biaNergy 1A

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

Risk: The NICOLA team might not have (proper) knowledge of the market and/or make incorrect forecasts. 

Consequence: If the team does not have sufficient knowledge of the market, it could set incorrect targets. This could lead to 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 NICOLA, with partial or complete loss of the invested capital.

2.      Risk associated with the size of the team

Risk: Given the stage of development that NICOLA 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 for both risks: The company intends to draw on the scientific network and its partner (KU-Leuven) to address skill gaps promptly until it finds a replacement. In addition, the team will implement a succession plan for the CEO and key team members to ensure continuity once the CEO steps out of his position (transition will start from 2032). 

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: Investors will have the opportunity to re-invest in new rounds, at the then current investment conditions.

1.       The risk associated with the need for receiving health permits by authorities

Risk: To harvest energy over the air by Mid-Wattage (60W) and High-Wattage introduction (220W), NICOLA must obtain health permits by authorities. Both of these technologies are still in the development phase and expected to be market ready within 18 months and 36 months respectively after closure of the seed round. There is as risk of delay or rejection of the required health permits which would mean that NICOLA is not authorized to enter the market in the next 3 to 4 years. 

Consequence: If this risk occurs, market entry of Mid-Wattage and High-Wattage technologies must be postponed by one year. This could lead to 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 NICOLA, with partial or complete loss of the invested capital.

Note: Investors may note that the Low-Wattage technology (6W), for which this offer is organized, has obtained the necessary permits and is now entering the EU and FCC/US markets. It is therefore not affected by this risk. Should the risk occur for the Mid-Wattage and/or High-Wattage technology, NICOLA will try to convince the authorities that their technology is not harmful for living being because of the methods NICOLA has developed and patented.

2.       The risk associated with intellectual property

Risk: The technology may be challenged by competing IP claims or copied by others.

Consequence: NICOLA will take legal action against infringers. This could lead to higher costs than foreseen, which -in turn- could lead to 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 NICOLA, with partial or complete loss of the invested capital.

Note: NICOLA considers that building its brand worldwide rapidly is very important as a protection measure. Part of the funds raised will be used to consolidate the Company's intellectual property. NICOLA protects its technology by secrecy of the details of the inventions. The Company has conducted an initial freedom to operate study and has not identified any blocking IP. A formal FTO acceptance confirmation has been received by the European Patent Office’s agency. 

3.      The risk associated with the use of this technology 

Risk: MRT-E technology may not perform in the pilot phase as expected or scale efficiently.

Consequence: If the model used does not perform or underperforms, NICOLA will not be able to carry out its activities according to the predetermined quality, which will jeopardize the business plan if not enough customers can be attracted (as was foreseen in the business plan). 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 NICOLA, with partial or complete loss of the invested capital.

Note: Although NICOLA is a technology designer and not a hardware producer, it follows the motto “Seeing is believing” and has demonstrated its technology through sample use cases. In them is the MRT-E technology as receiver implemented.

4.      The risk associated with competition

Risk: Any delays in market entrance within 5-7 years can cause competitors to enter the market.

Consequence: Competitors with big marketing budgets could overshadow NICOLA and its technology, which would jeopardize execution of the foreseen business plan. 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 NICOLA, with partial or complete loss of the invested capital.

Note: NICOLA has to keep up to pace with update capability to not lose its leading role in the market.

Risk: The risk of insolvency means that NICOLA 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 BIANERGY 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 NICOLA nor the Participatory Notes of the BIANERGY 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 BIANERGY. 

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 those risks: Investors in Participatory Notes bear the same economic risk as if they were investing directly as shareholders of BIANERGY.

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 Company itself.

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 NICOLA 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.

1.          Risk associated with the absence of an analysis by Spreds Finance

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

Consequence: Any investor considering subscribing to Participatory Notes should make its own analysis of NICOLA'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.

2.          Risk associated with the lack of (periodic) reporting

Risk: There is no obligation for periodic reporting in unlisted companies (except for the cases provided by law, such as the annual general meeting of shareholders and an alarm bell procedure). While some entrepreneurs proactively communicate good and bad news (with a certain periodicity), others do not. As a (minority) shareholder, one cannot enforce reporting (other than in cases provided by law).

Consequence: If an entrepreneur does not do (periodic) reporting, there can be long periods during which investors have no insight into the (financial) state of the company. The lack of reporting does not in itself change the (financial) state of the company but can create a sense of unease among investors. If at some point a company has to file a procedure of judicial reorganization or bankruptcy, this can be a (big) surprise for the investor. 

3.        Risk associated with the tax treatment of capital gains - government tax on capital gains

Risk: Investors are not currently subject to capital gains tax. However, such a tax has been proposed by the federal coalition agreement.

Consequence: If this tax is in force when investors realise a capital gain, it is possible that this capital gain will be taxed at the rate provided for

by the new law.

Note: The date of entry into force of this measure is uncertain. Capital gains existing prior to the entry into force of this measure will not be taken into account. An exemption of €10,000 could be taken into account (this amount would be indexed each year in line with inflation).

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