Hedera will distribute approximately 29.35 million coins during Q1 2021
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 an Amended SAFT, which entitled them to the same number of hbars that remained unvested at the time of signing the new offer, plus additional distributions of hbars that would, over time, be equal in cumulative value to the Purchase Amount (in USD) of the canceled SAFT.
The SAFT Exchange Offer laid out the Bonus Allocations under the Amended 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;
TPA = Total Purchase Amount for all SAFTs exchanged by all eligible SAFT holders as part of the Offer; and
Hedera also reserved the right to make additional or larger Bonus Allocation distributions, potentially fulfilling its obligations under the Amended SAFTs earlier than contemplated.
Hedera is now sharing the actual PPS from Q4 2020, to provide Amended SAFT holders visibility into their Q1 2021 distributions. Although Hedera did not sell any further coins that would constitute Prior Period Sales, it did make a payment of 293,465,100 hbars to Swirlds under the Master License Agreement for 14 months of owed payments.
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. Those coins therefore form the basis for the Q1 2021 Bonus Allocation to holders of the Amended SAFTs. The Q1 2021 distributions will be distributed on or about January 16th, February 16th, and March 16th.
Q1 2021 Distribution Details
PPS = ℏ 293,465,100
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 2021 would be equal to (293,465,100 / 10) * (IPA / 75,295,076). Hedera will distribute this Q1 2021 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 $0.05, the total USD value of the coins distributed as Bonus Allocations to all Amended SAFT holders in Q1 2021 (in aggregate) would be $1.47 M or approximately1.95% of those SAFT holders’ original principal investment.
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 50,500 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.