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Regulation D Resources Offering Preparation Services for Security Token Offerings Launch Tuesday, Feb. 19th, 2019

Regulation D Resources will begin providing services for the preparation and execution of Security Token Offerings (“STO”) on February 19th, 2019.

Initially executed as “coin offerings”, the Securities and Exchange Commission has deemed that coins or tokens that contain investment features are to be treated as securities and, thus, need to be sold through a proper securities offering.

Utilizing the Regulation D exemption is the most straightforward path to execute a Securities Token Offering and remain in compliance with Federal and State securities rules.  Regulation D Resources, with a 20 year track record of executing securities offerings under the Regulation D exemption, now provides offering preparation services for STO issuers.

Our services for the preparation of an STO offering encompass what is provided in our standard offering preparation service with a few key differences:

• Providing assistance in the development of the Token capitalization structure
• Setting the investment terms associated the Tokens
• Providing assistance in understanding the parameters needed for the Smart Contract
• Providing access to and assistance working with our third party managed partner platform for the execution of the token launch onto the blockchain

Selling a Token provides the holder with a security that can be traded on the blockchain assuming the holder has owned the security token long enough to satisfy the Rule 144 restrictions.  Tokens can also have revenue sharing features, dividend features, and other investment terms assigned to them through the offering and the associated Smart Contract.  Further, Tokens can also have utility features that, for certain companies, may allow the holder to use the Token as payment within the company’s eco-system or allow it to be used to redeem services.

The process for development of an STO is very similar to the preparation of an offer of traditional securities.  The offering terms are structured, PPM disclosure documentation is developed, subscription and suitability documents are drafted and finalized, and the SEC filing is then submitted through EDGAR.  From there the offering is promoted and, when the offering reaches the minimum offering amount, the Tokens can then be launched onto the genesis blockchain for distribution to Token holder’s digital wallets.

Most clients typically use the Regulation D 506(c) program which will allow for general solicitation of the Token offering through social media channels and direct advertising.

Is a Security Token Offering a fit for your Company’s funding needs and goals?

Call us today at (303) 984-4883 to discuss!