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Successful Closing & Fund Disbursement Protocols ​

A "Successful Closing" represents the execution of the investment contract. It is the precise moment when the offering conditions (contingencies) are satisfied, and the transaction becomes legally binding and irrevocable.

At this stage, the role of the platform shifts from a "Gatekeeper" of potential deals to an "Administrator" of finalized securities. Funds are released to the issuer, and digital assets are permanently assigned to the investor.

1. Pre-Closing Validation (The Audit) ​

Before a single dollar moves, the system performs a mandatory "Validation Gate" to ensure compliance with the offering's exemption status (Reg A+, Reg D, or Reg CF).

Verification Criteria ​

The Admin or System must verify three conditions:

  1. Subscription Target Met: The total cleared funds in escrow equal or exceed the "Minimum Funding Goal."

  2. AML Clearance: All participating investors have passed KYC/AML checks with no pending flags.

  3. Signature Completeness: Every dollar committed is backed by a countersigned Subscription Agreement.

System Action: Once validated, the offer status transitions to LEGALLY_CLOSED. This freezes the capitalization table; no new subscriptions can be accepted.

2. Breaking Escrow (SEC Rule 15c2-4) ​

The transfer of funds is governed by SEC Rule 15c2-4 (Transmission or Maintenance of Payments Received in Connection with Underwritings).

The Release Mechanism ​

  • The Contingency Met: Since the closing conditions are satisfied, the "Safety Zone" of the escrow account is legally unlocked.

  • Disbursement: The platform instructs the Qualified Custodian (or triggers the Smart Contract) to transfer the net proceeds to the Issuer's corporate operating account.

  • Irrevocability: Upon this transfer, the funds are no longer refundable (barring cases of proven fraud). The investment is considered "Risk Capital" deployed into the venture.

3. Asset Issuance & Investor Notification ​

Simultaneous with the movement of funds, the investor must receive the asset they purchased.

Trade Confirmation (SEC Rule 10b-10) ​

The platform must generate a final confirmation of the transaction.

  • Regulatory Requirement: SEC Rule 10b-10 mandates that investors receive a written notification disclosing the final transaction date, identity of the security, and total price.

  • Asset Delivery: The system mints the tokens or updates the digital Share Register to reflect the investor's new ownership stake.

Post-Closing Obligations (Reg A+ / Reg CF) ​

  • Reporting: For Regulation A+ and Reg CF, the successful closing triggers ongoing reporting obligations (e.g., annual reports, dividend tracking).

  • Dividends: The system initializes the "Dividend Period," marking the investor as eligible for future distributions based on the closing date.

4. Record Keeping & Supervision ​

The closing event generates the most critical documents in the investment lifecycle.

  • FINRA Rule 4511: The platform archives the final "Closing Transcript," which includes the list of all accepted investors, the exact time of fund release, and the final versions of the countersigned agreements.

  • FINRA Rule 3110: All notifications sent regarding the closing are supervised and stored to prove that investors were properly informed of the commencement of their ownership.