Translation: Original published in Finnish on 8/3/2026 at 7:00 am EEST.

Aiforia announced on Friday that it had signed a 20 MEUR binding venture debt financing agreement with the European Investment Bank (EIB). This was an expected development, as the company had already announced the indicative term sheet in June (see the Inderes commentary). We view the final agreement positively because it eliminates short-term financing uncertainty, although drawing down loan tranches will require strong sales performance from the company. This financing aligns with our previous assessment of Aiforia's funding needs, so this news does not impact our view of the stock. We will update the refined financial data in our model no later than in connection with the H1 report, which will be published on August 28.

Financing to be drawn down in three tranches upon fulfillment of terms

The financing is divided into three tranches (5 MEUR, 7 MEUR, and 8 MEUR), with drawdowns tied to achieving revenue and other interim targets over the next 36 months. Thus, raising the loan tranches requires the company to succeed in its commercial ramp-up. Each tranche matures seven years after its respective disbursement, includes a three-year grace period, and is amortized thereafter. The financing also includes customary non-financial covenants that require, among other things, the EIB's prior consent for a change in the CEO or the chairperson of the Board of Directors. Additionally, the arrangement includes a synthetic warrant arrangement that was previously announced and will be issued when the loan tranches are drawn down. While the warrants do not immediately increase the number of shares, they create a significant cash payment requirement alongside loan amortizations in the coming years.

Overall, we believe the loan arrangement is good news for Aiforia. The arrangement mitigates financing risk over the next few years by covering the financing needs we have estimated until the company achieves a positive cash flow position. The financing will enable the company to concentrate on developing its business in the coming years instead of raising funds. Following a thorough due diligence process, EIB financing also sends a positive signal in its own right. One weakness we see in the financing arrangement is that the funds cannot be drawn down if the business fails to meet the set terms. Therefore, in the event of a negative trend, financing does not provide Aiforia with any backup. To our understanding, warrants also reduce shareholders’ returns in a corporate acquisition scenario, as they are tied to the company’s increase in value. Debt financing also naturally limits the company's flexibility if the business does not develop as desired.

Financing puzzle for positive scenario now in place for the coming years

In June, Aiforia collected 6.4 MEUR in gross assets from a directed share issue. The now-confirmed EIB loan will extend cash sufficiency for several years, by which time the company should be approaching cash flow positivity, according to our estimates. The seven-year loan term and three-year grace period for each loan tranche provide operational breathing room for the company. However, debt financing is contingent on positive business development. We consider the combination of equity and EIB debt financing a sensible solution for the company. It minimizes the dilution of existing shareholders' ownership while securing resources to accelerate product development and international sales.