Translation: Original published in Finnish on 06/16/2026 at 09:02 am EEST

Aiforia announced on Monday that it had agreed with the European Investment Bank (EIB) upon a non-binding indicative term sheet for an up to 20 MEUR venture debt financing facility. We consider the news positive, as we have estimated that the company needs around 20 MEUR in additional funding to achieve cash flow positivity. We had previously assumed that this entire sum would be raised through equity. If realized, the debt arrangement would clearly decrease the financial risk in the coming years and significantly limit the pressure for share count growth in the short term. We will include the loan in our model if a final agreement is reached.

The financing package would cover our estimated total financing need

The planned 20 MEUR financing would be divided into three tranches (5, 7, and 8 MEUR), with drawdowns tied to achieving certain revenue and other milestones over the next 36 months. We previously estimated Aiforia's cash to be sufficient until the Q3/Q4 turn of the current year and had modeled the company raising an 8 MEUR share issue this year and a 12 MEUR issue in 2027. The financing planned by the EIB would thus fully meet our estimated total financing need to achieve profitability. We believe the three-year grace period and seven-year loan term included in the loan conditions are an excellent fit for the company's profile, where cash flows are expected to turn clearly positive only towards the end of the decade. The drawdown of financing is tied to revenue targets, which is typical for venture debt loans.

Synthetic warrants limit the immediate dilution of the share capital

The loan facility is conditional on the issuance of synthetic warrants to the EIB upon each drawdown of the loan tranche. Unlike traditional stock options, synthetic warrants are paid in cash upon the fulfillment of certain conditions, which prevents an immediate increase in the number of shares and the resulting dilutive effect on shareholders. On the flip side, there is a significant cash payment obligation in the future as the company's value increases. Despite this, we consider the instrument a better option for current owners than heavy share issues at the current valuation level. The completion of the arrangement would also strengthen confidence in the company's growth story, as the EIB typically conducts thorough due diligence before making these types of financing decisions.