Fika 1A

1.      Risk associated with the team's knowledge of the market and correctness of forecasts

Risk: The FIKA MANAGEMENT team might not have (proper) knowledge of the market and/or make incorrect forecasts. Indeed, FIKA aims to supply snacks and beverages to mostly SMEs (although FIKA does have a few larger customers). This market (in terms of size) and appetite has yet to be discovered.

Consequence: If the team does not have sufficient knowledge of the market, it could set incorrect targets. This could lead to a slower growth or a lower valuation in the event of a possible exit because the business plan could not be executed as planned. In that case, there could be lower or even non-existent returns. In the worst case, there could even be a liquidation and bankruptcy of the company, with partial or complete loss of the invested capital.

Note: Should this risk occur, FIKA plans to move into other markets (such as France or the Netherlands) and set up new business lines to offer complementary services to existing customers.

2.      Risk associated with the size of the team

Risk: Given the stage of development that FIKA MANAGEMENT is in, it is essential to have the right team for the future development of the company. If the company relies entirely on an indispensable person, there is a risk that this person will withdraw from the company. 

Consequence: If there is only one manager or key person and that person withdraws, the company is (temporarily) without management.  In case of difficulties, no one would be able to represent the company to make decisions.

Note: The company has two founders who are also directors. 

3.      The risk associated with the need for new financing

Risk: Given the stage of development that project owner is in, it is likely that there will be a need for new financing. 

Consequence: On the one hand, there is the risk that the company will not find investors, which would lead to the dissolution or bankruptcy of the company, causing the investor to lose part or all of his investment. On the other hand, there is the possibility that the company will find new investors, which will lead to dilution, which will be even greater if there is a lower valuation than the one currently used.

Note: Should this risk occur, FIKA plans to reduce costs and/or take out a loan. In the event of a new capital increase, investors will have the opportunity to re-invest in new rounds of financing, at the investment conditions in force at the time.

Risk: FIKA is a company primarily based on execution, reliability and quality of operations. As the company grows, FIKA must strive to achieve operational excellence in order to capture the benefits of expansion. An operational risk therefore exists.

Consequence: If this risk occurs, there will be inefficiencies and less effective scaling. 

Note: FIKA strives for continuous process and quality improvement. It is worth noting that one of the founders is a Lean expert. FIKA will also be organizing training courses.

Risk: The risk of insolvency means that the company does not have sufficient funds to meet its payment deadlines (cessation of payments). 

Consequence: If the company does not find alternative financing (shocked credit), it may go bankrupt. The insolvency or bankruptcy of FIKA MANAGEMENT may lead to lower or non-existent returns and in the worst case to a partial or total loss of the invested capital. 

1.           Risk associated with the lack of guarantees.

Risk: Neither the shares of FIKA MANAGEMENT nor the Participatory Notes of the FIKA 1A compartment of Spreds Finance provide guarantees of a return or repayment of the invested capital. 

2.           Risk associated with the lack of a fixed return.

Risk: Participatory Notes do not offer a fixed return. The return of the Participatory Notes depends solely on the performance of the Underlying Asset, namely the shares of FIKA MANAGEMENT. 

Consequence for both risks: If the project owner's predictions do not come true (within the predetermined timing), there is a risk of lower or non-existent returns and, in the worst case, partial or complete loss of the invested capital. 

Note for both risks: Investors in Participatory Notes bear the same economic risk as if they were investing directly as shareholders of FIKA MANAGEMENT.

Risk: Although each Spreds Finance compartment is ‘bankruptcy remote’ (meaning that no other creditor can claim a right on or against this compartment) in relation to the others and in relation to the ‘general’ liabilities of Spreds Finance itself, as a result of (i) the terms and conditions of the Notes, (ii) the articles of association of Spreds Finance and (iii)  Article 4 of the Law of 18 December 2016 on crowdfunding; there is a subsidiary risk of  insolvency of Spreds Finance. 

Consequence: Should such insolvency occur, Noteholders may be exposed to the risk of a significant delay in the recovery of their investment.

Note: The probability of this risk occurring is extremely low given the structure and organization of Spreds Finance, in particular the compartmentalization mechanism and the "bankruptcy-remoteness" described above. Each participation taken or loan granted to a project owner is recorded in a separate compartment and is appropriately accounted for in the accounts, taking into account the fact that the accounts are kept by compartment. As a result of (i) the conditions attached to the issue of Participatory Notes, (ii) the articles of association of Spreds Finance and (iii) article 10 of the law regulating the recognition and delimitation of crowdfunding and containing various provisions relating to finance and notwithstanding articles 7 and 8 of the Mortgage Law of 16 December 1851, the assets of a particular compartment serve exclusively to guarantee the rights of investors with respect to this compartment.

1.               Risk associated with the absence of an organized exchange market for Participatory Notes

Risk: Neither the project owner nor Spreds Finance organizes an exchange market for Participatory Notes. It is thus up to the investor himself to find a buyer for his Participating Notes. Given the absence of an exchange market for Participatory Notes, there is no way to adequately establish a comparative pricing methodology for Participatory Notes.

Consequence: A holder of Participatory Notes may not be able to find a buyer for the Participatory Notes it wishes to sell (at the price at which it wishes to sell).

Note: The intention is not to sell the Participatory Notes but to sell the Underlying Asset, often on the occasion of the sale of the Underlying Company itself (see Appendix B, (d)).

2.           Risk associated with the vote by the general meeting of holders of Participatory Notes to sell

Risk: Any decision by Spreds Finance to sell shares of FIKA MANAGEMENT is subject to the approval of the holders of Participatory Notes representing at least 75% of the outstanding Participatory Notes, unless Spreds Finance is required to sell them under a contractual or statutory provision. 

Consequence: Investors thus bear the risk that the general meeting of the holders of Participatory Notes may refuse to approve the sale of the participation, in which case all investors are bound by this decision and thus must wait to obtain redemption of the Participatory Notes.

3.           Risk associated with an investment in a young company

Risk: Investing in shares of young companies entails the risk that a buyer for the shares will not be found, or not at a fair price yielding a market return, or that a buyer will not be found within a reasonable period of time. 

Consequence: If no buyer is found for the holding, redemption of the Participatory Notes is not possible.

Note: Spreds Finance will make every effort within its powers to obtain the best possible price.

Risk: Spreds Finance has not conducted an analysis of the proposed project or of the financial situation of the Underlying Company.

Consequence: Any investor considering subscribing to Participatory Notes should make its own analysis of FIKA MANAGEMENT's solvency, activity, financial situation and prospects.

Note: Any decision to invest in Participatory Notes should be based on a comprehensive analysis of the project and of this sheet of essential investment information. Spreds Finance's model does not provide for the presentation of analyzed projects to investors but allows investors to invest based on the information made available to them, after making their own analyses.

To the best of the project owner's knowledge, there are no other material risks associated with its activities.