Equity Class Definitions

Detailed descriptions of Preferred and Common Share classes offered by TokenTEQ, Inc.

Preferred Shares

Preferred Shares constitute a separate class of equity issued to select investors. These shares carry enhanced economic rights and protections but do not confer governance or conversion rights.

Voting Rights: Preferred Shares are non-voting, except as required by law or pursuant to specific protective provisions as defined in the Company’s governing documents.
Dividend Rights: Preferred Shareholders are entitled to receive a fixed, non-cumulative dividend equal to 20% of the Company’s declared distributable annual profits, payable in priority to any dividends on Common Shares. Dividend payments are contingent on the Company’s profitability and availability of legally distributable funds.
Liquidation Preference: In the event of a liquidation, dissolution, merger, or sale of the Company, each Preferred Shareholder is entitled to receive a return of capital equal to the original purchase amount of their shares prior to any distribution to holders of Common Shares.
Conversion Rights: Preferred Shares are not convertible into Common Shares under any circumstances.
Transfer Restrictions: Preferred Shares may not be sold, transferred, assigned, or otherwise conveyed without prior written approval of the Company’s Board of Directors, except in the case of transfers to existing Preferred Shareholders in good standing who remain bound by applicable shareholder agreements.
Participation Rights: Preferred Shares do not include pro-rata or participation rights in future financing rounds unless expressly granted in a separate, board-approved agreement.

Common Shares

Common Shares represent standard equity ownership in TokenTEQ, Inc., entitling holders to governance rights and residual financial interests subordinate to Preferred Shares.

Voting Rights: Each Common Share carries one vote on all matters submitted to shareholder approval, including the election of directors and major corporate actions.
Dividend Rights: Common Shareholders may receive dividends if and when declared by the Board of Directors, but only after all Preferred Share dividend rights have been fully satisfied. Dividends on Common Shares are not guaranteed.
Liquidation Rights: In the event of a liquidation, dissolution, or sale of the Company, holders of Common Shares are entitled to a pro rata share of any remaining assets after all liabilities and Preferred Share liquidation preferences have been satisfied.
Transferability: Common Shares may be subject to lock-up periods, resale restrictions, or other transfer limitations pursuant to applicable shareholder agreements and securities regulations.

Disclaimer: The equity descriptions provided above are intended for summary and informational purposes only. They do not constitute legal or investment advice and do not supersede or replace any terms set forth in the Company’s certificate of incorporation, shareholder agreements, financing documents, or applicable laws. Final rights and obligations of shareholders shall be governed exclusively by the definitive agreements executed between the Company and its investors.