Team Topia

Hi Shardul, thanks for all the questions. I assume you are only asking because you are interested. I will take each of these in turn in a separate reply.

> (1) Why did you fall short of the $1M 2021 revenue goal? I'd chalk most of this up to adjusting to GAAP accounting principles. Regulation CF crowdfunding requires financials in GAAP format, and so we adopted GAAP financial reporting for the first time as part of this campaign. One key part of GAAP is Rule ASC 606, which says that subscription income should be recognized over the duration of the subscription. Our revenue projections for 2021 were based on winning a significant share of the sales opportunities we saw in our pipeline at the beginning of the campaign. We actually closed more of those deals than we had anticipated, but we underestimated the impact of distributing that new revenue evenly over the next 12 months. It was frustrating to crush our sales goals but still fall short of the annual revenue goal. On a trailing 12 month basis, we are still closing in on $1M milestone, but the timing of the revenue recognition did not align with the end of the calendar year. On the positive side: (1) we've learned how to better project revenue under GAAP rules, and (2) we've "banked" significant revenue that will be recognized in 2022.

> (2) How many years of profitability have you had and what was 2021 net income? First, I should make clear that our primary goal at this stage is growth, not profitability. When we raise investment, we invest that money in growing the company, and that investment does not count as income but the money spent does count against expenses, which results in negative net income. Our 2021 net income on a GAAP basis was $-160,807. For comparison, on a cash basis, our net income for 2021 was $-55,313. We only have GAAP financials starting with 2019, so I am not able to report financials on a GAAP basis prior to 2019. On an accrual basis, our previous and only profitable year was 2017, with $10,548 in net income. On a cash basis, in 2017 we recorded a $-2,031 loss.

> (3) What exactly is the commercial plan to achieve the $2M revenue goal? And how much of that will come from the existing swimming market vs new markets? I'm sorry, but for competitive reasons, I don't feel comfortable sharing that level of detail in this public forum. I will say that our expectation is that a large majority of revenue in 2022 and 2023 will come from the swim market. We will be working to expand into new markets, but we don't expect the revenue contribution from non-swim markets to surpass swim market revenue before 2024.

> (4) What is the cost to acquire a new customer? The cost to acquire a customer fluctuates seasonally, therefore we track this on a trailing 12 month basis. As of our Q4 board meeting in November 2021, our trailing 12 month customer acquisition cost was calculated as $353.

> (5) What is the lifetime value of a customer? This isn't a metric we track regularly. Our low churn makes estimating the lifetime of a customer a bit nebulous. For example 100% of the customers who signed up in our first 2 years are still customers today. In any case, my best estimate for that value right now is $2,827.

> (6) You mention an extremely low churn rate. How much of your revenue do you get or foresee getting from expansions within existing account relationships? Unlike enterprise software, where expansion comes in the form of more seats and/or upgrades to higher tiers of service, in our market we charge per athlete and the sizes of teams don't fluctuate much season to season. Thus, our main source of expansion revenue comes from our B2B2C model and premium mobile app subscriptions. Mobile app revenue is approximately 11% of our overall revenue, but it is the fast-growing portion and it has the potential to double our average revenue per customer over the next 2 years as Meet Maestro usage and associated mobile app subscriptions continues to increase. In terms of the relation between expansion revenue vs. revenue from new customers, we see both as roughly equal components to achieving our revenue goals.

> (7) You mention gross margin has grown from 50% in 2019 to 64% in 2020, which is good, but that seems low for a SaaS business. Any plans to increase this to 75/80+%? Our gross margins are lower than you might expect for a SaaS business because revenue from transaction fees makes up a large portion of our revenue, and the margins on transactions processing fees are quite low, less than 25%. We are working to increase overall gross margins on a number of fronts. As of Jan 1 this year, we have increased our payment processing fees from 2.9% + 30¢ per transaction to 3.4% + 30¢ per transaction, which will immediately increase our gross margin on transactions. We are also in the process of implementing updates to our pricing, introducing new product tiers and simultaneously simplifying the pricing model. For most customers, these changes will result in a net price increase, but given legacy pricing extended to existing customers, it will take up to 2 years for these changes to effect all our existing customers. Nevertheless, that process is starting later this month. Lastly, the portion of our revenue that is comprised of mobile app subscription is expected to increase sharply. Due to app store fees, which range from 15-30%, that revenue stream is effectively (currently) capped at 85%, thus the ability for this stream to boost overall gross margins above 80% is limited.

> (8) What is the go-to-market/sales/commercial strategy to penetrate the new markets you're targeting, like the year-round/club market? Again, for competitive reasons, I'm not comfortable sharing detailed plans and strategy in this public forum.

> (9) If I read correctly, in the past you've used a rev-share arrangement with an outside dev firm where they got 75% of your mobile revenues net app store costs. That seems high. Do you plan to do that again and if so, why share such a large portion of your revenue? You have done your homework! Yes it is correct, we funded the initial development of our mobile app via a revenue sharing agreement with a software development firm. Note however, that revenue share agreement was capped to the first $X in total revenue, and as of November 2021 that cap was met and the revenue sharing agreement has been paid in full. We now keep 100% of mobile app revenue. We structured the deal in this way because at the time we did not have the funds to pay for the mobile app development up front. Through this deal we (and our customers) got a mobile app much sooner and we got to keep 25% of the revenue stream it created—a revenue stream that would not have existed had the app not been created. It was a creative arrangement that benefitted both parties. Even though we are happy with the way that deal worked out, we do not plan to use a similar arrangement in the future. We have already taken our mobile app development "in-house" and, with the help of this campaign, we've been hiring developers to further expand our development capabilities.

> (10) You also mention you plan to hire 2-3 devs with the crowdsourcing funds. Will these be FTEs or outsourced? These will be FTEs. We've actually already made two of the hires, even though the funds from this campaign are still held in escrow. Our new Director of Product, Michael Swanson[1], started last month and Brian Moeskau[2] joined our team as a Principal Engineer, starting today! If anything, in large part due to the success of this campaign, I expect we will hire 2-3 *additional* developers this year, for a total of 4-5 new engineering hires. We are still actively hiring for additional positions. Please see: swimtopia.com/careers [1] linkedin.com/in/mswanson1524 [2] linkedin.com/in/bmoeskau

> (11) What plans do you have the scale your engineering operations? I can't imagine it can continue being you and Chris Bonser writing code and squashing bugs. I agree with you. Please see my previous answer. I should add we are also expanding our quality assurance testing capabilities, with a terrific new hire in October who splits her time between QA testing and customer support.

> (12) What does your product roadmap look like? I'm particularly interested in when you see the availability of those billing and other critical features needed to penetrate the year-round/club market. For competitive reasons we are not going to share our product roadmap on this public forum. I will say that we also see building those features as critically important. Hopefully, you can deduce from our recent hires that we are not sitting on our hands. In fact, I took a break from working on those features to answer these questions. ;-) No worries, it was worth the distraction. That said, I am looking forward to wrapping up this campaign later this month.

> (13) Any plans to add international language localization? Language localization is not top priority right now. We do see it as strategically important over the long haul and that factors into how we build our products. Our first localization is likely to be "en-AU" (Australian English), which aligns with our market and sales strategy and should be an easy first step toward adding non-English localizations in the future.

> (14) Are your prices too low? Any plans to increase them? Are our prices too low? We think so. As mentioned previously, we have already taken the step of increasing the fee we charge for transaction processing from 2.9% + 30¢ per transaction to 3.4% + 30¢ per transaction. Additionally, later this month, we are rolling out a restructuring of our pricing which introduces new product tiers and simplifies our pricing model. These changes are projected to result in a net increase of 25-50% in SaaS subscription fees, but will take up to 2 years to extend to all existing customers.

> (15) Why would NBC/Universal or Dick's Sporting Goods be interested in acquiring a sports management software company? Because they have completed similar acquisitions in the past. corporate.comcast.co…-company-sport-ngin thehustle.co/dicks-sporting-digital

> (16) What's in place to ensure the retention of the current management team and are there plans to add additional management talent, particularly on the commercialization and business development side? This is something I think about a lot. Growing a company is hard. Growing a company that lives up to its principles, avoids silos and politics, and achieves ambitious goals without burning out the people who got us there is extremely hard. We know it is hard and so we approach the problem with intention and focus. First, we have to respect and reward the people on our team, making sure they feel our success as we grow — with compensation, stock option grants, and improving benefits. For example, in the past few months, we've enhanced our PTO, 401k and healthcare benefits for all employees. Second, we set a high bar as we build the team. Top performers want to work with other top performers. We need to make sure we are building a team that will attract more talent as it grows. We feel we've done a good job of this so far, but this is something that is hard to maintain as we grow so we have to focus on this explicitly. This also means giving the leaders on our team the resources they need to hire and develop the talent they need to achieve our ambitious goals. Third, build a company culture that naturally supports our principles and encourages the behaviors we want to see. We treat this as a strategic project that involves the entire company, but especially our management team. For example, we have a designated "Ambassador of Fun" whose job it is to make sure we take time to celebrate and enjoy our accomplishments. With regard to a plan to add more management talent, we did just add a very talented Director of Product, who joins our management team, with our recent hire of Michael Swanson. I maintain an org chart that has boxes for many different jobs at various levels throughout the company. At this point, one person often has their name written in multiple of those boxes. For example, in addition to being CEO, I am also currently CFO and Director of HR (among others). I'm delighted when I have the opportunity to replace my name in a box on that org chart with someone who will do a job better than I ever could in that position. As far as additional commercialization and business development positions, we are currently hiring to fill a new Sales Associate position (which I realize is not exactly what you asked about, but is in the same ballpark). It is just a start. As we grow, we have plans to grow out all the parts of our organization in a balanced fashion.

We’re focused on building a great business, including an awesome product with an amazing team and strong company culture. We have been very intentional about laying a solid foundation for our future growth. We have several goals we are currently pursuing: 1. Within 24 months: - More than double our annual revenue to $2M+ - Gain meaningful traction beyond the swimming market - Raise a Series A of at least $5 million 2. Within 5 years: - Exceed $10M in annual revenue Future projections cannot be guaranteed. However, we do take the goals we set and the commitments we make very seriously. There are many potential exit opportunities for Team Topia. The sports management software segment is currently a “hot” sector with a lot of M&A activity from larger competitors, private equity firms, giant media companies like NBC/Universal, and huge retailers like Dick’s Sporting Goods. While we would certainly entertain attractive offers, especially in “1+1=3” scenarios where our merging with another company would unlock new potential and capabilities, we are not looking for a quick flip. Eventually, an IPO is a real possibility. Another sports platform, Active Network, went public in 2011 before later being taken private in 2013 by Vista Equity Partners for $1.05 billion. Ironically, it was Active’s archaic swim team management software that originally inspired me to start Team Topia in the first place. Completing that circle by taking Team Topia public would be gratifyingly poetic, indeed.

Nearly every club collects dues & fees through the Team Topia platform. The only exceptions are generally teams that do not collect any dues, such as school-affiliated teams. This isn't a metric we track, so I cannot provide a precise percentage at this time, but I estimate over 90% of teams on our platform collect dues and fees through our platform. So far, in 2021, we have processed $20,204,967 in registration dues & fees, including merchandise purchased during registration. Of this amount, 72% was collected via online credit card payments, 23% was paid offline via check, and 5% was paid via private club membership accounts, which is typical of teams affiliated with country clubs. An additional $791,174 has been processed in 2021 outside of registrations via online stores on team websites. 100% of these transactions are processed via credit card. Cost of Goods (COGs) in our financials includes the following items: - Payment processing fees - App store platform fees - Web hosting & related services - Support-related software & services

Thank you for the questions! I'll dig into each one in turn. == Q: Roughly how much growth do you anticipate will come from expansion within swim vs other sports? Is there much more growth available within swim? == Even with the traction we have in the swim market, there is still room to grow more than 10x within the swim market. Our estimation is that the total addressable market for swim team and meet management software is around $25-50M per year in the US and $80-100M per year worldwide. Primary available growth areas in the swim market include: 1. Meet Management — There is a very real near-term opportunity for our Meet Maestro product to displace the current market leader (Hy-Tek Meet Manager). This alone could result in 10x increase in revenue. (It is also worth mentioning here that Hy-Tek Meet Manager is also the leading solution for managing track & field meets in the US.) 2. Year-round/club — We are currently hard at work on features to support the more complex billing needs of year-round, club swim teams. A successful launch of these features could also quickly multiply annual revenue. 3. International — We currently have customers in 18 different countries, but we have not yet invested in engineering to support any languages other than English or to market our products internationally. While expanding internationally definitely comes with many legal and logistical complexities, it also presents another opportunity to further multiply revenues. The biggest near-term opportunity is in Australia, which is not only English-speaking, but also has rougly double the level of participation in competitive swimming as the US. It also helps that our head of Sales & Marketing is an Australian Olympic swimmer with a rich network of contacts in this market. Swimming represents roughly 5-10% of the overall sports market, thus expansion beyond swimming represents another opportunity to grow revenue by at least another order of magnitude.

== Q: To what extent will you be able to leverage existing tech for other sports? == Most of the technology we've built is not sport specific. Our platform includes terrific features for website content management, communications, roles & permissions, calendars, online registration, and volunteer management — none of which are specific to swimming. All of these are easily leveraged in other markets. In my opinion, after all the effort we've put into building this platform, it would be a shame *not* to expand it to serve additional sports. As for the parts of our platform that are swimming specific, we think of them more in terms of being "timed sport" specific. And those features should be relatively easy to extend to support other timed sports. For example, as mentioned previously, the primary software used to run swim meets (Hy-Tek Meet Manager), which Meet Maestro is rapidly replacing in the swim market, is also the market leader for running track & field events. We already are feeling "pull" from the market into other sports. Even though we currently only market to swim teams, occasionally a non-swim team will sign up for an account. We always respond to these non-swim teams suggesting we close their accounts because we don't want them to be disappointed by the (current) swim-centric focus of our platform. However, in some cases, despite our objections, teams will tell us they want to pay for SwimTopia anyway, because even with its limitations, they prefer it over alternatives. I've had a customer tell me "Look, you can either take my money, or I can hang up and call back pretending to be a swim team, what do you want me to do?" As a result, today we have a handful of track & field, cross-country, and ski teams using SwimTopia. With this campaign, I am happy to finally and publicly commit to better supporting the needs of these non-swim customers.

== Q: Is there risk of spreading the company too thin? How will you ensure that you understand the needs of other sports as intimately as you understand the needs of swim? == Great question! First, I should point out that our team's experience is not limited to swimming. Like most kids in the US, my kids played multiple sports. In addition to being a swim volunteer, I also coached my kids soccer and basketball teams. My sons played baseball and participated in robotics competitions. My daughter was very active in dance, basketball, and volleyball. Other members of our team have similar experience and exposure to a wide range of sports and activities. We started with swimming not because that is all we know, but because we saw a unique opportunity in the swim market that makes it a great "beachhead" from which to launch a platform to serve all kinds of sports. Existing platforms either offer very shallow support for tracking anything more than team scores and player positions or they are narrowly focused on a single vertical sport. We’re taking a different approach. We’re building a platform that supports all the *foundational types* of competition, such as timed sports (e.g. swimming, track, cross-country), and subjectively judged sports (e.g. diving, gymnastics, cheerleading), and making it extensible so that end-users who are passionate domain experts in a specific sport are able to tailor our platform to their needs. This approach will enable our customers to extend our platform to add deep support for potentially any sport or activity. This is a very similar to the crowdsourced localization strategy used by Facebook to add support for dozens of languages in just a few months, and which is credited with sparking that company's rapid global expansion. We have a two-pronged strategy for expanding into other sports. First, we will intentionally and methodically expand into naturally adjacent markets including track & field, cross country, diving, and gymnastics. In these cases, we will need to hire or build domain expertise in each additional sports. Expanding this domain expertise is something we are actively doing now. Second, we will simultaneously encourage and support organic expansion into additional sports by creating a platform that coaches and parents love and making them aware the same platform can be extended for use with potentially any other sport or activity. In the US, the majority of kids involved in sports participate in more than one sport. Thus, there is a built-in natural viral effect that—if executed effectively—can quickly spread to dozens of sports in just a few seasons.

Thanks for the question! Our products are currently built by our VP of Engineering (Chris Bonser) and yours truly, Founder & CEO (Mason Hale), with occasional assistance from contract/outsourced development resources. We don't have any dependencies on outside contractors to make updates or bug fixes to any of our products. Therefore, even though we do utilize contract resources at times, I would not describe our development as "outsourced." An expected immediate benefit of this campaign is to grow our development team so that we can more quickly add features and respond to customer feedback and suggestions. In fact, we're already seeing those benefits! As a direct result of this campaign, we recently opened a new Sr. Software Engineer position. If you know anyone who might be interested in joining our amazing team, we appreciate sharing the link to our careers page with them: swimtopia.com/careers

While we do have registered trademarks, we do not currently hold any patents, pending or otherwise.

Thanks for the question. To be clear this is an investment, not a contribution or donation. You would be investing to own an equity stake in the company. The investment vehicle we're using for this campaign is a convertible note. Convertible notes are very common for investment in early stage companies. It is a loan made to the company that includes special terms to convert the capital + accrued interest to equity in a future priced equity round of $1,000,000 or more (called a Qualified Financing). I recommend reading Wefunder's primer on convertible notes: wefunder.com/post/17…vertible-notes-work Our goal is to raise a Series A round of $5 million or more within the next 24 months. We can't guarantee we will achieve that goal, but that is what we are focused on achieving. If we do reach that goal and you invested in the campaign, your invested capital plus accrued interest would convert to shares of equity at that point in time. The price per share (and thus the % of the company) would be determined by the price set in that future equity round. Because you would be investing earlier, there are two terms in the convertible note that are meant to give you additional upside, relative to investors that invest later in that future round. These terms are: - Valuation cap: The valuation cap for this campaign is $10 million. This means that if in a future Qualified Financing the company pre-money valuation is set at something higher than $10 million, your investment would convert at the cap, as if the valuation were $10 million. Hypothetically, if a future Qualified Financing valued the company at $20 million, your investment would convert to approximately 2x the number of shares as someone investing for the first time in that future round, due to the valuation cap. I say "approximately" because accrued interest and rounding to whole shares could cause the actual number to be slightly more or less than 2x in that scenario. - Discount rate: The discount rate for this campaign is set at 20%. If on the other hand a future investment valued the company at $10 million or less, your investment would convert at a 20% discount of that future valuation. So if the future valuation was $10 million, your investment would convert as if the valuation was $8 million instead. Note that either the valuation cap or discount rate would apply, not both. The term most beneficial to the investor (you) would be used. Because we don't yet know exactly when a future Qualified Financing will happen or what the valuation may be at that time, we can't precisely say what % of the company your investment would be worth today. But given the valuation cap and discount rate, you have some assurance of a good return on your investment, provided a Qualified Financing occurs. It is also worth addressing the fact that the future is uncertain. We can't predict what will happen. A future Qualified Financing may never occur. In that case, this investment is still a debt on the company's balance sheet that is accruing interest. The interest rate for this campaign is set at 4% and the term of the loan is set at 36 months. No one would typically invest solely for the interest rate, but it does provide downside protection to the investor. In the event of a company liquidation, investors in convertible notes, as debt holders, would be repaid with interest before any other shareholders/investors would be receive money. And if the 3 year term expires with no Qualified Financing the note would come due and need to be repaid with interest at that time. Relative to other forms of investment, where if no "exit" occurs you never have an opportunity to get your money back, this is another valuable form of downside protection. That interest is continually accruing also creates a "ticking clock" in the mind of the company founder (me) to reach a Qualified Financing sooner rather than later so that accrued interest does not continue to pile up. In this way, the interest rate aligns the interests of the investor and company (both want to get to a Qualified Financing, with as a high a valuation as possible, sooner rather than later). I always like aligning interests. ;-)

The convertible notes will convert to equity when a Qualified Financing occurs, which is defined as a priced equity round of $1,000,000 or more. Our goal is to raise a Series A round of $5M or more within the next 2 years. While we cannot guarantee hitting the goal, that is our plan. Hitting this goal would be a Qualified Financing that would result in conversion of all notes from this crowdfunding campaign. I should note that while no one generally invests in a convertible note for the interest rate, that interest rate does create a "ticking clock" that increases the urgency for the company to reach a Qualified Financing so that the accrued interest does not continue to grow indefinitely. This feature aligns interests for investor and the company: everyone want to reach a Qualified Financing to convert the notes. However, because a convertible note is debt carrying interest, it also provides significant downside protections to the note holder, which are not present in other forms of investment. Please see my reply to the previous question for more details.

Hi George — investors in our Wefunder campaign were repaid principal plus interest (4% per year) which equates to (approximately) a 1.12x return on investment. Please see the confidential investor-only updates for more details.

Please see answer above