Questions and Answers

Buying shares

Where do you get private companies' shares?

Shares of a private company (or stock rights) are purchased directly from the company, its employees, existing shareholders, and funds that have previously bought the company's stock. The owners of the shares are verified by inquiries to the company the shares of which are being purchased. The funds owning the shares provide documents confirming actual ownership. The purchase documents include an unconditional guarantee of shares (rights) availability and no restrictions on direct or indirect sale.

Who sets share prices?

Share prices for private companies are not publicly available and depend on the current situation on the secondary market. An understanding of the current price range is formed as a result of inquiries to dozens of counterparties and direct stock owners.

How is the fact of investment confirmed?

The main document confirming the fact of investment in an SPV is a Capital Account Statement, which is prepared by the Fund Administrator. It contains the SPV name, raised capital, the investor's name, the amount of investment, the interest in the fund's capital, the date of fund closing. The investor has the right to request from the Fund Administrator all the documents based on which the shares (rights) were acquired.

Investment Security

How is Dizraptor regulated?

Private equity investments do not require licensing and FDIC insurance – since there are no broker-dealer operations – but are regulated. Dizraptor and its subsidiaries (SPVs) operate under SEC Regulation D, 506 (c), which assumes onboarding only accredited investors according to SEC classification. Before the deal closes (during fundraising), investors' money is accumulated in an account at a bank that is a member of the FDIC.

Where is the money transferred?

Investors' money is accumulated in an escrow-account, which is opened for each SPV. It is a special purpose account – for investing in a particular asset or class of assets.

All operations with investors' money are initiated by the Fund Manager. The money is debited from the account only after a dual check by the Fund Administrator and the bank's compliance team. If the transaction is not on the list of allowed, and/or there is no document justifying the transfer, then the money won't be transferred.

What if Dizraptor Inc goes bankrupt or an SPV goes into liquidation?

All shares and rights are “locked up” in an SPV, which shields the SPV assets (belonging to the investors) from any external liabilities, including the bankruptcy of Dizraptor Inc. If Dizraptor Inc. goes bankrupt or is liquidated, the SPV will not be affected because it is a separate legal entity.

An SPV can't go bankrupt, there are assets lying there “without movement”. The SPV can liquidate in two scenarios. In the case of an exit, all investors will receive an amount proportional to their contribution. In the case of SPV liquidation due to the depreciation of underlying assets, investors receive $0 each. This is the risk of investing.

What if my rights are violated?

The Fund Administrator makes sure that investors' rights are respected. If you think your rights have been violated, you can contact the Fund Administrator, who will explain your rights, obligations (if any) and plan of action. Contacts for the Fund Administrator are listed in the Subscription Agreement And Investor Questionnaire.

Documents

Why no hard copies of documents?

The deal is in a U.S. jurisdiction with the federal Electronic Signature Act (ESIGN). Therefore, documents are signed electronically using the DocuSign service, which operates under the ESIGN Act. What documents should an investor provide?

Minimum package of documents:

• passport or ID;

• proof of address – a document confirming the address of residence;

• proof of investment status – a document confirming the status of accredited investor.

Why do I need to provide the proof of investment status?

Unrestricted investing in private companies is available only to accredited investors – those who, in the opinion of the SEC, are sufficiently qualified and financially secure to make such investments.

It is a serious violation of U.S. law for an unaccredited investor to participate in a private company investment transaction. Liability for this violation extends to the Dizraptor, the SPV manager and the SPV administrator.

Taxes

What taxes does an investor pay in the U.S.?

In the United States, there is no tax on capital gains. This means that in the case of a successful investment with an SPV, the investor does not have to pay taxes in the U.S.

What taxes does an investor pay in the country of residence?

This information should be clarified directly with the local tax office. The most common practice is to pay one of two taxes: either on income or on dividends.