Jonathan,
I hope this message finds you well. I am writing to follow up on the fully executed non-binding term sheet between Lumos Analytics Inc. ("Lumos") and Vantage Peak Ventures Fund II, L.P. ("Vantage Peak"), which was countersigned by Samantha Reyes on behalf of Vantage Peak on September 1, 2023, following execution by Priya Narasimhan on behalf of Lumos. As you know, our firm, Calderwood & Harkness LLP, represents Lumos as issuer's counsel in connection with this SAFE financing round. We confirm receipt of the fully executed term sheet and appreciate the efficient turnaround from your team at Whitfield Harte.
**Proposed Timeline for SAFE Drafting and Execution**
We intend to circulate a first draft of the Post-Money SAFE (based on the YC standard form, with modifications) to your team no later than Tuesday, September 5, 2023. The SAFE will reflect the key economic terms set forth in the executed term sheet, including:
- **Purchase Amount:** $3,500,000 - **Post-Money Valuation Cap:** $28,000,000 - **discount Rate:** None - **MFN Provision:** In favor of the SAFE holder - **Pro Rata Participation Rights:** To be documented in a separate side letter - **Information Rights:** As specified in the term sheet - **Conversion Events:** Equity Financing (minimum $1,000,000 in aggregate proceeds), Liquidity Event, and Dissolution Event - **Governing Law:** Delaware
We would propose that Whitfield Harte provide comments or a markup within approximately three business days of receipt — i.e., by Friday, September 8, 2023. Our target is to reach execution of the Vantage Peak SAFE by approximately mid-September (September 12, 2023), with funding to occur concurrently upon execution.
For your awareness, Lumos is also in discussions with additional co-investors and anticipates a total round size of approximately $6,800,000 on the same terms. The co-investor SAFEs will follow the lead SAFE with Vantage Peak.
**Preliminary Diligence Request List**
Attached for Vantage Peak's review is our preliminary diligence request list (see **Preliminary Diligence Request List — Vantage Peak Ventures Fund II, L.P. (Sept. 2, 2023).pdf**). This is a standard early-stage SAFE diligence list, and Lumos is prepared to make the following categories of materials available:
1. **Corporate Documents:** Certificate of Incorporation (as filed with the Delaware Secretary of State, File No. 7394821), bylaws, board consents, stockholder consents, and a good standing certificate from the State of Delaware.
2. **Capitalization:** Current capitalization table reflecting 10,000,000 authorized shares of Common Stock, of which 8,600,000 are issued and outstanding, held as follows: - Priya Narasimhan — 4,200,000 shares - Elliot Marsh — 3,800,000 shares - Danielle Okoye — 600,000 shares
Lumos also maintains a 2022 Equity Incentive Plan with 1,200,000 shares reserved (480,000 granted to date; 720,000 remaining available for future issuance).
3. **Prior Financings:** Details of the pre-seed SAFE round completed in August 2022, consisting of $1,200,000 in aggregate investment at an $8,000,000 post-money valuation cap. Outstanding SAFEs are held by Ridgeline Angel Fund, L.P. ($500,000) and individual angel investors ($700,000 in the aggregate).
4. **intellectual Property:** Summary of IP assets, including U.S. Provisional Patent Application No. 63/987,214 (filed June 15, 2023), covering the Prism Core predictive risk algorithm, as well as proprietary technology related to the Lumos Prism platform.
5. **Material Contracts:** Key customer agreements, vendor agreements, and employee/contractor agreements (including IP assignment provisions).
6. **Financial Information:** Unaudited financial statements, current monthly recurring revenue (approximately $38,000 as of July 2023), and the company's operating budget and burn rate.
7. **Officers and Directors:** Current incumbency information is as follows: - Priya Narasimhan — CEO & President - Elliot Marsh — CTO - Danielle Okoye — CFO (joined March 2023) - Board of Directors: Priya Narasimhan (Chair), Elliot Marsh, and Kenji Watanabe (independent director, appointed July 2023)
8. **Regulatory/Litigation:** Confirmation that there is no pending or threatened litigation, regulatory proceedings, or government investigations involving the company.
9. **Bank Relationships:** Lumos maintains its primary operating account and a $200,000 revolving line of credit with Silicon Valley Commerce Bank ($0 drawn as of August 2023).
Additionally, I wanted to note that Lumos's auditor and tax advisor is Ashgrove Equity Partners Accounting Group LLP (engagement partner: Karen Yoshida), and intellectual property matters have been handled by Peralta IP Consulting LLC (Dr. Amir Farouk), should Vantage Peak wish to coordinate any third-party diligence inquiries directly. Please do not hesitate to supplement the attached diligence list with any additional requests specific to Vantage Peak's review process.
**Logistics**
Could you please confirm that the proposed timeline outlined above works for your team and for Vantage Peak? I understand Samantha Reyes is serving as the deal lead on the investor side and want to ensure alignment on scheduling. I am happy to arrange a brief call early in the week of September 4 to discuss any preliminary questions before we circulate the draft SAFE.
Christy Bauer, who is cc'd on this email, will also be assisting on the matter and can serve as an additional point of contact for your team going forward.
Please feel free to reach out at any time with questions.
Best regards,
**Omar Siddiqui** Associate Calderwood & Harkness LLP 555 California Street, 30th Floor San Francisco, CA 94104 D: (415) 555-3847 E: osiddiqui@calderwoodharkness.com
Matter No. 1008-00003
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