Streetbrewers 1A

Risk: The STREETBREWERS team might not have (proper) knowledge of the market and/or make incorrect forecasts, in particular an overestimation of the number of sales and the selling price.
Consequence: If the team does not have sufficient knowledge of the market, it could set incorrect targets. This could lead to a lower valuation in the event of a possible exit because the business plan could not be executed as planned. In that case, there could be lower or even non-existent returns. In the worst case, there could even be a liquidation and bankruptcy, with partial or complete loss of the invested capital. 
Note: The number of sales has been estimated very conservatively. STREETBREWERS has included the cost of installation in the overall cost to the customer. It is more attractive than that of the competition. Discussions are underway with a rental company that will enable STREETBREWERS to spread costs over time for the customer. A second-hand market will enable us to take back installations that are no longer in use, thus reducing the risk for the customer. 

Risk: STREETBREWERS plans to apply for innovation grants in early 2024, but it is not yet certain whether these grants will be received. Consequence: If the grants are not received, there will be fewer funds available for the company's development and it may have to seek other short-term financing.
Note: The entrepreneurs already have good experiences of this type of funding, so the risk is very limited. 

Risk: Given the stage of development that project owner is in, it is likely that there will be a need for new financing.
Consequence: On the one hand, there is the risk that the company will not find investors, which would lead to the dissolution or bankruptcy of the company, causing the investor to lose part or all of his investment. On the other hand, there is the possibility that the company will find new investors, which will lead to dilution, which will be even greater if there is a lower valuation than the one currently used.
Note: Investors will have the opportunity to co-invest in new rounds, at the then current investment terms if new investors are found. 

Risk: Investors can obtain a personal income tax reduction of 45% on the amount invested if they invest in start-up micro-enterprises. These companies must meet a number of criteria to qualify for this fiscal measure. One of the criteria is that the activity of the company must not be the continuation of an activity previously carried out by another legal entity. STREETBREWERS is in the process of being incorporated, and the company's business will be the sale of an installation enabling restaurants, bars, etc. to brew beer "to order", using an application. To do this, STREETBREWERS will use intellectual property developed by another company (including a Cloud platform for the control of multi-site industrial processes, including water treatment) for its activities, and the intention is to acquire the intellectual property after a few years. There is a risk that the relevant local tax authorities will regard STREETBREWERS' activity as a continuation of a previously conducted business, given that it will eventually use and take over the intellectual property of a company that has been in existence for more than four years. 
Consequence: If this risk occurs, the personal income tax reduction can either not be accepted by the competent local tax agent or be retroactively reversed, which means that the tax reduction obtained must be repaid.
Note: Whether or not there is a continuation of activity is a question of fact that can only be assessed by the competent local tax agent on the basis of all the facts and circumstances specific to the case. However, there are a number of criteria listed by the FOD Financiën/SPF Finances that may indicate a continuation of an activity previously carried out by another legal entity (such as the exercise of the same activity, the existence of the same customers and suppliers). In this case, the entrepreneurs have stated that the activities, customers, suppliers and staff of the two companies are not the same. In addition, in the unlikely event that a tax reduction is not taken into account by the FOD Financiën/SPF Finances (due to continuation of activity), STREETBREWERS will pay investors a compensation equal to the amount of the lost tax reduction. 

Risk: There is a risk that there will be changes in wastewater treatment legislation.
Consequence: If this risk materializes, the equipment would have to be adjusted to comply with the new legislation, which could cause STREETBREWERS to grow at a lower rate than forecast in the business plan. This could lead to a lower valuation in the event of a possible exit because the business plan could not be executed as planned.
Note: This risk is limited by the modular and scalable approach, which makes it easy to integrate a new block such as wastewater treatment. 

Risk: There is a risk that there will be changes in excise legislation. STREETBREWERS' customers need to communicate correct information to the FOD Financiën/SPF Finances and will use the solution offered by STREETBREWERS to do so. 

Risk: There is a risk that there will be changes in legislation relating to the safety of the food chain.
Consequence for both risks: If these risks materialize, STREETBREWERS' solution would have to be updated to comply with the new legislation, which could cause STREETBREWERS to grow at a lower rate than forecast in the business plan. This could lead to a lower valuation in the event of a possible exit because the business plan could not be executed as planned.
Note for both risks: These risks are limited thanks to the continuous monitoring of the plant, which will enable the customer to easily pass on all necessary information to the authorities, and because STREETBREWERS complies with the strictest standards in terms of equipment selection and automated plant cleaning. 

Risk: There is a risk that a competitor will develop a solution similar to that of STREETBREWERS.
Consequence: If this risk materializes, STREETBREWERS' expected market share could be lower than anticipated. This could lead to a lower 

valuation in the event of a possible exit because the business plan could not be executed as planned. In that case, there could be lower or even non-existent returns. In the worst case, there could even be a liquidation and bankruptcy, with partial or complete loss of the invested capital. Note: STREETBREWERS has a head start and intends to keep it thanks to the more powerful applications they will be able to offer their customers thanks to the greater amount of data collected from their customers. STREETBREWERS has clear ideas about what can be patented and is not worried about the physical plant being copied. The brewery's power lies mainly in its software. In the long term, STREETBREWERS itself will probably encourage brewery-building initiatives. The more breweries there are, the more robust the STREETBREWERS software will be. 

Risk: The risk of insolvency means that STREETBREWERS does not have sufficient funds to meet its payment deadlines (cessation of payments). Consequence: If the company does not find alternative financing (shocked credit), it may go bankrupt. The insolvency or bankruptcy of STREETBREWERS may lead to lower or non-existent returns and in the worst case to a partial or total loss of the invested capital. 

Risk: Neither the shares of STREETBREWERS nor the Participatory Notes of the STREETBREWERS 1A compartment of Spreds Finance provide guarantees of a return or repayment of the invested capital. 

Risk: Participatory Notes do not offer a fixed return. The return of the Participatory Notes depends solely on the performance of the Underlying Asset, namely the shares of STREETBREWERS.
Consequence for both risks: If the project owner's predictions do not come true (within the predetermined timing), there is a risk of lower or non- existent returns and, in the worst case, partial or complete loss of the invested capital. 
Note for both risks: Investors in Participatory Notes bear the same economic risk as if they were investing directly as shareholders of STREETBREWERS. 

Type 5 - Risk of failure of the financing vehicle

Risk: Although each Spreds Finance compartment is ‘bankruptcy remote’ (meaning that no other creditor can claim a right on or against this compartment) in relation to the others and in relation to the ‘general’ liabilities of Spreds Finance itself, as a result of (i) the terms and conditions of the Notes, (ii) the articles of association of Spreds Finance and (iii) Article 4 of the Law of 18 December 2016 on crowdfunding; there is a subsidiary risk of insolvency of Spreds Finance.
 Consequence: Should such insolvency occur, Noteholders may be exposed to the risk of a significant delay in the recovery of their investment. Note: The probability of this risk occurring is extremely low given the structure and organization of Spreds Finance, in particular the compartmentalization mechanism and the "bankruptcy-remoteness" described above. Each participation taken or loan granted to a project owner is recorded in a separate compartment and is appropriately accounted for in the accounts, taking into account the fact that the accounts are kept by compartment. As a result of (i) the conditions attached to the issue of Participatory Notes, (ii) the articles of association of Spreds Finance and (iii) article 10 of the law regulating the recognition and delimitation of crowdfunding and containing various provisions relating to finance and notwithstanding articles 7 and 8 of the Mortgage Law of 16 December 1851, the assets of a particular compartment serve exclusively to guarantee the rights of investors with respect to this compartment. 

Risk: Neither the project owner nor Spreds Finance organizes an exchange market for Participatory Notes. It is thus up to the investor himself to find a buyer for his Participating Notes. Given the absence of an exchange market for Participatory Notes, there is no way to adequately establish a comparative pricing methodology for Participatory Notes.
Consequence: A holder of Participatory Notes may not be able to find a buyer for the Participatory Notes it wishes to sell (at the price at which it wishes to sell). 

Note: The intention is not to sell the Participatory Notes but to sell the Underlying Asset, often on the occasion of the sale of the Underlying Company itself
(see Appendix B, (d)). 

Risk: Any decision by Spreds Finance to sell shares of STREETBREWERS is subject to the approval of the holders of Participatory Notes representing at least 75% of the outstanding Participatory Notes, unless Spreds Finance is required to sell them under a contractual or statutory provision.
Consequence: Investors thus bear the risk that the general meeting of the holders of Participatory Notes may refuse to approve the sale of the participation, in which case all investors are bound by this decision and thus must wait to obtain redemption of the Participatory Notes. 

Risk: Investing in shares of young companies entails the risk that a buyer for the shares will not be found, or not at a fair price yielding a market return, or that a buyer will not be found within a reasonable period of time.
Consequence: If no buyer is found for the holding, redemption of the Participatory Notes is not possible.
Note: Spreds Finance will make every effort within its powers to obtain the best possible price. 

Risk: Spreds Finance has not conducted an analysis of the proposed project or of the financial situation of the Underlying Company. 
Consequence: Any investor considering subscribing to Participatory Notes should make its own analysis of STREETBREWERS's solvency, activity, financial situation and prospects.
Note: Any decision to invest in Participatory Notes should be based on a comprehensive analysis of the project and of this sheet of essential investment information. Spreds Finance's model does not provide for the presentation of analyzed projects to investors but allows investors to invest based on the information made available to them, after making their own analyses.