Investor Q&A

An unconverted SAFE is itself a security and gives the investor contractual investment rights. Signing and funding it does not, by itself, issue the future shares. A share estimate, valuation calculation or reference in investor materials is not proof of completed stock issuance. If a qualifying conversion or separate issuance has occurred, its documents and corporate records establish the resulting shares. SAFE Sections 1, 2 and 5(c).

Before conversion or another applicable termination event, the investment instrument is a Simple Agreement for Future Equity. It is not presently issued common or preferred stock merely because it is signed and funded. A qualifying Equity Financing results in Standard Preferred Stock or Safe Preferred Stock under Section 1(a). Liquidity and dissolution events instead trigger the rights in Sections 1(b) through 1(d). The Y Combinator templated SAFE used by The Qwik Group does not establish a present Class A, Class B, Series A or non-voting shareholding.

An outstanding SAFE should be tracked in the Company's investment records and included in relevant capitalization calculations. A SAFE entry or projected conversion calculation is not an issued-stock ledger entry.

For a SAFE, the principal evidence is the executed agreement, together with evidence of payment, applicable amendments or side letters, and any valid assignment documents. These establish the contractual position; they do not alone prove issuance of the future stock. After conversion or a separate issuance, the supporting evidence includes the applicable transaction and authorization documents, the stock ledger and any certificate or uncertificated-share confirmation. Wire instructions identify a payment destination and do not prove that payment was received.

The Y Combinator templated SAFE used by The Qwik Group expressly states that it and the underlying securities are unregistered. A resale requires an effective registration statement or an available exemption under applicable federal and state law. Contractual transfer restrictions must also be satisfied. A statement about no lockup or no vesting does not eliminate securities-law restrictions. Time elapsed alone does not establish that every resale is permitted; the applicable exemption, acquisition history and affiliate status must be evaluated. SAFE opening legend and Section 4(b); SEC private-secondary-market guidance.

Potentially. Section 5(d) generally requires prior written Company consent to an investor's assignment of the SAFE or its rights. Specified transfers following death or disability and certain transfers to affiliated entities are exceptions to Company consent under that section; securities-law requirements still apply. A partial assignment may require agreed split or amendment documentation. If shares have already been issued, review the restrictions governing those shares separately. Consent to an assignment is not, by itself, a securities-law exemption.

The Y Combinator templated SAFE used by The Qwik Group does not expressly grant a right of first refusal, right of first offer, co-sale or tag-along right, or preemptive participation right. Its consent-to-assignment provision is a different restriction. The actual financing documents must be reviewed when that event occurs.

Establish a lawful route. Before solicitation or disclosure, review contractual restrictions and the proposed purchaser and have securities counsel identify an available resale exemption and required disclosures.

Investors considering a private secondary transaction should consult a licensed broker-dealer. The Company agrees to work with any licensed broker-dealer engaged to assist an investor, subject to applicable law, contractual restrictions and required Company approvals. This cooperation does not promise a buyer, approval, a particular price or liquidity.

The Y Combinator templated SAFE used by The Qwik Group does not grant a general contractual entitlement to recurring financial statements, the full cap table, all investor materials, or unrestricted access to Company data. Section 5(c) excludes stockholder rights before issuance solely by virtue of the SAFE.

The Y Combinator templated SAFE used by The Qwik Group contains no standalone general confidentiality covenant.

An unconverted SAFE has no fixed current issued-share percentage merely from a hypothetical share count. At an Equity Financing, Section 1(a) and the defined Company Capitalization determine conversion.

For an outstanding SAFE, obtain the written Company consent required by Section 5(d).

For a SAFE assignment, retain the executed assignment, required consent, buyer documentation and closing evidence, and update the Company's SAFE ownership records and capitalization schedule.