A principal-protected growth instrument.

As a contract, the prepayment right raises no question of insurable interest, risk transfer or claims discretion, and nothing asks a regulator to treat a fully collateralized obligation as insurance. No insurance is written or bought anywhere in the structure.

The Structuring Company is not a registered broker-dealer, is not a registered placement agent, and is not registered in any capacity under the Securities Exchange Act of 1934 or with FINRA or any state. It has given no undertaking to become registered and may never do so. Its role is confined by written agreement with each Project to issuer-side services — designing the instrument and the collateral mechanics, documentation, procuring the independent appraisal, the technology platform, Project diligence, administration and reporting. That agreement expressly excludes every investor-facing function: identifying, contacting, soliciting or negotiating with any investor or prospective investor, preparing or transmitting subscription documents, confirming accreditation, and allocating capacity among investors. It receives no compensation, in any form, for finding or introducing an investor. The Project offers and sells its own Note, through its own officers, who are salaried and are not paid any commission or other remuneration based directly or indirectly on transactions in securities. That is so whether an Investor comes on its own or through an investment adviser: the adviser advises its client and the client subscribes directly from the Project, on a non-discretionary, client-directed basis. An adviser does not offer or sell the Note and holds no selling agreement; the advisory firm receives nothing from the Project, the Vehicle or the Structuring Company and is paid by its own client. One case would be different, and it does not yet exist. A member of the Structuring Company intends to become a representative of an independent RIA and is not one today. If he does, and the adviser is that firm, that representative may also be advising the Project in the same transaction, and he is paid by the Structuring Company for that work. The advisory firm would still be on the Investor's side and would still sell nothing; the person may be on both sides, which is why the four conditions above govern that case — consent from both, no term negotiated by him, no part in the appraisal, no introduction either way. Until then he advises no investor at all. Only one case puts the selling function anywhere other than the Project. Where a Project instead requires a placement agent, an unaffiliated registered broker-dealer is engaged for that Project. Its fee is a multiple of the growth capital, not a percentage of what is raised — 10% of the first $10,000,000 of growth capital, 7.5% of the next $15,000,000 and 5% above that, capped at $3,500,000 per Project — so no fee in this structure is a percentage of face, and the fee is the same number in both investor classes. Nothing is payable to the agent before closing: no retainer, no work fee and no expense advance — a condition of engagement rather than a negotiating position, and one the program expects will leave an agent unavailable for most Projects. The fee is paid at closing out of the proceeds, which enlarges the face; the Project's cost of capital is unchanged at 10.0% a year after tax and the growth capital it receives is unchanged, because the Structuring Company's entitlement is denominated in dollars on the growth capital rather than as a share of the collateral. The cost falls on the Investor, through a larger face for the same Warrant. Whether a placement agent has been engaged for a Project, and on what terms, is stated before subscription.

The STRIPS are purchased through the Dealer at 79.00 and held in a securities account at the Custodian, pledged to an independent collateral agent for the investors, excluded from the Custodian's estate, never lent or rehypothecated, and bought to mature 45 to 90 days after the Note.

At each closing the Structuring Company represents that the Dealer is unaffiliated with it, with the Vehicle, with the Administrator and Custodian and with the Project. The Dealer prices both the interest and the principal components for the chosen date and executes the better of the two. Its compensation is the dealer spread and nothing else, and no part of it is shared with any other party to the transaction. If that ever ceases to be true for a given Project, it is disclosed before subscription. The Dealer buys the collateral and deals with no investor.

A Bermuda orphan special purpose company, bankruptcy-remote and dedicated to this Project alone. Its shares are held by a professional trustee under a Bermuda purpose trust, so that no party to the transaction owns it. It is a separate legal person with independent directors, and no US person holds its shares. It writes no insurance, issues no security to the investor and takes no deposit: it holds the collateral, grants the pledge and does nothing else.

The Vehicle costs $50,000 at closing and $50,000 a year, escrowed for the term. It covers Bermuda government fees, the registered office and resident representative, corporate secretarial work, two professional independent directors, the purpose trustee, economic substance and anti-money-laundering filings, and accounting. It is a cost, not a margin: an orphan vehicle that cannot pay its directors or its trustee stops being independently governed, and the whole structure depends on it remaining so for the full term. It does not scale with the raise. It also retains $5,000 as its own benefit from the transaction, so its directors can conclude it is entering the transaction for value.

A tax-exempt account is not a better investor; it is an investor with nothing to pre-fund.

Only two parties hold participations, set in dollars as a multiple of the growth capital — not as shares of the collateral. The Structuring Company, a US corporation incorporated in South Dakota, takes 1.7728x the growth capital as compensation for structuring and arranging; the Project's entitlement is the matured face less the Structuring Company's requirement; the Structuring Company takes the residual. That is what fixes the Project's cost of capital at 10% a year after tax (12.133% before tax) at any collateral price and in either class. The investor holds no participation.

Every outcome returns the principal. The pledged STRIPS accrete from 79.00 to par and mature 45 to 90 days after the Note; delivered in kind, they satisfy the Note at full maturity value whatever happens to the Project. If the Project fails the unit returns 1.00x after-tax (1.05x gross), and the Warrant is retained.

Illustrative example only; all figures are hypothetical. Not an offer, a solicitation, or tax, legal, or investment advice. Cash-neutrality applies to the taxable investor class and assumes a 21% federal corporate rate.

Returns shown describe the investment unit itself and are before anything an investor pays an adviser of its own choosing, which is the investor's own arrangement outside the structure.

Illustrative projections are available on request →