Definitions

Ecosystem Tokens

DCAP Coin

A utility cryptographic decentralized token issued by the Company based on the Ethereum protocol (ERC20 token) being the token which can be used by participants to acquire DCAP Ecosystem Tokens

Contract Address: 0x7ce910a8e811be8cda9a862f799878a96d276e7c

***DO NOT SEND MONEY or TOKEN TO THE CONTRACT ADDRESS. SENDING MONEY OR TOKEN TO THE CONTRACT ADDRESS IS UNRECOVERABLE.

Ordinary Token

A cryptographic token designed to provide utility across the DCAP ecosystem. The ordinary token is not the same but has similar attributes as a "staking token."

Preferred Token

A security cryptographic ownership token filed with the Security and Exchange Commission under Regulation D rule 506(c). The DCAP Preferred Token is created by the Company, issued by the Company and is pegged to the actual shares and ownership of DCAP, registered as, Decentralized Capital Allocation Protocol. DCAP Preferred Tokens grant holders voting rights to participate in the DCAP-DAO. The DAO participates in decision-making processes, feedback polls and surveys in regards to the operations of the ecosystem. Under SEC regulations, ALL participants and owners of the Preferred token are required to hold the asset for 1 year before selling it.

US Accredited Investor

At the initial launch of DCAP, we are launching 2 tokens and an NFT pool. DCAP coin is a currency, DCAP preferred token and the NFT Pool are both US restricted securities registered with the SEC under Reg D section 506(c) and Reg D section 506(b). To be an accredited investor you need to make 300K/year for the last 2 years and or have 1m in vested assets excluding your home, specifically excluding your primary residence. If the investor isn't an accredited investor then they invest into the NFT pool where we can have 35 non-accredited investors. Those are the only direct profit share opportunities.

A special note about restricted securities. Restricted securities cannot be sold for 1 year, this is a requirement from the SEC.

SEC Exemptions

Regulation D

US SEC 506(b)

Rule 506(b) of Regulation D is considered a “safe harbor” under Section 4(a)(2). It provides objective standards that a company can rely on to meet the requirements of the Section 4(a)(2) exemption. Companies conducting an offering under Rule 506(b) can raise an unlimited amount of money and can sell securities to an unlimited number of accredited investors. An offering under Rule 506(b), however, is subject to the following requirements:

• no general solicitation or advertising to market the securities

• securities may not be sold to more than 35 non-accredited investors (all non-accredited investors, either alone or with a purchaser representative, must meet the legal standard of having sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of the prospective investment)

If non-accredited investors are participating in the offering, the company conducting the offering:

• must give any non-accredited investors disclosure documents that generally contain the same type of information as provided in Regulation A offerings (the company is not required to provide specified disclosure documents to accredited investors, but, if it does provide information to accredited investors, it must also make this information available to the non-accredited investors as well)

• must give any non-accredited investors financial statement information specified in Rule 506 and

• should be available to answer questions from prospective purchasers who are non-accredited investors

Purchasers in a Rule 506(b) offering receive “restricted securities." A company is required to file a notice with the Commission on Form D within 15 days after the first sale of securities in the offering. Although the Securities Act provides a federal preemption from state registration and qualification under Rule 506(b), the states still have authority to require notice filings and collect state fees.

Rule 506(b) offerings are subject to “bad actor” disqualification provisions.

US SEC 506(c)

Rule 506(c) permits issuers to broadly solicit and generally advertise an offering, provided that:

• all purchasers in the offering are accredited investors

• the issuer takes reasonable steps to verify purchasers’ accredited investor status and

• certain other conditions in Regulation D are satisfied

Purchasers in a Rule 506(c) offering receive “restricted securities.” A company is required to file a notice with the Commission on Form D within 15 days after the first sale of securities in the offering. Although the Securities Act provides a federal preemption from state registration and qualification under Rule 506(c), the states still have authority to require notice filings and collect state fees.

Rule 506(c) offerings are subject to “bad actor” disqualification provisions.

Regulation S

The Commission adopted Regulation S to enhance access to offshore securities markets for both foreign and domestic issuers. Regulation S provides a safe harbor from the registration requirements of the Securities Act for offshore offers and sales of securities.

Regulation S provides an SEC-compliant way for U.S. and international (Non-U.S.) companies to raise capital in and outside the U.S. It is unnecessary to have a company in the United States of America use Regulation S. A Regulation S offering can issue equity or debt securities.

Participant

Any person (natural or juridical), who has contributed and is bound by the terms of the private placement and this White Paper and/ or who intends to hold and/or use DCAP Ecosystem Token(s) at any moment in time and shall include any person who intends to become a Participant.