Thread Protocol - Due diligence

[andynguyen11]

Full disclosure, I am the CTO / Co-Founder of Thread Protocol. I know there are a few lingering items that we need to address, but we are working diligently to get those checked off. Feel free to reach out to me directly over Telegram (andy_nguyen) or email (andy@threadprotocol.io) if you have any follow up questions.

Thread Protocol ICO

Team

• Chase White (Co-Founder & CEO) | LinkedIn
• Andy Nguyen (Co-Founder & CTO) | LinkedIn | Github
• Josh Mantooth (UX Design Lead) | LinkedIn
• Eva Vaughn (Community Manager) | LinkedIn

Advisors

• Dylan Sharkey | LinkedIn
• Patrick O'Reilly | LinkedIn
• Gary Ross | LinkedIn

Company

Thread Labs, Inc.

File Number: 6826459

Incorporation Date / Formation Date: 4/2/2018

Entity Kind: Corporation

Entity Type: General

Residency: Domestic

State: DELAWARE

Delaware company registry

Github

• Github account

Smart Contract

We're still working on codifying our token sale and vesting into smart contracts. Will update the issue once these have been committed to our github.

• Contract on Github

Vesting

• 2 year vesting schedule with a 1 year cliff for team and advisor tokens

White paper

• Download white paper

Questions & Answers

1. Where is your company registered? Could i have a copy of certificate of incorporation, list of directors and details of registered office address?

Thread Protocol is incorporated in Delaware as Thread Labs, Inc. Thread Labs, Inc. is a subsidiary of Loom Labs, Inc. which is also incorporated in Delaware.

Copy of certificate for Thread Labs, Inc. can be seen here when searching for THREAD LABS, INC. in the “Entity Name” field or 6826459 in the “File Number” field: https://icis.corp.delaware.gov/ecorp/entitysearch/namesearch.aspx

Copy of certificate for Loom Labs, Inc. can be seen here when searching for LOOM LABS, INC. in the “Entity Name” field or 6027710 in the “File Number” field: https://icis.corp.delaware.gov/ecorp/entitysearch/namesearch.aspx

Our office is located at 3300 N Interstate Hwy 35, Suite 700, Austin, TX 78705. We’re located in a different state than Delaware because incorporating in Delaware for US-based companies offer unique advantages (https://www.legalzoom.com/articles/incorporating-in-delaware-advantages-and-disadvantages)

The decision to create Thread Labs, Inc. as a new entity was to limit liability and future proof separating management of two different properties. We also did not want to get into branding/identity issues with the Loom Network.

2. Can i have details of any intellectual property which the company has created, registered or applied to register?

While Thread Labs, Inc. does not own any IP. Loom Labs, Inc. owns the following trademarks and properties:

http://tmsearch.uspto.gov/bin/showfield?f=doc&state=4801:ajk1gm.2.46

http://tmsearch.uspto.gov/bin/showfield?f=doc&state=4801:ajk1gm.2.47

https://loom.co

3. Can you share your Cap Table?

At this point in time we cannot share our cap table until we receive permission from all our shareholders.

4. Has there been any change in the shareholders in the past 12 months? If so what and why?

Thread Labs, Inc. was incorporated in April of 2018. The shareholders of Thread Labs, Inc. are the same shareholders of Loom Labs, Inc.

5. Has there been any change in the board of the company in the past 12 months? If so who and why?

There has not been a change in board at all. Thread Labs, Inc. has the same board as Loom Labs, Inc.

6. Who are the founding team members? What is the citizenship of the founding team? Has the founding team changed in anyway in the past 12 months? If so who and why?

The founding team are all US citizens.

Chase White - CEO

Andy Nguyen - CTO

7. In your team who is a part time employee?

All of our core team listed on the website are full-time employees.

8. Does any of the founding team members have any involvement in helping raise capital for other token projects? Is the person in question regulated to do so?

No, we are not involved in raising funds for any other token project.

9. How much money has the company raised (equity/token) and over what period?

Thread Labs, Inc. is a subsidiary of Loom Labs, Inc. Loom Labs, Inc. has raised just over $1 million USD over the past 2 years through angel investors. Approximately $150,000 is being used towards the Thread Protocol ICO.

10. What is your company's cash burn rate?

Our burn rate is approximately $30,000 per month with a team of 5 full time employees.

11. Is your company GDPR compliant?

Yes, our privacy policy can be seen here: https://us.threadprotocol.io/privacy-policy

12. What is the vesting schedule for Team and Advisors token?

Team advisory tokens all have 2 year vesting schedule with a 12-month cliff. The team/advisors are required to be under a 12-month holding period as per Rule 144 of the Securities Exchange Act of 1934 (https://www.sec.gov/reportspubs/investor-publications/investorpubsrule144htm.html).

13. Is vesting for Team and Advisors coded in the smart contract?

It will be coded into a smart contract that’s based off OpenZeppelin’s vesting token smart contract (https://github.com/OpenZeppelin/openzeppelin-solidity/blob/master/contracts/token/ERC20/TokenVesting.sol).

14. Is your smart contract deployed for the ICO?

Our smart contracts are still being written, and will be deployed once thoroughly tested.

15. Was your smart contract audited by an independent cybersecurity company? If yes by whom?

No, however all our smart contracts will be based on the OpenZeppelin framework. We do plan to have an audit soon. Details to follow.

16. Could i have a link to your github repo?

https://github.com/Thread-Protocol/ICO

17. Do you have a working product on a testnet? Will mainnet be launched before the crowdsale?

We do not have a working blockchain product. We do have a product on the market that will adopt our blockchain product once it’s complete - https://loom.co

18. Has the code for your product been published, and has is it been audited by an independent cybersecurity company? If yes by whom?

The code to our product has not been published or audited.

19. Are you using a reputable 3rd party for KYC verification? How safe is it to upload my Identity Document on your site?

Yes, we are using CoinList for KYC/AML and accreditation checks. https://coinlist.co/

20. Can US investors participate in the sale? If yes did you secure Reg-D?

Only accredited US investors are allowed to participate in the sale. Accreditation checks will be handled by CoinList. Accredited US investors tokens are also required to be under a 12 month holding period or lock up for SEC compliance as per Rule 144 of the Securities Exchange Act of 1934 (https://www.sec.gov/reportspubs/investor-publications/investorpubsrule144htm.html).

We are, however, exploring a Regulation CF option to raise up to $1,070,000 from unaccredited US investors. https://www.sec.gov/info/smallbus/secg/rccomplianceguide-051316.htm

21. Where is my money going and what will it be used for? Is my money going to be used to "cash out" others?

Funds are planned to be allocated in the following way (subject to change based on amount raised):
Product development: 50%
Partnerships: 20%
Company Operations: 15%
Marketing: 10%
Legal: 3%
Contingency: 5%

Since we are a seed-funded startup who has raised previous rounds of funding, our investors have agreed to using our ICO as a convertible event if we hit our soft cap of $2 million USD. A small percentage of funds raised may be in consideration for preferred returns or optionally converted to equity.

Please also note as part of the company operations allocation, we plan to use funds to pay taxes according to US tax law.

22. What specific rights come with my investment?

The THRD token carry no rights other than enabling usage and interaction with the Thread Protocol, if and to the extent successfully completed and deployed.

23. Are there financial statements? If so, are they audited, and by whom?

Thread Labs, Inc. is a privately-owned company so we won't be publishing financials.

24. How, when, and at what cost can I sell my investment? For example, do I have a right to give the token or coin back to the company or to receive a refund? Can I resell the coin or token, and if so, are there any limitations on my ability to resell?

It is our intention to facilitate the resale of tokens purchased at a later date, in compliance with applicable US-based laws. US-based purchasers will be obligated to a standard 1-year lockup period while our team works aggressively to build out our product, furthering the utility of the Thread token. At this time, we do not publicly forecast any future value of the Thread token, however our intention is to facilitate purchasing, using and/or selling the Thread token on exchanges and platforms, as compliant with applicable laws and regulations.

25. If a digital wallet is involved, what happens if I lose the key? Will I still have access to my investment?

THRD tokens will follow the ERC-20 standard, so any wallet that supports this standard can receive and send THRD tokens. As soon as the tokens are transferred to your ERC-20 wallet address, we cannot guarantee access to your tokens if you lose your private key.

26. Has the offering been structured to comply with the securities laws and, if not, what implications will that have for the stability of the enterprise and the value of my investment?

The Thread Protocol offering has been structured to comply with all applicable securities laws and regulations in the United States, under Rule 506(c) of Regulation D concurrently with a Regulation S offering. In staunch compliance with these regulations, our goal is to be both a steward and positive example of such compliance, while utilizing our imposed lockup periods to build out value in the utility of the Thread token, strategic partnerships and greater community of dedicated users. In this, it is our goal to facilitate the utmost stability of our token and product. We are also exploring a Regulation CF option to allow for participation of unaccredited US investors.