Mindstone

Key Information

Advanced Subscription Agreement

This investment round is being raised by way of a convertible equity investment structure, in this case an "advanced subscription agreement".

The key terms that apply to the Company’s advanced subscription agreement are set out below. See also attached Key Terms document for further details.

• Discount: conversion at a 20% discount to the valuation set by a Trigger Event.

• Valuation Cap: £20,000,000.

• Conversion is triggered by (“Trigger Events”):
- An Equity Fundraise – defined as the Company raising investment capital of at least £1,000,000 from one transaction or a series of transactions, in exchange for the company issuing shares;
- A Change of Control of the company (transfer of more than 50% of the share capital); or
- An IPO – being a listing of the company’s shares on a recognised stock market or secondary market.

• Longstop Date: 6 months from signing of instrument. (Note: this will be after the campaign closes).

• If conversion has not been triggered by the Longstop Date shares will be issued on the longstop date at the Default Share Price, which is the lower of:
- the lowest price of any shares issued after the date of this Agreement; and
- a price per share based on a pre-money company valuation of £15,000,000 on a fully diluted basis.

• The convertible would also convert to equity at the Default Share Price in the event of winding up or liquidation of the company.

Share Classes

The company currently has 3 classes of shares, Ordinary, Ordinary B and Preferred A.

Seedrs investors in this round will be receiving Ordinary shares in order to ensure EIS eligibility. Under the terms of the Advanced Subscription Agreement, some direct investors in this round may receive Preferred A shares, if the investor is not eligible for EIS tax relief.

The rights attached to the share classes are as follows:

• Ordinary shares:
- Full voting rights
- Full dividend rights
- No preference and no anti-dilution rights

• B Ordinary shares:
- No voting rights
- No preference and no anti-dilution rights
- These shares are reserved for the employee option pool

• A Preferred shares:
- Full voting and dividend rights
- 1x non-participating preference on liquidation and exit: A Preferred shareholders will first receive 1x their initial investment amount before the remaining proceeds are distributed between the Ordinary shareholders pro rata.
- Broad-based weighted average anti-dilution rights: right to be issued additional shares at nominal value in event of a down-round.

Existing Advanced Subscription Agreement

The company has the following outstanding Advance Subscription Agreement, which may convert to equity in the future and dilute existing shareholders:

1. £10,000 from an individual, with the following key terms:


• Discount: conversion at a 20% discount to the valuation set by a Trigger Event.

• Conversion is triggered by (“Trigger Events”):


- An Equity Fundraise – defined as the Company raising investment capital of at least £1,000,000 from one transaction or a series of transactions, in exchange for the company issuing of ordinary shares;

- A Change of Control of the company (transfer of more than 50% of the share capital); or

- An IPO – being a listing of the company’s shares on a recognised stock market or secondary market.

In which case, shares will convert at a discount of 20% to the Subscription or exit price.

• Longstop Date: 10/03/2023. If conversion has not been triggered by the Longstop Date shares will be issued on the longstop date at a price per share based on a pre-money company valuation of £10,000,000 on a fully diluted basis.

• On a Winding Up or Dissolution of the company, shares will convert in the same manner as at the Longstop Date.