[Pool] Fortunafi Series 1

Hi Everyone,

We at Fortunafi are launching our first pool on Tinlake- with revenue-based financing assets. Here’s a bit more about the pool. If you have any questions/comments feel free to comment below:

Summary

We are pleased to offer prospective investors the opportunity to gain exposure to revenue sharing agreements (“RSAs”) originated by Corl Financial Investments Inc. (the “Asset Originator”) and subsequently purchased by Series 1 of Fortunafi Asset Management LLC, a Delaware series limited liability company (the “Issuer”) pursuant to the terms of that certain RSA Purchase and Servicing Agreement, dated as of November 25, 2020 (the “Purchase Agreement”), by and between Issuer and the Asset Originator. Series 1 will offer for sale to investors tokens, as described below, corresponding to RSAs with various small businesses (“RSA Obligors”).

The Issuer will issue two tranches of ERC-20 tokens: Fortunafi Asset Management Series 1 DROP Tokens with the token ticker symbol FAM1DRP (“DROP” or the “DROP Token(s)”) and Fortunafi Asset Management Series 1 TIN Tokens with the token ticker symbol FAM1TIN (“TIN” or the “TIN Token(s)”), which will be offered for sale to investors on the terms described herein and in the Fortunafi Asset Management Series 1 DROP and TIN Subscription Agreements provided to prospective investors (the “Subscription Agreements”).

The DROP Token will be a senior token that generates a fixed rate of return when deployed in financings. The TIN Token will be a subordinated token that will be subject to first losses up to the full extent of its value, thereby acting as a buffer against losses to investors in the DROP Tokens. Issuer will target a 10% APR for DROP (the “DROP APR”) and the ratio of DROP to TIN will have a minimum ratio of 10% TIN (subject to change as set forth in the Subscription Agreements). Fortunafi Holdings Inc. (“Fortunafi Holdings”), the sole member of the Issuer, will purchase approximately seventy five percent (75%) of the TIN Tokens issued by the Issuer to demonstrate its confidence in the asset pool.

Issuer will use the blockchain protocol system developed by Centrifuge, Inc. (“Centrifuge”), known as the Tinlake Protocol (the “Tinlake Protocol”), to mint the DROP Tokens and TIN Tokens. Issuer’s use of the Tinlake Protocol will be subject to the terms and conditions of that certain Tinlake Protocol Service Agreement, dated as of November 25, 2020, by and between the Issuer and Centrifuge.

Warning Regarding the Use of Forward-Looking Statements

This Executive Summary contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this Executive Summary regarding investments, debt instruments, investment companies, investment strategies, future operations, future financial positions, future revenues, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements may include, among other things, statements about expected rates of return and interest rates, the attractiveness of the Tinlake Protocol, the availability of RSAs for purchase by Issuer, the Issuer’s financial performance and operations; and general economic developments which may affect the Issuer, the Asset Originator or the asset pool.
There can be no assurance that actual events will correspond with the above forward-looking statements and should in no event be considered a guarantee that those future events, activities, occurrences or performances will in fact happen. Any information in this Executive Summary concerning the prior experience of the Asset Originator or the Issuer is not necessarily indicative of the results to be expected in the future.

Summary of Terms


About the Asset Originator

Corl

Founded in 2016, Corl is a financial technology company that provides Capital-as-a-Service to startups and small businesses through innovative funding strategies, with repayment based on their customers’ gross revenue. The Corl platform is data-driven, scalable, and uses artificial intelligence to identify value across high-growth sectors. Core to Corl’s approach is leveraging financial, banking, social, and customer data to provide founder-friendly growth capital to help entrepreneurs and investors reach their strategic financial objectives. By using proprietary data, methods, and machine learning algorithms, Corl is able to identify asset-light and revenue-heavy businesses underserved by traditional investors. Equipped with these tools, Corl’s objective is to make revenue-sharing using Corl’s platform a mainstream method of raising capital and financing business growth.

About the Issuer

Fortunafi

Fortunafi is a yield and lending protocol for tokenized real world, cash flowing assets. In traditional capital markets and securitizations, the process from asset creation to a final securitization bond product requires numerous counter-parties that capital market participants must pay to verify information regarding the assets that are being bought, sold, and financed every day. This results in a less efficient and more expensive process. Fortunafi is verticalizing the entire process by bringing significant efficiencies to asset originators and better yields to investors by eliminating the various rent seeking capital market participants. This type of yield has historically only been available to the largest institutional investors (Pension Funds, Sovereign Wealth Funds, Private Equity Funds, Hedge Funds, etc).

Pool Description

The aggregate value of the assets owned by the Issuer is expected to be approximately 1 million Dai as of the Launch Date. The assets are comprised of RSAs purchased by the Issuer from Corl. Pursuant to the terms of the RSAs, in exchange for an initial investment of a fixed amount, the applicable RSA Obligor pays a fixed percentage of its monthly gross revenue to the Issuer. The RSAs remain in effect, and RSA Obligors are required to continue paying the applicable percentage of their monthly gross revenue to the Issuer, until such date as the RSA Obligor pays a specified buyout amount to the Issuer.

The pool of RSAs corresponding to the DROP Tokens and TIN Tokens will be a revolving evergreen pool. Corl may originate RSAs, and the Issuer may purchase from Corl, RSAs corresponding to RSA Obligors operating in a wide range of industries and sectors of the economy, provided that such RSA Obligors satisfy Corl’s proprietary underwriting criteria. As a result, the nature of the businesses and operations of the RSA Obligors corresponding to the pool of RSAs corresponding to the DROP Tokens and TIN Tokens may vary substantially over the term of this offering, and cannot be readily ascertained at this time.

Upon receipt of payments by the RSA Obligors, the Issuer will distribute any capital requested for redemptions of DROP Tokens and TIN Tokens (in each case pursuant to the terms of the Subscription Agreements) and then will redeploy the remainder into the purchase of new RSAs from Corl. The asset pool will be open for investment and token redemptions on a regular basis based on the Epoch duration (which duration is subject to change as set forth in the Subscription Agreements). The total value of the pool is expected to grow steadily.

DROP investors will not receive any payments of principal or interest in respect of any DROP Tokens until such time as the Investor elects to redeem such DROP Tokens. Until such redemption, all amounts payable to the Investor in connection with the DROP Tokens will be either (i) held in cash by the Issuer, free and clear of any liens or encumbrances, or (ii) deployed by the Issuer to fund the purchase of new RSAs.

DROP investors may redeem all or a portion of their DROP Tokens by triggering redemption of all or a portion of their DROP Tokens (each, a “Redemption Request”). The Investor may submit no more than one Redemption Request per each specified redemption period (each such period, an “Epoch”).

DROP Tokens will generate a fixed return of 10% DROP APR and will be senior in right of payment and redemption to TIN Tokens, which will represent at least 10% of the pool. Fortunafi Holdings has agreed to invest in the TIN tranche to demonstrate its confidence in the asset pool.

As set forth in the Subscription Agreements, certain terms set forth in this Executive Summary (e.g., the DROP APR, EPOCH duration, and minimum TIN Token to DROP Token ratio) are subject to change in the sole discretion of the Issuer. All changes to this Executive Summary will be announced 2 weeks prior to the effective date of the change(s).

The offering will be made available to accredited U.S. investors and international investors through a private placement under Regulation D and Regulation S of the U.S. Securities Act of 1933. The Issuer intends to utilize Section 506(c), which allows for general solicitation of the offering. Each U.S. investor will be required to have their status as an “accredited investor” verified prior to their initial purchase of DROP Tokens or TIN Tokens and periodically thereafter. Verification will be performed by Centrifuge or a third-party designee. For international investors, local laws and regulations will apply.

RSA Servicing

Pursuant to the terms of the Purchase Agreement, Corl will continue to service the RSAs acquired by the Issuer in accordance with the standards set forth in the Purchase Agreement. The Issuer may terminate Corl’s right to service any RSA at any time in its sole discretion. In the event that the Issuer terminates Corl’s right to service an RSA, the Issuer may, in its sole discretion, elect to engage a third party to service such RSA, or to service such RSA itself.

RSA Payment Assurances

  • Pursuant to the terms of the RSAs, Corl, in its capacity as the servicer of the RSAs, will debit a designated primary bank account of each RSA Obligor to obtain payments thereunder, and subsequently pass along such amounts to the Issuer.

  • Each RSA Obligor grants to the Issuer a security interest in all of its assets to the extent of the buyout amount set forth in the corresponding RSA.

  • One or more individual delegates of each RSA Obligor are required to provide a personal guaranty in respect of the payment obligations of the RSA Obligor under the corresponding RSA in the event that any accounting information, statements, certificates, representations, or warranties given to Corl or the Issuer during the term of the RSA are found to be inaccurate in any material respect.


FOR DETAILS PLEASE CONTACT FORTUNAFI: ir@fortunafi.com

DISCLAIMER: Nothing contained in this executive summary is to be construed as a solicitation or offer, or recommendation, to buy or sell any interest in any note or other security, or to engage in any other transaction, and the content herein does not constitute, and should not be considered to constitute, an offer of securities. No statement herein made constitutes an offer to sell or a solicitation of an offer to buy a note or other security.

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