Why Should An Issuer Looking to “Tokenize” Choose PrefLogic?

PrefLogic
PrefLogic
Nov 7 · 4 min read

So, if you believe in the potential of the three main forces that will drive digital securitization (Capital formation, Liquidity, Efficiencies) mentioned in my last blog PrefLogic: The Future of Raising Capital, there is a huge need for issuance platforms. Several will eventually emerge to meet the demand. PrefLogic is here for the start of the show with a robust product expected to launch in the 1st quarter of 2020. Their SaaS solution, the Securities Matrix, has a 3-pronged base of support, with strategic partners providing fully integrated solutions for:

  1. Document Preparation
  2. Insurance
  3. Custody and Compliance

Hidden behind a sleek and intuitive user interface (UI) is a complex maze of programming, partner support and optionality.

Document Preparation represents the first leg of the 3-pronged base of support. Each issuer using PrefLogic’s Turnkey Matrix will need a private placement memorandum (PPM). PrefLogic has designed a user-friendly data intake portal (PPM Builder) that will assist the issuer in preparing a first draft of its PPM, which will then be reviewed, edited and formalized by the issuer’s legal counsel. The Securities Matrix also carries an interface to the website of a strategic partner that will provide issuers the documents needed to organize and initiate formal operations of their legal entities.

The TigerMark insurance product represents the second leg of support. In July of this year, PrefLogic and Assurely announced a partnership to make the developing digital security marketplace safer. Assurely’s TigerMark insurance policy benefits both the issuing company and the investors participating in the digital security offering (DSO) by mitigating issuance risk on both sides. The issuer get the insurance they need and investors benefit by having an opportunity to get their principal investment returned upon a qualifying circumstance. The policy is customized to exactly how much is raised and there is no cost to the issuing company until their raise is successful. TigerMark provides an important piece in the development of a safe and successful marketplace.

Custody and Compliance comprise the final leg of partner support. PrefLogic has associated with Prime Trust of Nevada. Prime Trust is a chartered, regulated financial institution that prides itself on being a “technology company first”. Through an API interface to the PrefLogic SaaS solution, Prime Trust will offer numerous core banking and financial functions that reach deep into the blockchain space. These include digital security exchange connectivity, cap table management, compliance services, escrow services, banking and most importantly, qualified custody. Remember “Not your keys…Not your crypto”? Well guess what…Not anymore. Custody solutions have arrived.

Prime Trust, and therefore PrefLogic, have intact financial “rails” with several emerging exchanges, both US and non-US. This includes the recently announced Prime Trust partnership with BINANCE US. Soon, holders of digital security “tokens” will have visibility through the PrefLogic Dashboard to the exchanges that are legally compatible with their issuance and registered domicile. In other words, “Where can my token trade?”.

Ease of Use

Perhaps eBay for capital markets isn’t a perfect analogy, but my selling of a car on eBay in year 2000 was a breeze. PrefLogic has built a very powerful SaaS engine for capital formation, and one that from the very first line of written code has been engineered to be intuitive, efficient and easy for the issuer. Further helping to achieve this goal are educational videos, the automated PPM builder, and marketing video creation. All of this will be available with phone, email and live on-line support for questions and assistance.

Levels of Service and Pricing Tier

Depending on the complexity and purpose of the capital raise, PrefLogic will offer three products:

  1. Turnkey Matrix
  2. Liquidity Matrix
  3. Enterprise Matrix

Each of these products replace middlemen that small and medium-sized businesses can’t access and/or can’t afford. Even the highest level of service will be offered at a significant discount to the fee structure of their closest competitors, making it affordable to even the smallest issuer. PrefLogic will make money by way of the initial issuance fee, but will also have recurring monthly revenues for the functions of cap table management and investor notifications. These functions can easily be managed through the PrefLogic Dashboard.

SERC Token

Without getting terribly technical as promised at the beginning of my blog series, PrefLogic’s SERC token is an ERC-20 token supported by the Ethereum blockchain. The SERC token will be compatible with all major exchanges. There are 30+ customizable smart contracts that allow trading restrictions, jurisdiction limitations, KYC (know your customer), SEC rule compliance, shareholder notification and many other functions to be programmed. These are also engineered with “proxy” smart contracts allowing changes and updates to be passed along to the token holder as may be required due to law/rule changes or other factors over time.

In summary, PrefLogic’s platform offers a user interface that is unparalleled regarding ease of use, backend technology and partner support. The pending launch of PrefLogic’s Securities Matrix will demonstrate it as the most affordable DSO solution to come to market.

By: R. Jeffrey Cole, MD

Advisor to PrefLogic

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DISCLOSURE REGARDING ENDORSER. Dr. R. Jeffrey Cole, the author of this blog, owns a promissory note that is convertible into a significant number of shares of PrefLogic common stock at a fixed conversion price. In addition, PrefLogic has issued to Dr. Cole shares of PrefLogic common stock to compensate him for providing management and marketing advice to PrefLogic.

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