- Subject to Update
- If we don't answer your question, please let us know your question.
In what US state is Halagard incorporated?
- Nevada as a C corp
Where is your company based?
- Our headquarters are based in the Dallas TX metro area and will be expanding to other US locations as needed.
What is a Digital IPO?
- A Digital IPO (D-IPO) is similar to an Initial Public Offering. However, a D-IPO is uniquely underwritten by Halagard specifically for our clients and is offered privately. The D-IPO is then issued on the Halagard marketplace platform wherein investors can trade these shares. Halagard provides the digital stock and bond securities along with providing a marketplace platform for trading. No coins or tokens are used.
Is our idea protected?
- The Halagard process is patent pending, and we will be filing for additional patents and amending current processes as we build out this ecosystem.
Halagard Offering Questions
What is a Reg D 506 (c) offering?
- Reg 506 (c) basically provides access to capital by connecting the D-IPO with broker-dealers who place the initial digital offerings for investment. The SEC voted to propose amendments to Regulation D under the Securities Act to add new Rule 506(c). Rule 506(c) offerings technically are private placements made only to “accredited” investors, but they could be advertised widely – on television, in newspapers, and most importantly, over the internet. The JOBS Act of 2012 required the SEC to remove the prohibition on “general solicitation or general advertising”, which has been part of Regulation D since that regulation was adopted in 1982, so long as the purchasers in an offering were all accredited. The way the SEC is proposing to effect this legislative mandate means that there will be two different types of offerings under Regulation D’s Rule 506: • Rule 506(b) offerings, which cannot use general solicitation, but in which non-accredited investors can participate as long as they are provided with extensive information about the issuer of the securities, usually in the form of a private placement memorandum or PPM; and • Rule 506(c) offerings, which can use general solicitation, but must be sold to accredited investors only, in which the market will let investors dictate the type of information that they need to make informed investment decisions.
Do you consider yourselves an alternative to banks?
- We are an alternative to the business loan services provided by a Bank
- We don't compete with any other services provided by a bank such as Checking, savings, merchant etc.
Are you targeting banks to disrupt this institution?
- On the surface, it would appear that Halagard is a disruptor to banks as we know them; however, we are only providing an attractive alternative to commercial loans.
- There are many important services banks provide besides business loans.
- We are offering banks alternative solutions that could offset any potential loss from the business of loans.
- Since we are not storing investor funds and will use an API to pull and deposit funds, our banking partners will be able to attract more high net worth customers to increase their funds on deposit.
- Halagard will pay a fee to banks if they refer their rejected commercial loans applicants to us, as these customers may pass our underwriting process. Being rejected for a bank loan often does not mean that the company’s business and financials do not qualify. When the bank refers rejected loan seekers to Halagard; the bank then has the advantage of not losing their customer and may continue to provide other services for the benefit of the bank and their customer.
- Since we are not storing investor funds and will use an API to pull and deposit funds, our banking partners will be able to attract more high net worth customers to increase their funds on deposit.
Why is there no Reg A+ component?
- Reg A+ is a public offering and subject to very different rules than our private offerings.
- A Reg A+ offering are a lower cost than traditional public offerings.
- All of the middlemen and their fees are still in place.
- We believe our client base is not interested in the expenses associated with Reg A+ offerings.
How long will it take to underwrite a business?
- The real question is "How long before you know if Halagard is a solution for your needs?"
- We expect a maximum of three days after all documentation is submitted.
- However, it is possible that demand is greater than we anticipated and therefore, it may take longer.
How much time do we anticipate the fundraising will require?
- There have been several pre-revenue companies that have raised funding in a similar manner over the last year, and it has taken anywhere from minutes to weeks for the market to fully respond.
What does buying into the Halagard D-IPO entitle me to as an investor (e.g. permission to use, equity stake in the platform, etc.)?
- You will have an equity stake in Halagard and be able to participate in special dividends when we sell bundles of SMB equities.
- A special dividend is intended to happen when Halagard takes the 2% equity from multiple SMBs and creates a bundle of various equities that is sold to investors. Halagard shareholders will receive a small portion of the bundle as a dividend.
Will the Halagard D-IPO accept other cryptocurrencies in exchange for Halagard "shares" (e.g., Bitcoin, Ethereum, Litecoin, etc.)?
- No, all transactions with Halagard will be in USD.
- We will explore other hard currencies as we expand globally.
- As governments make decisions about crypto, i.e.: tax, regulatory etc., we will adjust the POV on crypto.
How will I, as an investor, be informed of progress?
- We will provide information to all interested parties via the investors section of our website and we will host occasional calls.
How can I join the board of directors?
- We believe a strong independent board provides the best governance. We will consider all requests to join our board. Please reach to us at [email protected]
Why doesn’t Halagard use the term Exchange?
- Regulators only allow the term “Exchange” to be used by companies that provide platform for the public and corporations to trade shares (i.e. NYSE, NASDAQ).
- All private platforms that trade shares must use other terms. Halagard has decided to use the term Marketplace.
When will Halagard shares be listed on your Marketplace and be tradeable?
- 1 year after the Halagard D-IPO our marketplace will be operational, and users will be able to trade digitized shares similar to any other public security.
What limitations are there on investors? (Minimum net worth, creditworthiness, location?)
- Only accredited investors may participate, per SEC regulations.
- The definition of an accredited investor can be found at: https://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=8edfd12967d69c024485029d968ee737&r=SECTION&n=17y18.104.22.168.22.214.171.124
How does Halagard distribute dividends and/or interest to investors?
- Similar to other securities, we work with the dividend payer to coordinate payments by placing funds into an account, reading the blockchain to determine the owners of record on x date and time, calculating the payment due, and then sending the payment to banks that provide wallets to distribute funds to the appropriate account holders.
Will Halagard make company financials publicly viewable?
- Yes, all companies that issue securities on our platform will be required to file an annual report even though the SEC does not require filings for Regulation D offerings.
Will these reports be filed with EDGAR, etc.?
- TBD, we will discuss with the SEC
Will there be a futures component?
- We are excited about what we call “Halagard 2.0 Ideas”. Some of these are listed below and have been shelved until we have the core of Halagard operational.
- Startup’s looking for funding
- Debt / Loans
- Global trading
How is raised capital spend controlled?
- Capital is managed the same as with any corporation. We will have both day-to-day oversight by our management, and global oversight provided by our board of directors.
As an investor, when will I see a return on my investment?
- Once the Halagard marketplace is operational post D-IPO close (12-15 months), you will be able to liquidate your shares in our private marketplace.
- This type of investment is rare in that it builds the exit path for investors and doesn’t require multiple lawyers to execute. You may liquidate assets on your own schedule.
Managing and Trading Assets
How do I convert/trade my digital shares back into flat currency?
- On your first trade (buying or selling shares) on the Halagard platform, you will use a bank account that uses our API to digitally move funds between your bank and the Halagard platform.
- 12-15 months after the Halagard D-IPO closes, our marketplace will be operational, and users will be able to trade the same as any other public security. All trades on our marketplace happen in $USD, so if you sold your digital shares, you will receive $USD into your bank account.
How quickly will I receive these funds?
- The industry standard is T+3, or 3 days post transaction, but we believe you shouldn’t have to wait for your funds. The exact timing for our solution is TBD, but we are planning on minutes.
- Since we are settling trades in minutes, whenever you make a bid, you must have the $USD in your bank account to cover the buy.
Will we allow people to place orders on-margin?
- To be able to settle trades in minutes, all buyers must bring cash to the table. If we allowed margin buys, we would either need to extend the settlement time, or Halagard would need to make a loan to a buyer. Neither of these options are of interest at this time.
Do I need to purchase Halagard tokens to acquire the right to use the service?
- No, there are no tokens required to use our marketplace. The buyer and seller will each pay a transaction fee.
- Additionally, you don’t need to be a Halagard shareholder to use the marketplace.
Are there any restrictions on trading shares once acquired?
- The lockup is at the D-IPO. Per SEC rules for private placement, shares cannot be traded for one year.
Security and Compliance Questions
How will Halagard mitigate the risk of money laundering?
- Halagard will not be responsible for AML since security oversight is provided by partner banks as part of their standard banking procedures. We will use a secure API to move funds between the banks and Halagard.
How will Halagard protect against phishing, DDOS attacks, etc.?
- The Halagard infrastructure is built on AWS and will leverage best practices.
- Additionally, we are going to employ a “white hat” who will be consistently monitoring systems for issues. Other precautions being taken include employing penetration testers, developing intrusion & anomaly detection systems, fail safes in contract code, code audit pipelines, potent access control systems, and facilitating a culture that prioritizes security.
How will you ensure people don’t lose their money in the event of a hack or security breach?
- Client funds stored on Halagard systems will have a very low risk of hacks and security breaches.
- Risks could potentially include, for example, manipulation of, in an unprecedented event, the hyperledger blockchain, or a hack the API for funds from a bank itself.
- Replicating our blockchain allows us to always roll back in the event of a hack. Given the inherent redundancy of distributed ledgers and our regular supplemental backups of the blockchain, we are confident information could never be changed without being promptly restored.
- Our bank API will require user authentication via the bank’s mobile app before any funds can be put into play. Requiring a hacker to breach Halagard and the bank at the exact same time will dramatically reduce any opportunity for a security breach’s chance of success.
- While no system is completely perfect, we intend to use the best technology and people to guard resources.
- In addition, the Hyperledger technology presents a unique opportunity in that every hack implicitly must be a transaction, which is then tracked such that its recreation can be prevented after the system is restored. In this way, Halagard will only grow more secure as we test the system.
SMB D-IPO Questions
How is this different from other SMB lending solutions?
- Halagard is not loaning funds.
- Many of the loan solutions in the market charge vulture rates, and these rates kill cash flow and hinder good companies from growing.
- Halagard’s success is tied to the SMBs success as we hold equity stake in each SMB.
What is the maximum offering amount for each company?
- There is a wide range of companies under the SMB umbrella with a variety of different capital needs. At this time, our only limiting factor will be that the company needs to be considered an SMB.
What is the minimum capital raise for each company?
- Initially, it will be $1M USD.
- Long term, we will register as an investment advisor and create funds that will allow us to provide sub $1M USD loans to SMBs and help them grow to a place in which they can be executed an D-IPO.
What is your definition of an SMB?
- Our range is 10 to 1,500 employees, and less than $2B in revenue.
What happens when an SMB on Halagard's platform eclipses these upper ranges?
- These issues will be managed on a case by case basis.
Are there any geographical limitations for companies seeking financing?
- Initially, we are focused on companies in the United States.
- However, we realize this solution must quickly become global and be able to service SMBs across the globe.
- Our goal is to create revenue flow and processes strong enough in the US that we begin considering alternatives to navigating different regulatory landscapes and become a global trading platform for SMBs.
- Are there any industry limitations for companies seeking financing?
- No, we are open to working with any SMB
What criteria does Halagard take into account during its vetting process? (Outstanding debt, geopolitical risk, industry-specific regulations, proven revenue stream, trials, patents, market research, etc.)
- We plan to keep Halagard’s proprietary process locked away, and you may judge the outcome as we publish the PPM for each D-IPO.
- We do have an advisor that built Fannie Mae’s AWS underwriting engine that processes 30K loan applications each day. We are planning to migrate this person to an employee.
What are the advantages of Halagard over venture capital?
- Traditionally, operational SMB’s are not candidates for venture capital.
- In comparison, Halagard requires a fixed fee for an equity raise and no board seat. A VC equity % would be higher and would require a board seat.
What are the advantages of Halagard over corporate partners?
- There is no cession of marketing rights or patents.
I have a great idea and want to use the Halagard model to raise funding for my company. Will you manage my D-IPO?
- During our launch, we will be focused on operational SMBs with revenue and assets.
- Once we are established we will open up the Marketplace to your companies too. Please register your company with us.
Why is Halagard seeking equity in my company?
- For any company, cash is king, and they are unable to innovate or expand if there is a large drain on cash.
- We want our clients to be successful.
- We have created a process that allows our clients to pay a small fee and keep their cash. We will use your equity to create products for investors so we can recover the cost of our services.
If Halagard has 2.5% equity in my company, and .5% can be sold as needed to support operational needs and your charity, do I have a say in how they trade it?
- At no time do we intend the sale of our equity to hurt our clients. We view our clients as part of our family.
- We intend for all clients to have similar terms concerning how Halagard can use the equity.
- After you have had a chance to review the terms, we can discuss any concerns you may have.
Is there an incentive for early adopters (from the SMBs’ perspective)?
- TBD, depending on market demand.
Will there be a market maker component to the marketplace?
- We are discussing with a market maker.
How will you market this concept to SMBs?
- We will utilize a mixture of methods.
- First, we will hire sales people who can travel and meet with SMBs and explain the Halagard process, which will help business owners calculate their needs and equity cost.
- Second, the leadership team and salespeople will speak at meetings typically attended by SMB owners (e.g., EO, EYO, and local service organizations).
- Third, online marketing, including calculators, allow business owners to visit our website and determine the general cost of a loan vs. Halagard and how both impact the value “x” years later.
- Fourth, traditional marketing & advertising, i.e. trade publications.
How is Halagard creating/licensing marketplace technology?
- The marketplace we will use will be an SEC-approved ATS.
- We have two different matching engine providers with whom we are talking about Halagard. If we engage one of these companies, they will need to make modifications to operate the matching engine on AWS.
- In addition to the technology for a matching engine, we would either purchase an SEC ATS license or go through the 6+ month process to file with the SEC to get our ATS license.
Why does Halagard need a blockchain?
- A blockchain is a distributed ledger that requires consensus for changes through a ‘consensus algorithm.’ By incorporating distributed ledger technology, Halagard enables an unprecedented degree of transparency and accountability while providing a revolutionary secure service. Halagard’s blockchain enables investors to independently download and query our marketplace, guaranteeing no tampering can occur behind closed doors. Investor’s with differing financial goals can know their funds won’t be unilaterally altered in a consensus-driven system. In this way, Halagard can facilitate and empower the marketplace, but not unfairly control it.
- By putting these assets on a blockchain, we bring them closer to interfacing with a growing digital asset economy.
Who is Halagard selecting to provide the blockchain?
- We will leverage the open-source Hyperledger Fabric blockchain being developed by the Hyperledger Consortium, a partnership between IBM and the Linux Foundation.
Why did you select you select Hyperledger instead of Ethereum?
- As of this moment, Hyperledger Fabric is better suited to Halagard’s goals. Fabric has proven the better choice due to its capacity for greater volume of transactions per second, the ability to switch consensus algorithms, computational parallelism, independence from a public chain, fine-grained access control, and our confidence in the organizations surrounding it. With Fabric, Halagard can avoid any unfamiliarity with the crypto economy as crypto is utilized more widely in the future (FYI- Halagard is not using tokens or coins).
What are Halagard’s plans for a charity?
- We have added a document to the Investor Data Room titled “Charity Idea” which will explain the macro concept for our charity.
- Why are you using a percentage of your fees for charity?
- The founders believe strongly in helping those in need, and by committing a portion of our revenue, we are ensuring this help is not influenced by other interest at the end of year.
- Additionally, we did not take a portion of our fee and designate it for the charity. We had planned to charge SMB’s 2.25% equity and we increased this to 2.5% to account for the charity aspect.
Could the charitable percentage be utilized different in the future? (Ex. as a discount for SMBs in the future)?
- Technically the .25% will be paid by the SMB directly to the charity and not to Halagard. This ensures the SMB is able to realize the tax benefit of the donation. The SMB fee will not be discounted by this % in the future.
- All future direction of charity and how funds are used will be the responsibility of the charity board.
Is the charity associated with any organizations or religious groups?
- Organization Associations: No, not at this time. It is possible in the future that the charity could be associated with various types organization in the future.
- Religious or political groups? The intent at this this time is no association. We want people focused on the mission and not splitting hairs over beliefs or choices.
I noticed in the cap table, you have several charities listed.
- This was by design, prior to launching our fundraising, we wanted to spread seeds of possibilities with several groups. These charities were selected personally by each of the Halagard Founders.
- Our analogy for the charities was that we are giving you a new, young wine that would have little value to the palate or the pocketbook today. As it becomes more drinkable and ages with time, you may choose to pull the cork or enjoy it now, or you may save it for later after more maturation in the wine cellar.