The structure of the proposed convertible note Jack and Gheric will use to lend ~$175,000–$200,000 to Abeó Health LLC for Phase 1 launch. A friendly, founder-protective structure. DRAFT for negotiation — not a binding instrument until executed by counsel.
This term sheet captures the structure of the proposed convertible note that Jack and Gheric will use to lend ~$175,000–$200,000 to Abeó Health LLC for Phase 1 launch. The actual promissory note must be drafted by California-licensed business counsel and reviewed by Brittany's independent counsel before execution.
Borrower: Abeó Health LLC (a California limited liability company)
Lenders: Jack Polo and Gheric Speiginer ("the Note Holders"), as co-investors via StarHub Studios ecosystem
Status: DRAFT for negotiation. NOT a binding instrument until executed by counsel.
Date: May 8, 2026
| Term | Value |
|---|---|
| Principal amount | $175,000 (or $200,000 if buffer is preferred) |
| Note Holders | Jack Polo (50%) + Gheric Speiginer (50%) |
| Per-Holder principal | $87,500 (or $100,000) |
| Borrower | Abeó Health LLC |
| Disbursement | Lump-sum wire to Abeó's business banking account at execution |
| Use of funds | Per marketing/founders-launch-plan.md Stage 1 budget — vehicles, licenses, drivers, marketing, working capital |
| Term | Value |
|---|---|
| Interest rate | 5.0% simple interest, accrued (not compounded) |
| Calculation method | Daily on outstanding principal |
| Payment | Accrued interest is NOT paid monthly. It accumulates and is either (a) added to the conversion amount upon Stage 2 seed close, or (b) paid in full with principal at maturity if no conversion. |
| Term | Value |
|---|---|
| Maturity date | 24 months from execution (extendable by mutual written agreement) |
| At maturity if no conversion | Borrower pays Note Holders the full principal + accrued interest in cash within 30 days, OR Note Holders may convert at maturity at the Cap (see Conversion below) |
The 24-month maturity is intentionally generous to give Brittany time. Most convertible notes are 12 months; this is built for the realistic seed-close timeline (Months 6–18).
The Note automatically converts to equity in Abeó Health LLC upon a "Qualified Financing":
| Term | Value |
|---|---|
| Qualified Financing definition | Abeó closes a priced equity round of ≥ $1,000,000 (Series Seed, Series A, or equivalent) |
| Conversion ratio | The greater of (a) the price-per-share at which Qualified Financing investors purchase, applied with the discount, OR (b) the price-per-share implied by the valuation cap |
| Discount applied to Qualified Financing price | 20% |
| Valuation cap | $8,000,000 pre-money |
The cap protects upside; the discount protects against flat rounds. Standard convertible note mechanics.
Illustrative — not a guarantee. If Stage 2 seed closes at $12M post-money raising $2M, and accrued interest is ~$13K per Note Holder over 18 months:
| Holder | Principal + Interest | Conversion price | Approx. equity stake |
|---|---|---|---|
| Jack Polo | $100,500 | $1.23/share (discount path) | ~1.7% |
| Gheric Speiginer | $100,500 | $1.23/share (discount path) | ~1.7% |
| Combined ecosystem | $201,000 | — | ~3.4% |
If StarHub Studios separately receives ~20% via the JV term sheet, total ecosystem equity post-seed sits around ~23% — within the healthy founder-vs-ecosystem balance per mythOS canon. Brittany retains majority founder ownership (~77% common after seed dilution + employee option pool reserve).
| Term | Value |
|---|---|
| Seniority | Senior to all existing and future unsecured indebtedness of Abeó until conversion or repayment |
| Subordination | Subordinate only to (a) secured indebtedness existing as of execution, (b) standard trade payables in the ordinary course |
| Equipment financing carve-out | Vehicle leases (Ford Transit WAV vans) are senior to this Note in their specific collateral, per standard lease security |
While this Note is outstanding, Abeó agrees to:
These covenants are standard for ecosystem convertible notes. They protect Note Holders without restricting Brittany's day-to-day operational authority.
The Note becomes immediately due and payable upon any of:
Note Holders may demand immediate repayment of principal + accrued interest + reasonable counsel fees. The default penalty is repayment, not acceleration of conversion — we are not punishing Brittany; we are protecting against bad-faith outcomes.
The Note must protect Brittany's operational authority. Specifically:
Note Holders do not have observer or voting rights on Abeó's management until conversion.
Quarterly financials only; no day-to-day reporting.
Brittany retains all authority over hiring, firing, customer relationships, pricing, partnerships.
Note Holders may not initiate or force a sale, dissolution, or merger of Abeó.
Brittany does NOT personally guarantee this Note. The Note is an obligation of Abeó Health LLC only.
If Abeó does not close a Qualified Financing within the maturity period (24 months), Brittany has options:
Pay the Note Holders the full principal + accrued interest within 30 days of maturity. Abeó retains 100% founder ownership (less any JV equity grants made separately).
Mutual written agreement to extend maturity by 12 months. Standard if Abeó is profitable but not yet at Series A scale.
Note Holders may elect to convert at maturity (instead of demanding repayment) at the Cap valuation, treating Abeó as if it had just closed a Qualified Financing at $8M pre-money.
Mutual agreement to restructure the Note as longer-term debt, equity grant, or hybrid. Requires counsel on both sides.
The convertible note is debt for tax purposes until conversion. Interest is taxable income when paid or accrued (depending on accounting method).
Interest is deductible as a business expense (subject to applicable limitations).
Conversion is generally a non-recognition event under IRC §354/§1036 for most C-corp conversions. For LLC-to-corporation conversions ahead of Series A, additional analysis required.
If Note converts to equity that is subject to vesting, Note Holders should consider 83(b) election within 30 days of conversion. Counsel should advise.
This is general guidance, not tax advice. Both parties should consult their own tax counsel.
| Term | Value |
|---|---|
| Governing law | California |
| Jurisdiction | State and federal courts located in Orange County, California |
| Counsel fees | Each party pays its own counsel costs (not paid by Abeó) |
| Amendments | Require written consent of both Note Holders and Abeó |
| Assignment | Note Holders may assign their rights only with Abeó's written consent |
| Severability | Standard |
| Entire agreement | Standard |
1. Brittany engages independent California-licensed business counsel to review this term sheet
2. Counsel drafts the formal Convertible Promissory Note against this baseline
3. JV Operating Agreement finalizes in parallel (separate document, same counsel review)
4. Both parties sign after counsel review and any negotiated revisions
5. Funds wired to Abeó's business banking account
6. Abeó begins Stage 1 deployment per the founders-launch-plan budget
Counsel for review: [TBD — Brittany selects independent business counsel]. This term sheet should not be signed until both parties have independent legal review. The amounts and terms above are negotiation starting points.
For Brittany's understanding:
Would require monthly principal + interest payments — burns operating cash before the company has revenue.
Doesn't accrue interest or have a maturity date — typically structured for very early Y Combinator-style investors and lacks the founder protections we want.
Would require valuing Abeó pre-revenue, which is hard, and would dilute Brittany immediately for no reason.
No monthly payments (all interest accrues to conversion or maturity). Conversion happens at the next priced round, where Abeó's actual valuation is set by outside investors. Brittany retains full equity until that point. Note Holders get rewarded for early support via the discount + cap. Standard ecosystem capital instrument across Silicon Valley + StarHub Studios canon.
This is a friendly, founder-protective structure. We're not Wall Street; we're family with skin in the game. — Jack