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.

Preemption details

YellowDog have raised £950k via convertible loan notes as part of a bridge round.
The key terms of the convertible loan notes are as follows:
1) Interest: 1% monthly interest, which will be paid annually in arrears

2) Discount: Conversion will be at a 50% discount to the valuation set by the relevant trigger event.

3) Valuation Cap: £12,500,000

4) Longstop date: 21 October 2022. The loan and any unpaid interest will either be repaid or converted into the most senior class of shares at the valuation cap, at the election of the lender. If the company has insufficient funds to repay the loan, the company may extend the longstop date for a period of up to 2 years.

5) Conversion triggers: the loan and any unpaid interest will convert into the most senior class of shares at the lower of the Valuation Cap or a 50% discount to the relevant trigger:
(a) automatically on the company raising at least £4,000,000 of new money where some or all of such amount is raised through an issue of shares;
(b) at the option of the lender if the company raising less than £4,000,000 of new money where some or all of such amount is raised through an issue of shares;
(c) automatically on an exit.

6) The loan and any unpaid interest will be repayable on a winding up event.

Please see attached the Key Terms document which has a full summary of important details of this round and review ahead of making an investment. Yellowdog has authority from shareholders to issue up to £1m in convertible loan notes as part of this round.

Please note that any decision as to conversion or repayment will be made by Seedrs on behalf of all Seedrs investors.

Runway

Please note that YellowDog has limited runway remaining, which means that including the proceeds of this round, they currently only have enough cash to take them through to circa April. YellowDog are looking to raise circa £5m in the coming months, which would likely secure them financially over the medium term. Investors should be aware that should YellowDog fail to do this there is a significant risk of insolvency in the near term.