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9. How do Note redemptions work?

A redemption payout is triggered upon a Qualifying Liquidity Event.Upon a Qualifying Liquidity Event, the Issuer will host a redemption claims offering, where eligible Note holders can submit a claim to redeem their Notes for payment. See next questions.

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10. What constitutes a Qualifying Liquidity Event?

Qualifying Liquidity Events include:
  • The Reference Company lists publicly and trades for six months, whether through an IPO, direct listing, or a merger where shareholders receive listed stock
  • Someone acquires control of the Reference Company
  • The Reference Company enters bankruptcy, insolvency, or a similar proceeding
  • The Reference Company liquidates substantially all of its assets
  • Ten years pass from initial issuance with none of the above happening
Ordinary funding rounds, employee tender offers, liquidity programs, and ordinary secondary sales don’t count. The Calculation Agent decides in good faith whether a liquidity event has occurred, what type it is, and its price.

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11. How much does a note pay upon a Qualifying Liquidity Event?

The Note redemption price is fixed according to its terms at the earliest Qualifying Liquidity Event. The Issuer’s obligation is firm and formula-driven. The payout is set by the formula in the Token Terms, minus any tax withholding and settlement fees.Payment Amount = Liquidity Event Price x Reference Asset Amount x Participation Rate – Required Withholding – Actual Settlement FeesEach note pays the Liquidity Event Price of one share of the Reference Company’s common stock — 1 Note = 1 Share. Payout is not contingent on what the Issuer or an affiliate recovers from any hedge or sourcing arrangement. How the Issuer manages its own exposure is the Issuer’s risk, not the holder’s payout formula.

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12. When do I get paid after an IPO?

The payout is triggered at the end of the trading day six months after the IPO, in line with traditional private market lockup periods. The Issuer then has up to 90 days to open the claim window. Once the claim window opens, you have one year to accept the redemption claim agreement, prove you control the wallet holding the notes, go through KYC, and other verification checks before payment. Your payment is forfeited if you do not claim within the one year claim window. In total, allow up to 9 months from IPO to redemption claims open.Illustrative timeline

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13. How is the payout price calculated for an IPO redemption?

Redemption price is set 6 months after the Reference Company begins trading publicly, not at the IPO price. The redemption price is calculated based on the trailing 10-trading-day VWAP on the company’s primary exchange leading up to that date. Once set, the price is fixed and won’t track the stock afterward.Example: IPO Liquidity Event PayoutYou hold 10 notes. The Reference Company IPOs at $400 per share. Six months later, its trailing 10-day VWAP is $500 leading up to the six-month date, so the Liquidity Event Price is fixed at $500. Your payout according to the formula set in the Token Terms would be as follows:

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14. What if the payout is triggered by something other than an IPO?

Timing depends on what the Reference Company’s shareholders receive. If it’s cash or freely tradable securities, payment after a verified claim is generally expected within about 90 days of the event. If it’s illiquid or restricted securities, payment may take 12 months or more. Either way, you’re paid in the settlement currency set in the Token Terms. The Offering Documentation provides more details on each scenario and the related payout timing.

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15. What if no liquidity event happens?

If no other Liquidity Events happen within 10 years of initial issuance, the note’s term expires. This triggers a payout under the Token Terms.Because the Reference Company still has no public market price, the Calculation Agent sets a reasonable Liquidity Event Price in good faith. It uses standard methods for valuing private-company shares, including:
  • Recent qualifying secondary sales of the company’s shares
  • Recent funding rounds
  • 409A valuations, the independent valuations private companies use to price employee stock options
  • Valuations of comparable companies
The Issuer will then host a redemption claims offering. Your payout follows the same formula and claim process as any other liquidity event. The price set at expiry could be lower than you expect, and you could lose some or all of your investment.

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16. Do I get paid automatically?

No. Holding a note at the record time does not confer the right to redemption payment. To get paid, you must:
  1. Accept the Token Terms
  2. Prove you controlled the wallet that held the notes at the record time
  3. Complete KYC and non-U.S. person re-certification
  4. Clear sanctions screening
Once verified, you’re added to the Issuer’s approved payments list. If you hold through a Qualifying Exchange Partner, it may submit one combined claim for its customers or may host its own claim portal.If you don’t submit a valid claim within the one-year window, your payment is permanently forfeited and kept by the Issuer.

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17. What happens to my notes after I’m paid?

They’re burned at the same moment you’re paid. Payment to your verified wallet or account fully satisfies the Issuer’s obligation, even if you later lose access to that wallet or account.

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18. Do I earn anything while I hold?

No. Notes pay no interest or dividends, and there are no scheduled payments before a liquidity event.

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19. Can I convert my notes into the company’s listed stock after an IPO?

Possibly, but it isn’t guaranteed. If a Reference Company completes an IPO and Ondo makes a corresponding public-market asset available, eligible holders may be offered a way to move their exposure into the post-IPO product, subject to the terms of the applicable offering.