Other Risks

Bonus rewards are voluntary.

The bonus rewards offered by a business are purely voluntary as a way for the business to show appreciation to investors. The bonus rewards are independent of the terms of the investment—for instance, if a business offers more bonus rewards, that does not mean it will offer a lower interest rate.

The bonus rewards are not enforceable under the investment agreement that you sign, and there is a risk that you will not receive the bonus rewards offered by the business or will be unable to use the bonus rewards because of restrictions placed by the business. NextSeed cannot force a business to fulfill its bonus rewards. The business owners are encouraged to honor the rewards so that they foster a good relationship with their investors.

Furthermore, if you invest using an IRA, there may be restrictions on whether you can receive the rewards yourself. Consult your tax advisor to find out how an IRA may impact bonus rewards.

The projections provided by a business may not be achieved.

The financial forecast a business provides is generally based on their experience and market trends. As with all financial forecasts, the results are based on assumptions made at the time of its creation and there is no assurance that those results will be achieved. Many external factors, like unpredictable economic factors, can materially affect those forecasts. Actual results may be significantly different from the forecasts.

The laws and rules governing NextSeed and the securities sold on NextSeed may change.

NextSeed and Issuers rely on existing rules such as Regulation Crowdfunding and Regulation D 506(c). The implementation and interpretation of these rules are continuing to evolve.

There is a possibility that changes to these rules may negatively impact how NextSeed operates, including how NextSeed services the securities.

The IRS may review or challenge the treatment of the securities offered by businesses on NextSeed.

Businesses that offer debt securities on NextSeed intend in good faith to treat the securities as debt instruments for U.S. federal income tax purposes.

Businesses that offer equity securities on NextSeed intend in good faith to treat the securities as equity instruments for U.S. federal income tax purposes.

This is not intended to be legal or tax advice to you as an investor. The IRS may challenge the business’s good-faith determination that the securities should be considered debt instruments for U.S. federal income tax purposes.