and engagement in this process, it has been a privilege leading this DAO and I hope to see you all aboard soon!
Vote here (ends October 25, 2022 at 0700 UTC):
uneRSDL (New Pool — note, please try the link above and vis a verse if you have trouble voting with your uneRSDL)
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