LevelNet ICO. Phase 2: Investment

LVLS is a financial instrument, which in Phase 2 offers the following:

● Access to the fund’s profits;
● Access to the register of fund shareholders;
● The opportunity to nominate a representative to the Board of Directors;
● The right to call an extraordinary board meeting.

The Exchange of LVL Tokens for LVLS

● LevelNet Capital plans to establish an investment fund or obtain a license to carry out investment activities.
● All LevelNet assets will be in the fund balance.
● LevelNet Inc. will issue up to 40% of shares and, under the option agreement, will transfer them under the management of the fund.
● After registration, the fund immediately begins to issue LVLS tokens (a financial instrument that gives the right to receive a share in the fund).
● Only LVL token owners can obtain the right to own LVLS tokens.
● Only LVL token holders can exchange them for LVLS tokens. For participants, up to 40% of fund ownership will be available.
● The exchange of LVL tokens for LVLS tokens will be carried out through the investor’s personal account, which is accessible via orderbook.io
● All qualified LVL token holders will have the preemptive rights to purchase non-distributed LVLS. (in the USA only “qualified investors” can get LVLS tokens)
● All LVL tokens exchanged for the LVLS token are subject to cancellation.
All exchange provisions are regulated by the Terms of Token Offering and cannot be changed.

LVLS Release

LevelNet Capital or the planned investment fund will undertake the release of a non-public LVLS financial instrument based upon blockchain technology.
The investment fund is obliged to provide LVL token holders the option to exchange their shares in the amount of up to 40% of the investment fund. The total price is equal to the amount of funds in the investment fund «Development and Implementation»
.
The Investment Fund is obliged to provide this option for the exchange of issued LVLS tokens. This is in accordance with the terms in the clause concerning the conversion procedure from shares to tokens.

Conversion Procedure

LVL token holders will have the right to exchange their tokens them for LVLS tokens, as described in the LVLS Release section and according to the following rules:

▪ The exchange rate of LVL tokens for LVLS tokens occurs at the market value of the LVL token at the time of exchange.
▪ The market price of the token is equal to the weighted average of the daily exchange price at the date of exchange.

The exchange of tokens for ownership in the fund is calculated by the following formula:
Share in the fund (LVLS)= Number of LVL tokens * Exchange value of the LVL token at the time of exchange / nominal value of LVLS — exchange discount. The exchange will be carried out through the investor’s personal account, which will be available at orderbook.io All LVL tokens exchanged for the LVLS fund are subject to cancellation.

Valuation

To evaluate the project and subsequent LVLS token offering, LevelNet has developed a simple project evaluation system based on the conditions described below:

● The project is evaluated by the «Development and implementation» fund.
● All other obtained funds will not go into the calculating of the project price.

The market value of the LevelNet project is estimated using the following formula:
Market Value = Development and Implementation fund * 100% / 40% of the LevelNet Fund.
Alternative valuation = calculated from the book value of the assets of all affiliated structures of the LevelNet project.

Evaluation Disclaimers:

● POST TOKEN OFFERING Ownership % is the share of investment fund ownership from the second phase.
● Once the «Development and implementation» fund is formed with a funding between $5M to $18.5M, the POST TOKEN

OFFERING Ownership % equals up to 40% of the investment fund. Should the size of the «Development and implementation» total less than $5M, then the fund will transfer ownership of the participants in a proportionally smaller amount. In this case, the POST TOKEN OFFERING Ownership % will be calculated using the formula:
POST TOKEN OFFERING Ownership %= «Development and Implementation» Fund *40%/5 000 000

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