A deliciously smooth and creamy dairy free alternative to milk made from Yellow Split-Peas!
Business Highlights
Fundraising history | This round | |
---|---|---|
Type
|
- | Convertible - Pre-emption |
Last price changed
|
31 Jan 2020 | 14 Sep 2020 |
Discount
|
- | 20.00% |
Valuation
|
£5,832,824.25 | N/A |
Share price
|
£19.05 | N/A |
Share price change (%)
|
0.00% | - |
Tax relief
|
- | None |
Learn more about convertible loan campaigns.
Idea
Introduction
Mighty Pea was launched in April 2019 and quickly generated a buzz. In its early months, the brand crowdfunded and reached its target of £300k in under a week. This year, the company raised over £1M more (of which £900,000 is this funding round) from existing investors and the UK Government's Future Fund.
Mighty Pea M.lk is currently available in Original, Unsweetened, and Barista versions. Its ready-to-drink 330ml range is available in Chocolate, Banana & Oat, and Iced Latte flavours. Brits can find the brand in Sainsbury’s, Marks & Spencer, Holland & Barrett, and WH Smith.
Mighty Pea M.lk is free from dairy, nuts, soy, and gluten. It contains as much protein as cow’s milk and 50% more calcium. It is also sugar-free, fortified with iodine and vitamins D and B12, free of artificial flavourings, and of course 100% vegan.
Corona has impacted some parts of the business, but it has also forced the company to push forward its online D2C plans with its own online webstore and the Amazon store.
Use of proceeds
The Use of Proceeds for this round are being used for three things:
1.) Key Hires within the Business
2.) International Expansion Costs
3.) Marketing & Advertising
This is a pre-emption round open to existing shareholders. Limited information is being provided at this time. Any additional information provided directly by the business to investors has not been reviewed or verified by Seedrs.
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....
As this campaign forms part of a Future Fund investment round, the terms are based on those prescribed by the Future Fund. 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.
1. 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: 20%
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: £4m
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.
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 2 July 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 2 July 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:
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.
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.
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.
2. Government matched funding
The company has been approved for funding by the Future Fund and this investment has been reflected as part of the amount raised. It is distinguished in pink in the progress bar of the campaign. This is to give investors an indication of the total size of the funding round (and potential dilution on conversion), but to also distinguish it from regular investment through the Seedrs platform. There is a £100,000 headroom amount available as part of this funding round, which will not be matched by the Future Fund.
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.
3. 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.
4. 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.
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.
5. 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).
6. 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.
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