The Salutary Financial Reporting Framework

Salutary’s mission is to give token-issuing businesses the same transparency and credibility that top-tier public companies enjoy, without burying you in red tape or unnecessary requirements. Our in-house financial-reporting framework and auditing practice follows core GAAP principles (accounting guidelines in the US), adapted for token-based businesses. That means we’ll work with you to create and publish:

• Quarterly GAAP-related financial statements that the market can read and trust

• Onchain and offchain asset verification so there’s no doubt about the value and location of your company’s assets

• Independent, audited confirmation that your reported numbers are valid. We attach our pedigree next to your financials and business when we sign off on them.

This document outlines our auditing methodology, demonstrating how we bring necessary financial rigor to the crypto ecosystem.

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Introduction

Salutary provides institutional-grade transparency, befitting of institutional-grade assets.

When you partner with Salutary, your token transforms into an institutional-grade asset. Its enforceable change-of-control features make company fundamentals like cashflows, revenues, gross margins, etc. all highly relevant metrics. Salutary tokens are institutionally legible assets, capable of attracting institutional participants.

An investable asset is an accountable one, and confidence in company fundamentals requires transparency. This means finances must be presented in a standardized, verifiable way; this is standard stuff in the business world and it's finally coming onchain. In crypto, when we hear the word “audit” we only think “code”; an audit also applies to financials.

You become a bright beacon of transparency in a sea of opacity by working with Salutary and recognizing basic truths of finance and business that your competition thinks is optional. Whether a business stores its data on a decentralized or a centralized database, it’s still a business. Crypto is a subset of finance; sticking an asset on a different kind of database does not suspend the laws of financial physics or rules of accounting.

If you want to create a real business and issue an asset a PE firm would consider owning, there are rules we must follow. These basic business fundamentals coming onchain are inevitable, and you are getting there first with Salutary.

Remember, you’re working with Salutary because your token transforms into a completely different asset, one that has the mechanical ability to reflect the success of your company. The greatest wealth creator in history has been building a valuable business and issuing an accountable instrument that represents it. Accountability and transparency are good things. They are necessary things. Salutary embeds these traits, you build the business, and the market figures out the rest.

Investability does not come without accountability. An asset is only investable when the issuer of the asset is accountable to it in some way.

• Think of any company-issued asset and analyze what its enforcement looks like. All non-commodity assets must do something, enforceably, to be investable. Bonds have covenants. Stocks have controlling teeth. What do tokens have? This is a problem, and Salutary is solving it.

• Your token is now an institutionally legible asset because of the enforceable control it has and the financial accountability you provide.

It is extremely important for both Salutary and you that the market has full confidence in the following two things:

• When a valid acquisition event occurs, it will be enforced

• Your financial reporting is honest and your business is legitimate

Salutary, in partnership with you, facilitates both.

For DeFi the word “audit” no longer only applies to code, it also means “financial audit”. Salutary acts as both an enforcer of M&A events as well as financial auditor. Acting with integrity and value creation now gets prioritized because it has the means to get rewarded with Salutary. Change incentives = change behaviors.

The Salutary Advantage: Healthy. Sustainable. Transparent. Enforceable.

Our audits combine:

• Big Four audit methodology and quality standards

• Deep crypto-native technical understanding

• M&A transaction structuring considerations

We satisfy institutional requirements while addressing crypto-specific complexities. Here’s how.

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NOTE: Salutary tokens are “change of control” instruments that facilitate the transfer of company assets under certain ownership percentages. They are both officially and technically a governance asset; a deeply serious, legally enforceable one. There are no promises of profit, cashflow claims, or dividends that accompany them. Neither Salutary nor its partners guarantee any correlation between token price and business performance. Pricing is determined by market forces and may not reflect business intrinsic value.

Financial transparency supports informed governance decisions; it does not ensure economic returns. Past performance is not indicative of future results.

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Quarterly Financials

Each quarter, we help partners prepare and publish these well-known accounting documents:

• Income Statement: GAAP presentation of standard items like revenues, operating expenses, net income, etc..

• Balance Sheet: onchain + offchain assets and all liabilities reconciled.  

• Statement of Cash Flows (and crypto equivalent): operating, investing and financing flows so stakeholders see the real inflows/outflows of your business

• Proof-of-Reserves Annex: cryptographic attestations of every treasury address and bank statement.

• Management Discussion (MD&A): comments on growth drivers, risks, capital allocation, and any unique items management wants to highlight.

  • 1. 1. 1. 1. • Your team can discuss business progress, how spending changed, strategic plans, etc.. Anything you think tokenholders would like to know that doesn’t show up in GAAP frameworks.

                • You can emphasize non-standard metrics. For example social media companies like to tout daily active users, streaming services discuss average watch time, etc.

                • You can field questions from tokenholders if you’d like. Just like a company earnings call.

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Annual Audit

In TradFi, this is known as a 10-k report. This is the kind of transparency and accountability that will materially set you apart in an industry where nobody operates with this degree of regimented transparency and professionalism.

All reports are published on Salutary’s Partner Portal with permanent IPFS archival.

Salutary conducts an annual “full-scope” audit on each partner’s financial statements, controls, and operations. We apply recognized GAAP principles and modify some procedures to address any unique situations, including onchain treasury, multi-sig governance, hardware-wallet security, and more. The end result is an independent audit opinion stating that your financials are accurate and your control environment is strong.

Onchain & Offchain Asset Verification

• Onchain: We check wallet addresses, bridging process, custody arrangements, etc.. For major treasury addresses, we verify balances on block explorers and reconcile them with your books.

• Offchain: Any stablecoins stored on centralized exchanges or fiat reserves in bank accounts get confirmed via direct statements and custodial letters. We collect third-party confirmations wherever possible.

  • Bank Statements: We request full monthly or quarterly statements from any banks holding fiat reserves. We confirm those balances as of year-end and publish summarized versions for transparency (sensitive info redacted as needed).

  • Centralized Exchange Custody: If you store stablecoins or crypto on a CEX, we request direct confirmations from the exchange to verify the exact amounts in your sub-accounts.

• You end up with an independent audit opinion confirming the numbers are accurate and free of material misstatement. Markets really value this.

Internal Controls (Scaled for DeFi)

This reliable, honest behavior builds market trust and shows you’re operating like a serious business whose token is an equally serious asset. While you don’t need the full heft of Sarbanes-Oxley, we do inspect and confirm the following so the market can assess your financials with confidence:

Security and Treasury Management

• Multisig Governance: We review who signs large transactions and how you mitigate single points of failure.

  • We check how your multisig is structured (e.g. 3-of-5), who are the signers, etc.

• Security & Access: We look at how you protect private keys, admin keys, and critical infrastructure.

  • Hardware Wallets: We examine how signers physically store their hardware wallets, whether they use well-known vendors (Ledger, Trezor, etc.), and whether they have clear procedures to prevent unauthorized access.

• Spending Approval: We document how your team authorizes expenses, namely checking to see that no single individual can unilaterally drain funds.

• If you rely on potentially high-risk activities like staking or yield farming, we identify those risks (eg. counterparty exposure, impermanent loss, etc.).

Software Controls & Access

• Admin Key Controls: If there are special admin privileges or upgradeable contracts, we check how you manage access, track changes, and require multiple sign-offs for critical code changes.

• Employee/Dev Access: We review who can push updates to repositories or move funds. This includes checking offboarding procedures for any departing team members.

Policy Documentation

• We document standard operating procedures for treasury transactions, bridging assets, new signers, etc. We confirm these policies exist and are updated as needed.

• We interview process owners and have them confirm how transactions are initiated, authorized, recorded, and reported.

Phishing & Hack Prevention

• Device & Network Security: We verify you maintain separate laptops or devices specifically for DeFi transactions, ideally with no routine web browsing.

• 2FA & Password Protocol: We confirm that any relevant accounts (CEX logins, DNS admin, etc.) use robust two-factor authentication with hardware keys or authenticator apps.

• Recovery & Backup: We look at how seed phrases and backup keys are stored (if you do something irresponsible like keep your keys online or in a password protector we are going to publicize this) and how you ensure they can’t be compromised by single points of failure.

Expenses, Liabilities, & Treasury Outflows

• Expenses: We pick samples of large or recurring outflows and review the underlying invoices, vendor agreements, or payroll records.

• Search for Unrecorded Liabilities: We investigate transactions after year-end to ensure any costs incurred but not paid are properly accrued.

Revenue & Protocol Inflows

• We examine your transaction logs, onchain data, and supporting systems to verify that fees, staking rewards, or other revenues are complete and recorded in the correct periods.

• Smart Contract Analysis: Where relevant, we’ll review the contract code that calculates fees or rewards to ensure it matches what’s reported in your financial statements. Any code audits you’ve passed are relevant here.

  • Note: Salutary does not do technical audits.

Token Issuances

• We confirm that any newly minted tokens or distributions (e.g., team/advisor payments, airdrops) are recorded accurately and in line with your disclosures.

• If your business has a vesting schedule, we check how you track it in your notes or footnotes.

Estimates & Complex Transactions

• Fair Value: If your treasury holds exotic, illiquid, or highly volatile tokens, we will apply standardized valuation methods to reflect a reasonable market rate.

• Revenue Recognition: For companies with long-term or subscription-type revenues, we confirm your recognition policy aligns with GAAP’s principles, as applicable.

Timely Disclosures

If a material event happens (executive departure, token sale, significant treasury changes, etc.), we’ll make sure there is a process in place to issue an announcement to your community. This is typically a press release and/or blog post.

Final Audit Review, Opinion, and Publication

• Aggregate Findings

• We collect any adjustments or issues found during testing. If material, we propose corrections to management. These are not mandates from Salutary, just suggestions.

  • They’re suggestions so long as issues aren’t egregious. Material mismanagement will be dealt with on an ad hoc basis, which may include termination of partnership.

• We also highlight control weaknesses related to onchain security, bridging risks, or multi-sig operations if we find any.

• Going Concern Assessment

• We assess whether you have sufficient liquidity (burn rate and runway) to continue operations for the next 12 months. This includes analyzing treasury burn rate and your business’ revenue outlook.

• Management Representation Letter

• Your leadership team signs a letter asserting that all records and disclosures were provided to us, and that they haven’t withheld any key information.

• Issuance of the Salutary Audit Opinion

• We release a formal opinion stating that your financials “present fairly, in all material respects, your financial position and results of operations” in accordance with GAAP and our in-house standards.

• Alongside this opinion, we provide a written summary of any significant findings or recommended improvements.

• Audit Report: We publish the final audit report, typically included in your year-end financial statements package.

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NOTE: financial transparency supports informed token ownership decisions; it does not guarantee token price correlation. The market determines this.

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Scope Limitations & Professional Standards

Our audit scope includes:

- Financial statement accuracy and GAAP-style reporting

- Asset existence verification and valuation analysis

- Internal control design and operational effectiveness

- Going concern assessment

Our Audit Scope Excludes:

- Smart contract code security (requires separate technical audit)

- Legal or regulatory compliance opinions

- Investment recommendations or token valuation opinions

- Prediction of future business performance

Salutary's audits are conducted in accordance with professional standards adapted for token-based businesses. While we apply rigorous procedures, no audit provides absolute assurance, and users should consider our reports as one element of their decision-making process.

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Integration With Our M&A Enforcement Framework

Our financial auditing directly supports Salutary's change-of-control mechanics with:

• Asset Mapping: Quarterly verification creates real-time asset inventories for potential acquisitions

• Valuation Baselines: Audited financials provide objective metrics for market reference

• Due Diligence Readiness: Continuous documentation maintains acquisition-ready status

• Dispute Prevention: Ongoing transparent reporting reduces post-acquisition challenges

This integration ensures that when a valid acquisition event occurs, all financial information is current, verified, and immediately actionable.

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Benefits for Teams & Tokenholders

• Confidence: Audited financials signal you’re focused on business growth and fundamentals and are operating with transparency and integrity by making them visible. These are standards that every serious industry abides by; it’s high time crypto enters this club.

• Streamlined Visibility: You get a GAAP-style framework without the overhead of a regulatory and accounting regime.

• Risk Reduction: Third-party verification helps uncover (and prevent) errors or misstatements before they become bigger problems.

• Excellent Optics: Should you ever run into legal issues, regulatory complaints, lawsuits of any kind, etc. having audited financials and transparent practices will be a robust mark in your corner that you have been operating with honesty and sincere aims. It shows you’re going out of your way to act in good faith.

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The Salutary Audit: High Value, Low Cost

Salutary's audit services are included in our partnership framework for early adopters. Rather than charging cash fees that drain your treasury, we align incentives through our standard token allocation model. This ensures:

- No audit costs depleting your runway and growth

- Aligned long-term incentives between Salutary and partners

This structure demonstrates our confidence in our partners' success and our commitment to sustainable value creation.

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Reach Out Today

Financial reporting and accountability are the basics of any business and well-run operation. Embrace it, and create the most wealth while doing so. Markets eventually recognize excellence. Our audited partners demonstrate to the market that they operate with the transparency and verifiability required for institutional participation. In an ecosystem where trust is scarce and accountability is non-existent, audited financials and enforceable rights are a powerful competitive advantage.

Genuine builders and capital allocators will love Salutary, because business fundamentals can manifest in tokens by enshrining enforceable, concrete governance and control abilities. With Salutary, you are no longer a “project” you are now a business. 

An overnight success is years in the making and comes from consistently doing the small things well. Do them well with Salutary.

Ready to level up? Reach out to us and schedule a call, click here.

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RISK DISCLOSURES & DISCLAIMERS

Salutary tokens are "change-of-control" governance instruments that may, at predefined thresholds, facilitate an enforceable transfer of business assets. They do not confer any rights to profit participation, dividends, revenue shares, or any guarantee of market valuations. Neither Salutary nor its partners makes any representation that token price will correlate with business performance. Market pricing is determined by independent actors and may not reflect intrinsic value.

Enforcement of acquisition events remains subject to applicable law, commercial feasibility, and jurisdictional constraints. Salutary reserves sole discretion in selecting enforcement methodology based on cost-effectiveness and legal practicability. No guarantee of successful enforcement exists in all jurisdictions. If enforcement actions prove unlawful, expose the company or its principals to disproportionate risk, or become economically impracticable, Salutary reserves sole discretion to suspend, modify, or decline proceedings.

All disputes must be resolved by individual SIAC arbitration seated in Singapore; class or representative actions are waived. All disputes arising under this Framework are subject to individual arbitration under SIAC Rules in Singapore. Class, collective, or representative actions are expressly waived.

This information is for educational purposes and is not an offer of securities nor is it legal or tax advice. Tokenholders should consult their own advisors regarding the implications of any acquisition event.

Any protections described herein are contractual governance mechanisms, not guarantees of economic outcome. They are designed to create procedural fairness and transparent processes, not to ensure any particular market result or token valuation.

Salutary documentation may contain forward-looking statements regarding potential acquisition scenarios and enforcement mechanisms. Actual results may differ materially due to factors beyond Salutary's control.

This document is proprietary to Salutary Pte. Ltd. and subject to the terms of the Master Services & Enforcement Agreement.

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Build for Weight

More Salutary documentation found here.