- SEC-regulated offering of digital tokens
- Balance sheet funding program for fintech investments
- Issuer (MoneyTrac subsidiary) focused on fintech for cannabis industry
With a public initial blockchain offering (“PIBCO”) now underway, Global Payout Inc. (OTC: GOHE) is showcasing its innovative prowess. A PIBCO is similar to an initial coin offering, except that the coins or tokens involved are treated as securities under federal laws. As a result, the rights and benefits represented by those digital assets are subject to SEC rules. Under the PIBCO, Global Payout’s majority-owned subsidiary, MoneyTrac Technology, Inc. (“MTRAC”), will offer tokens that provide share warrants of MoneyTrac Technology Inc. The company expects that the balance sheet funding program thus created will yield returns to token holders within two years.
Initial coin offerings (“ICOs”) have had enormous success in 2017. The 10 largest were able to raise over one billion dollars, according to Bloomberg (http://nnw.fm/aU2Rm). Filecoin, a data storage network, raised $257 million, while Tezos, which has developed its own secure blockchain infrastructure, raised $232 million. Amazingly, there were over 200 ICOs in 2017, some of which, very likely, were of dubious value.
This snake oil environment has prompted Pegasus Fintech to develop a process for public companies to initiate regulatory-compliant ICOs, referred to as public initial blockchain offerings to distinguish them from their unregulated brethren. Pegasus Fintech, Inc. is an innovative blockchain and token accelerator focused on delivering solutions in the financial services, blockchain and emerging cryptocurrency market sectors. With the PIBCO being subject to some SEC oversight, investor risk may be mitigated.
Compliance with federal securities laws is an essential requirement when funds are raised in the capital markets. Generally, any offer or sale of a security must either be registered with the SEC or meet an exemption. Regulation D, under the Securities Act of 1933, provides a number of exemptions from the registration requirements. However, notification of the issue and sale of the securities must be given to the SEC.
The MTRAC offering has been made under Rule 506(c) of Regulation D, which limits participation to “accredited investors” (http://nnw.fm/j2CbS). An individual is considered an “accredited investor” if he or she has earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years and reasonably expects the same for the current year or has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence and any loans secured by the residence (up to the value of the residence)).
The funds raised in this offering will, most likely, be invested in a fashion similar to some recent business deals. For example, Global Payout’s MoneyTrac subsidiary has acquired a majority stake in PotSaver, a periodical that provides listings on discounted cannabis-related products for local dispensaries and shops. Global Payout’s MoneyTrac division is aiming to become the most recognized brand for financial technology solutions in the cannabis industry. In addition, MTRAC has entered into an exclusive partnership with GreenBox POS, LLC (“GBOX”), a blockchain company, to provide strategic sales and marketing resources. MTRAC is set to launch GBOX services in the U.S., Canada and Mexico in April 2018. GBOX’s customized payment solutions, electronic modifications and custom-built blockchain kiosk machines fall in perfectly with MTRAC’s mission of ‘Banking the Unbankable’.
Global Payout has certainly come a long way since its inception in 2009. The company quickly became a leading provider of customized prepaid payment solutions for domestic and international organizations that distributed money across the globe. In 2014, it introduced its first online payment platform, called the Consolidated Payment Gateway (“CPG”), which allowed enterprise clients to transfer money to international bank accounts, mobile accounts and prepaid card accounts. Global Payout’s CPG has become the foundation for the introduction of its new, state-of-the-art fintech payment system in 2017, for both online and mobile applications that allow account holders access to an expanded suite of financial services. A look at how the company is applying blockchain for smart solutions is available in a recent Audio Press Release (http://nnw.fm/HyZ9I).
For more information, visit the company’s website at www.GlobalPayout.com
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