Joobs 1A

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

Risk: The NOVULA NETWORK 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 NOVULA NETWORK, 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 NOVULA NETWORK 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: NOVULA NETWORK's leaders combine expertise in recruitment, technology and digital growth. NOVULA NETWORK will start with few resources and gradually integrate top talent as the company grows, focusing on growth-hackers and product engineers.

3.      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.

4.     Risk associated with dilution
Risk: As mentioned above, the Company has historically received funds through convertible loans. These loans will, in principle, all be converted into shares at some point in time. 
Consequence: The conversion of the convertible loans will lead to dilution for the existing shareholders. In this case, it is not possible to predict exactly what percentage of dilution investors will experience. This is because this percentage depends on several currently unknown factors, such as: the date of conversion and whether or not interests are included in the conversion. 
Note: The discount granted is in line with the market. However, it is important to note that the maximum pre-money valuation that will be used for the capital increase where the loans will be converted is €3,000,000 and is determined based on the company's performance at that time). This means that this future capital increase will take place at a pre-money valuation that is lower than the post-money valuation at which the JOOBS 1A compartment of Spreds Finance would invest, meaning that there will be greater dilution than if the pre-money valuation were higher than the latest post-money valuation. Given the company's valuation, the dilution will be rather limited.

1.       Risk associated with market demand and competition risk

Risk: NOVULA NETWORK may be poorly adopted by users due to a lack of demand or interest from the market. This could be due to insufficient product-market fit, an unclear value proposition or ineffective communication with the target audience.

Consequence: Competitors such as LinkedIn, Indeed and Stepstone with large marketing budgets could overshadow NOVULA NETWORK and its technology, jeopardizing the execution of the planned business plan. 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 NOVULA NETWORK, with partial or complete loss of the invested capital.

Note: Unlike generic platforms, NOVULA NETWORK prioritizes local jobseekers and employers with hyper-personalized matching. What's more, AI-driven job recommendations and one-click applications create a frictionless hiring process that traditional players struggle to match. NOVULA NETWORK leverages high-ROI viral marketing that established platforms avoid due to their corporate structures.

2.       Risk associated with cybersecurity

Risk: Processing sensitive candidate and employer data presents security and compliance risks. The platform may become the target of data breaches or cyber-attacks, resulting in unauthorized access to sensitive user data.

Consequence: If this risk materializes, the company's reputation could be tarnished and legal action taken. 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 NOVULA NETWORK, with partial or complete loss of the invested capital.

Note: The framework in which NOVULA NETWORK operates is GDPR-compliant and built with strict data protection measures for EU compliance. In addition, NOVULA NETWORK uses end-to-end encryption, ensuring secure data storage and processing. The company will also conduct regular security audits to mitigate breaches and maintain the integrity of the platform.

3.      Risk associated with the use of this technology 

Risk: There is a risk of algorithm performance degradation due to technical problems such as errors, outages or server failures. These problems can have a negative impact on the user experience, accessibility and credibility of the platform, particularly during the development and scaling phases.

Consequence: If the model used does not perform or underperforms, NOVULA NETWORK 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 NOVULA NETWORK, with partial or complete loss of the invested capital.

Note: NOVULA NETWORK's algorithm evolves based on behavioral data to improve job recommendations over time. In addition, the company will regularly optimize the UX/UI to maximize engagement and reduce abandonment.

Risk: The risk of insolvency means that NOVULA NETWORK 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 NOVULA NETWORK 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 NOVULA NETWORK nor the Participatory Notes of the JOOBS 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 JOOBS. 

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 JOOBS.

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 NOVULA NETWORK 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 NOVULA NETWORK'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 absence of a verification of the key financial figures and ratios

Risk: The first annual accounts have not yet been published. As a result, the key financial figures and ratios cannot be verified by the crowdfunding service provider.

Consequence: As the financial figures have not yet been approved by the shareholders of NOVULA NETWORK, there is a limited risk that these figures will be changed. This could potentially affect investor analysis.

Note: These figures come directly from NOVULA NETWORK' accountant.

3.          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. 

4.        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.