Proportunity

Key Information

ASA Key Terms:

This investment round is being raised by way of a convertible equity investment structure, in this case an "Advanced Subscription Agreement". All investors in this round are entering into Advanced Subscription Agreements on the same terms.

The key terms that apply to Seedrs’ Advanced Subscription Agreement (the "ASA") are set out below. This convertible differs in a few key ways from Seedrs' standard convertible instrument, so please read carefully.

Conversion of the ASA:

Conversion of the ASA is triggered by certain scenarios occurring ("Trigger Events"), as follows:

(1) Financing Round: An equity raise raising at least £6m, or lower if agreed by the majority of the ASA holders.

(2) IPO: The listing of the Company’s shares on a recognised stock market or investment exchange.

(3) Sale: The sale of all or substantially all the assets of the Company or a number of shares that amounts to a ‘controlling interest’ in the Company (unless as part of a restructure).

(4) Longstop Date: Where no other Trigger Event occurs first, the ASA will convert at the date of 30 September 2023.

(5) Insolvency: Where the Company undergoes any other liquidation, dissolution or winding-up, whether voluntary or involuntary, resulting in a distribution of capital to shareholders.

Conversion Price:

On the occurrence of a Trigger Event, your investment will convert into shares at share price calculated as being the lower of the following:

- £36m divided by the fully diluted equity of the Company immediately prior to or on the date of the Trigger Event in question; or

- The price of any shares issued or sold as part of any Trigger Event, reduced by 15%.

- The calculation of fully diluted share capital assumes a share option pool of at least 15% and conversion or exercise of options, warrants, convertible instruments or exercisable securties that have been issued by the Company.

Conversion Share Class:

On the occurrence of a Trigger Event, your investment will convert into shares of a class that depends on the Trigger Event in question (see the rights of the various share classes in issue below). Again these differ from Seedrs’ standard terms, so please review these carefully:

(A) On a Financing Round: the most senior class of shares issued as part of that round, provided that such class will have a 1x non-participating liquidation preference based on the ASA conversion price (ie. Series A Shares, Seed Preferred Shares, A Ordinary Shares or any new share class created for the purposes of the Financing Round)

(B) On a Sale, the Longstop Date passing or Insolvency, the most senior class of shares in the Company at that time (presently Series A Shares) provided that such class will have a 1x non-participating liquidation preference based on the ASA conversion price; or

(C) On an IPO, Ordinary shares (at which point all shares in the Company shall also convert into Ordinary shares, as below).

Share Classes:

The company currently has four classes of shares, Series A Shares, Seed Preferred Shares, A Ordinary Shares and Ordinary Shares . The shares that investors will be receiving in this round will depend on how the ASA is triggered (see further below).

The rights attached to the share classes are as follows:

Series A Shares
- First 1x liquidation preference, ranking ahead of Seed Preferred Shares, A Ordinary Shares and Ordinary Shares
- Anti-dilution rights
- Voting rights

Seed Preferred Shares
- Second 1x non-participating liquidation preference, ranking behind Series A Shares but ahead of - A Ordinary Shares and Ordinary Shares
- Anti-dilution rights
- Voting rights

A Ordinary Shares
- Third 1x non-participating liquidation preference, ranking behind Series A Shares and A Ordinary Shares but ahead of Ordinary Shares
- Voting rights

Ordinary Shares
- No liquidation preference
- Voting rights

Conversion into Ordinary Shares:

The Series A Shares, Seed Preferred Shares and A Ordinary Shares can be converted into Ordinary Shares as follows:
- For an individual shareholder’s holding, at their request; or
- For the entire class of Series A Shares, at the request of the majority of Series A Share holders; and
- For the entire class of Seed Preferred Shares and A Ordinary Shares, at the request of the majority of the Seed Preferred Shareholders; and
- All of the above will convert into Ordinary Shares on an IPO

On conversion above, all affected shareholders shall be paid (where the Company has sufficient profit to be able to do so) a dividend equal to all accrued dividends. Where the Company has insufficient profit to pay those dividends in full, then any unpaid balance will be considered a debt of the Company to the relevant shareholders, unless waived by (i) the majority of Series A Share holders in relation to any dividends due to those shareholders and (ii) the majority of the Seed Preferred Shareholders in relation to any dividends due to Seed Preferred Shareholders and A Ordinary Shareholders.

Group Structure:

Investors in this round are investing into and will become shareholders of Proportunity Limited, Company Number 10470755. The Company also has 4 wholly owned subsidiaries which sit beneath Proportunity Ltd.

The subsidiaries are as follows:

1. SSM One Limited (09273700): An FCA regulated non-bank lender which issues customer loans.
2. Proportunity Investor NewCo Limited (12461995): Established to raise debt-based funding from HNWIs.
3. Proportunity CB SPV (12537146): Established for debt facility.
4. BrokerCo Limited (13544645): Established to house Proportunity’s brokerage.

Material Debt & Facilities:

The Company and its subsidiaries have the following outstanding loans:

1. £1,250,000 Recovery Loan Scheme agreement with Conister Finance & Leasing Ltd, at an interest rate of 7.71% per annum. The loan is held by Proportunity Ltd and is to be repaid in monthly instalments with the final repayment on 24/10/2027. A debenture over Proportunity LTD has been granted as part of the arrangement.

2. A total of £697,000 of loan agreements from 4 individuals at an interest rate of 13% per annum. The loans are held in Proportunity Investor Newco. and are to be repaid by 30/09/2022. The capital is used to finance customer loans and is subordinated to the below mentioned asset backed financing from Conister.

3. The Company also has an asset backed financing agreement with Conister Finance & Leasing Ltd, this facility is held by Proportunity CB SPV, and the Company utilises this to give out loans to Proportunity customers. The total facility is £5,000,000, of which the Company is currently utilising £4,571,772. The facility has an interest rate of 8.5% per annum. The Company currently repays the facility on an interest-only basis. The principal is held on a yearly rolling contract, with the next extension date set on 12 April 2023 As part of the agreement there is a Parent Guarantee from Proportunity Ltd in the case where Proportunity CB SPV cannot pay.

The funds raised from this investment round will not be used to repay these loans.

Raise on Seedblink:

As part of this funding round, the Company also ran a campaign on the Romanian crowdfunding platform, Seedblink. The campaign is now closed.

The Company raised €174,000 from the Seedblink campaign which is reflected in the Seedrs campaign. The investment is on the same terms as offered in this campaign.

The FX rate used for this reflection is 1 EUR = 0.859923 GBP.