Buy Units at €250 each through this exclusive public offer. Each Unit represents one share of Choice coop CV and 25 shares of Choice NV before the start of the listing of Choice NV. Investing is not without risks, read the information note and disclaimer below.
Choice is a free personal TV guide that lets you quickly and easily choose what really interests you from the overwhelming range of video and TV programmes on offer online. You can then view your choice whenever and wherever you want.
You can also take advantage of the group discounts that Choice negotiates for its members. To do so, exchange the coupon / e-voucher, which each Unit automatically generates per month. You can sell your remaining Units to consumers who have too few, on the website..
Investors in Units can thus reap cash returns of up to €2.5 or 1% per month, on top of the potential upside of investing early in a Consumer Tech company.
This public placement amounts to a maximum of €5 million (the legal ceiling) and will continue for a maximum of 2 months after the start of the listing of Choice NV. Over-subscription is not possible.
The investor runs the risk of losing all or part of his investment and/or not achieving the expected return. Choice nv does not have sufficient working capital to carry out all its plans without using the additional resources made available by this placement.
The instruments offered are units. The units are instruments that are certified and offered by choice trust and represent a new share of choice coop cv and 20 (or 25 in the case of subscription prior to the listing of choice nv) existing or new shares in choice nv. The rights attached to these instruments are described under parts iii and iv of the information note.
The units are not liquid instruments. They are not listed and are transferable in very limited circumstances. There is no possibility for investors to sell the units. The exchange of the units for the underlying shares of choice coop cv and of choice nv may only take place if the investors withdraw from the capital of choice coop cv. This withdrawal depends on the financial situation of choice coop cv and, due to a decision of the board of directors of choice coop cv, it will not be possible for choice nv to be listed on Euronext access.
We also refer to the articles of association of choice coop cv, choice nv and choice trust priv st. And the administration conditions of the units, which can be found on the website www.choice.be.
Main risks inherent in the issuer and the investment instruments offered,
1. Risk of loss of investment
In case of bankruptcy of, or default by Choice Trust, Choice coop CV or Choice NV, the shareholders run the risk of losing all or part of the invested capital. In the event of disappointing commercial success, participation in the liquidation of the company may result in a total loss of the investment.
2. Risk of not developing the activity of Choice coop CV, Choice Trust PRIV ST. and of Choice NV or failure of one or more activities.
Choice coop CV, Choice PRIV ST. and Choice NV are still in the phase just after start-up: the first phase of the development of Choice's activities. The launch of the Choice platform is currently in full swing. On May 20, 2020, the public release of Choice was made in the Google Play store. Revenue will probably only be acquired from 2021 onwards. The risk remains that the activity of Choice and the underlying shareholdings of Choice NV will not develop further or not favourably. There is a risk that an activity of Choice NV may not be exploited nationally or internationally as expected. This could lead to lower revenues.
3. Working capital risk - funding risk
As further described in chapter 2 of part II, the company Choice NV does not have sufficient working capital to carry out all its plans without using the additional resources made available by this placement. There is therefore a risk that, in the event of the failure of this placement, the activities will have to be limited to the roll-out in Flanders and that the additional investments cannot be made or can only be made subject to the collection of private funds. The amount paid to Choice Trust by the investors within the framework of the investments in Units, will indeed be used by Choice Trust to acquire shares of Choice coop CV and of Choice NV. These shares will be held by Choice Trust for the account of the holders of the Units as the Units represent one share in Choice coop CV and 20 (or 25 pre-IPO) shares in Choice NV. The amount paid by Choice Trust to Choice NV will be used by Choice NV to develop its assets and activities. There is a risk that Choice NV may not be able to finance itself sufficiently through the sale of the Units in the context of the current Offer or in any other way and in future financing rounds. There is then a risk that Choice coop CV and Choice NV will have difficulties to develop their activities. The development of the activities of Choice NV will therefore depend on the working capital of Choice NV. The current working capital of Choice coop CV covers the needs of Choice coop for the next 12 months because of the very limited need for working capital of Choice coop CV itself. The working capital of Choice NV itself covers the needs of Choice NV for the next twelve months, without the implementation of any internationalisation plans and without the granting of an additional subordinated convertible loan by Choice Trust to Choice NV as a result of this Offer. The company Choice NV expects to be loss making in the first year. Depending on future funds raised from Choice NV, whether through stock exchange or private placements of shares, convertible subordinated loans or non-subordinated loans, it will also be possible to finance any future loss.
4. Risks associated with the lack of transferability of the instruments offered
The issued Units certified by Choice Trust are not listed on any stock exchange and are not transferable except in very limited circumstances, in particular to the legal heir, legal spouse or partner, family trust of the holder of the Units or with the prior approval of the Board of Directors of Choice Trust. The shares of Choice coop CV are also not listed on the stock exchange and can be transferred only to shareholders of Choice coop CV (except in the case of repurchase by Choice coop CV) and subject to compliance with the applicable common-law rules of the statutes of Choice coop CV and of the Companies and Associations Code. These shares may be transferred to other partners in the event of death or death, subject to the prior approval of the Board of Directors. They may not be transferred to third parties, including the heirs and successors in title of the deceased partner, from among the survivors or on death. If the Board of Directors' approval is obtained, they are nevertheless transferable to third parties and may be transferred to persons who meet the conditions required by law and/or the articles of association to be partners. This can result in a great deal of illiquidity / non-transferability. Even if Choice NV's shares were listed on Euronext Access or any other European MTF (see below), there can be no assurance that a liquid market will develop for these shares.
5. Risk that the application for listing on Euronext Access is refused by Euronext and/or that the listing of Choice NV is delayed.
After the previous selection of Choice by Euronext for its TechShare program, the listing application process has now also been started to have Choice NV listed on Euronext Access. There is a risk that Euronext would consider that Choice NV does not meet the conditions to be listed on Euronext Access and that the listing application would be refused by Euronext. In this case, it will have to be considered on which other European MTF Choice NV or a legal successor of Choice NV could be listed. It is not certain that an alternative market can be found and, if an alternative market is found, when the listing can take place. The delay in Choice NV's listing project would have a direct impact on investors' ability to realise their investment.
6. Risk related to insufficient demand for e-vouchers
If there is insufficient demand for e-vouchers or coupons of the Choice coop CV share, which entitle you to discounts on Internet and TV, the expected cash proceeds of €2.5 per share of Choice coop CV, and therefore Unit, may not be achieved. This would result in not achieving the cash return and not achieving the DCF valuation of this cash return at €250 per Unit, at an IRR (Internal Rate of Return) of 1% on a monthly basis. There is also a risk that competitors of Choice or Choice partners would take actions that could undermine demand for e-vouchers. No e-vouchers have been sold so far. The market for e-vouchers will depend on the regions where Hermes provides internet services, the Antwerp, Leuven and Hasselt region and this market is still limited for the time being.
7. Risk relating to the tax treatment of the coupon of the Choice co-op
The monthly coupon of the share of the Choice co-op represents an e-voucher or discount coupon entitling you to Internet or TV at half price and which is saleable on the Choice website. According to Choice, this does not constitute a dividend coupon and, in our opinion, is not subject to withholding tax. However, there is a risk that this coupon could be taxed in the future. In this respect, there is no legal opinion of a specialized tax lawyer that can be added to this note.