Veri

Key Information

Convertible Key Terms

This investment round is being raised by way of a convertible equity investment structure, in this case a "convertible capital loan agreement".
The key terms that apply to the Company’s convertible instrument are set out below. Please also see the attached Key Terms document for further details; this convertible differs in a few key ways from Seedrs standard convertible instrument, so please read carefully.

• Discount Rate:

20% Discount: Investors benefit from a 20% discount on shares at the time of conversion during specific trigger events.

• Valuation Cap:

€40,000,000 Cap: The conversion valuation will not exceed €40,000,000, ensuring clarity on the maximum company valuation for early investors.

• Interest Rate:

8% Annual Interest: Accrued annually and compounded on December 31st, enhancing the value of the initial investment over time.

• Trigger Events:

1. Qualifying Equity Fundraise: A minimum of €5,000,000 equity raised.

2. Change of Control: Original shareholders reduce to less than 50% ownership.

3. Initial Public Offering (IPO): Company goes public.

• Conversion Details:

1. Pre-Longstop: Conversion at the lower of discounted share price from equity fundraise or a price derived from the valuation cap.

2. Post-Longstop: If no trigger event, conversion at a default price reflecting a pre-money valuation of €40,000,000.

• Longstop Date:

36-month deadline: Acts as a timeline boundary, post which the financial instruments convert based on stipulated conditions if no prior trigger event.

• Winding-Up Event:

Default Conversion: In absence of prior conversion, shares convert at the default share price immediately before any winding up of the company.

• Share Class:

Preferred Shares: Shares issued upon conversion will be Preferred Shares.

Share Classes

The company currently has 3 classes of shares, Common shares, Non-Voting Shares and Preferred Shares. Investors in this convertible round will hold Preferred Shares upon conversion of the convertible instrument.

The rights attached to the share classes are as follows:

Common shares: Common shares have voting rights but no liquidation preferences.

Non-Voting Shares: Non-voting shares don't have voting rights or liquidation preferences.

Preferred Shares: Preferred shares have voting rights and a 1x liquidation preference over the Common Shares and Non-voting Shares.

Group Structure

Investors in this round are investing in and will become shareholders of Human Engineering Health Oy, 3115245-3. This is the holding company for the group.

The group structure is as follows: Human Engineering Health Oy owns 100% of its subsidiary Human Engineering Inc.

Material Debt

The company has the following outstanding loans:

€615,000 loan from Business Finland at an interest rate of 1% per annum. The loan is to be repaid on 06 July 2029.

€174,000 loan from Business Finland at an interest rate of 1% per annum. The loan is to be repaid on 25 Jan 2031.

€199,000 loan from Nordea Bank Oyj at an interest rate of 3.5% per annum. The loan is to be repaid on 09 October 2026.

€1,100,000 loan from Finnvera Oyj at an interest rate of 2,62% per annum. The loan is to be repaid on 30 October 2030.

The funds raised from this investment round will not be used to repay these loans.

Convertible Loans

Convertible 1

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

$15,000 loan from 1 investor, with the following key terms:

• Interest rate: 0.01% per annum.

• Conversion trigger: In the event of a priced equity round.

• Conversion price: $19,500,000 divided by the aggregate number of outstanding Non-Voting Shares.

• Valuation Cap: $19,500,000 (pre-money)

• Share class: Non-Voting Shares

• Repayment date: 29.06.2031

Convertible 2

€6,417,986 from 8 investors, and $300,000 loan from 2 investors, with the following key terms:

• Interest rate: 0.01% per annum.

• Conversion triggers (in each case at the option of the lenders):

i) In the event of a priced equity round of not less than €5,000,000.

ii) Change of control

iii) At maturity

iv) Upon a material breach of the loan agreement

• Conversion price: Valuation lower of:

i) Subscription price per a Share applied in priced equity round minus a twenty per cent (20%) discount to such subscription price; or
ii) (b) applying a pre-money valuation of €80,000,000 of the Company.

• Valuation Cap: €80,000,000 (pre-money valuation)

• Share class: Preferred Shares

• Repayment date: 08.07.2029

Convertible 3

€900,000 loan from 4 investors with the following key terms:

• Interest rate: 7.99%

• Conversion triggers (in each case at the option of the lenders):

i) In the event of a priced equity round of not less than €5,000,000.

ii) Change of control

iii) At maturity

iv) Upon a material breach of the loan agreement

• Conversion price: Valuation lower of a subscription price per a Share:

i) applied in priced equity round minus a twenty per cent (20%) discount to such subscription price;
ii) or applying a pre-money valuation of €40,000,000 of the Company.

• Valuation Cap: €40,000,000 (pre-money)

• Share class: Preferred Shares

• Repayment date: 20.10.2026

Outstanding Payment

We have an outstanding payment of $38,000 to Syndigo LLC which we are re-negotiating. There are no additional expenditures expected for this payment which has been reflected in the 2023 financial numbers and runway calculations.

We have outstanding 2023 tax payments of $37,148 in the US, which are reflected in the 2023 financial numbers and the runway calculations. There are some minor expenses for the process that should not exceed $5000.