Enabling Market Access, Short Food Supply Chains At Scale and Unprecedented Data Transparency
Business overview
Location | Keynsham, United Kingdom |
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Social media | |
Website | www.fresh-range.com |
Sectors | Food & Beverage Mixed Digital/Non-Digital B2B |
Company number | 08786776 |
Incorporation date | 22 Nov 2013 |
Investment summary
Business highlights
- 'Food Tech Pioneers' - The Guardian
- Proprietary Technology to enable short food supply chains
- Applying for Future Fund, not conditional - see Key Info
- Official Technology Supplier to Crown Commercial Services
Learn more about convertible loan campaigns.
Key Information
Seedrs is supporting companies who are intending to apply to the Government backed Future Fund. You can read more about the Future Fund here: https://www.seedrs.com/learn/blog/the-future-fu....
In order for a company to be eligible to seek matched funding from the Future Fund, this investment round must be on the convertible loan terms that have been prescribed by the Future Fund for this purpose. These terms differ to our normal ‘advanced subscription agreements’.
Given this product differs from most campaigns on Seedrs, we urge all investors, including regular Seedrs investors, to read the information below and ensure you understand the terms in full before making your investment.
Key Terms
You will see a term sheet attached to this Campaign in the Documents section which sets out the key terms of the convertible loan and you can see the full document prescribed by the Future Fund here: https://www.british-business-bank.co.uk/ourpart....
A summary of the key terms is set out below, but should be read in conjunction with the term sheet:
• Discount: 40%
• Interest: 8% per annum, non-compounding. On conversion events, the company can choose to repay the interest or convert it to equity (generally without the discount). See the Term Sheet for more details.
• Redemption Premium: An amount equal to 100% of the principal loan amount
• Valuation Cap: £9,475,000
• Qualifying Equity Financing. The convertible loan will automatically convert on an equity financing raising at least the total loan amount, at the lowest share price of equity financing less the Discount or, if lower, the Valuation Cap share price.
• Maturity Date: 36 months from signing convertible loan agreement.
o The default position is on the maturity date is that the loan will convert to equity unless the investor majority elect to redeem.
- If redeemed, the company will repay the principal together with the Redemption Premium.
- If converted, the conversion price will be at the most recent funding round share price less the Discount, provided that funding round happened after 20 April 2020 and was at least a quarter of the size of the convertible loan investment. If no such funding round has occurred, conversion will be at the share price of the last funding round prior to 20 April 2020 (no Discount).
Or, if lower, at the Valuation Cap share price.
• Other events of default or conversion: There are various other scenarios in which the convertible loan may convert or be repaid and investors should reference the term sheet:
o Non Qualifying Funding Round: The convertible loan can convert on an equity financing round which does not meet the size criteria of a ‘Qualifying Equity Financing”, at the election of the majority of investors under the loan. Please see the term sheet for how this conversion is priced.
o Exit: The convertible loan will automatically convert or be redeemed on an Exit, whichever would give investors the higher cash return. Please see the term sheet for how conversion is priced and payments on redemption in this scenario.
o Events of Default: The convertible loan is to be repaid on the events of default, such as liquidation or winding up. See the term sheet for more details.
Government matched funding
The company intends to apply to the Future Fund for matched funding on the total eligible amount invested in this funding round. The Future Fund will “match” the funding raised via Seedrs or other eligible sources, subject to a minimum investment of £125,000 and a maximum investment of £5m. The Future Fund is to be allocated on a ‘first come, first served basis’, so there is no guarantee that a company will receive the Future Fund matched funding.
This campaign is not conditional upon receiving matched funding from the Future Fund. Seedrs will complete the investment and transfer the funds raised even if the application for Future Fund investment is rejected. We will ensure an application is made to the Future Fund for matched funding and will not complete until we know the outcome of the application. But if the application is rejected, the company will still be permitted to complete the investment round.
Seedrs does not charge any fees in relation to the Future Fund matched funding, application process or for acting as lead investor with respect to applications.
Conversion to equity
The convertible loan agreement prescribed by the Future Fund is equity focused and favours conversion of the loan to equity as the default position.
Redemption is only available in certain scenarios and is often subject to the vote of majority of the investors. Where a vote of investors is required, Seedrs will vote on behalf of any investors it represents as nominee.
There is a possibility that the convertible loan will convert in some scenarios without the consent of Seedrs (if we do not make up a majority of investors). It is also Seedrs’ position that this is primarily an instrument for investing in the equity of the fundraising business and our default position would be to vote in favour of converting the loans to shares in the company, unless there is a clear or compelling reason not to.
Risks
As always, investors should be aware of and accept the risks involved in investing in early stage and growth focused businesses: https://www.seedrs.com/pages/risk-warnings
In addition to the usual risk warnings included above, investors should be aware of and accept the following with respect to convertible loans:
• The convertible loan agreement is intended as bridge funding to a future funding round, but there is no guarantee that a company will be able to secure further funding.
• The Future Fund is to be allocated on a ‘first come, first served basis’ and there is no guarantee that a company will be successful in its application to receive the Future Fund matched funding.
• There is a risk that the Company may not have sufficient funds to repay the loan on the maturity date, pay interest when it becomes due or pay the redemption premium included in the terms.
• Convertible loans are unsecured obligations and in the event of a winding up or liquidation event will rank behind secured creditors of the Company.
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).
EIS Relief - past, current and future
As noted above, the convertible loan instrument is not compatible with EIS requirements, so no EIS applications will be made with respect to investments in the convertible loan.
The government has confirmed that investing in the convertible loan will not impact EIS relief previously claimed on investments in the fundraising company:
“The government has confirmed that such previous investments will not be affected where the convertible loan converts into shares. Where the convertible loan note redeems, we have been alerted that the government intends to make changes to the rules to clarify that this is compatible with such previous investments.”
However, investing in a convertible loan could impact your ability to claim EIS relief on future investments into the same company. The government has not clarified the position on this and has said it is a matter for HM Treasury and HMRC.
Seedrs is unable to provide tax advice. Tax treatment depends on individual circumstances and is subject to change.
Outstanding debt
£50,000 Bounce Back Loan from government. All funds remain in loan account as unspent spare cashflow.
Idea
Introduction
Our technology and infrastructure enable short, light and fast supply chains as an alternative to the mass system. Since 2014, dozens of local food producers and suppliers have joined the fresh-range platform cutting out financially and environmentally expensive mass haulage and storage. Producers earn the majority of the retail price paid and customers eat affordable, fresher food with provenance.
Having won the "Best Revolutionary Tech" award at the Crumbs Awards 2018 and established a National Advisory Board to drive government policy decisions the company is receiving nationwide interest to geographically expand the impact of our technology further.
In particular, we foresee a government initiative to initiate a new dynamic food procurement framework for the UK public sector as an exciting opportunity for the company to leverage it's proprietary technology within a large market.
Substantial accomplishments to date
Appointed an official Crown Commercial Services (CCS) supplier in 2019. We believe the company is in a strong position to be appointed the technology and management agent for The Future Food Framework that was announced last year: Read more here: https://www.dynamicfood.org/future-food-framework
Featured by The Soil Association (a major food and farming charity and organic certifying body in the UK ) as an innovator and thought leader in 'Dynamic Food Procurement' for the public sector. Read more here: https://www.soilassociation.org/shortening-supp...
Launched Farm Wilder exclusively online at Fresh-range. Farm Wilder is a collection of sustainable beef and lamb farmers managing 15,000 acres of land in Dartmoor, Devon. Read more here: https://www.fresh-range.com/bristol/producer/fa...
Watch celebrity-endorsed films for launch:
https://vimeo.com/418082869
https://vimeo.com/418203708
https://vimeo.com/418189275
https://vimeo.com/418212918
https://vimeo.com/418321273
Responded to Covid-19 crisis by delivering record retail home delivery sales in April 2020.
The Dynamic Food Procurement Advisory Board published a report that Fresh-range CEO Rich Osborn co-authored: "A Manifesto for a resilient, adaptable and sustainable UK food system has been submitted to the EFRA committee. Read here: https://ad555873-f343-4a7c-b674-b0e4792f5f9a.fi...
Monetisation strategy
We earn our revenue via a % margin/commission charged on food spend. We operate across 4 channels:
1. Retail home delivery.
2. Catering.
3. Retailer supply.
4. Technology & management agent.
Use of proceeds
The intent of this round is to accelerate our innovation plans for our proprietary technology platform. The innovation is focused on optimising readiness to tender for the Crown Commercial Services (CCS) Future Food Framework Technology and Management Agent contract.
- Multi-region capability across whole of UK.
- High volume front end traffic and order processing and backend concomitant users and order processing.
- Order management using additional fulfilment capability parameters by producer/supplier.
- Logistics processor stock management functionality enhancements to enable more efficient fulfilment frequency by producer/supplier and minimise food waste.
- Additional functionality to enable faster process for efficient picking and packing of orders.
- Foundational capability to adapt to 3rd party logistics hardware in warehouse.
- UX simplification of backend user functions.
- Separate access rights tiered by user.
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