REVENUE SHARING NOTES

Where a business agrees to pay you a set total amount on top of your investment. Monthly payments may be different every month.

EXAMPLE: YOU INVESTED $1,000 IN A REVENUE SHARING OFFERING ON NEXTSEED

document

SECURITIES:
REVENUE SHARING
NOTES

You own this

plant

PRINCIPAL:
$1,000
You invested this

Investment Multiple: 2x
How much the business agrees to pay you by the maturity date
(2 times your $1,000 principal investment = $2,000)

Revenue Sharing Percentage: 5%
How much the business agrees to pay investors each month from its gross revenues
(This is not in addition to the investment multiple— this is how
a business reaches the investment multiple payment)

Maturity: 48 Months
How long the business has to pay you in full

Security interest: Blanket lien on all assets of a business
A legal claim on the assets pledged by the business

Important
Securities are not guaranteed or insured and investors may lose some or all
of the principal invested if an issuer cannot make its payments

HOW PAYMENTS WORK

HOW ARE PAYMENTS CALCULATED?

Your payment depends on how much of the total investment pie you took with your principal investment.

Suppose that the total amount a business raised was $100,000 and you invested $1,000 -

Bill Bill 1 Bill 2 Bill 3 Bill 4 Bill 5 Bill 6 Bill 7 Bill 8 Bill 9

Your $1,000 investment slice out of
the total $100,000 raised is

Pie Chart

$ 100K raised

$ 1K investment

Your investment was 1% of the total funds a business raised
coins
THIS MEANS YOU GET 1% OF THE TOTAL PAYMENT A
BUSINESS MAKES TO ALL INVESTORS EACH MONTH.

HOW MUCH DOES A BUSINESS PAY TO
ALL ITS INVESTORS EACH MONTH?

The monthly payment a business owes to its investors each month depends on its gross revenues.

This means payments to investors are calculated first, before costs are deducted.

Let’s say the business has the following hypothetical revenues:

Month Gross Revenues x Revenue Sharing Percentage (per the investment terms) Total Payment (all investors)
1 $ 0 x 5% $ 0
2 $ 200,000 x 5% $ 10,000
3 $ 300,000 x 5% $ 15,000
4 $ 250,000 x 5% $ 12,500

SO WHAT IS MY MONTHLY PAYMENT?

Your monthly payment is your share of the total payment made to investors.

Month Total Payment (all investors) x Your Share Percentage You’re Paid*
1 $ 0 x 1% $ 0
2 $ 10,000 x 1% $ 100
3 $ 15,000 x 1% $ 150
4 $ 12,500 x 1% $ 125

*NextSeed charges a 1% administrative fee for each payment a business makes to you.

WHEN DO PAYMENTS END?

Payments end when the business pays you back your principal plus the
agreed amount on top, or when the maturity date is up, whichever is earlier.

The investment multiple determines what the total amount a business will pay you. In this case:

Multiple x Principal Investment Your Total Payment
2 x $ 1,000 $ 2,000

So if the investment’s maturity date is in 48 months, but the business pays
you $2,000 by month 40, then payments stop at month 40.

If it’s been 48 months and the business has only paid you $1,500, then the
business contractually owes you $500 at the maturity date or risks default.

There are currently no opportunities to exit or resell NextSeed investments.
After an offering has closed, your investment is committed to the business.

Disclaimer: This example is for illustrative purposes only and does not reflect an actual deal or performance.
The terms of each deal differ. The total payments above do not take into account NextSeed fees of 1% on
each payment made to investors. The exact length of time that it will take a business to pay each investor in full
cannot be known in advance. Payments are not guaranteed or insured and investors may lose some or all of
the principal invested if the business cannot make its payments.