Convertible Promissory Notes
Note converts to Class B Common Stock when the company raises $2,000,000 in a qualified equity financing
Maturity Date: April 20, 2020
$40,000,000 Valuation Cap
0% Discount Rate
5% Annual Interest Rate *
*Annual Interest Rate subject to adjustment 10% bonus for StartEngine shareholders. See 10% Bonus below
Maximum ($1,070,000) of Convertible Promissory Notes
Minimum ($10,000) of Convertible Promissory Notes
251 Little Falls Drive, Ashland, OR 19808
Description of Business
Erndo is a SaaS-based, market engagement ecosystem that uses tokens to mobilize customers as influencers for local commerce. Using crypto rewards to create incentive, Erndo acts as a revolutionary customer activity optimizer for small- to medium-sized businesses.
Type of Security Offered
Convertible Promissory Notes and Violet Tokens
Minimum Investment Amount (per investor)
The Offering includes $1 worth of Violet Tokens for every $1 invested, at the price per token set in the future token generation event. In addition, the following bonuses will apply.
$500+ – VIP Access to 2019 Token Pre-Sale.
$1,000+ - VIP Access to 2019 Token Pre-Sale -AND- a 5% Bonus on Perk Tokens up to the dollar amount of initial investment.
$2,500+ - VIP Access to 2019 Token Pre-Sale PLUS a 10% Bonus on Perk Tokens up to the dollar amount of initial investment.
$5,000+ – VIP Access to 2019 Token Pre-Sale PLUS a 15% Bonus on Perk Tokens up to the dollar amount of initial investment.
$10,000+ – VIP Access to 2019 Token Pre-Sale PLUS a 25% Bonus on Perk Tokens up to the dollar amount of initial investment.
Additional bonuses available on an individual basis for investments exceeding these amounts. Please contact the Erndo team at email@example.com for further information.
*All perks and tokens will be delivered after the campaign is completed, and upon availability of the Tokens.
Terms of Tokens
The token that investors will receive as a perk will be called, tentatively, “Violet Tokens”. Violet Tokens will be tradable for other tokens utilized in the Erndo Marketplace, such as Dough, including future tokens that are developed. Violet Tokens thus confer a unique advantage to the holder in that they can be exchanged for various types of tokens used in the Erndo ecosystem, including tokens that can be spent just like cash (C tokens) at any business in the Erndo network.
Please see the section Additional Information below for further information.
- Initial Blockchain: Ethereum
- Migration to Alternative Blockchain: Migration to Waves if needed
- Expected Network Launch date: Q2 2019
- Total amount of Tokens authorized for creation: 2,000,000
- Amount of Tokens or Rights to Tokens already issued: 0
- Will they be listed on Exchanges: We plan on listing the tokens on exchanges.
- if so, which: We plan on listing on the main altcoin exchanges, such as Binance.
Other Material Terms:
- Voting Rights: None
- Restrictions on Transfer: 1 year from closing of Offering
- Dividends/Distributions: None
- Redemption Rights: None
- Other: May be exchanged for tokens at the holders choosing when new tokens are launched by Erndo Inc.
Purchasers of securities in this offering, Class B Common Shares through a convertible note, will also receive a quantity of tokens with a worth that is equal to or greater than the value of the investment amount in this offering, contingent upon the successful development of the Full Product. For example, a purchaser who invests $500 during the Offering will also receive a special perk of $500 worth of tokens if and when there is a future token implementation. An investor whose purchase amount exceeds certain thresholds will receive additional Bonus Perk Tokens at a rate defined above in the “Minimums and Perks” section. The tokens will be delivered after the official launch of the token implementation event at a time designated by the Board.
In addition to the information above the Violet Token will entail a permanent benefit to the individual that is currently holding the Violet Token in the form of an increased mining rate within the Erndo platform. This rate will increase with the number of Violet Tokens held by the individual. This bonus does not stay with the individual if they sell their Violet Tokens and will instead be transferred to the new owner of the Violet Tokens. Violet Tokens will also be tradable with other individuals for cryptocurrencies or fiat cash through token exchanges such as Binance or Coinbase.
Erndo has already successfully executed on an Minimum Viable Product (MVP) demonstrating critical proof-of-concept, with “Dough” being a virtual currency (C tokens) that is currently live and can be spent at any business in the Erndo network, and “Tokens” being a digital asset (S tokens) that is currently live which confers a benefit to the holder in the form of an increased “mining” rate for acquiring Dough.
Current Status and Immediate Plans
While Erndo does not currently have a blockchain-based token, Erndo has immediate plans to begin development post-funding in order to integrate blockchain-based tokens into the core functionality of the platform. In the current, live iteration of the Erndo platform (the “Alpha” or the “MVP”), digital assets (tokens that are not currently recorded on a blockchain ledger) in the form of virtual currency and “Tokens” are the core influencing mechanism used to incentivize consumers to carry out economically relevant activity, such as modified purchasing habits (e.g. spending more than normal, or patronizing a new business that one has never been to before).
In the next iteration of the platform (the “Full Product”), we intend to use digital assets including but not limited to blockchain-based tokens to incentivize valuable consumer activity in various forms including but not limited to modified purchasing habits, influencer marketing, and data generation. The delivery of the token bonus perks, VIP access, and bonus tokens are contingent upon the successful development of the Full Product. While Erndo has immediate plans to realize the development of the Full Product and has already assembled the core team members necessary to do so, we are unable to guarantee that successful development will ever occur. Refer to the “Risks and Uncertainties” section of our Offering Statement for further information.
Tokens are an integral and central aspect of Erndo’s operation. Tokens are one of the main rewards used to incentivize consumer behavior. There are two planned types of tokens, one being called a “C token” and the other an “S token”. C tokens are spendable by users in the Erndo network in many ways including, but not limited to, purchasing goods and services from participating business or redeemed for special promotions such as gift certificates, coupons, or discounts. S tokens are used to increase a user’s associated status, which affects the rate at which they are capable of acquiring C tokens through actions that add value to the token economy (aka “mining”), such as through their purchasing habits.
“Mining” in the context of the Erndo ecosystem encompasses more than just blockchain transaction validation. Instead, “mining” in the Erndo context, which is how users are able to acquire tokens, is accomplished through various forms of activity which includes but is not limited to purchasing habits, influencer marketing, and data generation. As such, the Erndo platform rewards these miners with tokens each time they perform an activity that is economically beneficial to the Erndo ecosystem. Both of these types of tokens may be tradable on a cryptocurrency or token trading market platform such as Binance or Coinbase.
Currently, our live Minimum Viable Product (MVP) is already operating on a successful execution of the above concept. “Dough” is a C Token that is currently in-use on the Erndo MVP, live and being used as a real currency in a real economy with nearly a hundred businesses and several hundred users. Dough is pegged to the U.S. dollar and can be spent like cash at any business in the Erndo network. “Tokens” are an S Token that is also currently in-use on the Erndo MVP, and they increase the rate at which a person “mines” and earns Dough.
Bonus on Perk Tokens and VIP Access
An extra bonus on tokens (i.e. Violet Tokens) will be conferred to purchasers whose investment amount exceeds the relevant minimum thresholds, contingent upon successful development of the Full Product. For example, an investor who invests $8000, which meets the Tier 4 bonus threshold, will receive 15% additional perk tokens, for a total perk token value of $8000*1.15 = $9200.
VIP Access to our 2019 Token Pre-Sale will be given to purchasers whose investment amount exceeds $500. This perk confers purchasing privileges, including discounts and access to private pre-sale offerings, on a future token sale event conducted by or in affiliation with Erndo.
The Company currently does not have a functional distributed ledger based business model nor a blockchain based token and there is no guarantee that such will be developed in the future. The promise of future tokens is contingent upon the successful development of such items. There is no guarantee that successful development will ever occur. The right to receive future tokens and the offering of future tokens is being offered as part of this offering exempt from registration under Regulation CF.
Tax Advisory: Investors should consult their tax advisors with respect to the tax basis for each of the Securities and Violet Tokens, since they will trade independently.
Jurisdictions: No Investor who (i) resides, (ii) is located, (iii) has a place of business, or (iv) is conducting business (any of which makes the Investor a “Resident”) in the state of New York will be accepted in this offering.
The 10% Bonus for StartEngine Shareholders
Erndo, Inc. will offer a 10% bonus on the annual interest rate for all investments that are committed by StartEngine Crowdfunding Inc. shareholders (with ≥ $1,000 invested in the StartEngine Reg A+ campaign) within 24 hours of this offering going live.
StartEngine shareholders who have invested $1,000+ in the StartEngine Reg A+ campaign will receive a 10% increase in the annual interest rate on Convertible Promissory Notes in this Offering if they invest within a 24-hour window of their campaign launch date. For example, if invest in the first 24 hours, your annual interest rate will be 5.5% instead of 5%.
This 10% Bonus is only valid for one year from the time StartEngine Crowdfunding Inc. investors receive their countersigned StartEngine Crowdfunding Inc. subscription agreement.
Erndo Inc. will not incur any irregular use of proceeds.
A crowdfunding investment involves risk. You should not invest any funds in this offering unless you can afford to lose your entire investment. In making an investment decision, investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. These securities have not been recommended or approved by any federal or state securities commission or regulatory authority. Furthermore, these authorities have not passed upon the accuracy or adequacy of this document. The U.S. Securities and Exchange Commission does not pass upon the merits of any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering document or literature. These securities are offered under an exemption from registration; however, the U.S. Securities and Exchange Commission has not made an independent determination that these securities are exempt from registration.