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Explanation of the additional fundraise of what3words Limited (“what3words”,

“company”)

what3words has already raised funds on Crowdcube (the “Fundraise”) and is now making
additional capacity available for further investment. This document explains the structure of
the further funds being raised by what3words on Crowdcube (the “Additional Fundraise”),
including an explanation of the different share classes (“Shares”) and convertible loan notes
(“CLNs”) previously issued by what3words.

This document explains that different terms apply to investments made on this pitch page
compared to those made on the company’s other pitch page on Crowdcube before the
“Cutoff” (being 2.30pm (BST) 14 July 2022). The Cutoff is the point at which the aggregate
amount raised on Crowdcube in the UK pursuant to the Fundraise reaches €8m (or an
amount close to €8m, to be determined at the Company’s discretion, in order to account for
potential currency fluctuations).

Very high level summary:

There has been high demand for investment in what3words on Crowdcube, and we
are able to open up the possibility for further investment on this pitch page. All
investments made after the Cutoff and therefore in this Additional Fundraise will be at
the same price but on less favourable terms compared to investments made
previously, before the Cutoff on the other pitch page

Those who have invested before now will receive convertible loan notes on the same
financial terms as institutional and professional investors who invested between April and
December 2021. Those convertible loan notes will convert into shares at a discount to the
price paid in our next investment round. The shares that will be issued to those investing
before the Cutoff will be the most senior class of shares available in the company at the time
of conversion and will therefore benefit from the same protections as institutional
shareholders and others holding the most senior class of shares. However, in order to
comply with regulatory requirements, we are now only able to offer convertible loan
notes that convert into Ordinary shares at the same price for anyone who still wishes
to invest. If you choose to invest now, you should be aware that Ordinary shares do
not have many of the protections that other classes of shares have, meaning that in the
event that the company is not successful you will be more likely to lose all of your
investment.

Structure of the Additional Fundraise

The aggregate investment limit for the Additional Fundraise will be determined in response
to demand from investors on Crowdcube, but will not exceed the GBP equivalent of €8m (in
order to comply with relevant UK and EU regulations - both of which define the limits in
EUR). The currency for the Additional Fundraise will be GBP and references to EUR or € in
this section should be interpreted to apply to the GBP equivalent (as converted once the
Fundraise has been completed).

Crowdcube investors who chose to invest before the Cutoff will be issued with convertible
loan notes which convert into the most senior class of shares in issue at the time of
conversion (“Fundraise CLNs”). After the Cutoff, all subsequent investors on Crowdcube in
the UK and on Crowdcube in the EU - will receive convertible loan notes which convert into
Ordinary shares in the capital of the company (collectively the “Additional Fundraise
CLNs”). The Additional Fundraise through Crowdcube in the UK will be subject to a
maximum of €8m (or an amount close to €8m, to be determined at the Company’s
discretion, in order to account for potential currency fluctuations), whereas the total amount
raised on Crowdcube in the EU (adding up the amounts raised both before and after the
Cutoff) will be subject to a single aggregate limit of €5m (or an amount close to €5m, to be
determined at the Company’s discretion, in order to account for potential currency
fluctuations).

For an explanation of CLNs and the Shares issued by what3words, see the sections of this
document titled ‘Summary of Additional Fundraise CLANs and ‘Summary of share classes’.

Summary of Additional Fundraise CLNs

Convertible loan notes are short-term debt instruments whereby investors provide cash or
services in exchange for loan notes, which either convert into shares or are repaid (often, in
both cases, with interest). The Fundraise CLNs and Additional Fundraise CLNs are
structured to always convert into shares. Save for where an event of default occurs,
there are no circumstances under which the Fundraise CLNs or Additional Fundraise
CLNs would be repaid by what3words.

The key terms of the Additional Fundraise CLNs are summarised below:

- Term: 18 months from the date the CLN is issued (which will be on or around the
date that the funds are transferred to the company via Crowdcube).
- Conversion mechanics: mandatory conversion into shares in the case of maturity,
sale of what3words, listing or cash fundraise exceeding £17.2m (with at least 50%
coming from new investors). Optional conversion into shares in the case of any other
fundraise.
- Discount: (1) conversion within 12 months of issue - 10% discount; (2) conversion
after 12 months but before 15 months of issue - 15% discount; and (3) conversion
after 15 months but before 18 months of issue - 20% discount.
- Interest: 3% per year compounded, settled in shares on conversion.
- Share class on conversion: Ordinary shares (as described in ‘Structure of the
Fundraise’ above) (for those that invested after the Cutoff) (whereas those that
invested before the Cutoff on the other pitch page will receive the most senior class
of shares in issue at the time of conversion)
 - Valuation cap: £400m pre-money valuation (excluding any shares issued to
Crowdcube investors pursuant to the Fundraise and any shares to be issued on
conversion of existing CLNs), equivalent to a price per share of approximately £7.06
- Conversion Price: other than on maturity, the note converts at the lower of (i) £400m
valuation cap, and (ii) the share price in the transaction resulting in the conversion,
with the discount applied. On maturity, the note converts at the lower of (i) £400m
valuation cap and (ii) the price per share in the most recent fundraising with the
discount applied, but that the price pursuant to (ii) shall not be lower than the floor
price of £3.47452019 (being the price of shares issued in the Series C round).

what3words currently has CLNs in issue totalling £72.8m, of which £56.7m were issued for
cash and the balance in exchange for media value. The terms of the CLNs are materially
similar to the terms of the Fundraise CLNs, and Additional Fundraise CLNs, save for a) the
share class that Crowdcube investors who invested after the Cutoff will receive (as set out in
‘Structure of the Fundraise’ above), b) some of the CLNs issued in exchange for media value
do not accrue any interest and c) one CLN issued in exchange for media value may be
repayable in cash at maturity on 31 December 2022 if no conversion has taken place by
then, a scenario which the Company has accounted for in its runway forecasts.

Summary of share classes

what3words currently has four classes of Shares in issue, in order of seniority: firstly C1,
secondly A2 and A1 (C1s, A2s, A1s together, the “ Preference Shares”) and thirdly Ordinary
shares. In general, Preference Shares are held by institutional and larger private investors,
while Ordinary shares are held by smaller private investors (including investors in our
Crowdcube fundraising in 2020 via Crowdcube Nominees), and the founders (as well as by
employees of what3words in the form of share options).

Although the classes of Shares are equal in many respects, including voting rights (but
please note that voting rights as part of the Crowdcube nominee structure will be governed
by the Crowdcube investor terms and conditions), the Shares have different rights and
protections in relation to: (i) anti-dilution protection in certain circumstances; and (ii)
sale or liquidation of what3words.

Please note that this document contains a summary of the class rights of the Shares.
We recommend that you review the company’s articles of association (which will be
shared with you in the cooling off period), most notably paragraphs 7 and 8, for
further information.

(i) Anti-dilution protection.

Holders of Preference Shares receive some protection from dilution in the event of a future
fundraising at a price lower than the price paid to acquire those shares. Those shareholders
receive new shares (either for free or at nominal value of £0.01 per share, depending on the
circumstances) of the same class that they currently hold, which reduces the dilution impact
of such a downround.
Shareholders holding Ordinary shares - which will apply to those who choose to
invest after the Cutoff - do not benefit from such anti-dilution protection.

(ii) Sale or liquidation

In the case of sale or liquidation of what3words at a price lower than the price paid by
holders of Preference Shares, the holders of Preference Shares have some protection
to help them get their original investment amount back whereas Ordinary shares -
which will ultimately be issued to those who choose to invest after the Cutoff - have
no such protection. The order of priority for returning the original amount of capital invested
to shareholders, before any remaining funds are distributed, is as follows: (1) C1 shares; (2)
A2 and A1 shares; and (3) Ordinary shares.

The C1, A2 and A1 shareholders are entitled to receive back the amount they originally
invested before distributions are made to the Ordinary shareholders.

The distribution amount per share below which the liquidation preference applies is the price
paid at the time of investment, which is £3.47452019 for C1 shares, £2.329047885 for A2
shares and £0.548087463 for A1 shares.

The following table illustrates some scenarios at different company valuations (and the
corresponding share price), in the event of sale or liquidation. The effective share price is
the proceeds per share that would be distributed to shareholders for each class of share at
the example valuations listed.

Note: The table is illustrative only and may change depending on a range of factors, in
particular the price at which CLNs convert and into what share class. The table is calculated
based on the Company’s current cap table with the most conservative assumption for the
conversion of existing CLNs (i.e. assuming the CLNs convert into C1 shares at the floor
price) (but excluding the impact of the Fundraise CLNs).

*This is the subscription price of C1 shares. At and above this price, there are no liquidation
preferences and all shareholders receive pro rata distributions.
** This is the subscription price of A2 shares, and is the maximum that A2 shareholders can
receive ahead of Ordinary shareholders.
***At this price (and below) there is no amount left for Ordinary shareholders.
****This valuation is equal to the total amount invested by C1 shareholders, so at this level
C1 shareholders receive their full subscription amount back, with nothing left for any other
shareholders.

Additional rights and protections

Some shareholders have additional rights and protections in the Articles and the
Shareholders’ Agreement between what3words and some of the larger shareholders. These
include additional information rights, the right for certain investors to appoint a director or
board observer, and the right for certain investors to provide approval for a range of
company matters, including, but not limited to, the increase or decrease in the authorised
number of directors, changes to the company’s share structure, and the entering into
material transactions.

Cooling off email

A cooling off email will be circulated to everyone who has chosen to invest. This will include
key investment documents, which contain details on investors’ rights. You should seek
independent legal advice on these documents if you have any concerns. Crowdcube is not
able to provide you with legal advice. Please carefully read the Legal Review in your cooling
off email, which contains full details of the offer.