Understanding the terms used in a revenue share offering is crucial to evaluating its structure and potential outcomes. Below is an updated explanation of these key terms, aligned with Togetherise’s Promissory Note and practices:
- Offering: The process where businesses raise funds by offering securities to the public under the framework of National Instrument 45-110 (NI 45-110).
- Issuer: The business conducting the fundraising campaign through Togetherise.
- Investment Commitment: A pledge by an investor to provide funds for the offering. This commitment is governed by the terms outlined in the Offering Document. It may be canceled by either party under specific conditions before finalization, such as during a designated cooling-off period or prior to the completion of all required steps, including the signing of investment documents and transfer of funds.
- Target Offering Amount: The total capital the issuer aims to raise. Reaching this amount often signifies the success of the offering.
- Closing Minimum: The minimum funding amount required for the offering to proceed. If this minimum is not met, the funds are returned to investors. This threshold is specified in the Offering Document.
- Offering Document: A comprehensive document required by NI 45-110. It outlines material information about the issuer, the offering’s terms, and associated risks.
- Gross or Net Revenues: Defines whether repayments are calculated based on the total revenue generated by the business (gross revenue) or revenue after deducting expenses and allowances (net revenue). Specifics are disclosed in the Offering Document.
- Revenue Percentage: The proportion of the issuer’s revenue that is allocated for repayments to investors.
- Repayment Amount: The total amount investors receive, typically ranging from 1.x to 2.0 times their initial investment. The exact multiplier is outlined in the Offering Document and Promissory Note.
- Repayment Frequency: Specifies the interval at which payments are made (e.g., quarterly or annual). The Promissory Note provides details for each offering.
- Defer Payments: Allows issuers to defer a specified number of payments without triggering a default. Conditions and allowances for deferral are detailed in the Promissory Note.
- Secured: Indicates whether the offering is backed by the issuer’s collateral, such as assets or guarantees. The nature and scope of security, if any, are outlined in the Offering Document.
These terms clarify the rights and responsibilities of both issuers and investors in a revenue share offering. For full details, always review the Offering Document and Promissory Note associated with a specific offering.
