YOKUU 4A

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

Risk: The PROBIBEL 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 the company, with partial or complete loss of the invested capital.

Note: Today PROBIBEL scaled up and reached the break-even point. Current revenues consist of: ~60% from their own webshop, where they are now generating >€100k per month, with an Average Order Value (AOV) of €48 and a retention rate of >35%; and ~40% from B2B(2C) revenue, through a network of ~1,000 points of sale and 6 distributors distributing the products throughout BeNe. 

2.      Risk associated with the size of the team

Risk: Given the stage of development that PROBIBEL 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. There is also a risk that key hires in growth and sales could be delayed or not perform. 

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. If new hires are delayed or do not perform as expected, this could lead to missed commercial goals and slower market expansion.

Note: PROBIBEL has 2 co-CEOs and has a team of 3.5 people on the payroll. This round of financing will strengthen the sales team. PROBIBEL will build a strong recruiting pipeline in H1 2025 (ongoing), offer competitive mission-driven positions and maintain consultant engagement (e.g., interim strategy support from external marketing or sales consultants during recruitment).

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 (under Section B (f)), the Company has received funds through convertible loans in the past and is still scheduled to do so for this financing round. Several of these loans (if not all) will be converted into shares at some point. 

Consequence: The conversion of the convertible loans will result in dilution for the existing shareholders. In this case, it is not possible to predict exactly what percentage of dilution investors will experience. This percentage depends on a number of factors that are currently unknown (given that some modalities are still being negotiated at this time between the parties involved), such as the date of conversion and whether or not interest is included in the conversion. 

Note: To the extent possible, investors of this offering will be offered the opportunity to subscribe to the capital increase whereby the loans will be converted into shares. Note, however, that this does not constitute a right.

1.       Risk associated with customer understanding of YOKUU solution

Risk: Consumers still have little understanding of microbiome-based cleaning, leading to slower adoption.

Consequence: Delayed market penetration, underperformance of marketing campaigns and missed growth targets.

Note: PROBIBEL will invest in strong educational content (e.g. myth debunking, scientific explanations and expert support), UGC and clear product claims. It will run targeted campaigns to gradually build trust in key regions (e.g. NL, UK).

2.       Risk associated with applicable regulations

Risk: Regulatory uncertainty around probiotics and microbial detergents, especially in international markets. 

Consequence: Delay in product launch or forced reformulation; risk of product bans in certain markets.     

Note: PROBIBEL will continue to work proactively with regulatory bodies (e.g. EU Ecolabel working group). It will work with legal experts (e.g. Frederic Weekers) on risk assessments and compliance and maintain flexibility in formulation and claim strategy.

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 PROBIBEL 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 PROBIBEL nor the Participatory Notes of the YOKUU 4A 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 PROBIBEL. 

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

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 PROBIBEL 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 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 PROBIBEL'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. 

Note: Investors in Participatory Notes bear the same risk as if they invested directly in PROBIBEL and became shareholders. However, Spreds, as a crowdfunding service provider, tries to encourage each project owner to report at least 2x per year.

3.               Risk associated with the lack of verification of the key financial figures and percentages

Risk: PROBIBEL publishes an abbreviated schedule of its financial statements which meant that some of the financial figures (in particular revenue and gross profit margin) could not be verified by the crowdfunding service provider.

Consequence: There is a risk that the given figures are not correct. This could influence investors' analysis.

Note: These figures come directly from PROBIBEL's accountant.

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.