Questions and Answers

Totem LC Group, LLC is a Wyoming company that runs a member platform for funding business-to-business purchase orders. A vendor that has a purchase order from a qualified U.S. buyer uses member capital to pay its supplier and deliver the goods. When the buyer pays, the member is repaid principal plus a target return.

1. A vendor brings Totem a purchase order from a U.S. buyer. Totem and an independent trade credit underwriter review the vendor and the buyer.
2. Trade credit insurance is bound on the buyer's payment before any money moves.
3. You select the transaction yourself, through your operator, or by asking Totem's admin to select one for you. Totem never selects a transaction for you without your request.
4. The vendor signs the transaction documents first, then you sign. Operators never sign for you.
5. Your funds go to a joint transaction account set up for that vendor, and from there to the vendor's supplier.
6. The goods ship, the buyer accepts them, and the buyer pays, usually within 90 to 100 days.
7. Totem settles the transaction and credits your principal and return to your wallet as Platform Credits.

U.S. businesses only. Each buyer is reviewed by Totem and by the insurer's underwriter, who sets the credit limit the transaction must stay within.

Yes. Members can see all documents for each transaction on the platform, including the purchase order, the insurance policy, and the transaction's sources and uses. Vendor and buyer identities are kept confidential, so you may not contact them directly. If you want confirmation of a fact, such as that a buyer issued a purchase order or that a policy is in force, ask Totem and we will arrange it, for example through the insurer or broker.

The target is 5% per transaction. That is per transaction, not per year. How much you earn in a year depends on how long each transaction takes and how quickly your funds are redeployed. The 5% is a target, not a fixed or guaranteed amount.

From the vendor. Vendors pay Totem a transaction fee as a percentage of the capital deployed. From that fee Totem pays your target return and any operator compensation and keeps the rest as platform profit. If the buyer does not pay, the fee may not be collected.

No member fees are charged on transactions, deposits, or withdrawals.

Yes. You can lose some or all of your return and some or all of your principal. Here is our policy in plain words: Totem's first loss counts for Totem's profits. Any loss above the platform profit falls on the member.

Totem does not guarantee your return or your principal and does not use its other funds to cover losses. If a transaction loses money, the operator on that transaction is not paid, but operator pay is not a reserve and does not cover your loss.

Insurance

Totem requires all vendors to purchase a trade credit insurance policy tailored to meet the needs of Totem's program. The insurance policies pay 90% of the total receivable from a buyer and Totem's internal controls only allow funding up to 80% of the receivable from a buyer. This internal policy ensures that any insurance claim covers your principal and profit return.

Each transaction carries trade credit insurance on the buyer's payment, and Totem is first in line to receive claim proceeds. Typical policies cover about 90% of an insured loss with a $2,500 deductible which Totem's vendor pays. Because the platform caps funding at the insured amount, you are not asked to fund more than the policy covers.

• Buyer disputes over quality, quantity, or delivery, and buyers rejecting goods.
• Vendor failure to deliver, unless separate performance protection is in place.
• Vendor fraud, fake purchase orders, and the same order financed twice. Trade credit policies typically exclude these.
• The deductible and the uninsured share of the receivable.
• Losses where a policy condition was missed, such as a late report of an overdue payment.

Insurers can also deny or reduce a claim. Totem keeps its own calendar of policy deadlines and receives copies of all insurer correspondence to reduce that risk, but it cannot remove it.

Yes. Fraud is the risk insurance is least likely to cover. A vendor, buyer, insider, or outside criminal could fake documents, divert funds, or redirect a buyer payment. Totem's main defenses are independent review of the buyer, a transaction account per vendor that Totem controls and reconciles, multi-factor sign-in with IP tracking, a 48-hour hold on any change to a member's bank details, account alerts, and an e-signature audit trail. These reduce fraud risk. They do not eliminate it.

Totem may step in, directly or through someone it appoints, and complete the transaction. Vendors sign a conditional assignment of their order, supplier, receivable, and insurance rights, and grant Totem a security interest. Performance protection, such as a surety or letter of credit, is available for first-time vendors and large orders. Step-in can still fail: the buyer may refuse to deal with anyone else, competing creditors may have claims, and completion costs come out of the proceeds before members are repaid. Totem's step-in process has not been tested in an actual vendor failure.

Your Platform Credits and transaction funds sit in Totem-controlled accounts. In a Totem bankruptcy, you could be treated as an unsecured creditor, which can mean delays and partial recovery. Totem also depends on a small team, a select number of vendors, and two insurers, so a problem at any one of them could affect many members at once.

Funds deployed in a transaction are unavailable until that transaction settles. Once settled, your principal and return appear as Platform Credits. You may request conversion of your platform credits to U.S. dollars on banking days. Conversions are subject to Totem's approval and available liquidity, and may be delayed. There is no secondary market, and you cannot sell or transfer your interest without Totem's written consent.

No. Platform Credits are not bank deposits and are not insured by the FDIC or any government agency. The underlying cash is held in Totem-controlled bank accounts, and Totem uses sweep or multi-bank arrangements if any account exceeds $250,000. Bank balances can still exceed insured limits.

You may authorize Totem to put returned funds into new transactions for twelve months at a time. You will be notified before each redeployment and can object. You can revoke the authorization at any time for transactions not yet funded.

• Multi-factor sign-in and IP tracking on every account.
• A 48-hour hold on any change to your bank details before funds can go to a new account.
• Account activity alerts. (Alerts are on by default; members may opt out.)
• An e-signature audit trail for every document. Totem never signs on your behalf.
• Reconciliation of each vendor transaction account against Totem's bank records, with admin confirmation before funds are released.

No security system is perfect. Cyber insurance for Totem is pending.

Local operators manage groups of members in place of a Totem employee. They may help you select transactions but cannot sign for you or move your money. Referral partners only introduce prospective members. Neither gives investment, tax, or legal advice.

Yes. Totem earns more when more capital is deployed, which is an incentive to keep money working. Operators are paid on deployed capital, which is an incentive to steer members toward funding. Totem's officers may be involved in other businesses.

Totem's program is open to qualified individuals and institutions. Before anyone can fund, Totem verifies membership eligibility.

The minimum commitment to join as a Legacy Member is $200,000.

Non-U.S. individuals may participate only if Totem clears their country of residence and they complete additional identity, tax, and sanctions checks.

Totem does not provide tax advice. The tax treatment of your participation is 100% subject to your own attorney's or accountant's interpretation.

Totem reports payments to the IRS and withholds tax where the law requires it. Members provide a Form W-9 (U.S. persons) or the applicable Form W-8 (non-U.S. persons) before funding.

In approximately four years of operation, according to Totem's records:

• no late payments: every buyer has paid on or before its due date;
• no missed payments to members;
• no missing funds;
• no past-due items on Totem's aging reports; and
• no insurance claims submitted.

Over that period Totem has funded thousands of purchase orders.

• Past results do not predict future results. A clean record does not mean a loss cannot happen.
• Because no claim has been filed and no vendor has failed, Totem's insurance-claim process and step-in rights have not been tested in a real loss.
• The record covers a limited number of vendors, buyers, and years. Totem plans to grow substantially, and growth brings new risks.

1. Talk with Totem or your operator and review how the program works, including the risks.
2. Complete identity verification and eligibility verification.
3. Provide a Form W-9 or W-8 and link a verified bank account in your own name.
4. Sign the Member Agreement.
5. Fund your account, then review and sign the documents for each transaction you choose.

Contact Totem directly at partnerships@totemlcg.com or 208-996-0435. Have your own attorney, accountant, or financial adviser review your Member Agreement and transaction documents before you commit funds.