Pre & Post-Token Generation Guidelines

The Salutary Transformation: From Project to Business

When you partner with Salutary, you're not updating your tokenomics, you're fundamentally reengineering your token into a completely different asset class. It transforms from a speculative meme into a legitimate business instrument with enforceable change-of-control mechanics. This transformation requires the same strategic thinking that guides IPOs, corporate M&A transactions, and institutional capital raises.

The way you treat and distribute this enforceable business asset should be pragmatically rooted in what makes the most sense for your company. You should not be anchoring to how other DeFi “projects” do it, but rather how other businesses do so.

Your token is an institutionally legible asset with real rights, your competition’s coin is not. Despite both of these being “tokens”, they should be treated dramatically differently, because they do dramatically different things. All tokens are not created equally.

Key Transformations:

• From emission vehicle → Control instrument

• From speculation → Fundamentals alignment  

• From "fair launch" → Strategic capitalization

• From governance suggestion token → Enforceable control token

The result: a token that can command and express real business fundamentals, satisfy institutional diligence, and protect minority holders – without sacrificing the owner’s strategic vision.

Key Differences

Traditional Tokens:

• Speculative trading memes

• Marketing tools

• Governance theater, tokens only issue suggestions

• Emission-based distribution

• No enforcement mechanism

• Value disconnected from fundamentals

Salutary Tokens:

• Business control instruments

• Enforceable M&A votes (not suggestions)

• Institutionally ownable

• Strategic capitalization

• Legally enforceable rights

• Value creation and business fundamentals alignment through enforceable control

This transformation requires rethinking every aspect of token distribution. Salutary provides the framework; you maintain complete control over implementation. We're here to guide, not dictate, how you manage your token. We enforce M&A events, not cap tables. The distribution of the token is ultimately up to the founder and team.

Table of Contents

• 1. The Salutary Transformation: From Project to Business

• 2. Pre-TGE Implementation: Optimizing from Day 1

• 3. Post-TGE Implementation: The Recapitalization Opportunity  

• 4. Rights Offering Framework

• 5. Special Considerations by Sector and Scenarios

• 6. Legal & Compliance Considerations

• 7. Implementation Support & Resources

Terms:

• Token Generation Event (TGE): when your token is issued

• “Change of control” (COC): a Salutary M&A event where an investor accumulates enough of token to initiate acquisition proceedings for the business

• Rights offering: when a company gives existing shareholders or tokenholders the right to purchase additional shares or tokens, often at a discount, typically in proportion to their current holdings, usually within a specified time frame. A rights offering can also be provided free of cost.

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NOTE: Salutary tokens are “change-of-control” governance instruments. They confer no rights to profits, dividends, or revenue. Market pricing may not correlate with business performance. Any value is determined by market forces and is not guaranteed by Salutary or partners. Nothing herein constitutes legal, financial, or investment advice. All disputes are subject to individual SIAC arbitration; class or representative actions are waived.

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Business Mentality

This guideline outlines two frameworks to help partners architect token distributions that reflect the fundamental shift from DeFi "project" to legitimate business:

• Pre-TGE issuers can architect a company-minded distribution from day one

• Post-TGE issuers can recapitalize to align current holders with the token’s new controlling power. Core themes include cap-table discipline, thoughtfully set change-of-control (COC) thresholds, and transparent communication.

We do not tell partners how to manage their business or how to distribute/use their token. However, owners should treat their token significantly more seriously once Salutary partnership is in place.

For example: the notion of “fair launch” is not an applicable concept for a valuable asset with enforcement rights. What business on earth “fair launches” their debt, equity, or any other asset of worth? This is the frame of mind owners ought to be in. Valuable resources are distributed with intention and careful calculation, not as marketing promotions.

Here are things to keep in mind.

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Pre-TGE Implementation: Optimizing from Day 1

If you haven't launched your token yet, you can architect the distribution with its valuable nature in mind from Day 1.

Key Considerations for Pre-TGE Companies:

CRITICAL DISTINCTION: An asset with enforceable control abilities over a company should be distributed strategically. Your token is not emission candy or a trading bean, approach it like a cap table, not an airdrop event.

Traditional DeFi distribution models are incompatible with control-bearing assets. Does a company do "community distribution" of its stock? How about its debt? Real assets are subject to allocations that have an internalized understanding of their value; DeFi token distributions look the way they do because the assets are unserious. Your benchmarks should be how companies manage business assets, allocate accordingly. 

Design your token allocations with control and ownership in mind. Think like a PE firm, not a Pancake Swap farmer.

• Consider how much token is tradable relative to the Salutary COC threshold (e.g. if your float is 40% and the COC figure is 51%, you can’t get acquired).

• Plan for long-term value creation, not short-term emissions

DO NOT anchor to the token distribution models/schedules of other DeFi projects 

• DeFi token distributions look the way they do because the token has no enforceable rights or value accrual, so it is often handed out frivolously.

• A Salutary token does effect enforceable control over the issuing business. You have an institutional-grade asset, they do not. They are DeFi “projects”, you are a DeFi business.

• Your point of reference for your high-value coin should not be what the low-value coin people are doing.

• High-time-preference mercenaries and extractive retail hordes with minimal financial acumen should not be guiding company decision making, and unfortunately DeFi is awash in these types. Root decisions in what’s best for the business, don’t pander to ulterior-motive myopia.

That being said, it is ultimately your choice. These are Salutary guidelines, not rules.


Set acquisition thresholds thoughtfully 

• Work with Salutary to determine the right COC percentage

• Balance between accessibility and protection

• Remember: this threshold is where a COC event can occur. Keep company token ownership, float, and distribution schedules in mind when you set the COC threshold.

Tip: build a simple cap-table matrix that shows founder holdings, treasury, investor allocations, and public float versus proposed COC %. This helps visualize distributions.

Treat Salutary tokens like a business treats its equity

2. • Team/advisor allocations should reflect long-term alignment

   • Treasury management and token-based compensation should reflect the value of the asset relative to the business.

Treasury management considerations:

• Maintain sufficient tokens for strategic initiatives

• Plan for future capital needs without excessively diluting control

• Treat tokens like a high-value asset that you would be wise to not just casually mint (though you can mint more as you please, same as a company can issue more stock).

Bottom Line: Plan your token launch with the same caution and considerations that a company takes when it IPOs. Keep the vectors of accountability in mind, just like any company does when it issues a business asset.

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Post-TGE Implementation: The Recap(italization) Opportunity

Your token is already live. Maybe it's widely distributed. Maybe it's concentrated. Maybe it's somewhere in between. Your old token was a community vibe, your new Salutary token is an institutional-grade asset. This fundamental shift may warrant recalibrating who holds it and in what quantity.

Step 1: Assess Your Current Distribution

• Assess existing tokenholders and concentrations

• Map strategic holders and assess whether their incentives align with long-term value creation.

  • Ask yourself: are these holders helping or hurting me? What obligations do I have to them? Do I want them possessing material control in my business?

• Consider if current distribution aligns with an M&A-enabled asset.

Step 2: Design Your Rights Offering

If you’d like to allow old token and equity holders to convert their positions to Salutary tokens, you are more than welcome to do so. We can accomplish this via a standard approach: a rights offering.

NOTE: Salutary imposes zero requirements on how you manage this transition. Approaches may include:

A. Fractional Conversion

Example: A 10:1 ratio would mean 10 old tokens → 1 Salutary token.

The token is now a premium asset that warrants unique consideration. Here are some guidelines on conversion figures and tokenholder reactions:

• Tokenholders previously held a substanceless asset, they now hold a substantive one. Sophisticated holders should not get distracted with nominal figures.

• Would you rather own 10 units of vapor or one unit of gold? 5% of a trading bean or 1% of an M&A-enabled control stake? This framing can help illustrate how less is more when Salutary is involved.

• How you communicate this is up to you, but we’ve found direct messaging to be effective here.

The introduction of Salutary is a remarkably positive thing for tokenholders, we will help convey this with partners in marketing and communications. Do not get distracted with nominal % market cap figures token quantities when determining conversion ratios.

Repeatedly emphasize: even if the old token and new Salutary token have the same ticker symbol, they are two totally different assets. The percentages do not have to stay the same, and candidly, they probably shouldn’t. But that is the owner's decision, not Salutary’s.

Salutary is an exciting positive for tokenholders and community members. Once they internalize what’s happened, our involvement should be greeted with open arms. 

B. Selective Rights Offering

• Offer conversion rights to specific holder classes, or everyone. It's your call.

• Could favor long-term holders or strategic partners

• Maintains founder flexibility

• Consider who’s helping you, who’s not, and your obligations to them

C. Full 1:1 Migration

• Maintains exact distribution, likely only suitable to companies that solely had tokens and no preexisting equity (more details on this towards the end).

• Consider if your distribution suits a token that is now an enforceable acquisition vehicle prior to selecting this option. If it does, you can leave things the way they are and don't need to issue a new token, you can just turn the old token into a Salutary one.

Step 3: Address Existing Stakeholders

For Token Holders:

• Communicate the transformation clearly. You now own an institutional-grade control asset. You have enforceable tokenholder rights. Fundamentals are now relevant. This is a great thing for you! Salutary will help with this messaging.

• Offer conversion rights as you see fit and explain the logic behind it

• Set clear deadlines and terms

For Equity Holders (Including SAFE/SAFT setups):

The equity is now a second‑class citizen with Salutary. If a SAFE is involved, you may still issue the shares promised, and then attach a conversion right onto the equity that lets them convert into Salutary tokens at a founder‑selected ratio. You have the opportunity to clean up the cap table here, use it wisely and compliantly.

Equity becomes effectively marginalized with Salutary. There is no way around this.

Stock ranks contractually junior to Salutary tokens for all M&A and control purposes. The Salutary token now effects legal control over the business and its assets, whereas previously this was the equity’s domain.

• • You don’t have to eliminate your equity with Salutary, but it will become substantially less valuable and will be legally subordinate to the token.

  • If you have a dual token/equity model, a Salutary agreement will decrement the equity and effectively sideline it (similar to how the tokens are currently sidelined...). Consider terminating the equity and moving everyone to Salutary tokens.

Equity and token are necessarily cannibalistic of each other

• You are going to have to pick one or the other in respect to value accrual: token or stock? We cover the financial physics of this in The Value of a Token is What It Does.

• You cannot have two different assets both equally reflect the fundamental value of your business; it’s a “have your cake and eat it too” contradiction.

Summarized Equity/SAFE Options:

• Offer rights to convert equity and old token → Salutary tokens

• For SAFEs: Provide conversion rights when equity is issued

• Conversion ratios are entirely at founder/owner discretion

For Team/Advisors:

• Consider if existing allocations remain appropriate

• Adjust vesting/allocation schedules if needed to represent the Salutary token’s enforceable control and concrete value mechanism.

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Practical Scenarios: Visualizing the Transformation

Scenario A: The Recapitalizing Gaming App

- Pre-Salutary Distribution: 50% community airdrop, 20% team, 30% treasury

- Post-Salutary Distribution: 15% strategic float, 25% team/advisors (4-year vest), 60% treasury

- Rationale: Control concentration in company treasury mitigates takeovers. Nominal community % reduced to account for Salutary involvement while maintaining figures that encourage participation and don't abandon old tokenholders.

Scenario B: The Defensive DeFi Project

- Rights Offering Design: 10:1 conversion for passive holders, 5:1 for active governance participants (you can be as a la carte as you'd like to here).

- COC Threshold: Set at 65% to account for desire to have a 50% public float (places you comfortably out of acquisition parameters).

- Result: Aligned holder base and protected founder control. A focus on bringing over high-value tokenholders (active governance participants) that may bring value to your business in some respects.

Scenario C: Navigating Existing Equity

- Equity Conversion: Existing shareholders offered proportional conversion to Salutary tokens with vesting schedule, less the amount you allocate to old token holders.

- Keep in mind: any Salutary tokens allocated to the community will be coming out of the same pool as pre-existing equity holders.

- For example: if five people owned 100% of the equity, those same five can only own 80% of the new Salutary token if you want 20% to go to the community.

Note: Owners always have the ability to issue more Salutary tokens as they see fit, just keep in mind what this does to the float and COC thresholds.

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Rights Offering Framework

What Salutary Provides:

• Guidance on implementation

• Communication and marketing support

• Zero mandates on structure

What Founders Control:

• Conversion ratios

• Eligible participants

• Timeline and deadlines

• Special terms, ratios, or conditions

• Whether to do it at all

Special Considerations

For Crypto Businesses:

• Consider how existing distributions comport with COC thresholds

• Consider higher or select conversion ratios to filter for longer-term, fundamentals-oriented holders.

• Think about how you'll conduct strategic issuance of tokens in the future (eg for new hires, funding growth, etc.) and keep a healthy amount in your treasury to facilitate this.

For Real-World Asset Businesses (small business, IP, etc.):

• Existing equity may need special treatment to accommodate Salutary, we encourage eliminating it

• Regulatory considerations may influence how you structure your Salutary offering. For example, if you opt for a Reg D issuance of Salutary tokens (something we support) you will have certain constraints on who can access the token, and when.

• Traditional investor education likely required (Salutary will help here)

For Gaming/Consumer Companies:

• Large user bases may warrant tiered conversion options

• Consider loyalty rewards in conversion ratios

• Community communication is critical (this is always the case, but even moreso when you have a large retail audience)

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Legal & Compliance

Unlike other sections in this document, the following are not guidelines, they are requirements. Both Salutary and our partners must always keep regulations in mind and use language that adheres to the following:

• Clear disclosure of change-of-control mechanics

• No promises of profit or dividend rights. Salutary tokens are officially and technically not equity; we cannot describe them as this for both compliance and liability purposes.

• Compliance with local jurisdiction requirements (this is partner specific and something we will discuss with your counsel, as needed.)

Documentation Requirements

• Updated docs/token terms incorporating the Salutary framework

• Clear communication to existing holders consistent with Salutary compliant language

• Regulatory filings as required by jurisdiction (we don't impose this on you, but your country of incorporation may).

• Integration and linking to the Salutary Master Services & Enforcement Agreement so tokenholders can see all explicit terms and conditions consistent with token ownership.

Risk Disclosures

All major token-related communications must include:

• Clear articulation of Salutary mechanics (or link to them)

• Market risk acknowledgments

• No guarantee of market price correlation

• Enforcement limitation disclosures

Salutary will assist with these efforts and provide partners with all the resources they need here.

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Embodying Excellence

Incorporating Salutary isn't a technical upgrade, it's a material business transformation. Your token evolves from a “project” marketing emission to a fundamentals-aligned business-control asset. This shift is profound and should warrant recalibrating your approach to token distribution and management. Remember, just because it has the same ticker symbol does not mean it’s the same asset anymore!

Concluding, Takeaways to Keep in Mind:

• Pre-TGE: build it right from the start

• Post-TGE: get a unique "do-over" opportunity

• Every decision about implementation remains yours

• Strategic Vision: Approach token distribution with the sophistication of an IPO

• Clear Communication: Educate stakeholders on the fundamental value proposition

• Long-Term Focus: Optimize for sustainable business operations, not short sentiments

Whether you maintain your current structure or completely revamp your cap table, Salutary adapts to your vision. We're not here to tell you how to run your business, we're here to make your token represent your business.

Every company situation is unique, and your token transformation should reflect that. Your token is graduating, how you dress it for the ceremony is entirely up to you!

Ready to level up and attract institutional attention? Contact us 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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Additional documentation found here.