VALOE HAS AGREED ON A EUR 5,000,000 FINANCIAL ARRANGEMENT WITH WINANCE. THE FUNDING WILL BE USED AS WORKING CAPITAL AFTER THE SIGNING OF THE MASS PRODUCTION CONTRACT WITH SONO MOTORS HAS BEEN POSTPONED AND TO PAY DOWN THE COMPANY’S DEBT TO RIVERFORT.
Background and Purpose of Financial Arrangement
Valoe Oyj (“Valoe” or the “Company”) has signed a convertible note facility agreement with Winance concerning a funding arrangement of up to EUR 5,000,000 in convertible loan notes (the “Convertible Notes”) that will be accompanied by share subscription warrants (the “Warrants”) (the agreement, the Convertible Notes and the Warrants hereinafter referred to collectively as the “Arrangement”).
Valoe will use the funding as working capital. The need for additional funding became apparent after the signing of the mass production contract for Sion, Sono Motors’ self-charging electric vehicle, and the related estimated cash flows were postponed. In addition, Valoe will pay down its debt to Riverfort Global Opportunities Pcc Limited by approximately one million euro.
On 20 December 2022, Valoe disclosed that the signing of the contract Valoe is negotiating with the company’s significant customer has been postponed until the end of the first quarter of 2023. The delay was expected to have negative impact on Valoe’s working capital situation. With Winance’s financing that has now been agreed on, Valoe expects to be able to meet its working capital needs until the substantial customer contracts are signed and the planned cash flow from customer contracts start to materialize.
Under the Arrangement, Valoe issues Convertible Notes to Winance. The Convertible Notes may be drawn down so that the first tranche amounts to EUR2,000,000, after which the Convertible Notes may be drawn down in maximum of 6 sequential tranches of EUR 500,000 each (the first tranche and the subsequent Tranches, each “Tranche”) during a period of 24 months from the drawdown of the first Tranche provided that the preconditions for each Tranche are met. Winance has the right to convert each Tranche into the Company’s newly issued or treasury shares. In addition, Winance will receive Warrants stripped from the Convertible Notes at the drawdown of each Tranche. The Warrants entitle Winance to subscribe to additional shares of the Company with a subscription price described in the Characteristics of the Warrants.
The Company has an obligation to draw down the first Tranche of EUR 2,000,000 and a minimum of two sequential Tranches of the Convertible Notes, i.e. a total minimum of EUR 3,000,000. The remainder of the Convertible Notes, a total of four Tranches of EUR500,000 totaling EUR 2,000,000, may be drawn down by the Company at its discretion.
Valoe has, pursuant to the terms and conditions of the Arrangement between Valoe and Winance, withdrawn the first Tranche of EUR 2,000,000, and issued to Winance in total 2,000 convertible notes and in total 13,333,333 warrants related thereto.
