So I read the prospectus and I found a RED FLAG. It allows the company to buy back your token at any time, for 1$. they just have to give 60 days notice:
"The Issuer reserves the right to redeem the Tokens at any time prior to the Termination
Date up to an amount representing 99.9% of the equivalent of USD 1.00"
This needs to be addressed by Envion.
This is on page 12 of the prospectus:
https://static.envion.org/kyc/Envion_Prospectus.pdf"I TERM OF THE TOKENS
I. Term of the Token
The Tokens are issued for a period of 30 (thirty) years starting with commencement of the
Subscription Period (the end of that period: the “Termination Date”).
II. Redemption of the Tokens
1. The Issuer reserves the right to redeem the Tokens at any time prior to the Termination
Date up to an amount representing 99.9% of the equivalent of USD 1.00 (in words: one USDollar)
per Token. Notice of early redemption shall be given pursuant to clause M (Notices)
not less than 30 nor more than 60 days before the day fixed in the notice on which any Tokens "
It's not a red flag, it's standard in every single security or equity purchase agreement.
https://en.wikipedia.org/wiki/Share_repurchaseNot at $1 value. A share buyback would be at market value at the time or some such agreed upon price.
Would you agree to buy apple shares for$500 if there was a clause to buy it back at $500 whenver they want? doesnt make sense right. Unless I am misreading it but that should be clarified. It seems to be a buyback for $1?
I can see this will be an issue we have to address with some more depth. I'll provide a little more info now and we'll release a detailed statement.
It's technically not a repurchase. It's a feature of the financial instrument that underlies the ICO. ICOs don't really exist in the legitimate financial world right now, but envion worked with our legal team to find terms that would make an ICO possible now and viable into the future.
The redemption is not a buy back or a repurchase per se. It allows a refund to the purchaser up to 99.9% which means that you would be refunded your investment, but you would keep the ownership of your token and hence continue to receive the full value of the dividends entitled to you as the owner of that token.
We will elaborate on this concept in a blog post so that it's very clear how the financial instrument works and relates to the concept of ICOs. The high-level take-away is that we can't take your tokens and that it's a good thing because it means the ICO is iron-clad from a legal standpoint.
Ok, I see what you mean, further down I see:
2. The Issuer shall redeem the remaining amount of the equivalent of USD 1.00 (in words:
one US-Dollar) per Token on Termination Date together with any Profit Participation due and
not paid yet Profit Participations are subject to Swiss withholding tax (currently 35%).
So the 99.9% is being redeemed, and then the full amount is redeemed after the 30 years.
Thanks for clarification.
... but what is the purpose of the clause then.
I'd also like to know/get a response for this..
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