TheFactory is an early stage venture capital investors focusing on trending markets.

We invest in pre-seed and seed stage in fast growing Saas businesses that are disrupting traditional sectors.

TheFactory is an active investor giving businesses access to patient funding and support, and giving investors access to a largely privately held investment sector via a range of investment vehicles.

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The content in this section is attributable to the TheFactory Asset Management prospectus.

To deliver our vision our comapny structure is as follows:

TheFactory Group is the mother company for:

• TheFactory Asset Management is responsible for the investments and fund management.

• TheFactory Academy is responsible for accelerator programs.

• TheFactory Growth provides counseling services

• TheFactory Accounting provides accounting services

The Company’s investment objective is to generate capital growth over long term through investment in early stage SaaS businesses based predominantly in Norway and the wider Nordic.

Investment policy

In order to achieve its investment objective, the Company invests in pre-seed and seed investments in unquoted startups. The Company intends to realise value through exiting the investments over time.

The Company seeks exposure to early stage businesses which are high growth, with scalable opportunities, and have disruptive technologies in our focus markets fintech, porptech, retailtech, impact and sportstech.

Investments are expected to be mainly in the form of equity and equity-related instruments issued by portfolio companies, although investments may be made by way of convertible debt instruments. The Company intends to invest in unquoted companies and will ensure that the Company has suitable investor protection rights where appropriate. The Company may also invest in partnerships, limited liability partnerships and other legal forms of entity. The Company will not invest in publicly traded companies. However, portfolio companies may seek initial public offerings from time to time, in which case the Company may continue to hold such investments without restriction.

The Company may acquire investments directly or by way of holdings in special purpose vehicles or intermediate holding entities (such as the Partnership).

The Management Team has historically taken a board or observer position on investee companies and, where in the best interests of the Company, will do so in relation to future investee companies.

The Company’s portfolio is expected to be diversified across a number of geographical areas predominantly within the Norway and wider Nordic and the Company will at all times invest and manage the portfolio in a manner consistent with spreading investment risk.

The Management Team will actively manage the portfolio to maximise returns, including helping to scale the team, refining and driving key performance indicators, stimulating growth, and positively influencing future financing and exits.

Investment restrictions

The Company will invest and manage its assets with the object of spreading risk through the following investment restrictions:

• The value of no single investment (including related investments in group entities or related parties) will represent more than 15 per cent. of Net Asset Value, save that one investment in the portfolio may represent up to 20% of NAV;

• The aggregate value of pre-seed stage investments will represent no more than 25 per cent. of Net Asset Value; and

• At least 80 per cent of Net Asset Value will be invested in seed.

Each of the restrictions above will be calculated at the time of investment and disregard the effect of the receipt of rights, bonuses, benefits in the nature of capital or by reason of any other action affecting every holder of that investment. The Company will not be required to dispose of any investment or to rebalance the portfolio as a result of a change in the respective valuations of its assets.

For the purposes of the investment policy, “NAV” means the consolidated assets of the Company and its consolidated subsidiaries (together “the Group”) less their consolidated liabilities, determined in accordance with the accounting principles adopted by the Group from time to time.

Hedging and derivatives

Save for investments made using equity-related instruments as described above, the Company will not employ derivatives of any kind for investment purposes. Derivatives will not be used for currency hedging purposes.

Borrowing policy

The Company will not use borrowing to manage its working capital requirements nor borrowing for investment purposes.

Cash management

The Company may hold cash on deposit and may invest in cash equivalent investments, which may include short-term investments in money market type funds and tradeable debt securities. There is no restriction on the amount of cash or cash equivalent investments that the Company may hold or where it is held. The Board has agreed prudent cash management guidelines with the AIFM to ensure an appropriate risk / return profile is maintained. Cash and cash equivalents are held with approved counterparties, and in line with prudent cash management guidelines, agreed with the Board, AIFM and Portfolio Manager. It is expected that the Company will hold between 5 and 15 per cent. of its Gross Assets in cash or cash equivalent investments, for the purpose of making follow-on investments in accordance with the Company’s investment policy and to manage the working capital requirements of the Company.

Changes to the investment policy

No material change will be made to the investment policy without the approval Board of directors of TheFactory Asset Management AS. In the event of a breach of the investment policy set out above and the investment and gearing restrictions set out therein, the Management Team shall inform the AIFM and the Board upon becoming aware of the same and if the AIFM and/or the Board considers the breach to be material, notification will be made to a Regulatory Information Service.

In order to capitalise on the significant market opportunity, TheFactory believes its investment strategy should not be one dimensional. Therefore the Company invests in four different areas of opportunity:

Pre-seed

TheFactory has extensive scouts searching for early-stage fast-growing businesses in the sectors before valuations inflate.

Seed

This is where the Company sees the greatest opportunities to co-invest with the best and in the best cases, hence derisk portfolio.

Secondary

TheFactory’s fund structure allows it to sell in the secondary to realize returns.

TheFactory investments, typically:

• Secure a significant minority stake with board participation and rights in portfolio companies;

• Allow the Company to participate in later follow-on funding rounds in order to minimise any dilution where possible; and

TheFactory is an active investor and believes resolutely in adding value to its portfolio companies. The Company takes an active non-executive role in its companies and works hard to exert positive influence while still maintaining the distance necessary to keep perspective of the greater goal of value enhancement. There are number of key areas where the Company believes it can have most impact:

• Helping scale the Management Team

• Refining and driving the key performance indicators

• Organic growth and acquisition

• Business development and market entry

• Managing underperformance

• Investment exit review

TheFactory Asset Management AS will act as the Company’s alternative investment fund manager for the purposes of the AIFM Rules.

The AIFM will also be responsible for providing administrative, company secretarial and marketing services to the Company. These will include general fund administration services (including calculation of the NAV based on the data provided by the Portfolio Manager, bookkeeping and accounts preparation.

The AIFM is authorised and regulated in Norway by the Norwegian Finacial Supervisor Authority.

The portfolio is managed by TheFactory Asset Management AS, a specialist fund management and advisory business whose experienced and entrepreneurial management team has a strong track record in early stage venture capital. The management is based in Norway and is authorised and regulated in the Norway by the Norwegian Finacial Supervisor Authority.

The Company leverages the management’s years of experience, expertise and networks in the sectors to drive value creation in its investee companies.

In addition, the management consults with an advisory panel of expertise.

Audit Committee – Terms of Reference

Composition of the Committee

The Committee is determined as it is stated in the information memorandum of the particular Venture Capital fund. Usually, the committee will be comprised of three or more independent non-executive Directors appointed by the Board. Alternatively, the committee in teh fund also will be the board of directors. To the extent practicable, at least one member of the Committee should have recent and relevant financial experience ideally with a professional qualification from one of the professional accountancy bodies.

Meetings

The board of directors will meet at least twice each year, to review the drafts of the annual and half-year reports of the Company, for audit planning purposes and at such other times as may be required.

The Secretary shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance. The draft minutes of each meeting of the Committee shall be circulated to all members of the Committee and, once agreed by the Committee, will be circulated to all other members of the Board.

Financial Reporting

The Committee or BOD shall:

(i) where requested, provide advice to the Board on whether the annual report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the company’s position and performance, business model and strategy;

(ii) review the significant financial reporting issues and judgements made in connection with the preparation of the Company’s financial statements, announcements of results and related formal statements

(iii) consider significant accounting policies and whether the polices adopted are appropriate, any changes to them and any significant estimates and judgements;

(iv) review the adequacy and scope of the external audit, compliance with regulatory and financial reporting requirements, the clarity and completeness of disclosures in the financial statements and consider whether the disclosures made are set properly in context;

(v) satisfy itself that the annual and half-year reports and any other significant published financial information are properly and carefully prepared and give a fair representation of the Company’s affairs;

(vi) seek clarification from the Administrator of any changes in accounting policy or treatment affecting the Company’s report and accounts;

(vii) review related information presented with the financial statements, including the operating and financial review, and corporate governance statements relating to the audit and to risk management; and

(viii) where board approval is required for other statements containing financial information (for example, summary financial statements, significant financial returns to regulators and release of price sensitive information), whenever practicable the Committee or BOD shall review such statements first.

Principal Service Providers and Auditors are specified on a fund level