[Issuer] SolidBlock Holdings LLC., Detox Digital Series

OVERVIEW:

Business Name:

SolidBlock Holdings, LLC., Detox Digital Series and Medi Solutions Behavioral Health, LLC., are joint owners of Detox Digital Coin. While SolidBlock owns 100% of their half of Detox Digital Coin, Medi Solutions is further made up as follows: 50% Holdun Family Office; 25% Omicrom Holdings; 7.5% DBM 168 LLC.; 7.5% Bocca Trophy Portfolio, LLC.; and 7.5% others.

  • Current AUM: N/A
  • $ Volume of Transactions Completed Last 12 months: N/A
  • Target Launch Date: Detox Digital Coin was launched in December 2021.
  • Location and Team Size: the United States and Israel,4 people [ joint company]
  • Years in Operation:
    • If less than 2 years in operation, number of years founding team has worked together:

SolidBlock has been working with Holdun et al, for the past two years to create this deal.

About SolidBlock

Founded in 2018, SolidBlock is a leader in Tokenization as a Service (TaaS) for real estate, integrating blockchain and Web3 technology to allow real-world assets to join the emerging blockchain economy.

The company is best known for its role in the world’s first successful commercial property tokenization, raising $18M for the St. Regis Resort in Aspen, Colorado.

SolidBlock is led by Co-founders Yael Tamar and Yuval Wirzberger.

Holdun Family Office, Ltd. With an extensive reserve of knowledge based on this company’s five-generational investing dynasty, Holdun offers financial guidance to investors on their journey to leverage their financial security.

Medi Solutions Behavioral Health, LLC, has ultimate responsibility for the management, operations and investment decisions made on behalf of the partnership. With many years of real estate transactions to their credit, its members have led investors to successful, transformative, and equitable projects.

Omicrom Property Management, LLC., is a Delaware limited liability company that serves as the property manager for the real estate assets held by the Portfolio.

Main Contacts: SolidBlock: Co-Founder & CEO, Yael Tamar: [email protected]; Co-Founder & CIO, Yuval Wirzberger: [email protected]

  • Historical Loan Tape (years): N/A
  • Key Professional Partners (legal, accounting, operational, technical, structuring):

Israel Frenkel, Tax & Securities

Israel is a US trained attorney and CPA with vast experience. He provides advice and counsel to financial institutions, high-tech and low-tech companies, VC funds, and real estate partnerships on both legal and financial elements. He has a broad knowledge and experience with commercial agreements, international taxation, securities agreements and compliance, organization and structuring, due diligence, and mergers and acquisitions.

Leo Rocha, Senior Financial Analyst

Leo is a finance professional with a civil engineering background and 25 years of experience in Real Estate Development, Investment Analysis, and Corporate Finance. Prior to joining SolidBlock, Leo served as a finance consultant advising clients with property acquisitions and with project funding

Brendan Dunn Holt, CEO, Holdun Family Office, Ltd.,

Brendan has recently led the international expansion of Holdun and offers family office and wealth management services, investment banking and asset protection and trust structures. Brendan is also Director of the Holt Xchange Funds SPC.

Carlos Ulloa, MStJ, Managing Member, Holdun

Carlos is a business professional with more than five decades of experience in commercial and investment banking, including managing and operating international financial institutions. He has a reputation for integrity and the ability to structure innovative solutions for his clients.

Yuval Wirzberger, CIO and Co-Founder of SolidBlock

With more than 25 years of technology and product management experience, Yuval has helped both startups and large enterprises bring new media and technical visions to life. Yuval was instrumental in launching the first commercial property blockchain-based fundraise for the St. Regis Resort hotel development in Colorado.

Yael Tamar, CEO and Co-Founder, SolidBlock

Yael has a decade’s-worth of experience as a marketing executive within the fintech (financial technology), finance, telecom, and energy industries, as well as a long track record as an entrepreneur. Her initial work in real estate in both New York and Israel has paved the way for her pivotal role as SolidBlock’s CEO.

STRATEGY:

  • Business

    • Describe your business and go to market strategy.

Detox Digital Coins ( ‚ÄúDDCs‚ÄĚ) are real-estate backed security tokens representing an interest in the Detox Medical Digital Series, LLC. (‚Äėthe Series‚ÄĚ), established by SolidBlock to offer investors the opportunity to participate in the Detox Digital Coin which manages detoxification facilities, each with its unique and licensed approach to drug and alcohol and mental health recovery. The main underlying challenge and need for the project is the opioid epidemic which is a global malady, further exacerbated by the COVID-19 pandemic with an estimated 107,622 drug overdose deaths in the United States during 2021, an increase of nearly 15% from the 93,655 deaths estimated in 2020.

Our market strategy is two-pronged and consists of education about this niche real estate sector and the environmental and emotional impact investing in these facilities can have on the community of at-risk individuals.

  • What makes your approach unique within your industry?

For this offering SolidBlock, an internationally recognized pioneer in tokenization and the developer of a fully compliant tokenization platform, has teamed up with the Holdun Family Office (Bahamas) Ltd., and Omicrom Development, LLC (Delaware Incorporated), to raise up to USD $15M to purchase via tokenization additional facilities focusing on various levels of detox and healthy living care.

The Portfolio consists of real estate within the United States that is utilized to increase the number of substance abuse treatment programs available for those seeking a solution to opioid dependency. The Portfolio represents an investment in a niche commercial real estate sector that has insulation from the effects of the Coronavirus, and is considered ‚Äúessential business‚ÄĚ in the eyes of US federal and state governments. The Portfolio addresses a rapidly expanding market with an unmet demand: the exploding opioid crisis and the lack of treatment facilities.

Medi Solutions currently manages five thriving centers and anticipates acquiring additional centers that are specifically zoned and refurbished to provide diverse levels and stages of substance abuse programs.

Specifically, Detox Digital Coin will acquire facilities that address different levels of care for every state of recovery from substance abuse. These include:

  • Residential Drug and Alcohol Detoxification Centers
  • In-patient Drug and Alcohol Rehabilitation Centers
  • Sober Living Post Rehabilitation Residential Housing

The Series may hold, depending on the amount raised, up to 100% of several detox centers as delineated above. Each DDC is initially offered at a value of USD $1.

Using SolidBlock‚Äôs advanced platform on the Ethereum blockchain (the ‚ÄúSolidBlock Platform‚ÄĚ), investors will be able to purchase DDCs. The Company intends to use the proceeds of the sale of the DDCs (after payment of fees and offering expenses) to purchase an interest in the real property holding company, which wholly owns the medical detoxification centers.

  • Why are you a good partner for Centrifuge?

Collateralizing tokens that are backed by real world assets (RWAs) aligns with Centrifuge’s goal of unlocking liquidity for RWAs. This is the goal of Detox Digital Coin.

  • How do you differentiate yourself from competitors?

SolidBlock is introducing a new aspect to this niche commercial real estate sector, namely, tokenization. Real estate asset tokenization is an emerging trend representing the convergence of real estate investing and blockchain technology. Tokenization helps asset or fund owners raise capital more efficiently, and gives investors unprecedented access to private real estate investments, transparency, and liquidity.

DDC is a new series of Ethereum blockchain-based smart contract digital tokens consisting of software code meeting the ERC-20/1404 protocol standard as modified to meet transfer restriction requirements under applicable US securities law. The software code of the DDC Smart Contract will be based on open source code but will be proprietary and will not be published at this time.

SolidBlock’s state-of-the-art digital securities platform enables fractional ownership of the underlying assets or fractional entitlement to certain rights (revenue or interest) as well as trade of assets via OTC on the SolidBlock platform or through partner exchanges.

The Series seeks to execute and operate financial positions that will provide prospective purchasers of the DDC with the following benefits:

(i) the preservation and return of their capital contributions;

(ii) stable cash flow of quarterly distributions of a preferred interest equal to 8% of capital raised;

(iii) potential capital appreciation and sale of the Property after a 5-year term, with a 3-year extension to be determined in the sole discretion of the Company;

(iv) the realization of growth in the value of the Investments; and

(v) potential liquidity through a possible future listing of the DDC on a crypto market exchange, a marketplace to trade private digital securities.

  • How is your entity financed today, what are the current sources of capital:

Detox Digital Coin’s business model is based on fundraising and reaching the soft cap in order to execute and purchase the first property in the portfolio. There are currently five properties in the portfolio, each with a 10-year NNN lease with a built-in annual 3% raise.

  • Equity raised:

The Series seeks to raise up to $15,000,000 USD to invest into the Series which may hold, depending on the amount raised, up to 100% of several real property holding companies each of whom is the sole owner of a medical detoxification center (the ‚ÄúProperty‚ÄĚ or ‚ÄúProperties‚ÄĚ). We expect several tranches whereby there is a minimum cap of $3M.

  • Debt raised: N/A

  • What is your entity‚Äôs revenue/fee model:

Purchases of the DDCs will be paid in U.S. dollars. The Series may accept Bitcoin (‚ÄúBTC‚ÄĚ), Ethereum (‚ÄúETH‚ÄĚ), DASH, or other cryptocurrencies as payment for DDCs. Payment can also be made by wire transfer and credit card.

The funding objective is to raise $15,000,000 USD as outlined above in numerous tranches - each with a min. Cap of $3M and a maximum of $15M in accordance with the PPM. The offering price of each DDC is $1.00 and the minimum investment is $5,000 USD although the Series, in its sole discretion, may determine to lower the minimum amount. DDCs can be accessed and transferred (when and to the extent permitted under applicable regulations) through the SolidBlock Platform or held directly in a digital wallet.

  • Origination fees: N/A

  • Target spread: N/A

  • Other: N/A

  • Capital

    • Please explain the source(s) of, and ability to scale, your first-loss junior (TIN) capital in the pool:

Real Estate Rental Fees

  • Please explain the source(s) of, and ability to scale, your senior (DROP) capital in the pool:

Annual 3% rental Increases built into the NNN Leases of each property.

  • Capital relationships and how much you will bring through Centrifuge KYC to invest in either senior or junior tranche of your pool:

We have interested equity investors and institutions. We expect ‚Öď of deal size to be funded with ‚ÖĒ loan. LTV (65%).

  • DeFi

    • Outline why DeFi is important to your business strategy:

Blockchain and digital securities are changing the way we manage our investments and how they level the playing field for investors. The process of turning real world assets into security tokens‚ÄĒtokenization‚ÄĒmakes investments decentralized, immutable, and transparent, and allows investors to liquidate their holdings anytime. Tokenization also supports interoperability in the DeFi (decentralized finance) space, pushing forward the next revolution in banking. Here‚Äôs what DeFi can offer:

  • Permissionless and open access to financial transactions;
  • An independently operated decentralized mechanism with shared interoperable data points;
  • A non-custodial product that is programmable with smart contracts; and
  • An immutable system that is cryptographically verifiable.

We believe that the tokenization of real world assets will continue to be a growth industry, and we are using our platform to prepare our clients to be part of the blockchain economy. SolidBlock‚Äôs platform empowers asset owners to transact differently‚ÄĒbuy, sell, raise capital, and collateralize‚ÄĒand to manage their tokenized property in a decentralized fashion.

  • Articulate why Centrifuge‚Äôs community and protocol is a fit for financing:

SolidBlock‚Äôs TokenSuite‚ĄĘ platform tokenizes real world assets (RWAs) to prepare them for the blockchain economy. As a startup, we‚Äôre constantly seeking investors to invest in our vision, and we see Centrifuge as a natural collaborator in this effort.

Tokenized real estate is backed by real-world assets that have traditional valuations. They are a digital representation of ownership of an underlying asset. While the tokens themselves are virtual, the property they represent is tangible and is driven by the asset’s NAV (Net Asset Value).

Issuers of any kind of security are responsible for maintaining compliance, which can be a costly and burdensome process. Digital securities that have been properly programmed to include all relevant regulations are actually less prone to human error and are a far more efficient way to handle compliance.

In addition, if a digital security is lost or stolen, it can be burned (deleted), replaced by the issuer, and returned to the rightful owner.

In 2018, SolidBlock successfully tokenized the first commercial real estate project in US history, the St. Regis Hotel in Aspen, CO. We pioneered the legal, regulatory and technological framework that has become the industry standard for tokenized assets today.

Given Centrifuge’s commitment to support small businesses that are tokenizing RWAs, we believe SolidBlock is an excellent fit for the Centrifuge model.

STRUCTURE: RISK & TERMS

  • Please explain the key risks inherent in this opportunity and asset class:

The DDC offered hereby are highly speculative in nature, involve a high degree of risk and should be purchased only by persons who can afford to lose their entire investment. There can be no assurance that the Company’s investment objectives will be achieved or that a secondary market would ever develop for the DDC, whether via the SolidBlock Platform, via third party registered broker-dealers or otherwise. The risks we describe should not be considered an exhaustive list of the risks

that prospective Investors should consider before investing in the DDC. An investment in the DDC may be exposed to other risks of an exceptional nature from time to time.

To view a full accounting of the risks related to the structure, operation and performance of Detox Digital Coins, click here.

  • Pool Size & Pipeline:

  • Asset & Rates:

    • Asset Type(s): Medical Rehab Facilities Properties
    • Average Ticket Size: $100K
    • Average Asset Maturity: 5 years
    • Expect Default Rate: 2%
    • Expected borrowing rate on senior tranche (on-chain): 3%
    • Expected lending rate to end borrower (off-chain): 4%
4 Likes

Hi @solidblock, thank you for your POP submission. I have a question regarding the information you provide of TIN and DROP.

For funding TIN you write:

And for funding DROP you write:

Can you please expand a bit on that information, i.e. provide some specific figure if possible?

Thank you.

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POP Criteria Score: SolidBlock Holdings LLC., Detox Digital Series

The Centrifuge community has reviewed the POP for SolidBlock Holdings LLC., Detox Digital Series, based on the 10 criteria, and the result is: :two: / :ten:.

SCORE

For each criteria, either a :zero: (criteria not met) or :one: (criteria met) will be given.

Below you will find the results of the individual criteria:

Business Years in Operation: :zero:
Off-Chain Institutional Investors: :one:
Strong Pipeline: :one:
Volume Originated last 2 years: :zero:
Historical Loan Tape: :zero:
TIN Tranche: :zero:
DROP Tranche: :zero:
Pool Value at Launch: :zero:
Pool Value in 1 Year: :zero:
Asset Maturity: :zero:

RESULT

:no_entry_sign: This proposal does not meet the threshold of >66%.

NEXT STEP

The Centrifuge DAO may still give a recommendation and this POP may continue to advocate for their proposal publicly in the Forum and seek a path forward to finance RWAs through Centrifuge. However, a POP should be aware that the other organizations (underwriters and institutional investors) do not have a requirement to engage nor do any of the following steps in the POP process.

If you want to see all the steps of Stage 1 of the POP process, you can check this post here.

1 Like