How Mogli used Profit Units to Incentivize Employees, Retain Talent, & Generate $7M ARR

How Mogli uses Profit Units to Simplify Employee Ownership, Retain Talent and Bootstrap to $7M+ ARR Stevan Simich CEO and Founder, Mogli Technologies

Creating Wealth for the Next Generation of Technologists Why Profits Units are Better Than Traditional Equity Options for LLC Bootstrappers Options limit employee wealth and ownership How we kept staff as W2 and ensured Capital Gains Rates upon liquidity events Granting equity changed the sense of ownership Create your vesting schedule Termination rules Allow grants at discretion of LLC managers PUGs allow for various series of issuance Voting or non-voting Allow or not for tax (gain or loss) pass through benefit or just limited to a liquidity event Traditional Option vs PUG Nuances & Structure of PUG Structuring Series of Units

Mogli’s Revenue Growth From Mogli’s first SMS with Kenyan Farmers in 2013 to $7M+ in 2023 and clients across the globe, organization size and all verticals… CY 2023 $7M anticipated

PUG (Profit Unit Grant) Structure Maximizes benefit financially, operationally, culturally and with taxation Traditional equity options limit the creation of employee wealth and ownership Few employees can afford the cost of options We created two LLCs: Mogli Holdings (K1) Mogli Technologies (W2) W2 for operational and tax simplicity for staff K1 to ensure Capital Gains Rates Granting equity changed the sense of ownership, responsibility and loyalty for staff Excitement and reward for effort Limiting Employee Wealth What we do at Mogli Change Mindsets

Cap Table How we structure Profit Unit Grants Series A - Founders Voting rights K1 (gains and losses) “Threshold Value” Series B - Executives and staff Non Voting K1 as owners (no gains or losses) W2 as staff Gain liquidity upon an event greater than the threshold value Includes units reserved for future employees

It’s a Grant Some considerations to manage performance and retention Industry tends to be 4 year vesting plans At Mogli we chose a 3 year vesting plan - Vests upon the anniversary and monthly until full vesting Structured grant in 2023 With cause Forfeit vested units Without cause Reduce vested % ownership to discourage turnover Employee keeps 25% of vested units Buyback strategy Mechanism in place to buyback shares at discounted value Allow or modify grants at discretion of LLC Managers based on employee situation Employee has to leave due to family emergency Death or disability of employee Nuances & Structure of a Profit Unit Grant Termination Rules Grants Discretion

Nuances of Our PUG Plan Trade offs with giving ownership to staff Various issuance allows more flexibility Design to suit the business Allow for different classes of ownership Voting or non voting Units/Series Threshold Value for Series A Allows capital to be drawn by Series A holders up to threshold Avoids Dilution of Series B holders Allow / not allow for tax (gain or loss) pass through benefit Limit series holders only to a significant liquidity event Structuring Various Series of Units PUG Rights Taxes

Profits Units Create Opportunity A great ownership strategy for a growing bootstrapped business Limits creating employee wealth and ownership How we kept staff as W2 and ensured Capital Gains Rates upon liquidity events Granting equity changes the sense of ownership Aggressive vesting term Termination rules Allow grants at discretion of LLC managers PUGs allow for various series of issuance Voting or non-voting Allow or not for tax (gain or loss) pass through benefit or just limited to a liquidity event Traditional Option vs PUG Nuances & Structure of PUG Structuring Series of Units

Stevan Simich CEO and Founder, Mogli Technologies