Mootral

Key Information

Investment Terms

This investment round is being raised by way of a “SAFE” convertible instrument, which is attached in the Documents section of this Campaign.

Whilst similar in intent and mechanics to the standard Seedrs Advanced Subscription Agreement, this instrument differs in a number of ways, so investors should read the full instrument along with the key terms set out below:

• VALUATION CAP: £18,886,500

• DISCOUNT: 20%

• There is no longstop date applicable to this SAFE. Investors will remain as SAFE holders until a conversion event, being an ‘Equity Financing’, a ‘Liquidity Event’ or a ‘Dissolution Event’. It's the company's intention to seek an Equity Financing in late 2021.

• EQUITY FINANCING: The instrument will automatically convert into equity on an Equity Financing at the lower of: (i) the price paid in the Equity Financing, less the Discount; and
(ii) the share price determined by the Valuation Cap.

• ‘Equity Financing’ is defined as a bona fide transaction or series of transactions with the principal purpose of raising capital in exchange for the issue of Preference shares. Investors should note that there is no minimum size that the Equity Financing needs to meet in order to trigger conversion.

• LIQUIDITY EVENT: On a ‘Liquidity Event’ (a change of control transaction or IPO), the investor can either receive its investment back or convert into shares in the Company at the Valuation Cap price. If the investor elects to receive the cash investment back, and the company does not have available cash to pay all such investors who so elect, available cash will be distributed pro rata and any remaining SAFE Interest will convert to shares at the Valuation Cap price.

• DISSOLUTION EVENT: On a ‘Dissolution Event’ (company ceasing operations or a dissolution or winding up of the company), the SAFE investments become repayable (subject always to available proceeds).

Mootral has already raised £574,331 on terms consistent with this SAFE and the Seedrs investment is an extension of that funding round. It was therefore not possible to adjust terms to match the standard Seedrs convertible terms. Investors should review the SAFE instrument in full and are encouraged to ask any queries they may have about the mechanics and seek their own advice on the terms.

The SAFE comes with “Most Favoured Nation” (MFN) rights, which means that in case the company issues convertible instruments subsequent to the Seedrs raise at more favourable terms than the Seedrs SAFE, then the Seedrs SAFE will automatically enjoy these more favourable terms.

Outstanding debt

The company has the following outstanding loans and Convertible Loan Notes:

1. A loan facility of CHF 894,247 (GBP 700,500) with CHF 300,000 currently drawn down. This loan is guaranteed by the Swiss government and is at 0% interest. Repayments are to start from the end of September 2021, with repayment of CHF 24,841 (~GBP 20,000) per quarter over the next 10 years.

2. A long term loan of EUR 1.5m, with an interest rate of 1% above EURIBOR. Repayments will start in December 2026, at which time EUR 300,000 will be repaid annually over the following 5 years.

3. A Convertible Loan Note of USD 100,000 from US based Accelerator Third Derivative, with the following terms:
a. 8% interest p.a.
b. 20% discount
c. Share class: common stock
d. Conversion triggers:
- Next equity financing round: CLN to convert at the lower of: (i) the share price of the next equity financing round, or (ii) the share price at the next equity financing round with a 20% discount.
- Non-qualified equity financing round: if the company exits or liquidates with gross proceeds of less than USD 1m, investors can choose to convert to shares, as outlined in (i).
- On a company exit: the company will pay the investor 2x the outstanding principal balance, plus all accrued and unpaid interest.
e. If not converted, the CLN is repayable from December 1st, 2022 at the option of the lender.

4. A Convertible Loan Note of EUR 2.5m to Bionexus LLC, with the following terms:
a. Interest rate of 5% p.a.
b. Conversion triggers:
- Liquidity event (equity finance round of over EUR 10m, a change in control, or an IPO): the CLN will convert to the highest class of shares at a share price at the lower of: (i) 20% discount on the pre-money valuation of the equity raise, or, (ii) at the current valuation cap of GBP 18,886,500.
- Voluntary conversion: the investor has the right to convert the CLN to the highest class of shares at any time. This will convert the CLN at a valuation cap of EUR 47m.
- Repayment by the Company: the company has the right to repay the CLN to the investor at any time, plus double the amount of interest accrued at the time of repayment. If the Company elects to repay the investor, the investor has the right to choose to be issued shares at a valuation cap of EUR 47m, rather than cash repayment.

Please note, this CLN was initially entered into with a German Family Office, but was subsequently acquired by Bionexus LLC, which is controlled by a connected party to the Founders.

None of the funds raised will be used to repay these loans.

Outstanding SAFE agreements

Since November 2019, investment in the company has been through SAFE Notes that are on the same terms as this campaign. To date, this totals £4,072,079, excluding any amount shown in the progress bar of this campaign. These SAFE notes will convert at the same time as investment in this round.

Republic Co-raise

Mootral is co-raising with Seedrs US Partner, Republic, for a joint equity crowdfund. Investment on Republic is being raised via a Private Placement Memorandum (PPM) on the same terms offered to Seedrs investors. The exchange rate for these investments has been set at £1/$1.36.

The investment round on Republic will be open until mid-October, and so the company will continue to raise funds as part of this round after the Seedrs campaign closes.