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The information contained in this Crypto Asset Statement was last updated on March 15, 2024.

No securities regulatory authority in Canada has expressed an opinion about Holochain or any of the other Crypto Contracts or Crypto Assets made available through Newton Crypto Ltd. (Newton) on the Newton Platform, including an opinion that Holochain itself is not a security and/or derivative.  Changes to applicable law may adversely affect the use, transfer, exchange, or value of any of your crypto assets, and such changes may be sudden and without notice.

Newton is offering Crypto Contracts in reliance on a prospectus exemption contained in the exemptive relief decision Re Newton Crypto Ltd. dated March 8, 2024.  The statutory rights of action for damages and the right of rescission in section 130.1 of the Securities Act (Ontario) and similar legislation in the other provinces and territories of Canada would not apply in respect of a misrepresentation in this Crypto Asset Statement or the Newton Platform Risk Statement.

This overview provides a summary of certain risks associated with Holochain and is not an exhaustive description or summary of these risks and, in addition, does not take into account an individual’s particular situation or risk tolerance.  Investors are encouraged to conduct their own research prior to trading any crypto asset.

Newton users should read the Newton Platform Risk Statement for additional discussion of general risks associated with crypto assets made available through the Newton platform.  A copy of the Newton Platform Risk Statement acknowledged by you is available in your account in the “Statements & Reports” section.

Token Description & Project Background

Holochain is a framework for distributed applications that uses an “agent-centric” approach to set up a blockchain such that not every node needs to keep a full copy of the blockchain which is the case with other typical blockchains. 

The $HOT token was introduced to Holochain in 2018 as a way for users of the Holochain network to pay for Holofuel, which is the token needed for transaction fees on the Holochain.  The difference between the $HOT token and Holofuel is that $HOT is an ERC20 token that runs on the Ethereum network which is a redeemable IOU for Holofuel.

Holo was founded by Arthur Brock and Eric Harris-Braun, both of whom are experienced contract coders.  Holo held an “initial community offering” from March 2018 through April 2018.  Ultimately, 177.6 billion HOT was minted through a demand-determined process, with 133.2 billion HOT (75%) allocated for public sale and 44.4 billion HOT (25%) reserved for the team and company.

Risks of Holochain

Like an investment in other crypto assets, an investment in Holochain includes the following general risks:  (i) volatility risk and liquidity risk, (ii) short history risk, (iii) demand risk, (iv) forking risk, (v) code defects, (vi) regulatory risk, (vii) electronic trading risk, and (viii) cyber security risk.

For additional information of general risks associated with crypto assets, you may refer to the Newton Platform Risk Statement.  In terms of specific risks, as Holochain is one of the longest-standing crypto assets and its community base is widely decentralized, there is no central working group or authority to disclose material information to the public regarding Holochain.

Please note that these risks and the associated summaries or overviews provided for each herein are not intended to be an exhaustive discussion pertaining to all such risks and, in addition, there may be other risks that come with exposure to Holochain.  We encourage all Newton users to perform their own due diligence to assess the risks associated with Holochain and to determine whether this level of risk is acceptable to them.  Neither Holochain nor Newton guarantees the value of Holochain, and holders of Holochain will not have any recourse to Holochain or Newton if the value of Holochain declines for any reason whatsoever.

Newton’s Evaluation Process

Newton has reviewed and assessed Holochain prior to making it available on the Newton Platform and has concluded that Holochain is not a security or derivative under Canadian securities legislation; however, there is a risk that this conclusion could change in the future and that, in such event, Newton will be required to halt, suspend, and then remove Holochain from its platform as described in the Newton Platform Risk Statement.

Further, as indicated above, no Canadian securities regulatory authority has expressed an opinion about Holochain, including an opinion that Holochain is not itself a security and/or derivative.

Based on publicly available information Newton has reviewed Holochain, including, but not limited to, a review of the following:

• The creation, governance, usage, and design of Holochain, including the source code, security, and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that created Holochain.
• The supply, demand, maturity, utility, and liquidity of Holochain.
• Material technical risks associated with Holochain, including any code defects, security breaches and other threats concerning Holochain and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them.
• Legal and regulatory risks associated with Holochain, including (i) any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of Holochain, and (ii) statements made by any securities regulatory authorities in Canada, other regulators in IOSCO-member jurisdictions, or the regulator with the most significant connection to Holochain about whether Holochain, or generally about whether the type of crypto asset, is a security and/or derivative.

A link to the Holochain White Paper is available at the following link.