Legal
Terms of Service
1. Overview
Preflop Inc. (“Preflop,” “we,” “us”) operates a platform that facilitates income-share agreement (“ISA”) covenants between issuers and backers. These Terms of Service govern your use of the Preflop platform at app.preflop.co and any related services.
2. Eligibility
You must be at least 18 years old to use Preflop. Backers must be accredited investors as defined under SEC Regulation D during Phase 1. Issuer eligibility is determined by Preflop’s curation process, including conviction scoring and manual review.
3. ISA Covenants
A covenant is a legally binding income-share agreement between an issuer and their backers, mediated by a smart contract on the Base blockchain. The five terms of each covenant (principal, share rate, term, cap, floor) are set by the issuer and immutable once deployed on-chain. Preflop does not guarantee any return on investment. Covenant tokens represent revenue participation rights, not equity securities.
4. Tokens
Each covenant mints exactly 1,000 ERC-20 tokens on the Base network. Tokens represent a proportional claim on the issuer’s future income payments as defined by the covenant terms. Tokens are transferable within the constraints of applicable securities regulations. No additional tokens are minted after issuance.
5. Fees
Preflop charges a 2.5% origination fee on capital raised through the platform, deducted at funding close. Secondary market trading fees will be announced prior to Phase 4 launch. There are no fees for issuers whose covenants do not reach funding.
6. Income Reporting
Issuers are contractually required to report income each period as specified in their covenant. Preferred verification is via Plaid bank connection. Manual reporting with audit trail is the fallback. Failure to report constitutes a breach of the covenant agreement.
7. Risk Disclosure
Investing in ISA covenants involves significant risk, including the risk of total loss. Past income is not indicative of future income. Conviction scores and risk assessments are estimates and should not be relied upon as investment advice. You should not invest more than you can afford to lose.
8. Regulatory Status
Preflop operates under Regulation D (accredited investors) during Phase 1 and intends to expand to Regulation CF for broader access. Preflop is not a registered broker-dealer, investment adviser, or exchange. We are working with securities counsel to ensure ongoing compliance.
9. Limitation of Liability
Preflop provides the platform on an “as is” basis. We are not liable for losses arising from covenant defaults, smart contract vulnerabilities, blockchain network failures, or market conditions. Our total liability is limited to fees paid to Preflop in the 12 months preceding the claim.
10. Governing Law
These terms are governed by the laws of the State of Delaware, United States. Any disputes will be resolved through binding arbitration in Delaware.
Last updated: April 2026 · Preflop Inc. · Delaware C-Corp