UFODRIVE

Key Information

Convertible Details

This investment round is being raised by way of a convertible loan investment structure (“CLA”). The key terms that apply to the CLA are set out below, and also in the attached 'Term Sheet' document which you can download.

· Discount: 30%

· Valuation Cap: €21,000,000

· Longstop Date: 18 months from the date of the first CLA is signed (which may occur before the close of the Campaign).

· Interest: 10% annually which shall be (i) converted into equity alongside the principal on a conversion event; or (ii) repaid in cash on a repayment event.

· Automatic conversion on a Qualifying Equity Fundraise – defined as the company raising investment capital of at least €5,000,000 from one transaction or a series of transactions, in exchange for the company issuing shares;

· Conversion on a Trigger Event (being a Qualifying Equity Fundraise, Change of Control or IPO) will be at the lower of:

o the lowest price paid per share in connection with the Trigger Event, discounted by the Discount; and

o a price per share based on the Valuation Cap on a fully diluted basis.

· The Lenders (acting by a decision of the Lender Majority) shall have the right to demand repayment of the loan (including any accrued interest) in the following circumstances:

o On an Event of Default (being an insolvency, cessation of business, or a material breach of the CLA);

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

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

o The disposal of all or substantially all of the company’s assets.

· 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:

o the lowest price of any shares issued after the date of this Agreement; and

o a price per share based on a pre-money company valuation of €17,000,000 on a fully diluted basis.

· Conversion on an Event of Default will be at the Default Share Price.

Share Classes

The company currently has 3 classes of shares, Preferred Shares, A Class Shares and Ordinary Shares. All investors in this round, including Seedrs investors, will be receiving A Class shares on conversion.

The rights attached to the share classes are as follows:

Preference Shares
- Full voting rights.
- 1x participating preference on liquidation and exit (a “Realisation Event”) as set out below.
- Broad-based weighted average anti-dilution rights: right to be issued additional shares at nominal value in event of a down-round.
- Held by a single early stage investor.

A Class Shares
- Full voting rights.
- A Class shareholders will receive their initial investment amount after the Preferred Return has been distributed but before ordinary shareholders (see preference summary below).
- No anti-dilution rights.

Ordinary Shares
- Full voting rights.
- Ordinary shareholders are entitled to receive their initial investment amount only after Preferred Shareholders and Class A Shareholders have been paid out in priority (see preference summary below).
- No anti-dilution rights.

On a Realisation Event, proceeds shall be distributed as follows:

Firstly, the holders of Preference Shares will receive their initial investment amount together with (i) a cumulative unpaid preferred 25% coupon and (ii) a sum equal to the deemed value of any tax relief lost as a result of a Realisation Event;

Secondly, the holders of any other preferred classes (including the A Class Shares) will receive their principal investment in preference to the Ordinary Shares;

Thirdly, the holders of Ordinary Shares shall receive an amount equal to their principal investment;

Fourthly, any remaining proceeds shall be distributed pro rata amongst all shareholders provided that the Preferred Shares shall only be entitled to an amount equal to their actual investment.

BVP (Green Tech VC)

BVP Investments acts as Investment Manager on behalf of Link CTI Limited, an existing investor in UFO Drive. Some of the key terms of the BVP investment are set out below:

- The board has the right to redeem the BVP Shares at a sum not less that the aggregate subscription price plus (i) the value of all accumulated unpaid interest on the Preference Shares (calculated on the basis of not less than 4 years interest being payable); and (ii) the deemed value of any lost tax relief.

- If the BVP Shares are not disposed of by the 5th anniversary of the initial subscription (December 2024) the Investment Manager, with the support of the Investor Majority, has the right to appoint a corporate finance adviser at the Company’s expense to find a suitable purchaser for the shares. In the event terms of the sale are agreed, all shareholders shall be required to take all necessary action to consummate the sale.

- The Investment Manager is entitled to an exit fee of 3% plus VAT of the proceeds of any sale of the BVP Shares.

- If there is a Realisation Event at a higher price within 12 months of BVP transferring its Shares (the “Transfer Event”), BVP shall be entitled to receive sum equal to the relevant portion of the proceeds payable based on the above liquidation preference, less the amount received in relation to the Transfer Event.

Outstanding Convertible Loans

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

€1,105,000 loan from 8 lenders, with the following key terms:
- Interest rate: 6%
- Conversion trigger(s): €5m raise
- Conversion price: 30% discount (provided that such discounted pre-money valuation shall never be lower than € 20,000,000)
- Share class: A Class
- Repayment date: 12 September 2022

Funds from this convertible have not been reflected in the Campaign.

Debt

Please note, UFODRIVE has the following outstanding loans:

1) A commercial bank loan from BGL for €300k. This is repayable after Series A fundraising, has a 5 year term, and accrues interest at 1.5%.

2) A COVID-19 relief loan from the government of €62k. No repayment is required in the first 12 months, interest is accrued at 1.5%, 5 year term, and repayment terms are defined in mid-2021.

Investor funds will not be used to repay these loans.

Corporate Structure

UFODRIVE has a parent company incorporated in Luxembourg, which is a public limited company (registration number B221549). There are 6 subsidiary companies, which are limited companies, based in the following countries; Belgium, Germany, France, Austria, Ireland, United Kingdom.

Investors in this round are investing in the Luxembourg parent company in this group structure.

Secondary Market

Investors will not be able to sell their interest in the convertible loans on the Seedrs Secondary Market unless and until they have converted to shares in the company (and then only subject to eligibility and the terms and conditions of the Seedrs Secondary Market).

Reflected Investment

Please note, some investment received directly by the company for this round has been in Euros. This is reflected into the campaign at the ECB reference rate as of 11/12/20, which is £0.911 per €1. Any further funds received directly by the company during the duration of the campaign will use this exchange rate also. All investments made through the campaign will be made in GBP.