THE STRUCTURE

SIT will issue tokenised cumulative preferred shares in Sustainable Impact Token Ltd, a British Virgin Islands (“BVI”) registered entity.  The shares will attract a target cumulative yield of 10% per annum.  They will be preferred to common equity shares in SIT for both dividend distribution and also in a liquidation scenario. 

SIT will loan the money raised through the tokenised share issuance to the entity that owns the algae biomass project in Poland (“Project Co”).  The loan seniority will be a senior secured meaning that SIT will be the senior creditor to the Project Co and benefit from a security package including Project Co shares and key assets.  The Project Co will not be able to raise any further funds without the permission of SIT.  If the Project Co faces difficulty performing its obligations, SIT could enforce security over the Project Co and / or its assets.

The rationale for raising the funds in the BVI is that this jurisdiction is one of the most supportive locations for allowing crypto and blockchain principles being applied to company law, thereby enabling a tokenised share issuances to be legally robust.

Given the structural seniority of the loan from SIT to Project Co, investors can have confidence that their investment is truly backed by tangible assets.