Residently

Key Information

Tax Relief:

The Company has applied for Advanced Assurance for EIS and expect to hear back from HMRC imminently. The Company are confident they will receive this Advanced Assurance.

ASA Terms:

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 (the "ASA") are set out below. This convertible differs in a few key ways from Seedrs' standard convertible instrument, so please read carefully.

Conversion is triggered by ("Trigger Events"):
(1) An Equity Fundraise – defined as the Company raising bona fide equity investment of at least £2,500,000 from one transaction or a series of transactions, in exchange for the company issuing equity shares;

(2) A Dissolution Event - defined as the Company being wound up, liquidated, dissolved or the cessation of its operations;

(3) A Liquidity Event - defined as being one of the following:
- A Change of Control of the Company (whereby a person who did not already hold a controlling interest in the Company subsequently acquires one);
- An Asset Sale (disposal of all / substantially all the Company’s assets); or
- An IPO – being a listing of the Company’s shares on a recognised stock market or secondary market; and

(4) The Longstop Date, namely 31 July 2022, being reached and subject to none of the Trigger Events at (1), (2) and (3) having occurred by that date.

On the occurrence of a Trigger Event, your investment will convert into ordinary shares at a price per share that depends on the Trigger Event in question. The various conversion mechanisms are set out below. Again these differ from Seedrs’ standard terms, so please review these carefully:

- Equity Fundraise (Trigger Event (1) above): A 20% discount to the highest price per share paid for as part of the Equity Fundraise in question;

- Dissolution Event and Longstop Date (Trigger Events (2) and (4) above): A price per share that is equal to the valuation cap of £30m divided by the fully diluted share capital of the Company as at the date of entry into the Seedrs ASA, (excluding any shares to be issued on conversion of the ASAs and SAFEs referred to in this Key Information (including the Seedrs ASA)); and

- Liquidity Event (Trigger Event (3) above): A price per share that is equal to the valuation cap of £30m divided by the fully diluted share capital of the Company as at the date of the Liquidity Event in question (exlcuding any shares to be issued on conversion of the ASAs and SAFEs referred to in this Key Information (including the Seedrs ASA).

The Seedrs ASA will not convert at a less advantageous price than the existing SAFEs and ASAs entered into as part of this convertible round.

SAFE Investment & Terms:

Please note, the Company is raising investment alongside this Campaign via a SAFE (Simple Agreement for Future Equity). As the terms of the SAFE differ slightly from what is being offered to Seedrs investors, it has not been reflected in the campaign bar.

Currently, £2.4M has been raised through the SAFE, the terms of which are laid out below. The terms of the SAFE are substantially the same as the ASA (the ASA having only been entered into to provide an EIS eligible alternative) save for the following key differences:

(1) On an Equity Financing, the SAFE will convert into the same share class as the shares being issued as part of the Equity Finance, with identical rights, privileges and preferences (where relevant), save that any:
- liquidation preference;
- price-based anti-dilution protections; or
- dividend rights,
shall be calculated on the basis of the attributable conversion price.

(2) The price per share at which the SAFE investment will be converted at on an Equity Financing will be:
- if converted prior to 30 July 2022: A 20% discount to the highest price per share paid as part of the Equity Financing in question (the “Discounted Price”); or
- if converted after 30 July 2022: the lower of (i) the Discounted Price and (ii) a price per share that is equal to the valuation cap of £30m divided by the fully diluted share capital of the Company at the date of the SAFE (excluding any shares to be issued on conversion of the ASAs and SAFEs referred to in this Key Information (including the Seedrs ASA)) (the “SAFE Price”).

(3) On a Liquidity Event, the SAFE will convert into seed preferred shares (if either an Asset Sale or a Change of Control) or ordinary shares (if an IPO), in each case at a price per share that is equal to the valuation cap of £30m divided by the fully diluted share capital of the Company as at the date of the Liquidity Event (excluding any shares to be issued on conversion of the ASAs and SAFEs referred to in this Key Information (including the Seedrs ASA));

(4) In the case of a Dissolution Event, the Company will pay the SAFE holders a preference payment equalling their investment. If the Company does not have sufficient assets with which to meet that payment, then all of the Company’s assets will be distributed to the SAFE holders; and

(5) If the SAFE is to convert on the Longstop Date, namely 27 July 2023, the SAFE will convert into seed preferred shares at the SAFE Price.

(6) The Longstop Date is 27 July 2023 (rather than 31 July 2022 as per the Seedrs ASA).

Share Classes:

The Company has multiple classes of shares, full details of which can be reviewed in the Company’s Articles of Association which are attached to this campaign (the "Articles of Association"). All investors in the ASA round, including Seedrs investors, will be receiving ordinary shares and should be aware that:

(1) Preferred shares (referred to as ‘Seed Shares’)
• The Company has seed preferred shares which rank ahead of the ordinary shareholders with a 1x non-participating preference. Details can be seen in the Articles of Association.
• The seed preferred shares also have anti-dilution rights in the event the Company issues shares at a price lower than that paid for the seed preferred shares.

(2) Hurdle shares
• The Company also has a series of hurdle shares in issue, which have been used to incentivise management/employees in the Company. These shareholders will only participate in proceeds if the exit value is above the relevant ‘hurdle’ value.
• To the extent hurdle shares have already been issued or allocated at the time of conversion, they will be included in the calculation of the Company’s capitalisation if the ASA converts on the Longstop Date and therefore will not have a further dilutive effect on investors in the ASA.

(3) Restricted Ordinary Shares
• These are ordinary shares issued as part of an employee incentive scheme, which contain certain restrictions.

(4) Ordinary shares
• Voting rights
• Pro-rata dividend rights
• Pro-rata share in distribution of assets as a result of a liquidation, following the preference payment to preferred shareholders. Hurdle share holders will only be allowed to participate pro-rata following the applicable valuation hurdle having been exceeded (as above).

The above is a brief summary of certain key aspects of the share capital structure only.

Material Debt:

The Company has the following outstanding loans:

1. $1,337,167.16 (USD) loan from Venture Lending & Leasing at an interest rate of 12% per annum. The loan is to be repaid by December 2023. A debenture had been granted giving the lender a charge over all assets of the Residently Group.

The funds raised in this campaign will not be used to repay these loans.

Convertible Loan:

The Company has the following outstanding convertible loans, which may convert to equity after this round and dilute existing shareholders:

1. A £2,537,672.43 convertible loan (the ‘Loan’) from a group of investors and matched by The Future Fund, which will either convert into equity or be repayable in accordance with the following key terms:

Conversion:
• Interest rate: 8%
• Discount: 20%
• Valuation cap: None
• Share class: the most senior class of shares
• Maturity Date: 36 months after the Loan was made (being 27 July 2023)

• Conversion trigger:
(i) automatically on a Qualified Financing, being any bona fide equity financing round occurring after the date of the Loan agreement and prior to the Maturity Date in which the Company raises an amount equal to at least the aggregate amount of the Loan received by the Company at the time of such financing round, in newly committed capital (excluding (a) any part of the Loan; (b) any shares issued on the exercise of any option granted to an employee, officer or consultant of the Company by way of incentive; and (c) any issue of shares on conversion of any part of the Loan);

(ii) at the election of the Lender Majority (or a Relevant Majority in the event that the Company is raising less than 25% of the principal amount of the Loans outstanding as at the date of the financing) on a Non-Qualified Financing, being any bona fide equity financing round, other than a Qualified Financing, occurring after the date of the Loan and prior to the Maturity Date in which the Company raises newly committed capital involving the issue by the Company of shares to investor(s) (excluding (a) any part of the Loan; (b) any shares issued on the exercise of any option granted to an employee, officer or consultant of the Company by way of incentive; and (c) any issue of shares on conversion of any part of the Loan);

(iii) subject to the consideration to be received by the Lenders, automatically on an Exit, being (i) the acquisition of a controlling interest in the Company as a result of an arms' length sale of shares in the capital of the Company; (ii) an asset sale or (iii) an IPO; and

(iv) automatically on the Maturity Date, where none of the conversion triggers above have occurred.

• Conversion price:
(i) in respect of a Qualified Financing: a price per share equal to the lowest price per share paid by investor(s) for such senior class of shares on the Qualified Financing after reducing such price per share by the Discount.

(ii) in respect of a Non-Qualified Financing: a price per share equal to the lowest price per share paid by investor(s) for such senior class of shares on such Non-Qualified Financing after reducing such price per share by the Discount.

(iii) in respect of an Exit: a price per share equal to the lowest price per share paid by investor(s) for such class of shares in the then most recent bona fide equity financing in which the Company either: (i) raises newly committed capital after 20 April 2020 and prior to the Maturity Date equal to an amount which is greater than 25% of the aggregate of the principal amount of the Loan then outstanding, after reducing such price per share by the Discount; or (ii) raised committed capital prior to 20 April 2020, from one or a series of related transactions involving the issue by the Company of shares to investor(s) (excluding (A) any part of the Loan; (B) any shares issued on the exercise of any option granted to an employee, officer or consultant of the Company by way of incentive; and (C) any issue of shares on conversion of any part of the Loan); and

(iv) in respect of the Maturity Date: a price per share equal to the lowest price per share paid by investor(s) for such class of shares in the then most recent bona fide equity financing in which the Company either: (a) raises newly committed capital after 20 April 2020 and prior to the Maturity Date equal to an amount which is greater than 25% of the aggregate of the principal amount of the Loans then outstanding, after reducing such price per share by the Discount; or (b) raised committed capital prior to 20 April 2020, from one or a series of related transactions involving the issue by the Company of shares to investor(s) (excluding (A) any part of the Loan; (B) any shares issued on the exercise of any option granted to an employee, officer or consultant of the Company by way of incentive; and (C) any issue of shares on conversion of any part of the Loan, provided that only the principal amount converting shall be reduced by the Discount and not any interest.

Repayment:

• Repayment triggers:
(i) for Loan amounts other than that invested by the Future Fund, at the election of the Lender Majority;

(ii) for the Future Fund’s element of the Loan, at the election of the Future Fund;

(iii) automatic repayment where a Lender would receive more by way of repayment than it would do by way of cash consideration upon the sale of its shares issued on a conversion triggered by an Exit;

(iv) in the event that the investors and/or the Future Fund would receive any non-cash consideration on an Exit, for any shares that would have been issued to them on conversion at the election of the Lender Majority (for Loan amounts other than that invested by the Future Fund) and/or the Future Fund (for the Future Fund's element of the Loan); and

(v) on any default of the loan agreement.

• Repayment amount: 2x the total of the Loan as well as interest that has accrued on the Loan.

Group Structure:

Investors in this round are investing into and will become shareholders of Residently Holdings Limited, Company Number: 10965217. This is the holding company for the group.

The holding company has the following wholly owned subsidiary companies:

1. Residently Services (UK) Ltd: Residently Services provides a technology platform and mobile app that connects landlords and property managers with their renters.

2. Residently Leasing (UK) Ltd: Residently Leasing rents UK properties and sub lets them to tenants – this is a temporary vehicle to provide supply of properties to Residently Services when business first set up , but the intention is for this subsidiary to eventually be wound up.

3. Residently USA LLC: Residently USA provides a technology platform and mobile app that connects landlords and property managers with their renters in the USA.

R&D Claims:

The Company has an R&D claim (to the value of £28,482) from 2017 which is under partial enquiry by HMRC and withheld from PAYE. The Company's accountants are in discussion with HMRC regarding the claim.