Balluga

Balluga is seeking to raise £500,000 in return for 20.00% equity in the company.

Summary

Since the patenting of the first coil spring in 1763, beds have been commercialised for mass sales to an expanding consumer market that currently stands at £15bn per annum.

Design innovations like pocket springs, polyurethane foam, latex and recently memory foam, have been launched to disrupt the incumbent market leader through effective marketing campaigns and backed by IP protection.

Balluga has such an opportunity now, with its innovative suspension system protected with an IP portfolio in over 40 countries. Balluga’s technology isn’t limited to just one sector or industry, it provides a legal monopoly for a further 18 years to disrupt all market sectors for any sleep product worldwide.

Following a round of seed investments of £600,000 over the last 4 years, Balluga is now seeking a second round of funding of between £500,000 and £600,000 to launch Balluga in 2015.

These funds will be used to set up a small scale manufacturing and marketing base in the UK and employ a management, production and sales team.

By combining advanced design with the latest technology, Balluga aims to disrupt and expand the bed market with a product portfolio that will be targeted to suit the needs of consumers of all ages.

The Problem - Current bed designs

Consumers are currently resigned to selecting a bed in a public environment while fully dressed.

The firmness of the mattress is fixed at time of purchase and will diminish over time.

Users are compelled to suffer the discomfort of a deteriorating mattress for many years in order to attain value for their purchase.

This process is exacerbated by the fact that used mattresses are un-hygienic and have to be discarded into landfill sites, polluting the planet and the environment.

The Solution - Balluga

Balluga provides a range of advanced beds that allow users to customize every aspect of their sleep experience.

Balluga’s adjustable firmness support will not deteriorate overtime and has an active suspension that constantly adjusts to eliminate any discomfort during sleep.

Balluga beds are cleanable, recyclable and remain hygienic and infestation free throughout their life cycle. 

They provide a future proof investment with an extensive range of comfort and luxury accessories that can be added to enhance the sleep experience.

Deal structure

The company is seeking a minimum fundraise of £500,000 in return for 20.00% of the equity and with the option to overfund to £600,000. The minimum subscription amount is £10,000 or such other minimum subscription as the directors and Asset Match may determine from time to time.

At the same time as the fundraise completes, existing investors in the Company will convert c.£230,000 of loans in to equity. This conversion will strengthen the Company's balance sheet further.

This company has a single share class and investors will be issued shares that rank pari passu with the existing share capital.

Exit

The Company expects that an exit will most likely come from a trade sale after a three to five year period. The Company is aiming to achieve unit sales of c. 2,800 per month by the end of year three. At this time the Company would consider viable exit options, including entering into discussions with international companies involved in furniture and "interconnected consumer products."

With an eye to the future and investor liquidity, the Company has also entered into an agreement with Asset Match to facilitate electronic trading of the ordinary shares, subject always to the Articles of Association. It is anticipated that the share trading facility will become active at an appropriate time, typically at the end of the EIS period. Prior to the share trading facility becoming active, Asset Match will assist the Company with the procurement of an ISIN number and will liaise with its existing registrar to become CREST eligible. These provisions will ease settlement, the administration involved in running the share register, shareholder meetings, forms of proxy and dividend payments if made.

Tax relief

Balluga has submitted its plan to raise money, details of its structure and trade etc. to HMRC and has been given advance assurance that the proposed share issue is likely to qualify for Enterprise Investment Scheme (EIS) tax reliefs.

Tax relief is available only to individuals who subscribe for shares in an Enterprise Investment Scheme. Relief is at 30 per cent. of the cost of the shares, to be offset against the individuals' Income Tax liability for the tax year in which the investment was made.

If you sell, give away or otherwise dispose of shares, tax reliefs can reduce your Capital Gains Tax liability. Your shares must meet certain conditions to qualify for these reliefs.

Please visit the HMRC website for further information on EIS tax relief.

The availability of any tax relief, including EIS and SEIS, depends on the individual circumstances of each investor, and may be subject to change in the future. If you are in any doubt about availability of any tax reliefs, of the tax treatment of your investment, you should obtain independent tax advice before proceeding with your investment.

This summary should be read in conjunction with all documentation made available on this site. Please read the supporting documentation carefully before making any investment decision.