[SB-frOGI Coin] MIP6 Application: MEMBERSHIP INTERESTS IN RED FROG DIGITAL SERIES OF SOLIDBLOCK HOLDINGS, LLC, IN THE FORM OF RED FROG DIGITAL COIN (frOGI Coin) - a SolidBlock Offering

Intro: frOGI Coins are real-estate backed security tokens representing an interest in the Red Frog Digital Series, LLC (‘the Series”) established by SolidBlock Holdings, LLC, to offer investors the opportunity to participate in the current and future development and operations of Red Frog Beach Island Resort & Spa (“Property”), owned and operated by Blue Sea Holdings, LLC, through its wholly-owned subsidiary Oceans Group International, Inc. S.A. (“OGI”), a Panamanian corporation. The development includes two main components: (1) a high-margin initial revenue business from additional private residence sales and the recurring revenue stream based upon rental and other revenue stemming from these sales; and (2) joint venture partnerships with hotel/resort developers and hospitality brands that will establish hotels, a second marina and an adjacent village at the Property.

For further information, please see how SolidBlock’s platform is becoming an ideal way to make a profit through real estate and how you can make this work for you when investing in frOGI Coins.

1. Who is the interested party for this collateral application?

The interested party for this collateral application is Red Frog Digital Series (the Series). Specifically, SolidBlock Holdings, LLC, has formed the Series (Delaware incorporated) to offer investors the opportunity to participate in real estate through the Red Frog Beach Island Resort & Spa as delineated above.

Main Contacts - SolidBlock: Co-Founder, Co-CEO and CMO, Yael Tamar: [email protected]; SolidBlock Founder and Co-CEO, Yuval Wirzberger: [email protected]

2. Provide a brief high-level overview of the project, with a focus on the applying collateral token

Project - in Brief

For this offering SolidBlock Holdings, LLC, an internationally recognized pioneer in tokenization and the developer of a fully compliant tokenization platform, has teamed up with Blue Sea Holdings, LLC, which holds 100% of Oceans Group International, Inc. S.A. (“OGI”), a Panamanian corporation and the Developer (“Developer”). OGI was founded more than 18 years ago to develop real estate and provide expertise across the continuum of development and operations.

Today, Red Frog Beach Island Resort & Spa is a unique enclave encompassing 1,528 acres of Isla

Bastimentos in the archipelago of Bocas del Toro, Panama, including 5 miles (8 km) of some of the most stunning beaches on the Caribbean as well as a deep-water marina amidst a diverse ecosystem that is home to monkeys, sloths, red frogs and over 100 species of birds. Real estate development to date includes 50 secluded villas and 7 condominiums, as well as a beach club, restaurant, and spa.

The expansion of Red Frog Beach brings investors an unprecedented opportunity to be a part of the first-of-its-kind socially responsible, destination resort. Backed by 18 years of successful acquisition, development and operations of a luxury resort, coupled with preservation of 1,000+ acres of flora and fauna, investors can be confident in the project’s financial and environmental sustainability and social accountability.

Red Frog Beach boasts adventure by day, luxury by night and social-environmental responsibility all year long.

The Resort is committed to preserving 80% of the island property forever, providing 100% solar power, implementing various conservation projects, reforesting cattle lands, and improving the lives of those living in the island community through its non-profit foundation and volunteer-led projects.

The Resort has received the coveted Green Globe Certification three years in a row, reflecting its commitment to sustainable practices within the tourism industry – the only destination in Panama to achieve this impressive distinction.

The Series intends to provide investors with an opportunity to partake in the Property’s continued expansion and growth. The Series seeks to opportunistically execute and operate financial positions that will provide prospective purchasers of the frOGI Coins with the Offer of up to 37,190,000 frOGI Coins representing 38% of the membership units of the Series, for a maximum aggregate capital contribution of $37,190,000. The $37,190,000 will be offered in up to four tranches over a period of 24 months.

Fractional ownership/Tokenization of real estate, in general

SolidBlock’s state-of-the-art digital securities platform enables fractional ownership of the underlying assets or fractional entitlement to certain rights (revenue or interest) as well as trade of assets via OTC on the SolidBlock platform or through partner exchanges.

Real estate asset tokenization is an emerging trend representing the convergence of real estate investing and blockchain technology. Tokenization helps asset or fund owners raise capital more efficiently, and gives investors unprecedented access to private real estate investments, transparency, and liquidity.

SolidBlock was a first mover in the industry spearheading the tokenization of the St. Regis Aspen Ski resort (currently trading on tZero as ASPD as of 2020).

The frOGI Coin token holders shall receive a priority of a return of capital contributions made and a preferred return amount equal to an annual rate of return of 8% non-compounded annually (“Preferred Return”) and calculated daily on the Capital Contributions made by the frOGI Coin token holder, calculated from the date of receipt of such capital contributions and accrual of the Preferred Return until the date of distribution to such frOGI Coin token holders.

The offering price per frOGI Coin is US $1.00. The minimum investment amount by an Investor is $5,000 USD although the Company, in its sole discretion, may determine to accept a lesser amount. The minimum amount with respect to which a closing will occur is $8,000,000 or 8,000,000 frOGI Coins. The maximum amount will be $37,190,000 or 37,190,000 frOGI Coins. Targeted term: 10 years from the initial closing of the first tranche. frOGI Coins can be accessed and transferred (when and to the extent permitted under applicable regulations) through the SolidBlock Platform or held directly in a digital wallet.

frOGI Coins are held on behalf of investors by SolidBlock in a cold storage wallet, and can be accessed and traded through the SolidBlock Platform. Investors will also have the option to store their coins in any ERC-20 compatible wallet. It is also important to understand that because they are stored on the blockchain, investors in frOGI Coins can view a record of their investment on the SolidBlock Platform. The Series will communicate with Investors through the SolidBlock Platform or via electronic mail as to material developments regarding an investment. Investors can review their account statements online and see that they have received payments on the frOGI Coins they own.

A Purchaser’s eligibility is as follows: (a) if in the United States, or a U.S. Person (as defined in Regulation S under the Securities Act), must be a verified “accredited investor” (as defined in Regulation D under the Securities Act); (b) if outside of the United States, must be an investor

excluded from the Regulation S definition of a “U.S. Person” who is not purchasing for the account or benefit of a U.S. Person (as defined under Regulation S) and who is eligible to purchase and hold frOGI Coins under the applicable laws of the Investor’s jurisdiction; or (c) if in the United States, a “retail investor,” as defined in Regulation CF under the Securities Act, through a certified crowd-funding partner. In the United States, the Offering is being conducted pursuant to Rule 506 (c) of Regulation D under the Securities Act.

3. Provide a brief history of the project

The history of the project is embedded in the separate histories of the main stakeholders behind the Series – SolidBlock Holdings, LLC, and Blue Sea Holdings, LLC – who have partnered to create this investment offer.

As previously stated, Blue Sea Holdings, LLC, which owns 100% of Oceans Group International, Inc. S.A. (“OGI”), a Panamanian corporation, was founded more than 18 years ago to develop real estate and provide expertise across the continuum of development and operations of Red Frog Beach Resort & Spa.

Today, Red Frog Beach Island Resort is committed to preserving 80% of the island property forever, providing 20% of its power with sustainable energy, implementing various conservation projects, reforesting cattle lands, and improving the lives of those living in the island community through our non-profit foundation and volunteer-led projects. The Resort has received the coveted Green Globe certification three years in a row, reflecting our commitment to sustainable practices within the tourism industry – the first destination in Panama to achieve this impressive distinction.

In Component One of the expansion phase, RFB will complete the building of 190 new hospitality units. As private residences (villas and micro-communities) are completed, the sale of these properties creates a one-time, high margin, well-timed initial revenue that includes a 40% initial deposit followed by construction milestone payments. A recurring revenue stream is then created through the vast majority of these new properties being committed by their owners to the rental pool managed by OGI and its operating partner. Revenue is also generated from additional related services and amenities such as the spa, stores and restaurants.

As part of Component Two of the expansion plan, RFB will focus on joint venture partnerships with developers and hotel/resort brands will establish six (or more) hotels at RFB as well as a second marina and adjacent village. OGI has entered into a strategic partnership with Enjoy Group, Central America’s premier hotel and resort management company. This strategic partnership includes collaboration on master planning, branding, sales and resort management. The first resort development partnership is in progress to construct a high-end resort that will include private villas, hotel-like rooms and suites, restaurants and spa.

SolidBlock is a smart contract development and management platform for tokenized assets. In other words, SolidBlock transforms real estate, a traditionally illiquid asset into a tradable security through tokenization. SolidBlock spearheaded the successful tokenization of the five-star St. Regis Aspen Resort in Colorado. The Aspen Coin (as termed) was the first ever tokenized commercial real estate project in the world whereby $18M was raised using the SolidBlock platform. The Aspen Coin was listed on tZERO in Sep 2020 (amidst the COVID-19 crisis), traded by more than 800 customers with over 4-8% of its market cap traded every month. The issuance price was $1, was about $1.30 at the time of listing (30% premium) and now stands at about $1.20.

The SolidBlock team is simultaneously working on diverse tokenization projects for residential, commercial, and hospitality-based properties in the United States, Europe, and Asia. Moreover, SolidBlock prides itself on its efforts to advance and facilitate interoperability and regulatory standardization, thus mitigating barricades to digital markets and investing.

Through the leveraging of these companies’ wealth of experience, the frOGI Coin was born. frOGI Coins provide an unprecedented opportunity for savvy investors interested in digital securities backed by one of the safest asset classes, namely real estate.

The Property combines an excellent business opportunity with ESG - environmental, social, and governance (ESG) factors that hold increasing interest for investors. ESG performance measures non-financial disclosures which forecast risk, resiliency and character of an asset.

At SolidBlock, we believe that the expansion of Red Frog Beach Resort & Spa sets our company’s standards for a socially conscious investment with promising yields as delineated within this document.

4. Link the whitepaper, documentation portals, and source code for the system(s) that interact with the proposed collateral, and all relevant Ethereum addresses. If the system is complex, schematic(s) are especially appreciated.

PPM Link: Red Frog PPM - Finalized Version - August 2021.docx.pdf - Google Drive

Smart Contract Link: audits/SolidBlock Security Recheck.pdf at main · pessimistic-io/audits · GitHub

Please note: SolidBlock is in the process of tailoring our smart contract to the Red Frog Beach project. This is a link to the smart contract for a different SolidBlock project on our marketplace.

Investor Presentation: RFB _ Press Release.pdf - Google Drive

Issuance Process

5. Link any available audits of the project. Both procedural and smart contract focused audits.

The smart contract was built based on the Ethereum network, ERC 1404, https://erc1404.org/, audited by Pessimistic. Link to the audited smart contract: audits/SolidBlock Security Recheck.pdf at main · pessimistic-io/audits · GitHub.

Please note: SolidBlock is in the process of tailoring our smart contract to the Red Frog Beach project. This is a link to the smart contract for a different SolidBlock project on our marketplace.

The PPM (Private Placement Memorandum) has been prepared and reviewed by our legal team, which includes our in-house counsel, Mr. Israel Frenkel.

6. Link to any active communities relating to your project.

7. How is the applying collateral type currently used?

The current collateral type uses an asset-backed SPV tokenization structure. The asset is placed in a newly formed entity (the Delaware Series LLC) and equity shares are issued in the form of tokens.

8. Does one organization bear legal responsibility for the collateral? What jurisdiction does that organization reside in?

The SPV for the project is a United States Delaware Limited Liability Series formed for the purpose of investing in the expansion of Red Frog Beach Resort & Spa. SolidBlock Inc., a Delaware C-Corp, is the general partner of this SPV and thus bears general responsibility.

9. Where does exchange for the asset occur?

Exchanges may occur in two distinct ways: Via peer-to-peer trading tokens over the counter on the SolidBlock platform, following a 1-year lockup for US investors, as per the US regulation. The tokens will also possibly be listed on exchanges and ATSs with appropriate level of licenses with whom SolidBlock works (tZero, Archax, Merj, Atlas.one, Texture Capital, Rialto, ADAX, etc.)

10. (Determined by Legal Domain Team) Has your project obtained any legal opinions or memoranda regarding the regulatory standing of the token or an explanation of the same from the perspective of any jurisdiction? If so, those materials should be provided for community review.

We have created an official Private Placement Memorandum (PPM) , guided and written by our US US-licensed securities attorney (Israel Frenkel) and are raising funds under Reg D 506 (c), Reg S and Reg CF. The project also passed due diligence with North Capital, which is a registered US-based broker-dealer.

11. (Determined by Legal Domain Team) Describe whether there are any regulatory registrations for the token and provide related documentation (including an explanation of any past or existing interactions with any regulatory authorities, regardless of jurisdiction), if applicable.

As mentioned above, we are using Reg D 506 (c), Reg CF, Reg S for which we have filed or will file Form C and Form D with the SEC. We are registering with Edgar. All the subsequent links will be provided in the comments section.

We are registering the security with the CUSIP Global Services. Legal Entity Name: Red Frog Digital Series of SolidBlock Holdings, LLC., (the “Series”). The GMEI/LEI registration number will be provided in the comments section.

12. (Optional) List any possible oracle data sources for the proposed Collateral type.

The initial data source is based on the initial valuation presented based on the appraisal provided. The data source will be the price. In other words, the question we tackle here is the price setting mechanism. Initially, there will be an issuance price and thereafter, the price oracle will be the market fee - the price for which people are actually buying and selling. It should be noted that at this point, only the SPV is borrowing against the collateral.

13. (Optional) List any parties interested in taking part in liquidations for the proposed Collateral type.

We have several accredited investors and groups who may be interested in taking part in liquidation of the collateral in case of default. We will need to develop the list and grow the potential investor base together with MakerDAO.

I will have to read this more carefully.

But what banks in Panama does the one or more of the companies behind this proposal bank with?

I will read this all in depth when I have time and have more detailed commentary then.

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Hi @MakerMan,

Thanks for your interest.

Our primary bank is Global Bank - the 2nd largest private bank in Panama. We also work with Banco General and Banco Nacional as secondary banks.

This proposal will be up for a Greenlight Poll on Monday (2021-11-15). Voting will last for two weeks, with all votes impacting the privatization score for this RWA proposal.

@MakerMan were you able to review this proposal further?

So just to be clear. What exactly are they asking of maker? I understand they are looking to raise ~37 Million dollars however are they looking for Maker to fund a portion of this or the entire thing?

According to solidblock.co the project is targeting a 15% return. Why is there a 7% delta between the rate in this proposal versus what is posted on solidblock?

Hi @Zarevok We are open to raising as much as Maker is willing to finance.

Hi @Zarevok

15% IRR with 8% preferred.

IRR is a financial metric

8% preferred return Is a guaranteed return.

These are two different things