RECORD Notes

Royalty-Linked Notes (RLNs) are structured, tokenized financial instruments secured by future royalty revenues from music catalogs. They provide rights holders—such as artists, labels, and publishers—with upfront capital in exchange for assigning their future royalty streams.

Revenue-Backed, Not Debt-Based

RLNs transfer economic rights to future royalties, differing fundamentally from traditional loans. Investors receive repayments directly linked to royalty performance from the revenue originating platforms.

Built-In Legal Safeguards

RLNs include critical investor protections:

• Irrevocable Assignment: Economic rights fully transferred for the RLN term.

• Bankruptcy Isolation: Protection against claims in issuer insolvency.

• Enforcement Terms: Defined penalties triggered by issuer non-compliance, ensuring strong contractual protection.

Dynamic Return Structure

The innovative maturity structure aligns stakeholder incentives:

• Minimum Return Threshold: Note maturity extends automatically if performance falls below set benchmarks, giving a protection to investors.

• Maximum Return Cap: Early closure when returns exceed performance expectations, securing investor gains, reducing the friction for right holders.

Due Diligence and Pricing

Every RLN undergoes independent underwriting and third-party validation, ensuring transparent pricing, risk clarity, and consistency across the ecosystem.