Information Memorandum

The Clarity Project (ICO) Limited

A private company incorporated in Jersey with registration number 126967

Dated: [●] 2018

TABLE OF CONTENTS

1. RISK WARNINGS
2. IMPORTANT INFORMATION, JERSEY REGULATORY WARNINGS AND RESTRICTIONS ON DISTRIBUTION
3. DIRECTORY
4. OVERVIEW OF THE ICO
5. JERSEY TREATMENT OF ISSUER
6. MANAGEMENT AND ADMINISTRATION
7. PROCEDURE FORPURCHASE OF TOKENS
8. RIGHTS ATTACHING TO A TOKEN
9. TAXATION
10. CONFLICTS OF INTEREST
11. STATUTORYANDGENERALINFORMATION
12. DEFINITIONS

APPENDIX 1 – PRIVACY NOTICE

APPENDIX 2 – WHITE PAPER

 

1.             RISK WARNINGS

                  Prospective Tokenholders should carefully review the risk factors set forth in this section prior to purchasing any Tokens. Prospective Tokenholders should consider the purchase of any Tokens as involving a degree of financial risk and should therefore carefully consider the following risk factors (together with other matters set out elsewhere in this Information Memorandum).

Prospective Tokenholders should carefully consider the following factors, among others, in deciding whether to purchase any Tokens and should consult their own legal, tax and financial advisors as to these risks and purchasing any Tokens.

The following is a brief description of certain factors which should be considered prior to purchasing any Tokens. The following, however, does not purport to be a comprehensive summary of all the risks associated with any purchase of Tokens generally.

Please see the White Paper (attached as an Appendix to this Information Memorandum) for further information on the initial coin offering (the “ICO“).

1.1           General risk warnings

If you are considering purchasing any Tokens at the ICO and subsequent token issuances or have already done so, be aware of the many risks this may entail, including the total loss of the price you paid to purchase any Tokens. The ICO is unregulated and may result in substantial risks for purchasers of the Tokens.

Be aware that:

1. You will have no protection where the ICO is unregulated;
2. ICOs are a highly speculative form of investment;
3. Prospective Tokenholders should be prepared for the possibility of losing their investment completely; and
4. ICOs are not subject to existing capital markets regulations.

Many financial regulators, including the European Securities and Markets Authority (“ESMA“), have observed a rapid growth in ICOs, which raise capital for enterprises, and are concerned that purchasers may not realise the high risks that they are taking when purchasing Tokens in ICOs.

ICOs are highly speculative. ICOs, depending on how they are structured, may fall outside of the regulated space, in which case Tokenholders do not benefit from the protection that comes with regulated investments. ICOs are also vulnerable to fraud or illicit activities, owing to their anonymity and their capacity to raise large amounts of money in a short timeframe.

If you are under any doubt as to the risks or suitability of the purchase of any Tokens, you should seek advice from an appropriately qualified financial adviser.

ICOs are extremely risky and highly speculative – we repeat here the guidance provided by ESMA with respect to general risks associated with ICOs. Prospective Tokenholders should realise that they are exposed to the following risks when purchasing Tokens:

• Unregulated space, vulnerable to fraud or illicit activities: depending on how they are structured, ICOs may not be captured by the existing rules and may fall outside of the regulated space. Some ICOs may be used for fraudulent or illicit activities, with several recent ICOs having been identified as frauds, while financial regulators cannot exclude that some are being used for money laundering purposes. In the case where an ICO does not fall under the scope of the laws and regulations of national or supra-national jurisdictions (such as ESMA), purchasers cannot benefit from the protection that these laws and regulations provide;
• Risks arising from lack of governance rights: as Tokens confer no governance rights of any kind with respect to the Clarity Project or the Issuer; all decisions involving the Issuer (including to sell or liquidate the Issuer) will be made by the Issuer acting in its sole and absolute discretion, and all decisions involving the Clarity Project, including, but not limited to, decisions to discontinue the Clarity Project, or to create and issue more Tokens, will be made by the Issuer. These decisions could adversely affect the Clarity Project or any Tokens you hold;
• Jurisdiction related risks: residents, tax residents or persons having a relevant connection with certain jurisdictions are excluded from the Token sale. Changes in your place of domicile or the applicable law may result in you violating any legal or regulatory requirements of your applicable jurisdiction. You are responsible for ensuring that the distribution, holding, use or exchange of Tokens is, and remains, lawful despite changes to applicable laws, your residence and circumstances;
• Risks arising from the market in which the Clarity Project operates: The crypto-currency exchange market, the token listing and trading market, ICOs, and, by extension, the Clarity Project, are subject to a variety of federal, state and international laws and regulations, including those with respect to know your customer, anti-money laundering and customer due diligence procedures, privacy and data protection, consumer protection, data security, and others. These laws and regulations, and the interpretation or application of these laws and regulations, could change. In addition, new laws or regulations affecting the Clarity Project could be enacted, which could impact the utility of Tokens in the Clarity Project ecosystem. In addition, Token users are subject to or may be adversely affected by industry specific laws and regulations or licensing requirements. If any of these parties fails to comply with any of these licensing requirements or other applicable laws or regulations, or if such laws and regulations or licensing requirements become more stringent or are otherwise expanded, it could adversely impact the Clarity Project or Tokens, including its utility to obtain or provide services within the Clarity Project;
• High risk of losing all of the capital paid: the vast majority of ICOs are launched by businesses that are at a very early stage of development. Those businesses have an inherently high risk of failure. Many of the tokens that are being issued have no intrinsic value other than the possibility to use them to access or use a service/product that is to be developed by the issuer. There is no guarantee that the services/products will be successfully developed and, even assuming that the project is successful, any eventual benefit may be extremely low relative to the capital paid for the Tokens;
• Lack of exit options and extreme price volatility: Tokenholders may not be able to trade their Tokens or to exchange them for traditional currencies, such as the US Dollar or Euro. Not all the Tokens are traded on virtual currency exchanges and when they are, like virtual currencies, their price may be extremely volatile. Many of those exchanges are unregulated and vulnerable to market price manipulation and fraudulent activities. Tokenholders may be exposed to the lack of exit options or not be able to have their Tokens bought back for a prolonged period;
• Risk of competing platforms: it is possible that alternative platforms could be established that use the same open source code and protocol underlying the Clarity Project and attempt to facilitate services that are materially similar to the services offered by or within the Clarity Project. The Clarity Project may compete with these alternatives, which could negatively impact the Clarity Project and Tokens, including the utility of Tokens for obtaining services offered by or within the Clarity Project;
• Inadequate information: the information that is made available to prospective Tokenholders or token purchasers, e.g. in so-called “white papers”, is in most cases unaudited, incomplete, unbalanced or even misleading. It typically puts the emphasis on the potential benefits but not the risks. It is technical and not easily comprehensible. Prospective Tokenholders may therefore not understand the risks that they are taking and make decisions as to purchasing the Tokens that are not appropriate to their needs; and
• Flaws in the technology: the distributed ledger or blockchain technology that underpins the Tokens is still largely untested. There may be flaws in the code or programs that are used to create, transfer or store the Tokens. Tokenholders may not be able to access or control or their Tokens may be stolen, e.g., in case of a hack. More generally, the technology may not function quickly and securely, e.g. during peaks of activity.

Purchasing Tokens involves a high degree of risk. You should consider carefully the risks described below, together with all of the other information contained in this Memorandum, before making a decision to purchase any Tokens. The following risks entail circumstances under which, our business, financial condition, results of operations and prospects could suffer.

1.2           Risks associated with purchasing the Tokens.

There may not be a successfully developed market for the Tokens. It will require the expertise of the Issuer’s management, time and effort to develop the Tokens. It is possible that the Tokens may not meet Tokenholder expectations at the time of purchase. Furthermore, despite good faith and efforts to maintain the Tokens, it is still possible that the Tokens will experience malfunctions or otherwise fail to be adequately developed or maintained, which may negatively impact the Tokens.

While the Issuer has sought to retain and continue to competitively recruit experts, there is a general scarcity of management, technical, scientific, research and marketing personnel with appropriate training to maintain the Tokens.

Purchasing new crypto currency projects involve a high degree of risk. Purchasing token resales may involve an even higher degree of risk.

Financial and operating risks confronting new crypto currency projectsare significant: the Issuer is not immune to these. The market in which the Issuer competes is highly competitive and the percentage of companies that survive and prosper is small. New crypto currency projectsoften experience unexpected problems in the areas of product development, marketing, financing, and general management, among others, which frequently cannot be solved.

Risk of losing access to tokens due to loss of private key(s), custodial error or your error.

Tokens can only be accessed by using an Ethereum wallet with a combination of the contributor’s account information (address), private key and password. The private key is encrypted with a password. You acknowledge, understand and accept that if your private key or password gets lost or stolen, the obtained Tokens associated with your Ethereum wallet address may be unrecoverable and permanently lost. In addition, any third party that gains access to your private key, including by gaining access to the login credentials relating to your Ethereum wallet, may be able to misappropriate your Tokens. Any errors or malfunctions caused by or otherwise related to the digital wallet or vault you choose to receive and store Tokens, including your own failure to properly maintain or use such digital wallet or vault, may also result in the loss of your Tokens.

Risk of incompatible wallet service.

The wallet or wallet service provider used to receive Tokens must conform to the ERC20 token standard in order to be technically compatible with Tokens. The failure to ensure such conformity may have the result that that purchaser will not gain access to his Tokens.

Risk of inadequate resources.

The Token sale and the Clarity Project will require intensive computing resources. The demand for these resources may exceed the Issuer’s estimates. Ultimately, the Issuer’s resources may prove inadequate to support the Token sale or to develop the Tokens, which may affect the distribution or utility of the Tokens.

Risks associated with incomplete information regarding Clarity Tokens.

You will not have full access to all the information relevant to the Company and/or to Clarity Tokens. The Company is not required to update you on the progress of Clarity Tokens. You are responsible for making your own decisions in respect to purchasing Tokens. The Company does not provide you with any recommendation or advice in respect of the purchase of Tokens. You may not rely on the Company to provide you with complete or up to date information.

The Issuer may be forced to cease operations or take actions that result in the Issuer’s dissolution.

It is possible that, due to any number of reasons, including, but not limited to, an unfavourable fluctuation in the value of cryptographic and fiat currencies, the inability by the Issuer to establish the Tokens’ utility, the failure of commercial relationships, or intellectual property ownership challenges, the Issuer may no longer be viable to operate and the Issuer may dissolve or take actions that result in its dissolution.

The tax treatment of theTokens, the purchase rights contained therein and the Tokens’ distribution is uncertain and there may be adverse tax consequences for Tokenholders upon certain future events.

The tax characterization of the Tokens is uncertain, and each Tokenholder must seek its own tax advice in connection with a purchase of Tokens which may result in adverse tax consequences to Tokenholders, including withholding taxes, income taxes and tax reporting requirements. Each Tokenholder should consult with and must rely upon the advice of its own professional tax advisors with respect to the treatment of any purchase of the Tokens and the rights contained therein.

• Risks associated with the

The Tokens may not be widely adopted and may have limited users.

It is possible that the Tokens will not be used by a large number of individuals, companies and other entities. Such a lack of use or interest could negatively impact the development of the Tokens and therefore the potential utility of the Tokens.

Risk of hard-fork.

The Clarity Project will need to go through substantial development works as part of which it may become the subject of significant conceptual, technical and commercial changes before release. As part of the development, an upgrade to Tokens may be required (a hard-fork of the Tokens) and that, if you decide not to participate in such upgrade, you may no longer be able to use your Tokens and any non-upgraded Tokens may lose their utility in full.

Risk of uninsured losses.

Unlike bank accounts or accounts at some other financial institutions, Tokens are uninsured unless you specifically obtain private insurance to insure them. Thus, in the event of loss or loss of utility value, there is no public insurer or private insurance arranged by us, to offer recourse to you.

Alternative crypto currencies may be established that compete with or are more widely used than the Tokens.

It is possible that alternative crypto currencies could be established that utilize the same or similar open source code and protocol underlying the Tokens. The Tokens may compete with these alternative crypto currencies, which could negatively impact the Tokens.

Risks associated with markets for Tokens.

The Issuer may choose not to enable or otherwise facilitate any secondary speculative trading or any such external valuation of Tokens. This may restrict the contemplated avenues for using Tokens to the token utility described in the Clarity Project whitepaper and could therefore create illiquidity risk with respect to any Tokens you own. Even if secondary trading of Tokens is facilitated by third-party exchanges, such exchanges may be relatively new and subject to little or no regulatory oversight, making them more susceptible to fraud or manipulation. Furthermore, to the extent that any third party ascribes an external exchange value to Tokens (e.g. as denominated in a crypto or fiat currency), such value may be extremely volatile and diminish to zero. If you are purchasing Tokens as a form of investment on a speculative basis or otherwise, or for a financial purpose, with the expectation or desire that their inherent, intrinsic or cash-equivalent value may increase with time, you assume all risks associated with such speculation or actions, and any errors associated therewith, and accept that Tokens are not offered by the Issuer or its affiliates on an investment basis. You further acknowledge that any contribution that you make under these Terms (or you consider to be invested in the Issuer) will not be protected, guaranteed or reimbursed by any governmental, regulatory or other entity, and is unlikely to be protected by any jurisdiction.

The open-source structure of the Tokens means that theTokens may be susceptible to developments by users or contributors could damage the Tokens and the Issuer’s reputation and could affect the utilization of the Tokens.

The Tokens will operate based on an open-source protocol, the Ethereum blockchain, which is maintained by many contributors. The open-source nature of the Ethereum protocol means that it may be difficult to maintain and neither the contributors nor the Issuer may have adequate resources to address emerging issues or malicious programs that develop within Ethereum adequately or in a timely manner. Third parties not affiliated with the Issuer may introduce weaknesses or bugs into the core infrastructure elements of Ethereum and open-source code which may negatively impact the Tokens. Such events may result in a loss of trust in the security and operation of the Tokens and a decline in user activity and could negatively impact the market price of the Tokens.

The Tokens may be the target of malicious cyberattacks or may contain exploitable flaws in its underlying code, which may result in security breaches and the loss or theft of the Tokens. If the Tokens’ security is compromised or if the Tokens are subjected to attacks that frustrate or thwart the ability to use or transfer Tokens, users may cut back on or stop using the Tokens altogether, which could seriously curtail the utilisation of the Tokens and cause a decline in the market price of the Tokens.

The Tokens’ structural foundation, the open-source protocol, the software application and other interfaces or applications built upon the Tokens are still in an early development stage and are unproven, and there can be no assurances that the Tokens and the creating, transfer or storage of the Tokens will be uninterrupted or fully secure which may result in a complete loss of users’ Tokens or an unwillingness of users to use Tokens. Further, the Tokens or their suppliers may also be the target of malicious attacks seeking to identify and exploit weaknesses in the software or the Tokens which may result in the loss or theft of the Tokens. For example, if the Tokens are subject to unknown and known security attacks, this may materially and adversely affect the value of the Tokens.  

Lack of Initial Demand.

If there is insufficient initial demand there is a risk that the Tokens fail to gain support and grow as a currency. This risk is unknown until the ICO has commenced and demand has been identified.

Unanticipated risks.

Cryptographic tokens such as the Tokens are a new and untested technology. In addition to the risks set out in this section, there are other risks associated with your acquisition, storage, transfer and use of Tokens, including those that the Issuer may not be able to anticipate. Such risks may further materialise as unanticipated variations or combinations of the risks set out in this section.

1.4           Risks related to blockchain technologies and digital assets.

The regulatory regime governing the blockchain technologies, cryptocurrencies, Tokens and coin offerings such as the Tokens is uncertain, and new regulations or policies may materially adversely affect the development and the utility of the Tokens.

Regulation of coins (including the Tokens) and coin offerings such as this, cryptocurrencies, blockchain technologies, and cryptocurrency exchanges currently is undeveloped and likely to rapidly evolve, varies significantly among international, US federal, US state and local jurisdictions and is subject to significant uncertainty. Various legislative and executive bodies in the United States, the EU and in other countries may in the future, adopt laws, regulations, guidance, or other actions, which may severely impact the development and growth of the Tokens and the adoption and use of the Tokens. Failure by the Issuer or certain users of the Tokens to comply with any laws, rules and regulations, some of which may not exist yet or are subject to interpretation and may be subject to change, could result in a variety of adverse consequences, including civil penalties and fines.

As blockchain networks and blockchain assets have grown in popularity and in market size, state, national and supra-national agencies have begun to take interest in, and in some cases regulate, their use and operation.

The regulation of non-currency use of blockchain assets is also uncertain. To the extent that a domestic government or quasi-governmental agency exerts regulatory authority over a blockchain network or asset, the Tokens may be materially and adversely affected.

Various jurisdictions may, in the near future, adopt laws, regulations or directives that affect the Tokens. Such laws, regulations or directives may directly and negatively impact our business. The effect of any future regulatory change is impossible to predict, but such change could be substantial and materially adverse to the development and growth of the Tokens and the adoption and widespread use of the Tokens.

New or changing laws and regulations or interpretations of existing laws and regulations may materially and adversely impact the value of the currency in which the Tokens may be exchanged, the liquidity of the Tokens, the ability to access marketplaces or exchanges on which to trade the Tokens, and the structure, rights and transferability of the Tokens.

Risk of software weaknesses.

As Tokens, the smart contract system and the Clarity Project are based on the Ethereum protocol, any malfunction, breakdown or abandonment of the Ethereum protocol may have a material adverse effect on Tokens, the smart contract system and/or the Clarity Project. Moreover, advances in cryptography, or technical advances such as the development of quantum computing, could present risks to the Clarity Project (including the utility of Tokens for obtaining services), the smart contract system and/or the Clarity Project, by rendering ineffective the cryptographic consensus mechanism that underpins the Ethereum protocol. The smart contract system concept, the underlying software application and software platform (i.e. the Ethereum blockchain) is still in an early development stage and unproven. There is no warranty or assurance that the process for creating Tokens will be uninterrupted or error-free and why there is an inherent risk that the software could contain defects, weaknesses, vulnerabilities, viruses or bugs causing, inter alia, the complete loss of contributions and/or Tokens.

Risk of swap.

In order to stay up to date with technology, the Clarity Project system may be required to update or change the smart contract system that Tokens operate on. In the event that a swap is required, the Issuer will make a good faith effort to credit every user’s account in such a way that no Tokens are lost. However, the Issuer does not, and cannot, promise that every user will be accommodated.

The Tokenholderswill have no control and the Issuer may only have limited control following the issuance of the Tokens.

The Tokens depend on a network of computers to run certain software programs to process transactions. Because of this less centralized model, the Issuer has limited control over the recording of the Tokens once issued. In addition, purchasers of Tokens are not and will not be entitled, to vote or receive dividends or be deemed the holder of capital stock of the Issuer for any purpose, nor will anything be construed to confer on the holders any of the rights of a stockholder of the Issuer or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action or to receive notice of meetings, or otherwise.

There may be occasions when certain individuals involved in the development and launch of the Tokens may encounter potential conflicts of interest in connection with the ICO, such that said party may avoid a loss, or even realize a gain, when other purchasers of the Tokens are suffering losses.

There may be occasions when certain individuals involved in the development and launch of the Tokens may encounter potential conflicts of interest in connection with this Initial Coin Offering, such that said party may avoid a loss, or even realize a gain, when other purchasers of the Tokens are suffering losses. Purchasers of the Tokens may also have conflicting purchase, tax, and other interests with respect to the Tokens, the Tokens’ code, the timing of the network launch or other Token pre-sales, or other factors. Decisions made by the key employees of the Issuer and/or its affiliates on such matters may be more beneficial for some Tokenholders than for others.

Holders may lack information for monitoring the Tokens.

Tokenholders may not be able to obtain all information it would want regarding the Tokens on a timely basis or at all. It is possible that a holder may not be aware on a timely basis of material adverse changes that have occurred with respect to the Tokens.

The Issuer and the Tokens have no history.

A Token will be a newly formed token and neither it nor the Issuer has any operating history. Each prospective Tokenholder should evaluate such potential purchase on the basis that the Tokens, the Issuer or any third party’s assessment of the prospects of the Tokens may not prove accurate. Past performance of the Issuer or any similar token is not predictive of future results.

If the Tokens are unable to satisfy data protection, security, privacy, and other government and industry-specific requirements, their growth could be harmed.

There are a number of data protection, security, privacy and other government- and industry-specific requirements, including those that require companies to notify individuals of data security incidents involving certain types of personal data. Security compromises could harm the Token’s reputation, erode user confidence in the effectiveness of its security measures, negatively impact its ability to attract further people to use the Tokens, or cause existing holders to sell their Tokens.

The further development and acceptance of blockchain networks, which are part of a new and rapidly changing industry, are subject to a variety of factors that are difficult to evaluate. The slowing or stopping of the development or acceptance of blockchain networks and blockchain assets would have an adverse material effect on the successful development and adoption of the Tokens.

The growth of the blockchain industry in general, as well as the blockchain networks with which the Tokens will rely and interact, is subject to a high degree of uncertainty. The factors affecting the further development of the cryptocurrency industry, as well as blockchain networks, include, without limitation:

• Worldwide growth in the adoption and use of Bitcoin, Ethereum and other blockchain technologies;
• Government and quasi-government regulation of Bitcoin, Ethereum and other blockchain assets and their use, or restrictions on or regulation of access to and operation of blockchain networks or similar systems;
• The maintenance and development of the open-source software protocol of the Ethereum network;
• Changes in consumer demographics and public tastes and preferences;
• The availability and popularity of other forms or methods of buying and selling goods and services, or trading assets including new means of using fiat currencies or existing networks;
• General economic conditions and the regulatory environment relating to cryptocurrencies; or
• A decline in the popularity or acceptance of Bitcoin, Ethereum or other blockchain-based coins or tokens would adversely affect our results of operations.

The slowing or stopping of the development, general acceptance and adoption and usage of blockchain networks and blockchain assets may deter or delay the acceptance and adoption of the Tokens.

Risks associated with third party contractors.

Development of the Tokens and of the Clarity Project, and the operation of the Token sale, will require third-party contractors with particular expertise in Ethereum and blockchain technology. The availability of such contractors is limited. There may not be a sufficient number of contractors available on terms deemed acceptable by the Issuer. The costs associated with any such contractors may be significantly greater than currently estimated. Furthermore, the quality, reliability and timely delivery of services by such contractors may vary significantly.

The prices of blockchain assets are extremely volatile. Fluctuations in the price of digital assets could materially and adversely affect our business, and the Tokens may also be subject to significant price volatility.

The prices of blockchain assets such as Bitcoin have historically been subject to dramatic fluctuations and are highly volatile, and the market price of the Tokens may also be highly volatile. Several factors may influence the market price of the Tokens, including, but not limited to:

• Global blockchain asset supply;
• Global blockchain asset demand, which can be influenced by the growth of retail merchants’ and commercial businesses’ acceptance of blockchain assets like cryptocurrencies as payment for goods and services, the security of online blockchain asset exchanges and digital wallets that hold blockchain assets, the perception that the use and holding of blockchain assets is safe and secure, and the regulatory restrictions on their use;
• Tokenholders’ expectations with respect to the rate of inflation;
• Changes in the software, software requirements or hardware requirements underlying the Tokens;
• Changes in the rights, obligations, incentives, or rewards for the various participants in the Tokens;
• Interest rates;
• Currency exchange rates, including the rates at which digital assets may be exchanged for fiat currencies;
• Fiat currency withdrawal and deposit policies of blockchain asset exchanges on which the Tokens may be traded and liquidity on such exchanges;
• Interruptions in service from or failures of major blockchain asset exchanges on which the Tokens may be traded;
• Purchase and trading activities of large purchasers that may directly or indirectly purchase Tokens or other blockchain assets;
• Monetary policies of governments, trade restrictions, currency devaluations and revaluations;
• Regulatory measures, if any, that affect the use of blockchain assets such as the Tokens;
• The maintenance and development of the open-source software protocol of the Tokens;
• Global or regional political, economic or financial events and situations; or
• Expectations among the Issuer or other blockchain assets participants that the value of the Tokens or other blockchain assets will soon change.

A decrease in the price of a single blockchain asset may cause volatility in the entire blockchain asset industry and may affect other blockchain assets including the Tokens. For example, a security breach that affects Tokenholder or user confidence in Bitcoin may affect the industry as a whole and may also cause the price of the Tokens and other blockchain assets to fluctuate.

Bank misappropriation or insolvency

The Issuer may allocate some the proceeds from the sale of the Tokens into deposit accounts held with various banks. There is a risk that the banks could become insolvent and/or misappropriate the funds.

General hacking: risk of theft and vulnerabilities.

The smart contract system concept, the underlying software application and software platform (i.e. the Ethereum blockchain) may be exposed to attacks by hackers or other individuals including, but not limited to, malware attacks, denial of service attacks, consensus-based attacks, Sybil attacks, smurfing and spoofing. Any such successful attacks could result in theft or loss of contributions or Tokens, adversely impacting the ability to develop the Tokens and derive any usage or functionality from the Tokens. You must take appropriate steps to satisfy yourself of the integrity and veracity of relevant websites, systems and communications. Furthermore, because the Clarity Project is based on open-source software, there is a risk that a third party or a member of the Issuer’s team may intentionally or unintentionally introduce weaknesses or defects into the core infrastructure of the Clarity Project, which could negatively affect the Clarity Project and the Tokens.

Risk of Ethereum mining attacks.

As with other cryptocurrencies, the blockchain used for the smart contract system is susceptible to mining attacks, including but not limited to double-spend attacks, majority mining power attacks, “selfish-mining” attacks, and rare condition attacks. Any successful attacks present a risk to the smart contract system, expected proper execution and sequencing of token transactions, and expected proper execution and sequencing of contract computations. You understand and accept that the use of miners will ultimately be in control of the distribution of Tokens via the smart contract system, and that a majority of miners could agree at any point to make changes, updates, modifications to, or effect a deletion or destruction of the smart contract system, and that such a scenario could lead to the Tokens losing intrinsic value and/or functionality.

Fraud

The Tokens are not fully decentralised, and there is a risk that an employee of the Issuer, the Administrator or one of its suppliers conducts fraudulent activities which could undermine the value of the Tokens.

IN VIEW OF THE FOREGOING CONSIDERATIONS, AMONG OTHERS, A PURCHASE OF ANY TOKEN(S) IS SUITABLE ONLY FOR PURCHASERS WHO ARE CAPABLE OF BEARING THE RELEVANT RISKS AND WHO CAN AFFORD TO PAY THE MINIMUM PURCHASE AMOUNT.

THE FOREGOING RISK FACTORS DO NOT PURPORT TO BE A COMPLETE EXPLANATION OF THE RISKS INVOLVED IN THIS OFFERING. PROSPECTIVE TOKENHOLDERS MUST READ THE ENTIRE INFORMATION MEMORANDUM INCLUDING THE RELEVANT SUPPLEMENTS AND ALL ATTACHMENTS AND MUST CONSULT THEIR OWN PROFESSIONAL ADVISERS, BEFORE DECIDING WHETHER TO PURCHASE ANYTOKEN(S).

 

 

2.             IMPORTANT INFORMATION, JERSEY REGULATORY WARNINGS AND RESTRICTIONS ON DISTRIBUTION

2.1          Important Information

                  This document (the “Information Memorandum“) does not constitute an offer or solicitation by any person in any jurisdiction in which the offer or solicitation is unlawful or in which the person making the offer or solicitation is not qualified to do so or to persons to whom it is unlawful to make the offer or solicitation. Persons into whose possession this Information Memorandum comes are required to inform themselves about, and to observe, the laws and regulations applicable to them in the relevant jurisdiction.

ProspectiveTokenholders should not construe the contents of this Information Memorandum as legal, tax or financial advice.  Each prospective Tokenholder should consult its own professional advisors as to:

(a)   the legal requirements within the country of its residence for the purchase, holding or disposal of the Tokens;

(b)   any foreign exchange restrictions that may be relevant to it and the income and other tax consequences that may be relevant to the purchase, holding or disposal of the Tokens; and

(c)   the suitability of a purchase of the Tokens to its personal circumstances and risk appetite.

A purchase of Tokens is only suitable for financially sophisticated purchasers who are capable of evaluating the merits and risks of such a purchase and who have sufficient resources to be able to bear any losses which may result from such purchase. Prospective Tokenholders are strongly advised to conduct their own due diligence including, without limitation, the legal, tax, and financial consequences of purchasing any Tokens.

To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this Information Memorandum is in accordance with the facts and does not omit anything likely to affect the import of such information.  However, this Information Memorandum has not been subject to independent verification and the Directors accept responsibility for the accuracy or completeness of the statements contained in this Information Memorandum. Prospective Tokenholders must, therefore, determine for themselves what reliance (if any) they should place on the statements contained in this Information Memorandum.

This Information Memorandum includes forward-looking statements relating to, among other things, the future financial performance and objectives of the Issuer, the Tokens and the ICO, plans and expectations for the operation of the Issuer, the Tokens and the ICO, and estimates or expectations for fees, costs and expenses.  These forward-looking statements are typically identified by terminology such as “may”, “will”, “aim”, “target”, “should”, “expect”, “anticipates”, “plans”, “intends”, “believes”, “estimates”, “projects”, “predicts”, “seeks”, “potential”, “continue” or other similar terminology.  Forward-looking statements are inherently unreliable, and prospective Tokenholders should not rely on them.  The forward-looking statements are based on the Issuer’s current expectations, assumptions, estimates and projections about future events.  Actual results are subject to numerous risks, conditions, and uncertainties that could cause actual results to differ materially from those expressed in a forward-looking statement as a result of factors such as those described in “Risk Factors” at section 1of this Information Memorandum and elsewhere in this Information Memorandum.  The Issuer does not have any obligation to update or otherwise revise any forward-looking statements after the date of this Information Memorandum or to reflect the occurrence of unanticipated events.  The Auditor has neither reviewed nor audited any of the calculations, figures, or forward looking statements contained in this Information Memorandum.

No person has been authorised to make any representations or to give any warranties or to give any information with respect to the Tokens, except the information contained in this Information Memorandum. Neither the delivery of this Information Memorandum at any time nor any sale made pursuant hereto shall imply that information contained herein is correct as of any time subsequent to the date set forth on the cover of this Information Memorandum.  Any reproduction or distribution of this Information Memorandum or retransmission of their contents in whole or in part to any person other than a prospective Tokenholder’s professional advisers, without the consent of the Issuer, is prohibited.

The Issuer reserves the right to refuse to accept the offer of any prospectiveTokenholder to purchase any Tokens for any reason or no reason.

The advisers of the Issuer named in this Information Memorandum act only for the Issuer in connection with the ICO described in this Information Memorandum and will not be responsible for providing the protections offered to their clients or for advising any other person in connection with the ICO.

This Information Memorandum may, from time to time, be supplemented with supplements to this Information Memorandum or other offering documents.  In that event, the disclosures contained in such supplements to this Information Memorandum or other offering documents shall supersede this Information Memorandum to the extent thereof.

The Directors of the Issuer have taken all reasonable care to ensure that the facts stated in this document are true and accurate in all material respects, and that there are no other facts the omission of which would make misleading any statement in the document, whether of facts or of opinion. All the Directors accept responsibility accordingly.

Purchasing any Tokens involves special risks, and should be considered only by persons who can bear the economic risk of their purchase for an indefinite period and who can afford a total loss of their purchase. Please see section 1(Risk Factors) of this Information Memorandum for further information on the risks involved in this ICO.

The Directors reserve the right to modify, withdraw or cancel any offering made pursuant to this Information Memorandum at any time prior to consummation of the offering and to reject any purchase of the Tokens, in whole or in part, in their sole discretion.

This Information Memorandum is intended solely for use on a confidential basis by those persons to whom it is transmitted by the Issuer in connection with the contemplated Initial Coin Offering. Recipients, by their acceptance and retention of this Information Memorandum, acknowledge and agree to preserve the confidentiality of the contents of this Information Memorandum and all accompanying documents and to return this Information Memorandum and all such documents to the Issuer or the Administrator if the recipient does not purchase any Tokens at the Initial Coin Offering. Neither this Information Memorandum nor any of the accompanying documents may be reproduced in whole or in part, nor may they be used for any purpose other than that for which they have been submitted, without the prior written consent of the Issuer.

Neither the Directors nor the Issuer are making any representation to any prospective Tokenholder regarding the legality of purchases of any Tokens by such prospective Tokenholders under applicable laws.

The distribution of this Information Memorandum and the Initial Coin Offering in certain jurisdictions may be restricted by law. Prospective Tokenholders should inform themselves as to the legal requirements and tax consequences within the countries of their citizenship, residence, domicile and place of business with respect to the acquisition, holding or disposal of the Tokens, and any foreign exchange restrictions that may be relevant thereto.

2.2          Jersey Regulatory Warnings

A copy of this document has been delivered to the Registrar of Companies in accordance with Article 5 of the Companies (General Provisions) (Jersey) Order 2002, and he has given, and has not withdrawn, his consent to its circulation.

The Commission has given, and has not withdrawn, its consent under Article 2 of the Control of Borrowing (Jersey) Order 1958 to the issue of securities in the Issuer.

The Commission is protected by the Control of Borrowing (Jersey) Law 1947, as amended, against liability arising from the discharge of its functions under that Law.

It must be distinctly understood that, in giving these consents, neither the Registrar of companies nor the Commission takes any responsibility for the financial soundness of the Issuer or for the correctness of any statements made, or opinions expressed, with regard to it.

If you are in any doubt about the contents of this document you should consult your stockbroker, bank manager, solicitor, accountant or other financial adviser.

The directors of the Issuer have taken all reasonable care to ensure that the facts stated in this document are true and accurate in all material respects, and that there are no other facts the omission of which would make misleading any statement in the document, whether of facts or of opinion. All the directors accept responsibility accordingly.

It should be remembered that the price of securities and the income from them can go down as well as up.

2.3          Restrictions on Distribution

This Information Memorandum does not constitute an offer to sell, or the solicitation of an offer to acquire, Tokens in any jurisdiction where such an offer or solicitation is unlawful or would impose any unfulfilled registration, qualification, publication or approval requirements on the Issuer.

2.4           US SELLING AND TRANSFER RESTRICTIONS

For the purposes of this section, the following defined terms shall have the meanings set out below:

“Non-U.S. Person(s)” means any person not meeting the definition of a “U.S. person” set forth in Rule 902 of Regulation S under the U.S. Securities Act;

“offshore transaction” has the meaning set forth in Rule 902 of Regulation S under the U.S. Securities Act;

“U.S. Securities Act” shall mean the United States Securities Act of 1933, as amended;

“U.S. Person(s)” has the meaning of “U.S. person” in Rule 902 of Regulation S under the U.S. Securities Act.

The issuance and sale of the Tokens have not been registered under the U.S. Securities Act or any other applicable securities laws and, unless so registered, the Tokens may not be offered, sold, pledged or otherwise transferred within the United States or to or for the account of any U.S. Person, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and any other applicable securities laws. The Tokens are being offered and issued in reliance upon Regulation D under the U.S. Securities Act.

Each purchaser of a Token will be deemed to represent, warrant, and agree as follows:

(1) Either it is:

(A) an “accredited investor” (as defined in Rule 501 of Regulation D under the U.S. Securities Act); or

(B) not a “U.S. Person” and is acquiring Token(s) in an “offshore transaction” (each as defined in Rule 902 of Regulation S under the U.S. Securities Act).

(2) It understands that the Tokens are not registered under the U.S. Securities Act or any other securities laws, including U.S. state securities or blue sky laws and non-U.S. securities laws, and the Issuer does not intend to register the Tokens under such laws.

(3) It is acquiring Token(s) for its own account for investment purposes only and not with a view to resale or distribution.

(4) If such purchaser is an acquirer in a transaction that occurs outside the United States within the meaning of Regulation S under the U.S. Securities Act, you acknowledge that you may not sell or otherwise transfer Tokens at any time to a U.S. Person or for the account or benefit of a U.S. Person within the meaning of Rule 902 under the U.S. Securities Act.

(5) If such purchaser is an acquirer in a transaction occurring inside the United States, you acknowledge that until one year following the issuance of any Token(s) you will not be permitted to offer, sell or transfer any Token(s).

(6) It understands that each Token will, unless otherwise agreed by the Issuer and the holder thereof, be deemed to bear a legend substantially to the following effect:

THIS TOKEN HAS NOT BEEN REGISTERED UNDER THE US. SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR SOLD TO, OR PURCHASED FOR THE ACCOUNT OR BENEFIT OF, A U.S. PERSONS (AS DEFINED IN RULE 902 OF REGULATION S UNDER THE U.S. SECURTITIES ACT), EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY YOUR ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, AS THE HOLDER YOU:

(1) AGREE THAT YOU WILL NOT RESELL OR OTHERWISE TRANSFER THIS TOKEN, EXCEPT

(A) IF IT IS TO A U.S. PERSON, THEN NOT UNTIL AFTER THE FIRST ANNIVERSARY FOLLOWING THE ISSUANCE OF ANY TOKEN(S);

(B) IF IT IS TO A NON-U.S. PERSON OUTSIDE THE UNITED STATES, SUCH SALE MUST OCCUR IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR RULE 904 UNDER THE U.S. SECURITIES ACT;

(C) TO THE ISSUER OR ANY SUBSIDIARY THEREOF; OR

(D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED IN ACCORDANCE WITH THE U.S. SECURITIES ACT WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION;

AND, IN EACH CASE DETAILED ABOVE, THE SALE OR TRANSFER MUST HAVE BEEN MADE IN ACCORDANCE WITH APPLICABLE U.S. STATE AND LOCAL SECURITIES LAWS, AND

(2) AGREE THAT YOU WILL DELIVER TO EACH PERSON TO WHOM THIS TOKEN OR AN INTEREST HEREIN IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (l)(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND AS SUCH TRANSFERRED TOKEN(S) WILL CONTINUE TO BE RESTRICTED UNDER U.S. LAW. AS USED HEREIN THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANING GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE U.S. SECURITIES ACT.

(7) It (a) is able to act on its own behalf in the transactions contemplated by this Information Memorandum, (b) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its prospective investment in a Token, and (c) (or the account for which it is acting) has the ability to bear the economic risks of its prospective investment in a Token and can afford the complete loss of such investment.

(8) It acknowledges that (a) none of the Issuer nor any person acting on its behalf has made any statement,  representation, or warranty, express or implied, to it with respect to the Issuer or the offer or sale of any Token(s), other than the information we have included in this Information Memorandum, and (b) any information it desires concerning the Issuer, any Token(s) or any other matter relevant to its decision to acquire any Token(s) (including a copy of the Information Memorandum) is or has been made available to it.

(9) Either (i) no portion of the assets used by it to purchase or hold any Token(s) constitutes assets of any (a) employee benefit plan that is subject to Title I of ERISA, (b) plan, individual retirement account or other arrangement that is subject to Section 4975 of the Code or provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code (collectively, “Similar Laws”), or (c) entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement or (ii) the purchase and holding of any Token(s) will not constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or a similar violation under any applicable Similar Laws.

(12) It acknowledges that the Issuer will not be required to accept for registration of transfer any Token(s) acquired by it, except upon presentation of evidence satisfactory to the Issuer that the restrictions set forth herein have been complied with.

(13) It acknowledges that the Issuer and others will rely upon the truth and accuracy of the foregoing acknowledgments, representations and agreements and agrees that if any of the acknowledgments, representations or agreements deemed to have been made by its purchase of any Token(s) are no longer accurate, it shall promptly notify the Issuer and the initial purchasers. If it is acquiring any Token(s) as a fiduciary or agent for one or more investor accounts, it represents that it has sole investment discretion with respect to each such account and it has full power to make the foregoing acknowledgments, representations and agreements on behalf of each account.

2.5            NOTICE TO RESIDENTS OF THE PEOPLE’S REPUBLIC OF CHINA

Persons domiciled in, residing in, or purchasing from the People’s Republic of China (excluding the Special Administrative Regions of Hong Kong Macau, and the island of Taiwan) are excluded from participating, either directly or indirectly, in this Token sale.

 

 

 

3.             DIRECTORY

The Issuer The Clarity Project (ICO) Limited 17 Bond Street St Helier Jersey JE2 3NP	Directors of the Issuer Mr Aynsley Damery Mr Steven Briginshaw Mr Luke Smith Ms Julie Heaven Mr Lewis Buckley (each of whose address is the registered office address of the Issuer)
The Administrator to the Issuer Helm Trust Company Limited 17 Bond Street St Helier Jersey, JE2 3NP	The Auditor to the Issuer  BDO Limited Windward House La Route de la Liberation St Helier Jersey JE1 1BG
Impact Investments Limited 17 Bond Street St Helier Jersey JE2 3NP	Impact Advisory Limited 17 Bond Street St Helier Jersey JE2 3NP
The Clarity Project Limited 17 Bond Street St Helier Jersey JE2 3NP	The Legal Adviser as to Jersey Law Carey Olsen 47 Esplanade              St Helier Jersey, JE1 0BD

 

 

 

4.             OVERVIEW OF THE ICO

4.1          The information set out in this summary should be read in conjunction with the full text of this Information Memorandum.  Please see the White Paper (attached as an Appendix to this Information Memorandum) for further information on the Initial Coin Offering.

4.2          Purposeof the Tokens

4.3          The purpose of a Token is a utility token to confer digital access rights to an application (the “Clarity Platform“), which is designed to provide the following benefits to the following parties:

4.3.1       Business Owners

(a)        Access to Reliable and Understandable Financial Data– the Clarity Platform provides a Tokenholder with access to a centralised store of business data relating to their business, providing insights into the performance of a business. The Clarity platform links directly with online accounting software and summarises all of a business’ financial data into an easy-to-understand dashboard to assist business owners in analysing their business’ performance and helping them make better informed business decisions (please see page 14 of the White Paper for further details).

(b)        Access to Data and Access to New Funding– the Clarity Platform allows business owners to control who has access to their business data and to receive rewards for sharing elements of such data with others. The Issuer will issue Clarity Tokens to businesses for sharing data and when a business reaches the top of one of the KPI benchmarking leader boards. These leader boards will display a business’s performance compared to its peers on an anonymised basis (please see page 14 of the White Paper for further details).

(c)        Storage and Electronic Signature of Documents– the Clarity Platform provides digital storage for staff contracts, bank loan agreements, insurance details, health and safety reports and other business-related documents in a digital wallet system (please see page 14 of the White Paper for further details). This aspect of the Clarity Platform will allow, by way of example, employees to electronically sign off their employment contract, the insurer to sign off an insurance contract or the bank to sign off a loan agreement (please see page 14 of the White Paper for further details).

4.3.2       Institutional Investors / Banks

(a)        Access to Data on Investment Prospects– the Clarity Platform allows a business’ documents and business data to be independently verified on the blockchain, giving the data more reliability and credibility to interested third parties such as banks or investors (please see page 29 of the White Paper for further details). Third party users of the Clarity Platform (such as accountants, employees, customers and suppliers) will use an app to confirm the validity of the data uploaded to the Platform.

(b)        Reduced Cost of Due Diligence– the Clarity Platform allows business data to be shared with banks and interested institutional investors, who can better analyze the risk of investment in businesses that they might otherwise have avoided investing in owing to the high cost of due diligence against the projected return (please see page 14 of the White Paper for further details).

4.3.3       Corporate Social Responsibility – B1G1

(a)        Thedirectors of the Issuer already have an existing membership with the charitable project, B1G1 (please see page 22 of the White Paper for further details). Please see further information about B1G1 here: https://b1g1.com/businessforgood/.

(b)        Once a Token has been purchased, the Issuer will send funds to B1G1, through their giving platform, to make one of the following impacts:

(i)          Plant a tree to provide fruit or vegetables for a rural community; or

(ii)         Protect a young girl from sex trafficking by keeping her in school; or

(iii)        Provide access to business training for new entrepreneurs to help them get out of poverty.

4.4          Use of the Tokens

4.4.1       Business Owners– will pay a monthly subscription fee in Tokens equivalent to £100 (one hundred Pounds Sterling). Tokens can be purchased from current Tokenholders on external exchanges or on the Clarity website. Ownership of a Token provides access to the Clarity Platform with the option to purchase additional in-platform services using further Tokens (please see page 28 of the White Paper for further information).

4.4.2       Institutional Access– banks or potential investors in a business whose data is available on the Clarity Platform will pay a monthly subscription fee in Tokens equivalent to £1,000 (one thousand Pounds Sterling). Tokens can be purchased from current Tokenholders on external exchanges or on the Clarity website. Ownership of a Token provides access to the Clarity Platform and sets of anonymised business data, with the option to purchase further details on a particular business using further Tokens (please see page 35 of the White Paper for further information). A bank or potential business investor will be required to pay the Token equivalent of an estimated £5,000 for full access to due diligence information on a business.

4.4.3       Rewards – Tokenholders will receive additional Tokens as rewards for a) sharing additional data on their business within the Clarity Platform and b) reaching the top of one of the Issuer’s KPI benchmarking leader boards (please see page 36 of the White Paper for further information).

4.5          Use of ICO Proceeds

4.5.1       The proceeds of the ICO are planned to be used primarily in payment of the following (please see page 38 onwards of the White Paper for further information):

(a)        Customer Acquisition – an estimated 55% of the ICO proceeds will be directed towards acquiring customers including, but not limited to:

(i)      partnerships with accounting firms and, where appropriate, acquisition (an estimated 35% of total ICO proceeds);

(ii)     digital advertising (an estimated 10% of total ICO proceeds); and

(iii)    events and networking (an estimated 10% of total ICO proceeds).

(b)        Platform Development – an estimated 15% of the ICO proceeds will be spent on the development of the Clarity Platform itself, including hiring and acquiring a leading development team with experience of building similar software and one dedicated to advancing the uses of Blockchain into fintech. The Issuer will use a leading Blockchain expert to hire a Jersey based team who can deliver the platform. The detailed specification of the Clarity Platform will be determined based on the amount raised during the ICO.

(c)        Operational Expenses – an estimated 14% of the ICO proceeds will be spent on the operational expenses of the Issuer.

(d)        Advisors and Consultants – an estimated 10% of the ICO proceeds will be spent on paying the Issuer’s advisors and consultants, including Funding Tec Limited, a company incorporated in Jersey (registration number 122993).

(e)        Founders and Early Participants – an estimated 5% of the ICO proceeds will be allocated to the founders of, and early participants in, the Issuer and the ICO, includingthe directors of the Issuer as compensation for time spent in the build up to the ICO.

(f)         Corporate Social Responsibility – B1G1 – an estimated 1% of the ICO proceeds will be contributed towards certain charitable projects with the Global Giving Movement B1G1.

• Target Proceeds
  • The minimum target subscription proceeds of the ICO is the sale of 10,000,000 (ten million) Tokens (equating to approximately ETH4,000 (four thousand Ether) or US$800,000 (eight hundred thousand US Dollars) (“First Hurdle“)[1].

4.6.2       If the First Hurdle is not reached by the end of the ICO offer period (currently anticipated to be on or around 13 April 2019), all Ether received as part of the ICO sale will be returned to the original Tokenholders by smart contract to the original key address (please see page 38 of the White Paper for further details). Those Tokens purchased during the pre-sale are non-refundable and were purchased on this understanding.

4.6.3       Each  potential purchaser  will  be required  to  specify how  many  Tokens they  would  like to purchase and send the appropriate amount of Ether. At this point, the smart contract will verify that the amount of Ether is appropriate to the Phase requirements (i.e. more than the minimum amount to purchase at once) and will accept/reject the transaction if the criteria (i.e. the Phase requirements at section 7of this Information Memorandum) are not met.

4.6.4       The Ether proceeds from the ICO will be converted by the Issuer (or an affiliate) into fiat currency on a reputable exchange (or exchanges) and used to pay for the Issuer’s acquisitions and operating expenses. Such conversion will occur on exchanges outside of Jersey.

4.7          Pre-Sale of Tokens

4.7.1       There will be a total of 240,000,000 (two hundred and forty million) Tokens issued by the Issuer, divided as follows:

(a)        Private Pre-Sale– 70,000,000 (seventy million) Tokens have been set aside to be sold at 5 cents or 10 cents each depending on the amount purchased. As the Issuer had not been incorporated at the time of the private pre-sale, Tokens purchased during the pre-sale were purchased from Impact Numbers Limited (“UKCo“), a company incorporated in England and Wales (company number 11158269), for fiat currency pursuant to an English law governed pre-sale agreement. Any conversion from fiat currency into crypto (or vice-versa) will be done by UKCo. UKCo and the Issuer will enter into an agreement pursuant to which the Issuer issues Tokens to the pre-sale purchasers in satisfaction of the UKCo’s procurement obligation under the pre-sale agreement. The contractual obligation to convert the private pre-sale purchasers’ fiat currency into cryptocurrency is upon UKCo.

(b)        Public ICO– 120,000,000 (one hundred and twenty million) Tokens will be available for purchase during the ICO, at varying prices depending on the Phaseof the ICO. Tokens purchased during the ICO can only be purchased from the Issuer for cryptocurrency.

(c)        Founders and Strategic Partners – the remaining 50,000,000 (fifty million) Tokens will be issued to the founders and strategic partners of the ICO as well as being used on the Platform to reward the community.

4.8          Primary Issuance of Tokens

4.8.1       In order to purchase Tokens, each potential purchaser must sign up to the website (http://clarityproject.io/) and register their details. An ABI (Application Binary Interface) will be provided via the ‘buying portal’ embedded in the website which allows participants to interact with the Clarity Platform’s smart contract.Only Ether will be accepted as payment to purchase Tokens during the public ICO.

4.8.2       Each potential purchaser will be required to specify how many Tokens they would like to purchase and send the appropriate amount of Ether to the Issuer. At this point, the smart contract will verify that the amount of Ether is appropriate to the Phaserequirements (i.e. more than the minimum amount to purchase at each Phase) and will accept/reject the transaction if the criteria are not met (i.e. the Phaserequirements as set out at paragraph 7.1of this memorandum).

4.8.3       If the First Hurdle is reached by the end of the ICO offer period (currently anticipated to be on or around 13 April 2019), the Tokens will be minted immediately and sent to the purchaser’s wallet. However, the wallet will not show the balance of the Tokens in the respective wallet until the Issuer supplies them with the token address which will be emailed to each purchaser if the ICO reaches the First Hurdle by the end of the ICO offer period.

4.8.4       Initial purchasers may buy Tokens during the public ICO using only Ether.

4.9          Primary Issuances to US Persons

4.9.1       US Persons cannot have control of any Tokens purchased for a period of 12 (twelve) months commencing at the end of the ICO Offer Period.

• Secondary Market
  • A Tokenholder may subsequently transfer a Token to another person via a crypto currency exchange on which the Tokens will be listed. Alternatively, Tokenholders will be able to transfer Tokens between each other outside of an exchange.

4.10.2     It is not possible to predict the price of a Token on the secondary market (i.e. on any digital currency exchange). However, it is expected that the price of a Token on a digital currency exchange will correlate to the price for a business owner to access to the Clarity Platform, which will be £100 (one hundred Pounds Sterling) per month.

4.11        Token Purchase Scheme

4.11.1     The Issuer may elect to purchase Tokens from Tokenholders to supply Tokens to users of the Clarity Platform (please see page 46 of the White Paper for further details. Under no circumstance does a Tokenholder have the right to demand the redemption or repurchase of their Token(s).

4.11.2     The Tokens may be bought back at a price of 70% (seventy per cent) of the current market value. At the time ofthe Clarity Platform going live, the Token market value will start at 0.0099985, at the current rate[2].

 

 

5.             JERSEY TREATMENT OF ISSUER

5.1           There are currently no existing capital markets regulations in Jersey specifically governing initial coin offerings (“ICOs“). However, the Jersey Financial Services Commission (the “JFSC“) is aware of the desire of ICO promoters to use a Jersey incorporated issuer because of Jersey’s reputation as a well-regulated and reputable jurisdiction.

5.2           Accordingly, the JFSC has established certain conditions that any issuer of an ICO registered in Jersey is required to satisfy. These are implemented through a consent (a “COBO Consent“) granted under the Control of Borrowing (Jersey) Order 1958, which any Jersey entity wishing to issue an ICO must obtain.

5.3           The conditions require the issuer of the ICO to take certain measures to manage, amongst other things, financial crime and investor risks. The conditions reflect the guiding principles pursuant to which the JFSC discharges its functions as the Island’s financial services regulator (the “Guiding Principles“) which are to have regard to:

5.3.1       the reduction of the risk to the public of financial loss due to dishonesty, incompetence, malpractice or the financial unsoundness of financial service providers;

5.3.2       the protection and enhancement of Jersey’s reputation and integrity in commercial and financial matters;

5.3.3       the best economic interests of Jersey; and

5.3.4       the need to counter financial crime both in Jersey and elsewhere.

5.4           However, whilst the JFSC has established certain conditions that issuers of ICOs are required to satisfy, it does not regulate or supervise the ICOs or the issuers.

5.5           The COBO Consent imposes on the issuer certain requirements which reflect the Guiding Principles, including to:

5.5.1       acknowledge that ICOs are a “sensitive activity” falling within the JFSC’s Sound Business Practice Policy. Accordingly, the issuer must maintain and adopt systems, controls, policies and procedures for the customer take-on, profiling and transaction monitoring at enhanced levels ensuring reporting of suspicions of money-laundering and financing of terrorism activity;

5.5.2       apply relevant AML/CFT requirements to persons that either purchase tokens from, or sell tokens back to, the issuer of those tokens;

5.5.3       appoint and maintain a TCSP;

5.5.4       appoint and maintain a Jersey resident director on the board of the issuer; where the Jersey resident director is a natural person and a principal person of TCSP appointed by the issuer;

5.5.5       obtain the JFSC’s prior approval to any change to the TCSP appointed by the issuer , the Jersey resident director of the issuer or additional specified counterparties of the issuer as set out in the COBO consent;

5.5.6       prepare and file annual audited accounts with the Jersey Companies Registry;

5.5.7       have procedures and processes in place to (i) mitigate and manage the risk of retail investors investing inappropriately in the ICO, and (ii) to ensure retail investors understand the risks involved;

5.5.8       prepare and submit to the JFSC an Information Memorandum (which may be in the form of a White Paper) which complies with certain content requirements required of a prospectus issued by a company under the Companies (Jersey) Law 1991; and

5.5.9       ensure that any marketing material (including the Information Memorandum) is clear, fair and not misleading.

 

 

 

6.             MANAGEMENT AND ADMINISTRATION

6.1          The Issuer

6.1.1       The Issuer is a private limited company established in Jersey with registration number 126967 and whose registered office address is at 17 Bond Street, St Helier, Jersey, JE2 3NP.

6.1.2       The Directors of the Issuer have control and authority over and responsibility for the operations and management of the Issuer. The Directors of the Issuer may appoint additional persons as Directors from time to time.  The Directors will be responsible for ensuring compliance with the Issuer’s ICO restrictions.

6.1.3       The Directors of the Issuer are:

(a)        MrAynsley Damery

Aynsley graduated with an honours business degree from the National University of Ireland and then qualified as a chartered accountant. Aynsley left KPMG in 2000 to become a partner in an award-winning accounting firm in the UK. In 2014, he founded a niche business advisory practice Accounting for Entrepreneurs to help small business owners make more of an impact, winning further national and international awards. He is one of the founders of a fintech startup, TaxGo, delivering an online accounting solution to the smallest of UK businesses. Aynsley is also a founding board member of The Cyber Trust (protecting those vulnerable and most at risk of cyber-crime) and an advisory board member of Free to Shine (protecting girls at risk of trafficking by providing them with education and support).

(b)        Mr Steven Briginshaw

Steven qualified as a chartered accountant in 2006 and has since started, built and sold two accountancy and business advisory firms. He has advised small business owners in multiple countries.

(c)        Mr Luke Smith

Luke qualified as a chartered accountant in 2002 at KPMG and has run his own successful accountancy practice in Jersey since 2007. He has significant experience in business valuations and merger and acquisitions, although his primary skill set is in business advisory; helping business owners innovate their systems, services and products. Luke was also FD to a £21M turnover professional and managed services IT consultancy for seven years having helped grow the business from 40 to 200 staff before leaving to focus on this project.

• Ms Julie Heaven

Julie qualified as a chartered management accountant in 2003 and has extensive experience working in both financial services and in practice working with local business owners. Julie, based in Jersey, Channel Islands currently acts as a business advisor for a number of small businesses and has led financial projects, implemented financial software solutions as well as advised on business acquisitions and management buy outs.

(e)        Mr Lewis Buckley

Lewis qualified as an advocate of the Royal Court in 2001. His legal practice focused on specialising in trust law, regulatory law and anti-money laundering. Lewis was appointed as a Director of Helm in September 2011.

6.1.4       Each director will be remunerated for their role as director as follows:

(a)        Mr Aynsley Damery– £100,000 (one hundred thousand Pounds Sterling) per annum.

(b)        Mr Steven Briginshaw– £100,000 (one hundred thousand Pounds Sterling) per annum.

(c)        Mr Luke Smith– £100,000 (one hundred thousand Pounds Sterling) per annum.

(d)        Ms Julie Heaven– £100,000 (one hundred thousand Pounds Sterling) per annum.

(e)        Mr Lewis Buckley– The fee charged by the Administrator for the provision of the Administrator’s services will form part of the Administrator’s fee pursuant to the Administration Agreement.

6.2          The Administrator

6.2.1       The Administrator is Helm Trust Company Limited, a company incorporated in Jersey on 20 March 1989 with registration number 43642 and whose registered office address is at 17 Bond Street, St Helier, Jersey, JE2 3NP.

6.2.2       The Issuer has delegated the administration of the Issuer to the Administrator on the terms of an Administration Agreement. Such administration services include the Administrator acting as the company secretary of the Issuer.

6.2.3       The Administrator is a company incorporated in Jersey with limited liability under the Companies Law. The Administrator is the holder of a licenceto conduct trust company business with licence numberTCB0030 and is regulated by the Commission.

• The Auditor
  • The Auditor of the Issuer is BDO Limited, a company incorporated in Jersey on 14 August 2009with company number 103834and whose registered office address is at Windward House, La Route de la Liberation, St Helier, Jersey, JE1 1BG.

6.3.2       The Auditor’s principal responsibilities are to audit and express an opinion on the financial statements of the Issuer in accordance with applicable law and accounting standards.

6.4          Impact Investments Limited

6.4.1       Impact Investments Limitedis a company incorporated in Jersey on 9 March 2018 with company number 125959and whose registered office address is at17 Bond Street, St Helier, Jersey, JE2 3NP.

6.4.2       Impact Investments Limited’sprincipal responsibilities are as the parent company of the Issuer, Impact Advisory Limited and The Clarity Project Limited, the promoter of the ICO, and the owner of the intellectual property underpinning the Clarity Platform software.

6.5          Impact Advisory Limited

6.5.1       Impact Advisory Limited is a company incorporated in Jersey on 8 June 2018 with company number 126592and whose registered office address is at 17 Bond Street, St Helier, Jersey, JE2 3NP.

6.5.2       Impact Advisory Limited’swill be responsible for partnerships with accounting firms and, where appropriate, their acquisition using some of the proceeds of the ICO.

6.6          The Clarity Project Limited

6.6.1       The Clarity Project Limitedis a company incorporated in Jerseyon8 June 2018 with company number 126587and whose registered office address is at 17 Bond Street, St Helier, Jersey, JE2 3NP.

6.6.2       The Clarity Project Limited will be responsible for leasing the intellectual property underpinning the Clarity Platform from Impact Investments Limited, and receiving Tokens from Tokenholders for use on the Clarity Platform.

6.7          Additional Service Providers

6.7.1       Additional service providers may be appointed from time to time according to the requirements of the Issuer.

 

 

7.             PROCEDURE FORPURCHASE OF TOKENS

7.1          There is no minimum investment in the raise, although the average purchase is expected to be the Ether equivalent of approximately US$1,000 (one thousand US Dollars).

7.2          As is common in initial coin offerings, the price of a Token will increase during each Phase of the ICO and is designed to encourage early participation (please see page 37 onwards of the White Paper for further details):

Phase of ICO	Phase 1	Phase 2	Phase 3
Price of a Token (in Ether and USD equivalent)	ETH0.0003999 / US$0.08	ETH0.00069989 / US$0.14	ETH0.00099985 / US$0.20
Minimum number of Tokens to be purchased	N/A – no minimum	N/A – no minimum	N/A – no minimum
Number of Tokens released	10,000,000 (ten million)	30,000,000 (thirty million)	80,000,000 (eighty million)
Dates of offer period	3 November 2018 – 6 January 2019		16 February 2019 – 13 April 2019

 

7.3          ETH / US$ Exchange rate– the exchange rate used in the White Paper is 1 ETH equals US$200.03 (two hundred US Dollars and three cents)[3].

7.4          Pre-Sale– prior to Phase 1 of the ICO, there was a non-refundable private pre-sale of 70,000,000 (seventy million) Tokens. As the Issuer had not yet been incorporated at the time of the pre-sale, Tokens purchased during the pre-sale were purchased from UKCo, a company incorporated in England and Wales (company number 11158269), for fiat currency pursuant to an English law governed pre-sale agreement. Any conversion from fiat currency into crypto (or vice-versa) will be done by UKCo, which will enter into an agreement pursuant which UKCo will procure the issuance of Tokens by the Issuer to the private pre-sale purchasers. The contractual obligation to convert the private pre-sale purchasers’ fiat currency into cryptocurrency will be upon UKCo.

7.5          Unsold Tokens– following the end of Phase 3 of the ICO, any unsold Tokens will be burnt.

7.6          Total Number of Tokens– once the Token sale is complete no further Tokens will be created, ensuring there is only a finite number of Tokens in circulation (see page 26 of the White Paper for further details).

7.7          Procedure for purchase of Tokens

7.7.1       Prospective purchasers of Tokens must register on the ICO’s website (http://clarityproject.io/).

7.7.2       Prior to purchasing Tokens, AML/CFT checks will be conducted on prospective purchasers via a third party AML verification provider.

7.7.3       The Issuer may also run an AML/CFT analysis (provided by a third party) on an applicant’s blockchain history and may, order a more in-depth report should the initial analysis reveal any potential issues, or if the applicant is subscribing for a large number of Tokens.

7.7.4       Tokens will not be issued until the applicant has been AML/CFT’ed.

7.7.5       If the applicant fails to pass the AML/CFT checks, the applicant’s funds will not be accepted or will be returned to them.

 

 

 

8.             RIGHTS ATTACHING TO A TOKEN

8.1          Economic Rights attaching to a Token

8.1.1       As Tokenholders are notshareholders in the Issuer, they have norights under the Issuer’s memorandum and articles of association.

8.1.2       Tokenholders are not entitled to:

(a)        vote at any meetings of the Issuer;

(b)        vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof;

(c)        give or withhold consent to any corporate action or to receive notice of meetings, or otherwise;

(d)        receive dividends from the Issuer; or

(e)        be deemed the holder of capital stock of the Issuer for any purpose.

8.1.3       A summary of the Articles of Association is not included in this Information Memorandum as Tokenholders are not shareholders in the Issuer and have no rights under the Articles of Association.

8.1.4       In the interests of transparency, the Articles of Association are available to view online via the following link: (http://clarityproject.io/).

 

 

 

 

9.             TAXATION

9.1          Jersey Taxation

9.1.1       It is the responsibility of all prospective Tokenholders to inform themselves as to any tax consequencesarising from their purchase of any Tokens and the Issuer’s operations or management, as well as any foreign exchange or other fiscal or legal restrictions, which are relevant to their particular circumstances in connection with the acquisition, holding or disposition of the Tokens. Prospective Tokenholders should therefore seek their own separate tax advice in relation to their holding of the Tokens and accordingly the Issuer does not accept any responsibility for the taxation consequences of any purchase of Tokens by any Tokenholder.

9.1.2       The Issuer is treated as a separate ‘zero rated company’ and will fall to be assessed under Article 123C of the Income Tax (Jersey) Law 1961, as amended (the “1961Law“), as a Jersey resident company which is neither a “utility company” nor a “financial services company” and as such will be charged to Jersey income tax at a rate of zero per cent (0%) on its income (other than on receipts chargeable to tax under Schedule A of the 1961 Law – which relates broadly to income or profits derived from the ownership, disposal or developmentoflandinJersey).

9.1.3       No death duties, capital gains tax, gift, inheritance or capital transfer taxes are levied in Jersey. No stamp duty is levied in Jersey on the issue, transfer or buyback of Tokens held, but probate stamp fees may be payable at the rate of up to 0.75% of the value of the Jersey estate in the event of the death of the Tokenholder.

9.1.4       The attention of Jersey residents is drawn to the provisions of Article 134A of the 1961 Law which may in certain circumstances render such a resident liable to income tax on any undistributed income or profits of the Issuer.

9.1.5       AJerseygoodsandservicestax(“GST“)appliesatastandardrateoffivepercent (5%) onthemajorityof goods and services supplied in Jersey for local use or benefit. The Issuer will apply for International Services Entity status under the Goods and Services Tax (Jersey) Law 2007 (the “GST Law“). In connection with their International Services Entity status the Issuer will pay an annual fee to the Comptroller of Income Tax in Jersey, which is currently fixed at two hundred Pounds Sterling (£200).  As an International ServicesEntity, the Issuer will not be required to charge GST and in most situations will not be subject to a GST charge on goods and services provided tothem.

9.2           United States Taxation

9.2.1       The Internal Revenue Service (IRS) is aware that “virtual currency” may be used to pay for goods or services, or held for investment. Virtual currency is a digital representation of the value that functions as a medium of exchange, a unit of account, and/or a store of value.

9.2.2       In general, for US Persons, the sale or exchange of convertible virtual currency, or the use of convertible virtual currency to pay for goods or services in a real-world economy transaction, has tax consequences that may result in a tax liability.

9.2.3       For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency.

9.2.4       Under currently applicable law, virtual currency is not treated as currency that could generate foreign currency gain or loss for U.S. federal tax purposes.

9.2.5       A US Person who receives virtual currency as payment for goods or services must, in computing gross income, include the fair market value of the virtual currency, measured in U.S. dollars, as of the date that the virtual currency was received.

9.2.6       US Persons may be subject to penalties for failure to comply with tax laws. For example, underpayments attributable to virtual currency transactions may be subject to penalties, such as accuracy-related penalties under section 6662 of the Internal Revenue Code. In addition, failure to timely or correctly report virtual currency transactions when required to do so may be subject to information reporting penalties under section 6721 and 6722 of the Internal Revenue Code.

9.3          International Tax Compliance

Common Reporting Standard

9.3.1       The OECD has developed a new global standard for the automatic exchange of financial information between tax authorities (the “Common Reporting Standard” or “CRS“). The CRS has been implemented in the EU by way of the Revised Directive on Administrative Co-Operation (Council Directive 2014/107/EU). Jersey is a signatory to the CRS and intends to conduct its first exchange of information with tax authorities of other signatory jurisdictions in September 2017. Jersey legislation which implements the CRS in Jersey came into effect on 1 January 2016 (the “Jersey CRS Legislation“).

9.3.2       In summary, the Jersey CRS Legislation requires “reporting financial institutions” in Jersey to identify, review and report on “financial accounts” maintained by them and which are held by residents for tax purposes (whether individuals or entities with “Controlling Persons” who themselves are tax residents) of jurisdictions with which Jersey has agreed to exchange information.

9.3.3       Reports will be made to the Jersey Comptroller of Taxes and then passed to the competent authority of the jurisdiction in which the account holder is resident. Although the Issuer will attempt to satisfy any obligations imposed on it by the CRS, no assurance can be given that it will be able to satisfy such obligations. Implementation of the CRS may require the Issuer to conduct additional due diligence and report upon accounts held with it by Tokenholders who are reportable persons in other participating jurisdictions. As the Jersey CRS Legislation also provides for the “wider approach” of CRS to be followed, equivalent due diligence information will be demanded for a Tokenholder who is not a resident of a participating jurisdiction (in order to avoid the need for this information to be gathered retrospectively in future years). The Issuer may also require certain additional financial information from Tokenholders to comply with its due diligence and reporting obligations under the CRS.

9.3.4       Failure by the Issuer to comply with the obligations under the CRS may result in fines being imposed on the Issuer and in such event, the target returns of the Issuer may be materially affected. All prospective Tokenholders must agree to provide the Issuer at the time or times prescribed by applicable law and at such times reasonably requested by the Issuer such information and documentation (whether relating to themselves and/or beneficial owners) prescribed by applicable law and such additional documentation reasonably requested by the Issuer as may be necessary for the Issuer to comply with its obligations under CRS.

9.3.5       Prospective Tokenholders should consult their tax advisers with regard to the potential CRS tax reporting and certification requirements associated with a purchase of the Tokens. It is further recommended that prospective Tokenholders who are entities consider themselves whether they have any obligations to notify their respective shareholders or accountholders about the information that the Issuer requests, and the potential disclosures that the Issuer will be obliged to make in connection with those persons in complying with its obligations under CRS.

9.4          This Information Memorandum does not address legal, regulatory or taxation issues outside of Jersey. Accordingly, prospective Tokenholders should consult their professional advisers on the potential tax, exchange control and other consequences of purchasing, holding or selling Tokens under the laws of their country of citizenship, domicile or residence.

 

 

10.          CONFLICTS OF INTEREST

10.1        The Directors, the Issuer and the Administrator or companies with which any of them are associated may from time to time act in relation to, or be otherwise involved in, other companies which have similar objectives to those of the Issuer. It is therefore possible that any of them may, in the course of business, have potential conflicts of interest with the Issuer. Each will, at all times, have regard in such event to its obligations to the Issuer and will endeavour to ensure that such conflicts are resolved fairly. In addition, any of the foregoing may deal as principal or agent with the Issuer, provided that such dealings are carried out as if effected on normal commercial terms negotiated on an arm’s length basis. Neither the Issuer nor any of its affiliates nor any person connected with it is under any obligation to offer any ICO opportunities of which any of them becomes aware to the Issuer or to account to the Issuer in respect of (or share with the Issuer or inform the Issuer of) any such transaction or any benefit received by any of them from any such transaction. In determining the net asset value of the Issuer, the Directors may rely on valuations provided or attributed to any asset or liability by the Administrator and/or the Issuer.

10.2        Members of the Issuer’s group, their affiliates or any person connected with them advise, sponsor or manage other companies, vehicles or accounts in which only the Issuer’s investors, entities and partners, employees, affiliates or other persons connected with the Issuer’s group may invest. Such companies, vehicles or accounts may pursue the same or a similar investment objective and use the same or a similar investment approach as the Issuer, or may employ investment approaches that are more or less leveraged or risky. The partners, employees or affiliates of members of, or other persons connected with, the Issuer’s group, or other investment professionals, involved in advising, sponsoring or managing such companies, vehicles or accounts may, or may not, provide similar services to, or fulfil similar roles in respect of, the Issuer. Accordingly, such proprietary companies, vehicles or accounts may produce investment results that are substantially different from those of the Issuer. To the extent that the Issuer invests in similar markets and investments at or about the same time, such other companies, vehicles or accounts may compete with the Issuer with respect to such investments. The potential fees payable to the Issuer or another member of the Issuer’s Group by another Issuer entity might in certain circumstances exceed the potential fees payable by the Issuer. Members of the Issuer’s Group will allocate resources as they in their sole discretion consider appropriate in managing the assets of the Issuer and any other proprietary and/or non-proprietary companies, vehicles or accounts in accordance with their respective investment objectives and approaches.

10.3        Any director of the Issuer who has, directly or indirectly, an interest in a transaction entered into or proposed to be entered into by the Issuer or by a subsidiary of the Issuer which to a material extent conflicts or may conflict with the interests of the Issuer, and of which the director is aware, will be required to disclose to the Issuer the nature and extent of their interest. Notwithstanding such interests, each of the directors will be entitled to be counted in the quorum and vote on the matters to be discussed at the Issuer’s board meetings.

10.4        The Directors will seek to ensure that any conflict of interest of which they are aware is resolved fairly.

10.5        By acquiring or continuing to hold Tokens, each Tokenholder will be deemed to have acknowledged the existence of the actual or potential conflicts of interests described above and to have waived, to the fullest extent permitted by applicable law, any claim with respect to the existence of any such conflicts.

10.6        The foregoing does not purport to be a complete list of all potential conflicts of interest involved in a purchase of any Tokens.

 

 

11.          STATUTORYANDGENERALINFORMATION

This section contains statutory and general information in relation to the ICO. Please see the White Paper (attached as an Appendix to this Information Memorandum) for further information on the Initial Coin Offering.

11.1        TheInitial Coin Offering (ICO)

Having fully considered the White Paper (attached as an Appendix to this Information Memorandum), you are invited, subject to the terms of the White Paper and this Information Memorandum, to purchase Tokens issued by the Issuer.

11.2        Opening and Closing dates of the ICO(the “ICO Offer Period“)

Phases 1 and 2

11.2.1     Phases 1 and 2 of the ICO offer period are anticipated to:

11.2.1.1       open at 00:01 GMT on 3 November 2018; and

11.2.1.2       remain open until 23:59 GMT on 6 January 2019(or such other time as shall be selected by the Directors).

Phase 3:

11.2.2    Phase 3 of the ICO offer period are anticipated to:

11.2.2.1       open at 00:01 GMT on 16 February 2019; and

11.2.2.2       remain open until 23:59 GMT on 13 April 2018 (or such other time as shall be selected by the Directors).

11.3        The Maximum Number of Tokens

11.3.1     A maximum of 240,000,000(two hundred and forty million) Tokens will be issued by the Issuer.

11.3.2     However, the number of Tokens available for public sale will be 120,000,000(one hundred and twenty million) Tokens.

11.3.3     Please see page 32 of the White Paper for further details.

11.4        Token Issue Price

11.4.1     The Issuer cannot issue Tokens at less than the prices stated at section7.1of this Information Memorandum during the ICO Offer Period.

11.4.2     70,000,000 (seventy million) Tokens have been allocated to a private pre-sale of Tokens.

11.5        Minimum Amount Required to be Raised by the ICO

11.5.1     The minimum amount required to be raised by the ICO is ETH4,000 (four thousand Ether).

• Proceeds of the ICO

Please see section 4.5of this information Memorandum for details of the use of proceeds of the ICO.

11.7        Allocation

The Issuer reserves the right to decline in whole or in part any attempt to purchase Tokens. Accordingly, prospective Tokenholders may, in certain circumstances, not be allotted and issued the number of Tokens for which they have applied.

11.8        Changes to the Information Memorandum

In the event that there are any significant changes affecting any of the matters described in this Information Memorandum or where any significant new matters have arisen after the publication of this Information Memorandum and prior to the ICO, the Issuer may publish a supplementary document.  Any such supplementary document will give details of the significant change(s) or the significant new matter(s).

11.9        Payment

11.9.1     Payment for the Tokens should be made in accordance with settlement instructions to be provided to successful purchasers of Tokens by the Issuer.

11.9.2     To the extent that any attempt to purchase Tokens is rejected in whole or in part (whether by scaling back or otherwise), monies received will be returned without interest at the risk of the applicant as soon as practicable thereafter.

11.9.3     The Issuer will not be held liable for any costs incurred in returning funds, or the movements in exchange rates if any funds have been converted from one currency to another during the purchase process.

11.10      Costs

11.10.1  On the assumption that the ICO launches and raises gross proceeds of the Ether equivalent of the First Hurdle, up to twenty four per cent (24%) of those gross proceeds will be spent on the operational expenses and paying the advisors and consultants of the Issuer.

11.10.2  The use of the ICO proceeds is more fully explained at section 4.5of this Information Memorandum.

11.10.3  In the event that the ICO raises less than the First Hurdle, Impact Numbers Limited (the UKCo) will cover the costs of the Issuer’s service providers or will provide a loan to the Issuer to cover any shortfall in the payment of such costs, to be repaid out of any future surplus of the Issuer once the ICO raises an amount in excess of the First Hurdle.

• Anti-money laundering / due diligence
  • Each of the Issuer and its agents, reserves the right to request such information as is necessary:

(a)   to satisfy applicable due diligence requirements; and

(b)   to verify the identity of a Tokenholder or prospective Tokenholder and (if any) the underlying beneficial owner or prospective beneficial owner of aTokenholder’s or prospective Tokenholder’s Tokens.

11.11.2  In the event of delay or failure by the Tokenholder or prospectiveTokenholder to produce any information required for due diligence and / or verification purposes, the Directors, in consultation with any of the Issuer’s agents, will refuse to accept an attempt to purchase Tokens. Tokens will only be issued once KYC has been completed.

11.12     Purchase and transfer restrictions

• This Information Memorandum does not constitute an offer to sell, or the solicitation of an offer to acquire,Tokens in any jurisdiction where such an offer or solicitation is unlawful or would impose any unfulfilled registration, qualification, publication or approval requirements on the Issuer.

11.13     Legal implications of purchasingTokens in the ICO

11.13.1  Aprospective Tokenholder irrevocably offers to purchase Tokens, which offer is capable of acceptance or rejection by the Directors either in whole or in part. If the offer is accepted by the Directors either in whole or in part this Information Memorandum forms a binding contract between the Issuer and the Tokenholders.

11.13.2  None of the agreements appointing the Administrator, Auditor, legal counsel or any other of the Issuer’s service providers provide for any third party rights in favour of the Tokenholders.

11.14     Rights Attaching to a Token  

11.14.1  Please see section 8of this Information Memorandum for more information on the rights attaching to a Token.

• Financial Information and Reports
  • The Issuer’s year-end will be 31 December. The first financial year of the Issuer will end on 31 December 2019.

11.15.2  The audited annual accounts of the Issuer will be available on the Issuer’s website (http://clarityproject.io/) within 6 months after the end of the financial year to which they relate.  The Issuer may also issue management updates from time to time.

11.16      Distribution Policy

The Directors currently intend to use any proceeds from the ICO in accordance with section 4.5(Use of the ICO proceeds), the White Paper (attached as an Appendix to this Information Memorandum) and do not intend to pay any dividends to its shareholders, or to make any ex gratia payments to Tokenholders.

11.17      Incorporation and Share Capital

11.17.1  The Issuer was incorporated in Jersey on 27 July 2018 with registration number126967and whose registered office is at 17 Bond Street, St. Helier, Jersey, JE2 3NP.

11.17.2  As at the date of this Information Memorandum:

(a)    the Issuer’s issued share capital comprised one (1) subscriber share (fully paid) issued to Helm Trust Company Limited (as nominee for Impact Investments Limited); and

(b)    the Issuer’s authorised share capital is £10,000made up of 10,000shares of par value £1.00each.

11.17.3  The Directors retain the right to issue an unlimited number of shares.

11.18     Registered Office and Register of Members

11.18.1   The registered office of the Issuer is 17 Bond Street, St Helier, Jersey, JE2 3NP.

11.18.2   The Issuer’s register of members will be held at 17 Bond Street, St Helier, Jersey, JE2 3NP.

11.18.3   There will not be a register of members in relation to the Tokenholders, as the ownership of Tokens is evidenced on the blockchain.

11.19      Directors of the Issuer

11.19.1   The Directors of the Issuer are as follows:

(a)        Mr Aynsley Damery;

(b)        Mr Steven Briginshaw;

(c)        Mr Luke Smith;

(d)        Ms Julie Heaven; and

(e)        Mr Lewis Buckley.

11.19.2  For further details on the Directors please view the biographies at section 6(Management and Administration) of this Information Memorandum.

11.20     Directors’ Interestsand Remuneration

11.20.1  Please see section6.1for details of each Director’s remuneration.

11.20.2  Mr Aynsley Damery is a director of the Issuer and a director and an ultimate beneficial owner of Impact Investments Limited, which in turn is the sole owner of the issued share capital in Impact Advisory Limited, The Clarity Project Limited, and The Clarity Project (ICO) Limited.

11.20.3  Mr Steven Briginshaw is a director of the Issuer and an ultimate beneficial owner of Impact Investments Limited, which in turn is the sole owner of the issued share capital in Impact Advisory Limited, The Clarity Project Limited, and The Clarity Project (ICO) Limited.

11.20.4  Mr Luke Smith is a director of the Issuer and an ultimate beneficial owner of Impact Investments Limited, which in turn is the sole owner of the issued share capital in Impact Advisory Limited, The Clarity Project Limited, and The Clarity Project (ICO) Limited.

11.20.5  Ms Julie Heaven is a director of the Issuer and an ultimate beneficial owner of Impact Investments Limited, which in turn is the sole owner of the issued share capital in Impact Advisory Limited, The Clarity Project Limited, and The Clarity Project (ICO) Limited.

11.20.6  Mr Lewis Buckley is a director of the Issuer and an employee of the Administrator.

11.20.7  Please see section10(Conflicts of Interest) for more information on conflicts of interest.

• Litigation

The Issuer has not since its incorporation been in nor is it engaged in any legal or arbitration proceedings and no legal or arbitration proceedings are pending or threatened against the Issuer which may have or have had a significant effect on the financial position of the Issuer.

• Documents available for inspection

Copies of the following documents may be inspected during usual business hours on any Business Day at the registered office of the Issuer in Jersey at the address stated in the Directory of this Information Memorandum:

11.22.1  this Information Memorandum; and

11.22.2  the latest annual report and accounts of the Issuer.

• Material Contracts

The Issuer in the ordinary course of its business has, or will have, entered into agreements for the procurement of necessary facilities and services. These include:

(a)   the Administration Agreement;

(b)   the IP Licensing Agreement; and

(c)   inter-company loan agreements between Impact Investments Limited and Impact Advisory Limited, The Clarity Project Limited, and the Issuer.

11.24     DataProtection  

11.24.1  The Issuer’s Privacy Notice confirming how personal information is collected, processed and disclosed, together with a Tokenholder’s rights under (i) the General Data Protection Regulation (2016/679) and any national law issued under that regulation; and (ii) the Data Protection (Jersey) Law 2018 and any other legislation in Jersey concerning data protection, as amended from time to time (together the “Data Protection Legislation“) is included at Appendix 1 to this Information Memorandum.

11.24.2  It is a condition of issuing the Tokens to a Tokenholder that every Tokenholder agrees that:

(a)    any personal data provided to the Issuer and/or its affiliates is accurate and complete and that it may be lawfully processed by the Issuer and/or its affiliates for the purposes set out in the Privacy Notice;

(b)    where the consent of any data subject is required, it has all necessary authority to provide the personal information on behalf of any relevant individual;

(c)     it will make the Privacy Notice available to each Relevant Individual (as defined in Appendix 1)and draw their attention to it.

11.24.3  The data protection registration of the Issuer can be found on the website of the Jersey Information Commissioner: https://oicjersey.org/.

 

 

 

12.          DEFINITIONS

The following definitions will apply throughout this Information Memorandum:

Accounting Date	means 31 December each year. The first financial year of the Issuer will end on 31 December 2019.
Administrator	has the meaning as set out at section 6.2of this Information Memorandum.
Administration Agreement	means the agreement entered into between the Administrator and the Issuer, as amended, substituted or supplemented from time to time.
Articles of Association	means the memorandum and articles of association of the Issuer, as amended, substituted or supplemented from time to time.
Auditor	has the meaning as set out at section 6.3of this Information Memorandum.
Business Day	means any day on which banks in Jersey and London are open for normal banking business (excluding Saturdays and Sundays).
Commission	means the Jersey Financial Services Commission.
Companies Law	means the Companies (Jersey) Law 1991 (asamended).
Directors	means the Directors of the Issuer for the time being, or as the case may be, the Directors assembled as a board or as a committee thereof and “Board ofDirectors” shall have a corresponding meaning.
ESMA	means the European Securities and Markets Authority.
First Hurdle	has the meaning at as set out at section 4.6 of this Information Memorandum.
Initial Coin Offering / ICO	means the initial coin offering of the Tokens.
ICO Offer Period	has the meaning as set out at section 11.20 of this Information Memorandum.
Impact Investments Limited	has the meaning as set out at section 6.4 of this Information Memorandum.
Impact Advisory Limited	has the meaning as set out at section 6.5 of this Information Memorandum.
Information Memorandum	means this information memorandum as amended, substituted or supplemented from time to time.
International Tax Compliance Legislation	means the Taxation (Implementation) (Jersey) Law 2004 and any subordinate legislation, regulations or orders including but not limited to, the Taxation (Exchange of Information with Third  Countries) (Jersey) Regulations 2008, the Taxation (Implementation) (International Tax Compliance) (Common Reporting Standard) (Jersey) Regulations 2015, the Taxation (Implementation) (International Tax Compliance) (United Kingdom) (Jersey) Regulations 2014, the Taxation (Implementation) (International Tax Compliance) (United States of America) (Jersey) Regulations 2014, or any other applicable international tax compliance legislation.
IP Licencing Agreement	means the intellectual property licensing agreement entered into between Impact Investments Limited and The Clarity Project Limited, as amended, substituted or supplemented from time to time.
Issuer	has the meaning as set out at section 6.1 of this Information Memorandum.
Pounds Sterling, “£” or GBP	means the lawful currency of the United Kingdom.
SEC	means the United States Securities and Exchange Commission.
The Clarity Project Limited	has the meaning as set out at section 6.6 of this Information Memorandum.
Token(s) / Clarity Token(s)	means the Clarity tokens issued by the Issuer.
Tokenholder	means a holder of any Token(s).
Token Price	means the price at which prospective Tokenholders will be able to purchase the Tokens, as more fully described at section7.1 of this Information Memorandum.
US Dollars, “$” or USD	means the lawful currency of the United States of America.
U.S. Person(s)	has the meaning of “U.S. person” in Rule 902 of Regulation S under the U.S. Securities Act.
U.S. Securities Act	shall mean the United States Securities Act of 1933, as amended.

 

 

 

APPENDIX 1 – PRIVACY NOTICE

1. INTRODUCTION
   • This Privacy Notice sets out how personal information is collected, processed and disclosed in connection with the Issuer.
   • As a result of a proposed or actual purchase of Tokens from the Issuer either made by you or a firm or entity with which you have a connection (the “Applicant“), your personal information and/or the personal information of other relevant individuals of the Applicant (such as directors, officers, employees or beneficial owners or persons connected to the foregoing) may be provided to the Issuer, the Administrator and/or any of their affiliates (where such relevant individuals and the Applicant shall together be referred to as the “Relevant Individual“).
   • The Issuer will act as data controller in respect of its use of personal information provided by a Relevant Individual. In this Privacy Notice, “the Issuer”, “we” or “us” refers to the Issuer and/or its affiliates (as applicable) and “you” refers to the Relevant Individual.
   • Service providers appointed by the Issuer (including the Administrator, the Auditor and any third party AML provider) may also process personal information relating to Relevant Individuals when conducting administrative and other activities relating to the Issuer. Where they are required to do so in order to comply with their own legal and regulatory obligations, they will do so as data controllers in their own right.
   • This Privacy Notice sets out how the personal information of Relevant Individuals is collected, processed and disclosed in connection with the Applicant’s purchase of Tokens from the Issuer. Unless otherwise provided for in this Privacy Notice, terms and expressions defined elsewhere in this Information Memorandum shall have the same meaning where used in this Privacy Notice.
2. THE PERSONAL INFORMATION WE PROCESS
   • We may collect various types of personal data about you, including:
     • identification information (which may include your name, ID card and passport numbers, nationality, place and date of birth, gender, photograph and/or IP address and personal data relating to claims, court cases and convictions, politically exposed person (PEP) status, personal data available in the public domain and such other information as may be necessary for the Issuer and its service providers to perform their functions and comply with their CDD processes and discharge AML/CFT obligations);
     • tax status information (which may include your tax residency, tax ID and/or your tax status);
     • contact information (which may include postal address and e-mail address and your home and mobile telephone numbers);
     • about your family relationships (which may include your marital status, the identity of your spouse and the number of children that you have);
     • professional and employment information (which may include your level of education and professional qualifications, your employment, employer’s name and details of directorships and other offices which you may hold); and
     • financial information, sources of wealth and your assets (which may include details of your, shareholdings and your beneficial interest in assets, your bank details and your credit history).
   • We may also collect and process personal data regarding people connected to you, either by way of professional (or other) association or by way of family relationship.
3. WHERE WE OBTAIN YOUR PERSONAL INFORMATION:
   • We collect personal information from the following sources:
     • personal information which data subjects provide to us or which is given to us by the Applicant, including but not limited to:
       • information set out on the Issuer’s website;
       • such other forms and documents as we may request that are completed in relation to the administration/management of any purchase of Tokens from the Issuer;
       • information gathered through client due diligence carried out as part of our compliance with regulatory requirements; or
       • any personal information provided by way of correspondence with us by phone, e-mail or otherwise;
     • personal information we receive from third party sources, such as:
       • entities in which you or someone connected to you has an interest;
       • your legal and/or financial advisors;
       • other financial institutions who hold and process your personal information;
       • credit reference agencies and financial crime databases for the purposes of complying with our regulatory requirements; and
     • personal information received in the course of dealing with advisors, regulators, official authorities and service providers by whom you are employed or engaged or for whom you act.

4. WHY WE COLLECT YOUR PERSONAL INFORMATION:

Lawful grounds for processing:

• We may hold and process your personal information on the following lawful grounds, namely where:
  • the processing is necessary for our legitimate interests, provided your interests and fundamental rights do not override those interests;
  • the processing is necessary to comply with our respective contractual duties to the Applicant under the terms of the Issuer’s website, this Information Memorandum and any supplemental agreements thereto;
  • the processing is necessary to comply with our legal and regulatory obligations;
  • (on rare occasions) where we have obtained consent to processing personal information for a specific purpose; and
  • on rare occasions, where it is needed in the public interest.

Purposes of processing

• Pursuant to paragraph 4.1 above, personal information may be processed for the purposes set out below (“Purposes“). The Purposes based on our legitimate interests are set out in paragraphs 4.2.1 to 2.2inclusive):
  • facilitating the administration of the Issuer and its service providers;
  • communicating with data subjects as necessary in connection with the Applicant’s purchase of Tokens from the Issuer;
  • monitoring and recording telephone and electronic communications and transactions:
    • for quality, business analysis, training and related purposes in order to improve service delivery; and
    • for investigation and fraud prevention purposes, for crime detection, prevention, investigation and prosecution of any unlawful act (or omission to act);
  • to comply with the listing, legal, regulatory, reporting and/or financial obligations of the Issuer or any legal or regulatory obligations of any service provider or functionary (or his/her employer) of the Issuer;
  • disclosing your personal information (including your identity and interest in the Issuer) to any bank, financial institution or other third party lender providing any form of facility, loan, finance or other form of credit or guarantee to the Issuer;
  • to enforce or defend the rights of the Issuer, or those of third parties who provide services to the Issuer;
  • collecting, processing, transferring and storing customer due diligence, source of funds information and verification data under applicable anti-money laundering and terrorist financing laws and regulations; and
  • liaising with or reporting to any regulatory authority (including tax authorities) with whom we are either required to cooperate or report to, or with whom we decide or deem it is appropriate to cooperate in relation to an investment, and which has jurisdiction over the Issuer or its investments.

5. SHARING PERSONAL INFORMATION
   • We may share your personal information with our group companies and third party service providers, including the Administrator, any third party AML provider, banks, financial institutions or other third party lenders, IT service providers, auditors and legal professionals to facilitate the running of the Fund. The group companies and third party service providers to whom your information may be transferred are based in the following jurisdictions: Jersey and/or the UK.
   • Where we share your information with a third party, we require the recipients of that personal information to put in place adequate measures to protect it.
   • Where we transfer your personal information outside the European Economic Area, we will ensure that it is protected and transferred in a manner consistent with legal requirements applicable to the information. This can be done in a number of different ways, for instance:
     • the country to which we send the personal information may be approved by the European Commission as providing adequate protection for personal data;
     • by utilizing a contract based on “model contractual clauses” approved by the European Commission; or
     • where the recipient is in the US, it may belong to the EU-US Privacy Shield scheme.
   • In other circumstances, the law may permit us to otherwise transfer your personal information outside the EEA.
   • If you would like further information about the safeguards we have in place to protect your personal information, please contact the Administrator.
6. RETENTION OF PERSONAL INFORMATION
   • Your personal information will be retained for as long as required:
     • for the Purposes for which the personal information was collected;
     • to establish or defend legal rights or obligations or to satisfy any reporting or accounting obligations; and/or
     • as required by data protection laws and any other applicable laws or regulatory requirements.

7. ACCESS TO AND CONTROL OF PERSONAL INFORMATION
   • You have the following rights (which are subject to certain conditions and exceptions) in respect of the personal information about you that we process:
     • the right to access and port personal information;
     • the right to rectify personal information;
     • the right to restrict the use of personal information;
     • the right to request that personal information is erased; and
     • the right to object to processing of personal information.
   • You also have the right to lodge a complaint about the processing of your personal information either with us, with the Office of the Data Protection Commissioner in Jersey (dataci.je) or the data protection authority in the EU member state of your usual residence or place of work.
   • Where we have relied on consent to process your personal information, you have the right to withdraw consent at any time.
   • If you wish to exercise any of the rights set out in this paragraph 7, please contact the Administrator.
8. INACCURATE OR AMENDED INFORMATION
   • Please let us know as soon as possible if any of your personal information changes (including your correspondence details). Failure to provide accurate information or to update information when it changes may have a detrimental impact upon the Applicant’s purchase of Tokens from the Issuer. Failure to provide information where it is required for anti-money laundering or other legal requirements means that we may not be able to accept the Applicant as a Tokenholder.
9. QUESTIONS
   • If you have any questions about this Privacy Notice or how we handle your personal information (e.g. our retention procedures or the security measures we have in place), or if you would like to make a complaint, please contact the Administrator.
   • This Privacy Notice is up-to-date as of the date of this Information Memorandum. If it is updated, we will provide the Applicant with the updated version and require them to bring it to your attention.

 

 

APPENDIX 2 – WHITE PAPER

 

 

[1]As at 14 October 2018 at 11:15 as per the exchange rate on: https://ethereumprice.org/

[2]As at14 October 2018 at 11:15 as per the exchange rate on: https://ethereumprice.org/

[3]As at14 October 2018 at 11:15 as per the exchange rate on: https://ethereumprice.org/