In 2020, Hedera provided a proposal to all existing SAFT holders, offering them the opportunity to exchange their outstanding SAFT for a new form of SAFT. Those who accepted tendered their original SAFT(s) in exchange for the new SAFT, which entitled them to the same number of hbars that remained unvested at the time of signing the new offer, plus an additional amount of hbars equal in cumulative value to the Purchase Amount (in USD) of the canceled SAFT.
The amendment laid out the Bonus Allocations under the new SAFT, calculated as follows:
Number of hbars paid each quarter as part of the Bonus Allocation = (PPS/10) * (IPA/ (TPA)), until the cumulative dollar value equals IPA, where:
PPS = Prior Period Sales, i.e., coins sold by Hedera in the prior quarter (including sale of coins received through network transaction fees and sale of coins from Treasury, but excluding sale of coins withheld from employee distributions).
IPA = The Purchase Amount of the original SAFT; and
TPA = Total Purchase Amount for all SAFTs exchanged by all eligible SAFT holders as part of the Offer.
Hedera also reserved the right to make additional or larger Bonus Allocation distributions, potentially fulfilling its obligations under the Amended SAFTs earlier than contemplated.
Prior Period Sales, for the Purposes of Calculating SAFT Distributions
Hedera is now sharing the actual PPS from Q4 2021, to provide Amended SAFT holders visibility into their Q1 2022 distributions. Hedera finalized the sale of 163,389,375 coins through hbar purchase agreements, similar to previously disclosed sales conducted in prior quarters. The sales were for $32.09M and the price was set at approximately $0.1964. Hedera also made a payment of 5,036,944 hbars to Swirlds in Q4 2021 under the Master License Agreement. As described in the SAFT Exchange Offer, when those monthly minimums are paid in hbar rather than fiat, the coins transferred count as Prior Period Sales. These coins form the basis for the Q1 2022 Bonus Allocation to holders of the Amended SAFTs. The Q1 2022 distributions will be distributed on or about January 16th, February 16th, and March 16th.
Q1 2022 Distribution Details
PPS = ℏ 168,426,319
TPA = $75,295,076
The matrix provided here will be updated after each distribution.
Holders of Amended SAFTs can calculate the number of hbars they should expect to receive by entering the values above as well the Purchase Amount of their individual SAFT (the IPA), into the formula for the Bonus Allocation. In other words, an individual’s total Bonus Allocation for Q1 2022 would be equal to (168,426,319 / 10) * (IPA / $75,295,076). Hedera will distribute this Q1 2022 Bonus Allocation in the three monthly installments noted above.
As described in the SAFT Exchange Offer and the Amended SAFTs, Hedera will calculate the dollar value of the Bonus Allocations using the 30-day trailing average of the publicly-listed coin price on CoinMarketCap (or another third-party source that we deem to be reliable) at the time of each distribution. The USD value of each distribution will be recorded and will count toward the cumulative dollar value of the Bonus Allocations to be paid, in total, under the new SAFTs.
For example, at a 30-day trailing average coin price of $0.40, the total USD value of the coins distributed as Bonus Allocations to all Amended SAFT holders in Q1 2022 (in aggregate) would be $221,864 or approximately 0.14% of those SAFT holders’ original principal investment.
ℏ 16,842,631.9 * $0.40 = $6,737,052.76 (8.95% of $75,295,076)
Please note that this distribution is not indicative in any way of future distributions. We are committed to ongoing transparency and open communication and will notify the public when the next distributions for Amended SAFT holders will happen.
An additional 3,278,518 hbars will be distributed during this period under other agreements based on PPS but calculated separately so as not to diminish the distributions to SAFT Exchange Offer Participants.