The Securosys token offering
Tags: Security Token Offering, Blockchain, ICO, Hsm, Ito

In the following post, we want to provide you with an overview of our token, and how it works for you as a contributor. At Securosys, we strive to set a landmark for a new era of growth financing. Crowd financing and the token economy have created a new set of possibilities for companies to gather money on the market. With the addition of security token offerings, a new class of assets was created and there are still differences in how they are structured and back-fitted to existing law. We are at the forefront of this innovation and proud to have created an asset that is both attractive to crowd investors, as well as traditional investors.

In the current landscape of growth financing, there is one major trade-off that must be addressed by anyone that is asking the market for money. Liquidity versus security. Tokens emitted in an ITO are of high liquidity, but there is still a gap between innovation and the law protecting the investors. With our partner Froirep, we found a viable solution to cater to both demands. The SET token can be held as a “security token” and offers certain rights to the holder, including a share in the business gains by Securosys. If the investor prefers to hold classic equity, he can convert his tokens to shares (non-voting and voting shares are both available) immediately.

The tokens offer high liquidity, besides the dividend share that is distributed through them. On the other hand, the shares offer shareholder rights (depending on the shares the tokens are converted to), but they are not as liquid as the tokens. We are firm believers that this opens up an interesting dynamic.

With the increase in functionalities of the token economy, there is an increase in the complexity of the token structure and associated rights. Therefore, we ask the reader to always fall back to the official whitepaper for any details about the token mechanics and deal structure.

The Securosys SET token

Securosys will issue the Securosys Token (SET) as a security token. The following gives an overview, including token distribution, profit sharing, and conversion mechanism.

Name: Securosys Token

Ticker: SET

Price per token: CHF 5.00 (or equivalent)

Token type: ERC20 compliant token

Token purpose: SET tokens can be converted into shares. The conversion rate is 100 tokens to one Securosys share of CHF 1.00 nominal value. The tokens entitle to an annual dividend-linked participation per token when the company issues a dividend.The dividend-linked participation is a cash payment by Securosys in CHF, tokens, or Ether. The amount of participation per token equals 1% of the amount dividend paid per Securosys share.

Hard cap: 3’049’345 SET Token

Pre-money valuation: CHF 49’259’350 (accounting for discounts)

Participation options: Bitcoin, Ether, and Fiat (CHF, €, $) via bank wire.

ITO timeframe: 6.11.2018–7.12.2018 (target dates. For more details see “ITO tickets” below.)

The SET tokens are considered securities under Swiss law. That’s why we use both terms ITO/initial token offering and STO/security token offering to be more specific about the nature of our token sale.

Although the tokens represent shares in the company, they do not confer any voting rights.

Profit sharing

Every year after receiving the audit report and checking the general financial health of the company, the Securosys board makes a decision on paying out dividends. The general assembly has to approve the proposal, then approved dividends are paid out to share and token holders. Note that Securosys just entered the second year of profitability, but has not paid out dividends in the four years of existence.

25% of the dividends paid to shareholders are distributed to the token holders. The 25% corresponds to the 25% of shares represented by the SET tokens. The dividends are paid out via smart contract in ETH or SET tokens with the rate CHF/ETH calculated at the date of payout. If dividends are paid out in SET tokens, they come from the company reserve or market buybacks by the company.

If a subsidiary of Securosys is sold, the same procedure applies for the exit proceeds.

Requirements for dividend payouts

To be eligible for the dividend distribution, the holder needs to be in possession of at least 1000 SET tokens, and they have to be registered and verified with Securosys. This is due to the Swiss tax withholding requirements.

Participant limitations

Within the EEA, Securosys will rely on prospectus exemptions, offered to less than 150 investors per member state, offered in batches of over €100,000 per investor, or offered to qualified investors only. The full terms of the SET sale will be included in the Token and Token Sale Terms, to be published separately on the Securosys Token Sales website, reachable through ico.securosys.ch.

For other jurisdictions, Securosys will rely on a general representation from the investor that no security laws, or other laws, are violated by the purchase of token shares by the respective investor.

ITO tickets and schedule

According to each investment size and method, various lockup periods apply. All tokens in the Securosys company reserve are locked up 24 months after the ITO. Some tokens that are not sold in the ITO phase are kept separate for private investor sales that will be ongoing due to time-intense processes on the investor side. Please have a look at the table below for all ticket sizes and corresponding lockup periods.

Target dates for public sale November 6 to December 7, 2018

Token distribution and use of proceeds