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Convertible bond 2022-2024

It's time for sustainable change in the chocolate industry.

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A basic information sheet has been prepared for this security.

What is a convertible bond?

A convertible bond is a loan that can be converted into shares at fixed times and a fixed conversion price. If the loan is not converted into shares (by you or us), you get your money back plus interest.

Repayment & Interest 3.50

Your convertible bond bears interest at 3.50%. The interest will be repaid to you together with the invested amount at the end of the term (December 31, 2024) if no conversion is made.

Investment volume: 999,936 €

In total, convertible bonds for 999,936 € will be issued. This is within the value limits of German investor protection.

Transformation process & period

There are 2 conversion periods in which the convertible bond can be converted into shares:

Conversionperiod: 01.11.22 to 30.11.22. For the conversion we need from you notice that you want to convert your convertible bond and your original certificate.

Conversion period: 01.12.22 to 31.12.22 fairafric has the right to convert your convertible bond into shares and needs your original certificate.

Your shares will be created a few weeks after the conversion. We will inform you shortly before the respective periods, which steps are necessary to convert your convertible bond.

Type of shares: Preferred shares

The convertible bond can only be converted into preferred shares. These have no voting rights, but receive a higher dividend of 2.00% on the par value per share compared to ordinary shareholders.

Conversion price into shares 72.00€

Your convertible bond can be converted into shares at the current share price of 72.00€. This conversion price is fixed.

Business valuation

At the share price of 72.00€, the fairafric Group (Germany, Ghana) is valued at just under 39.5 million€.

How it works

Fill out form

We will create a personalized subscription form with your data.

Sign

Print the contract 2x and sign both copies. Then please send us both copies by mail.

Deposit

As soon as we have countersigned the contract, we will send it to you with a request for payment. Please transfer the amount to the account we have specified.

Conversion

Within the given time frames the conversion will be done by you or by fairafric.

Entry in the share register

We will enter you in the shareholders' register as soon as the shares are created.

Since 2020, our chocolate factory has been located in rural Ghana

Dear Investors,

I founded fairafric in 2016 out of a simple motivation - to fight a crying injustice: only just under 5% of the global turnover with chocolate arrives where the cocoa is grown, in West Africa!

While an average Fairtrade bar of chocolate leaves about 0.24 € in the country of origin of the cocoa, 1.33€ of each bar of fairafric goes to Ghana, which is more than 5 times as much.

With the construction of a modern, solar-powered chocolate factory in rural Ghana, fairafric has already impressively demonstrated that it is possible to produce world-class chocolate even in cocoa-growing countries.

While Fairtrade remains in colonial structures (Africa provides raw materials), we have shown with our customers that value creation in Africa has a real chance. Now it is time to utilize our new production capacity, create more jobs and pay as much premium as possible to our cocoa farmers.

I am very proud to be part of this journey and look forward to continuing it with you in the future. I will continue to go full throttle and make sure that every euro invested will write a piece of chocolate history!

Yours sincerely, Hendrik Reimers

Our vision 2030

10,000 jobs created

100 million turnover

100 million production capacity in tablets per year

Reference fairafric AG

Weinrich joined fairafric as a shareholder in 2019.

We were one of the first producers of organic and fair trade chocolate in Germany. I see a similarly bright future for Made in Africa." Cord Budde Owner Ludwig Weinrich

Weinrich produces the brands Vivani, GEPA, iChoc, Devine and many more. More than 1 million bars are produced daily at the company's headquarters in Herford.

Weinrich also trains our Ghanaian key personnel in the course of a training program and supports us in the operation of the factory.

Weinrich has invested further in fairafric as part of the rights issue.

Claro joined fairafric as a shareholder in 2019.

,,fairafric will shape fair trade. Because that's the only way to create an equal economy." Marie-Claire Pellerin CEO Claro Fair Trade AG

Claro fairtrade AG is the Swiss fair trade organization and has around 600 points of sale for fair trade products.

Claro takes over the distribution for fairafric in Switzerland.

Claro has taken advantage of the subscription right and continues to invest in fairafric.

Existing shareholders

,,I see enormous growth potential in fairafric and am convinced that the business model can set a new industry standard."

Wolf-Rüdiger Daetz has 30 years of experience as CFO in international industry with local assignments in Asia, Europe and Central America. He is a convinced impact investor at fairafric and a chocolate lover.

Frequently asked questions about fairafric

2015
First official meetings between Hendrik and cocoa farmers* and cocoa workers* in Ghana.

2016
First Kickstarter campaign
Foundation of fairafric GmbH
First production

2017
Second Kickstarter campaign
Successful organic certification of the entire value chain
Start of collaboration with Yayra Glover Ltd.
Change from 20g bars to 100g bars

2018
Third Kickstarter campaign
Certification Climate Neutral (both chocolate and company)
Establishment of fairafric Foundation, which holds shares in fairafric GmbH for cocoa farmers*
First Seedrs campaign (Seedrs enables startups to attract their clientele as shareholders*), in which 264 private individuals have invested in fairafric

2019
Decision to build a larger chocolate factory on our own: On the land of the cocoa cooperative we work with, in the rural region where the cocoa beans also grow.
Increase of shareholders to 360; Ludwig Weinrich and claro fairtrade AG join the fairafric family
Winning of the Lammsbräu Sustainability Award

2020
Construction of our new chocolate factory in Amanase. Record-breaking construction time of 5.5 months from groundbreaking to the first bar.

2021
fairafric GmbH becomes fairafric AG. Within 3 days the first convertible bond with 990.000€ is fully subscribed and already within 24 hours the first share issue of 999.589,80€ of fairafric is sold out. fairafric buys 250 tons of cocoa beans for production in 2021, paying the highest premiums in West Africa. fairafric also chases record after record in 2021. fairafric more than doubles last year's sales and produces over 2,000,000 bars of chocolate.

However, this is just the beginning!

The owners of fairafric are the founding team, our 750 shareholders from the clientele, Ludwig Weinrich GmbH and claro fair trade AG as well as our team and the cocoa farmers of our partner cooperative.

We have 4 major investment projects, all of which we will tackle in the coming months:

1. purchasing our cocoa ingredients alone will cost us more than 1.1 million euros for production in 2022.

2. a visit concept is to be established, which will combine farm visits with factory visits.

3. a canteen in which dishes are cooked with ingredients from our organic farms.

4. the establishment of a marketing and sales team in Ghana, as well as the intensification of our distribution channels in Europe.

From 2023-2024, we are expected to be operationally profitable. As we have to pay interest and repayments of over 1,000,000€ in 2022 and our ingredient warehouses and intermediate storage facilities have to increase significantly to accommodate the upcoming growth, we still calculate a loss for 2022.

Through our new Visitor Center, we also want to give our customers the opportunity to get a deep look into our operations. The factory visit will be combined with a visit to our farmer communities, all in one day! Unique in the world!

Frequently asked questions about the convertible bond

fairafric only issues preferred shares. Preferred shares are shares in which the shareholders have no voting rights, but receive a higher dividend (a preference) compared to the ordinary shareholders. At fairafric, this preference is 2.00% on the nominal value (1.00€) per share. If the preference shares are not paid or not paid in full and the arrears are not settled in the following year, the preference shareholders are granted voting rights as long as the arrears have not been settled (§140 AktG).

We do not share information about our investors with any tax office. You simply declare interest/dividends received on your tax return.

If you want to lend us money interest-free, write us a short e-mail. Of course, this is also possible and supports us even more.

Since the convertible bonds are issued unsecured, you may lose your investment completely. Therefore, do not invest money that you absolutely need.

The public offering will run until the maximum amount of 999,936€ has been subscribed. Due to extremely high demand, we expect this to happen within a few weeks.

As this is a new issue of shares, the price is set by fairafric. We have done this in consultation with experts, our existing shareholders (who also support this valuation through further investments) and calculations. In the calculations, we looked at the development since the last valuation, the costs that would arise if the company were to be built up again in this way, and we discounted the future cash flows.

The valuation was then set at €39.5 million.

fairafric AG is not listed on the stock exchange (for regulatory reasons, this will not be possible for at least 3 years). However, in order to establish tradability, we are currently working with a service provider to set up a kind of bulletin board through which buyers and sellers can come together.

Effect

The impact of fairafric

What does local value creation mean on site?

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