YellowDog

Idea

Introduction

Many industries experience business critical computing processes that, requiring lots of computing power, often overrun and fail causing high costs to those businesses. These high performance computing (HPC) applications include rendering computer generated imagery, processing of risk, financial and actuarial models, and weather forecasts.

YellowDog aims to solve these problems with its leading Intelligent Predictive Scheduling and Orchestration Platform. This technology allows enterprises to:

• Reliably deliver HPC on demand whenever and wherever businesses need it
• Quickly and effectively deliver the multi-cloud enablement of applications
• Improve the cost effectiveness and efficiency, and the operational performance of compute-hungry applications that are running on premise, in the cloud or across both.

Convertible key terms

The key terms for this convertible are set out below and in the Convertible Key Terms document attached.

Conversion of the advanced subscription agreement will take place:

• On an equity fundraise of £2,000,000 or more, at a 50% discount to the lowest share price paid by investors in the equity fundraise. There is no valuation cap.

• If no qualifying equity fundraise has occurred, on the Longstop Date (which will be 6 months from the date of the agreement) at a share price of £2.87 (this was the share price of the company's last funding round and equates to a current company valuation of £13,950,711.20), or, if lower, the price of any share issued after the date of the advanced subscription agreement.

• If a change of control or IPO occurs prior to the above events, conversion will automatically trigger at a price per share which is the lowest price per share issued or sold as a part of an IPO or change of control, discounted by 50%.

• If a winding up event occurs prior to the above triggers, conversion will happen immediately prior to the winding up event at a share price of £2.87, or, if lower, the price of any share issued after the date of the advanced subscription agreement.

Preemption details

This campaign is to allow investors the ability to exercise their pre-emption rights on a £300k investment that YellowDog has raised so far offline by way of an advanced subscription agreement.

YellowDog also raised £500k at the start of the year by way of a convertible loan note from an institutional investor. Your pre-emption rights have been calculated on the total £800k of investment however the terms of the CLN vary from the ASA and has not been included in this round. The key terms for the CLN are as follows:

• Discount: 50%

• Valuation cap: the price per share based on a fully diluted pre-money valuation of £12,500,000.

• Longstop date: 24 months (Jan 2022)

• Qualifying financing round: £4,000,000

• Interest: 1% per month paid monthly in arrears

Conversion of the CLN will take place:

• On a qualifying financing round of £4,000,000 or more, at the lower of a) a 50% discount to the share price paid by investors in the round; and b) the price per share based on a fully diluted pre-money valuation of £12,500,000.

• On a non-qualifying financing round of less that £4,000,000 note holders have the right (but not the obligation) to convert at the lower of a) a 50% discount to the share price paid by investors in the round; and b) the price per share based on a fully diluted pre-money valuation of £12,500,000.

• If the CLN hasn't been converted before the longstop date, on or after the longstop date noteholders will have the right to convert at the share price set by the valuation cap.

• Under certain limited circumstances, including on a winding up event, the convertible loan notes will be immediately redeemed.

As this is a pre-emption campaign open only for existing shareholders, minimum details are being provided. More information on YellowDog can be found on the company's post investment page and by requesting access to the shareholder update. Please note, this information has not been verified or approved by Seedrs.