Peckwater Brands

Key Information

Share Classes:

The company currently has 4 classes of shares, Ordinary, A Ordinary, A2 Ordinary and B Ordinary (Non-Voting). All investors in this round, including Seedrs investors, will be receiving A2 Ordinary shares.

Holders of Ordinary, A Ordinary, & A2 Ordinary shares will receive voting rights. B Ordinary (Non-Voting) Shareholders form the option pool and will not receive voting rights.

Liquidation waterfall:

The A2 Ordinary and A Ordinary shares each carry a 1x non-participating preference on a liquidation, return of capital or exit which has been drafted to be EIS eligible.

This means that on a liquidation, return of capital or exit, the proceeds will be distributed as follows:

(1) First, A2 Ordinary Shareholders will receive 1x their initial investment amount back;

(2) Second, A Ordinary Shareholders will receive 1x their initial investment amount back;

(3) Finally, the Ordinary Shareholders will share in the remaining proceeds pro rata to the number of shares held,

Provided that if the A2 Ordinary Shareholders or the A Ordinary Shareholders would be entitled to a greater amount if the proceeds were distributed to all shareholders on a pro rata basis (according to the number of shares held), then the above waterfall will not apply and the proceeds shall be distributed to all shareholders pro rata. Please also refer to the section entitled “Stonegate” below.

Convertible Loans:

The company has the following outstanding convertible loans, which will not convert to equity as part of this round but may dilute shareholders in the future:

1. £4,459,864.00 of unsecured convertible loan notes from various individual investors, with the following key terms:
• Interest rate: 1% per annum (only payable if the convertible loan is repaid on the longstop date or on a winding up event)
• Discount: 20%
• Qualified Financing - the Company raising an equity round of £10m or more
• Non-Qualified Financing - the Company raising an equity round of less than £10m
• Valuation Cap: £90,000,000
• Repayment date: 8 June 2028

- Conversion or repayment triggers:

(1) On Qualified Financing, the loan will automatically convert into the highest class of shares at the lower of (i) a 20% discount to the price of the Qualified Financing or (ii) the Valuation Cap.

(2) On Non-Qualified Financing, the Investor Majority can, with the consent of the Company, elect to have the loan automatically convert into the highest class of shares at the lower of (i) a 20% discount to the price of the Non-Qualified Financing or (ii) the Valuation Cap.

(3) On the Maturity Date, the Investor Majority can elect to have the loan plus accrued interest repaid.

(4) On a change of control, the loan will convert into the highest class of shares at the lower of (i) the lowest price paid for the Company’s shares in the change of control and (ii) the Valuation Cap.

(5) On a winding up event, the loan plus accrued interest becomes immediately repayable
Please note that the terms of the CLN can be varied by agreement of the Company and the Investor Majority.

Group Structure:

Investors in this round are investing in and will become shareholders of Peckwater Investments Ltd (12284429). This is the holding company for the group. There a 14 subsidiaries within the group which are outlined in the Org chart below:

These subsidiaries are wholly owned except for Peckwater Brands (NKD) Limited (13804935), which was previously a joint venture entered into in the Middle East taking over an existing business. Peckwater Investments Ltd still holds a controlling stake of 51% in the business.

Stonegate:

The company has entered into an additional commercial arrangement with a previous investor and current shareholder Stonegate Group, whereby Stonegate, upon a liquidation or exit, shall be deemed to hold additional A2 Ordinary Shares (representing up to 22.8% of the Fully Diluted Share Capital of the Company) subject to strict performance metrics.

These include the number of sites introduced to Peckwater by Stonegate and the performance level of such sites.

Please note, given the nature of these rights, they have not been factored into the pre-money calculation of the round but would (if achieved by Stonegate) represent future dilution to investors on an exit or liquidation.