Beyond Sports 1A

1.      Risk associated with the team's knowledge of the market and correctness of forecasts

Risk: The BEYOND SPORTS 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: BEYOND SPORTS began by surveying parents of BJJ children, white belts, and more experienced BJJ practitioners. The vast majority do not use any app or paid platform to support their progress. However, more than 50% indicated they would be willing to pay €2 to even €5 per month for a mobile app that meets their needs. Over 97% said they would use a free platform if it teaches the fundamentals effectively These figures clearly demonstrate that this is an underserved market.

2.      Risk associated with the size of the team

Risk: Given the development stage BEYOND SPORTS is currently in, having the right team in place is essential for the company’s future growth. If the company relies entirely on one key person, there is a risk that this person may withdraw from the business.

Consequence: If there is only one manager or key figure and that person steps away, the company may be left (temporarily) without management. In the event of difficulties, there would be no one able to represent the company or make crucial decisions.

Note: The team currently consists of one director.

3.      Risk associated with the need for new financing

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. 

1.       Risk associated with the entry of a 'copycat' competitor into the market

Risk: There is a risk that a competitor will develop a solution similar to that of BEYOND SPORTS.

Consequence: If this risk materializes, BEYOND SPORTS' 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: BEYOND SPORTS plans to maintain its first-mover advantage through rapid innovation, a focus on unique gamification features, building strong partnerships with BJJ academies and influencers, and implementing a freemium model to capture market share.

2.       Risk associated to user conversion to a paid subscription

Risk: Slow conversion of users from the free version to premium subscriptions.

Consequence: If this risk materializes, the company may set incorrect targets. This could lead to a lower valuation in the event of a potential exit, as the business plan would not have been executed as planned. In that case, returns could be low or even non-existent.

Note: To mitigate this risk, the company can create attractive premium features, regularly analyze user conversion statistics, and adjust strategies based on market feedback. It can also implement multiple revenue streams, such as subscriptions, in-app purchases, and B2B licenses (e.g., for law enforcement, security companies, etc.).

3.       Risk associated to user interest in the platform

Risk: Some individuals may be resistant to AR-based learning compared to traditional BJJ training methods.

Consequence: This may limit market penetration, which could lead to a lower valuation in the event of a potential exit, as the business plan would not have been executed as planned. In that case, returns could be low or even non-existent.

Note: BEYOND SPORTS plans to collaborate with respected BJJ academies and coaches to enhance credibility and position the product as a complement to traditional training. They will create educational content about the benefits of AR and offer free trials and demos at BJJ events.

4.       Risk associated to the use of technology

Risk: Challenges in maintaining long-term user engagement with content and features across different skill levels and regions.

Consequence: This may result in reduced or no growth, which in turn may lead to a lower valuation in the event of a potential exit, as the business plan would not have been executed as planned. In such a case, returns could be low or non-existent. In the worst-case scenario, BEYOND SPORTS could face liquidation or bankruptcy, with partial or total loss of invested capital.

Note: Retaining user interest and minimizing churn is crucial. BEYOND SPORTS will develop a modular content structure to provide relevant material for users from beginner to advanced levels. The company will regularly update the content library with new techniques (e.g., from major competitions) and include interactive feedback mechanisms. It will also use data analytics to personalize content and learning paths based on individual performance and user preferences.

5.       Risk associated to the CEO’s time commitment

Risk: Thomas Mouley, Gunther Fasoel, and Gregory T'Kint will not dedicate 100% of their time to this venture and will all work part-time on BEYOND SPORTS activities.

Consequence: If the entrepreneurs do not devote their full professional time to the project, they may be less able to respond to certain opportunities and/or take preventive measures against setbacks—either because they lacked the time to conduct timely analyses and failed to foresee issues, or because they couldn't react quickly enough. This could lead to slower growth or a lower valuation in the event of an exit, as the business plan would not have been executed as planned. In that case, returns could be lower or even nonexistent. In the worst-case scenario, the company could face liquidation and bankruptcy, resulting in partial or total loss of the invested capital.

Note: In the early stages, most of the workload will consist of project development. The time commitment from Thomas, Gunther, and Gregory will increase over time as the workload grows.

Risk: The risk of insolvency means that BEYOND SPORTS 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 BEYOND SPORTS may lead to lower or non-existent returns and in the worst case to a partial or total loss of the invested capital. 

1.           Risk associated with the lack of guarantees

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

2.           Risk associated with the lack of a fixed return

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 BEYOND SPORTS. 

Consequence for those 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 those risks: Investors in Participatory Notes bear the same economic risk as if they were investing directly as shareholders of BEYOND SPORTS.

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.

1.               Risk associated with the absence of an organized exchange market for Participatory Notes

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 Company itself.

2.           Risk associated with the vote by the general meeting of holders of Participatory Notes to sell

Risk: Any decision by Spreds Finance to sell shares of BEYOND SPORTS 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.

3.           Risk associated with an investment in a young company

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.

1.               Risk associated with the absence of analysis by Spreds Finance

Risk: Spreds Finance has not conducted an analysis of the proposed project or of the financial situation of the Company.

Consequence: Any investor considering subscribing to Participatory Notes should make its own analysis of MINDSPELLER BCI'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.

2.               Risk associated with the lack of (periodic) reporting

Risk: There is no obligation for periodic reporting in unlisted companies (except for the cases provided by law, such as the annual general meeting of shareholders and an alarm bell procedure). While some entrepreneurs proactively communicate good and bad news (with a certain periodicity), others do not. As a (minority) shareholder, one cannot enforce reporting (other than in cases provided by law).

Consequence: If an entrepreneur does not do (periodic) reporting, there can be long periods during which investors have no insight into the (financial) state of the company. The lack of reporting does not in itself change the (financial) state of the company but can create a sense of unease among investors. If at some point a company has to file a procedure of judicial reorganization or bankruptcy, this can be a (big) surprise for the investor. 

Note: Investors in Participatory Notes bear the same risk as if they invested directly in MINDSPELLER BCI and became shareholders. However, Spreds, as a crowdfunding service provider, tries to encourage each project owner to report at least 2x per year.

3.               Risk associated with the tax treatment of capital gains - government tax on capital gains

Risk: Starting 1 January 2026, a tax on capital gains from the sale of assets will apply. The shares of BEYOND SPORTS will fall under the scope of this capital gains tax in the event of an exit.

Consequence: If the realized capital gain on the sale of BEYOND SPORTS shares exceeds the exemption (€10,000, which may be increased to €15,000), investors will be required to pay tax on this capital gain.

Note: As noted above, there is an exemption of €10,000 (an amount that will be indexed annually in line with inflation). To the best knowledge of the project owner, there are no other material risks related to its activities.

To the best of the project owner's knowledge, there are no other material risks associated with its activities.