Editing Freetrade
The edit can be undone. Please check the comparison below to verify that this is what you want to do, and then publish the changes below to finish undoing the edit.
Latest revision | Your text | ||
Line 10,330: | Line 10,330: | ||
=== Key terms of the convertible loan note === | === Key terms of the convertible loan note === | ||
{| class="wikitable" | {| class="wikitable" | ||
|+ | |+ | ||
! colspan="3" |A convertible loan is an investment for equity in a company where shares will be issued at a future date. Usually, the shares will be issued when the company completes a larger round of investment. A convertible loan allows a company to raise equity finance without setting a valuation. | ! colspan="3" |A convertible loan is an investment for equity in a company where shares will be issued at a future date. Usually, the shares will be issued when the company completes a larger round of investment. A convertible loan allows a company to raise equity finance without setting a valuation. | ||
Please see below a summary of the key terms of within tranche 1 of the convertible loan notes offered to Crowdcube investors in this round. | Please see below a summary of the key terms of within tranche 1 of the convertible loan notes offered to Crowdcube investors in this round. | ||
|- | |- | ||
|Share type(s) on offer | | | ||
{| class="wikitable" | |||
|'''Share type(s) on offer''' | |||
|Series B shares. | |Series B shares. | ||
|The convertible loan notes will convert into the most senior share class created and in issue at the point of conversion. | |The convertible loan notes will convert into the most senior share class created and in issue at the point of conversion. | ||
The Company's most senior share class is currently Series B shares, which carry voting and pre-emption rights and a preference to receive the issue price back first alongside the other preference shares in certain circumstances. | The Company's most senior share class is currently Series B shares, which carry voting and pre-emption rights and a preference to receive the issue price back first alongside the other preference shares in certain circumstances. | ||
|- | |- | ||
|Duration/Relevant Date | |'''Duration/Relevant Date''' | ||
|12 months from the date of issue. | |12 months from the date of issue. | ||
|If no conversion event occurs before this date, the convertible loan notes will automatically convert into Shares. | |If no conversion event occurs before this date, the convertible loan notes will automatically convert into Shares. | ||
|- | |- | ||
|Discount Rate | |'''Discount Rate''' | ||
|20% | |20%. | ||
|This is the amount of discount on the Shares which investors will receive compared to the share price at which other shares in the Company are being issued following a Qualified Financing event. | |This is the amount of discount on the Shares which investors will receive compared to the share price at which other shares in the Company are being issued following a ''Qualified Financing'' event. | ||
|- | |- | ||
|Interest | |'''Interest''' | ||
|N/A. | |N/A. | ||
|The convertible loan notes offered in tranche 1 of this Crowdcube round do not accrue interest. | |The convertible loan notes offered in tranche 1 of this Crowdcube round do not accrue interest. | ||
|- | |- | ||
|Valuation Cap | |'''Valuation Cap''' | ||
|£400,000,000 pre-money valuation. | |£400,000,000 pre-money valuation. | ||
|Convertible loans may contain a Valuation Cap, which is the maximum pre-money valuation of the Company that will be used to calculate the share price if there is a Qualified Financing prior to the Relevant Date. | |Convertible loans may contain a Valuation Cap, which is the maximum pre-money valuation of the Company that will be used to calculate the share | ||
|} | |||
{| class="wikitable" | |||
| | |||
| | |||
|price if there is a ''Qualified Financing'' | |||
prior to the ''Relevant Date.'' | |||
|- | |- | ||
|Default Price | |'''Default Price''' | ||
|£3.7711 | |£3.7711 | ||
|The Default Price is the price per Share of the Company that will be used to calculate the number of Shares investors will receive following a CET1 Capital Event, Sale or on the Relevant Date. | |The Default Price is the price per Share of the Company that will be used to calculate the number of Shares investors will receive following a ''CET1 Capital Event'', ''Sale'' or on the ''Relevant Date''. | ||
|- | |- | ||
|Conversion Events | |'''Conversion Events''' | ||
|The convertible loan will convert into fully paid Shares on the occurrence of the following: | |The convertible loan will convert into fully paid Shares on the occurrence of the following: | ||
|The convertible loan notes will convert into fully paid Shares in the Company on the occurrence of certain events. | |||
|- | |||
| | |||
| | |||
● ''Qualified Financing'' - automatically if the Company raises at least £40,000,000 at a price per Share of more than | |||
£3.7711 (''Default Price''). | |||
| | |||
|- | |||
| | |||
| | |||
● ''CET1 Capital Event'' - in the event that the capital held by the Company to meet its regulatory capital requirements under the FCA’s rules, falls below a certain level. Please note that in the event that there is a CET1 Capital Event only the amount of outstanding convertible loan required to meet the regulatory capital requirement will convert. | |||
| | |||
|- | |||
| | |||
| | |||
● ''Relevant Date'' - if no conversion event has occurred automatically on the date falling 12 months after the date of issue of the convertible loan note (or such other date as may be agreed between the Company and the Noteholder Majority). | |||
| | |||
|- | |||
| | |||
| | | | ||
● ''Sale -'' automatically on a sale of all, or substantially all of, the Company’s assets; or a sale of any of the shares in the | |||
| | |||
|} | |||
{| class="wikitable" | |||
| | |||
|Company resulting in a change of control of the Company. | |||
| | |||
|- | |||
|'''Conversion Price''' | |||
|● On a ''Qualified Financing'' a price per Share equal to the lower of: | |||
○ the lowest price per Share paid by investors in the Qualified Financing by a 20% discount; and | |||
○ a price per share which results from dividing a pre-money valuation of | |||
£400,000,000 by the number of Shares in the ''Fully Diluted Share Capital.'' | |||
|This is the price per Share at which the convertible loan notes will convert into Shares in the Company following a ''Qualified Financing, CET1 Capital Event, Relevant Date'' or ''Sale.'' | |||
|- | |||
| | |||
| | |||
● On a ''CET1 Capital Event;'' the ''Relevant Date;'' or a ''Sale,'' the Default Price (£3.7711 per Share). | |||
| | |||
|- | |||
|'''Additional Shares''' | |||
|In the event that, following conversion | |||
|The convertible loan notes being | |||
|- | |||
| | |||
|of any of the convertible loan notes | |||
|offered to Crowdcube investors | |||
|- | |||
| | |||
|prior to a ''Qualified Financing,'' the | |||
|benefit from anti-dilution protection. | |||
|- | |||
| | |||
|Company issues Shares at a price | |||
| | |||
|- | |||
| | |||
|less than the Default Price, | |||
| | |||
|- | |- | ||
| | | | ||
|noteholders will be issued with such | |||
| | |||
| | |||
|- | |- | ||
| | | | ||
| | |number of additional Conversion | ||
| | | | ||
|- | |- | ||
| | | | ||
| | |Shares to put them in the position they | ||
| | | | ||
|- | |- | ||
|Tax relief being offered | | | ||
|would have been if the loan notes had | |||
| | |||
|- | |||
| | |||
|converted at the lower price. | |||
| | |||
|- | |||
|'''Repayment''' | |||
|Provided no ''CET1 Capital Event'' has occurred and the FCA has given prior permission for such repayment, the convertible loan notes are repayable at the written demand of the majority of noteholders (being holders of 66.67% of the principal amount outstanding) on an Event of Default - i.e. if the Company becomes insolvent. | |||
|In certain circumstances the convertible loan notes may be repaid, rather than converted into Shares. | |||
|} | |||
{| class="wikitable" | |||
|'''Tax relief being offered''' | |||
|N/A. | |N/A. | ||
|Tax relief is not being offered in respect of tranche 1 of the convertible loan notes offered in this Crowdcube round. | |Tax relief is not being offered in respect of tranche 1 of the convertible loan notes offered in this Crowdcube round. | ||
|} | |||
| | |||
| | |||
|- | |||
| | |||
| | |||
| | |||
|- | |||
| | |||
| | |||
| | |||
|} | |} | ||