All noodles are not created equal. Award winning, No nasties. Real food. On-the-go healthy & delicious.
Business overview
Location | Bournemouth, United Kingdom |
---|---|
Social media | |
Website | www.mrleesnoodles.com/ |
Sectors | Food & Beverage Mixed Digital/Non-Digital Mixed B2B/B2C |
Company number | 09679948 |
Incorporation date | 10 Sep 2015 |
Investment summary
Business highlights
- Acclaimed instant cup noodle and congee rice porridge food range
- Using the finest real food ingredients & absolutely no nasties
- Established in UK/Europe, Australia and launching in the USA
- Investment conditional upon Future Fund funding - see Key Info
Learn more about convertible loan campaigns.
Idea
Introduction
Mr Lee’s Pure Foods is an innovative food/tech company creating award-winning premium healthy noodles-in-a-cup and soon to launch instant Congee Asian rice porridges, and is now expanding on 3 continents. Our mission is to disrupt food-on-the-go’s unhealthy reputation and help time-pressed people eat better.
Good in, Bad out: Our foods have only the finest real-food ingredients & absolutely no nasties. With over 50 significant global food, health and business awards and nominations, our ‘Real Food-Real Taste-Real Quick’ focus has gained a growing global presence.
These are complemented by Mr Lee’s automated, interactive ‘Hot Noodle Vending Kiosks’, a 24/7 healthy self-serve locational food solution in early-stage roll-out in the UK and we aim to also implement pilots of these as part of the US launch. Our ambition is that 2020 will also see the launch of our truly innovative and highly anticipated instant Congee.
This is a Future Fund convertible campaign open to existing investors to take up their pre-emption rights and invest more. Please read the Key Terms tab and the term sheet document for more details about the terms of the round.
Substantial accomplishments to date
- Strategic global sales channels in place that we believe will lead to scale growth: major grocery, convenience and health retailers in 5 countries; airlines and railways (client growth and sales pre-CV19 expected to come back soon after); food service sector; and online e-com grocery sites including Amazon & Mrleesnoodles.com
- Manufacturing established with supply chains in UK, Australia and USA and local sourcing benefits such as RSPCA Australian beef & chicken and Organic Non-GMO USA meats in America
- Global scale-up team in place with commercial capabilities in all main markets.
- Nottingham University food development team partnership with 3-yr pipeline of new foods
- Significant proven PR success capability with highly driven founder mission and disruption story. 189 PR mentions in 2019 and multi-channel campaigns in 2020 incl. Damien Lee in Ch 5’s Rich House Poor House (5th April) and Penguin Random House publishing Mr Lee’s 100 Noodle Recipe cookbook in global markets
- 50+ global awards and nominations incl. Grocer Gold Exporter of the Year, UK Great Taste, Great British Entrepreneur winner, The Sunday Times Maserati 100 winner, The Vendies Best Newcomer (Hot Noodle Kiosk), Ranked 52 in the Global Foodtech 500, plus many more
- An investor base and board which includes leading food industry innovators, multinational foodco CEO, professional global emerging food investors, multi-national business and brand builders as well as a healthy crowd and employee participation
Monetisation strategy
Revenues are generated through the sale of our noodles & congees in Australia, UK/Europe and in the USA. Sales channels in all 3 global markets are expected to include B2B (retail, travel, wholesale) and B2C (DTC online website sales and Amazon seller-central). We now aim to rapidly build sales outlet numbers, increasing SKUs stocked per account and rates of sale per outlet, and adding key B2B partnerships.
From a solid foundation of food, team capabilities and established distribution channels to drive our scale up phase, we are implementing plans to increase sales through continuing to build our retail, convenience and B2B client footprint in USA, UK/Europe and Australia as well as our brand awareness and product range.
Kiosk division scale is intended to be built through partnerships with large foodservice and retailers with 2 major initiatives in 2020. Revenue share from product sales as well as other machine and screen based income streams are anticipated as scale grows.
Use of proceeds
Investment is to drive the scale-up phase of Mr Lee’s Pure Foods, particularly focusing on USA entry and further expansion, Congee launch, direct-to-consumer e-commerce and ongoing penetration into existing market channels. Funds raised have the following estimated allocation:
USA marketing/PR/multi-channel launch and ongoing marketing initiatives in 2020 (Building the number of outlets, rate of sale and contract clients as well as brand traction): 25%
Product development, new product initiatives and our ‘Food team’ - (Building SKU range for greater SKU’s stocked per outlet) - 10%
Working capital for food production during scale up (Filling contracts, e-commerce supply and new outlet and sku/outlet growth requirements): 20%
Hot Noodle Kiosk (Vending) machine programme to move to scale-up: 5%
Global group operating and personnel costs runway for commercial functions and scale up activity (Australia, UK, USA): 40%
Please note that the company has £250k in loans. The funds raised in this rounds will not be used to pay these loans.
Key terms
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.
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
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.
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 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).
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 intends to apply to the Future Fund for matched funding on the total eligible amount invested in this funding round. Subject to eligibility criteria and the Future Fund's approval, 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’ to eligible and approved businesses, so there is no guarantee that a company will receive the Future Fund matched funding.
This campaign is conditional upon receiving matched funding from the Future Fund. Seedrs will not complete the investment and transfer the funds raised until we have confirmation that the Future Fund matched funding application has been approved and that the Future Fund is ready to make the investment. If the application is denied, the campaign will be cancelled and funds will be returned to investors.
Because this campaign is conditional upon the matched funding, you will see that we have reflected the Future Fund investment as part of the round. It is distinguished in pink in the progress bar of the campaign. This is to give investors an indication of the potential total size of the funding round (and potential dilution on conversion), but to also distinguish it from regular investment through the Seedrs platform.
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.
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.
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.
Open an account to get access to the team members of Mr Lee's Pure Foods
Already have an account? Log in
To comply with financial regulations, we can only show full campaign details to registered users.
Only shareholders can access this page
If you successfully purchase a share lot of this business, you will be granted access.
Buy sharesOnly shareholders can access this page
If you successfully purchase a share lot of this business, you will be granted access.
Buy sharesOnly shareholders can access this page
If you successfully purchase a share lot of this business, you will be granted access.
Buy sharesOnly shareholders can access this page
If you successfully purchase a share lot of this business, you will be granted access.
Buy shares