Statement of the Board of Directors on the proposed acquisition of Creturner for Xpecunia as well as assessment statement and information brochure

Why is this acquisition beneficial for Xpecunia and its shareholders?

The obvious implication is that profitability should rise sharply and permanently in ordinary Xpecunia operations when the cost base falls. It is energy – electrical energy – which is the basic cost, Xpecunia has from the beginning worked actively with investments, mainly in massive investments in the field of solar cells to reduce costs and environmental impact . The joint investment in a bioenergy boiler that is the basis for it has an investment profile that benefits both the regular activity of Xpecunia and the additional one of Creturner.

Influencing the cost base in Xpecunia creates financial barriers both on the revenue side and on the cost side and thus strengthens all parameters including the cash flow in the group. This means that Xpecunia becomes less sensitive to revenue fluctuations and is significantly less affected by external cost increases. Future expansion can reasonably be pursued where Xpecunia apart from other players can achieve profitability where others cannot. The position of Xpecunia’s operations becomes even more unique and sustainable in the long term. Cost savings are expected to be in the order of 13–16 million Swedish crowns annually based on the year 2022.

The combination with Creturner creates a situation and an opportunity that would otherwise have been difficult to achieve. In addition to being able to leverage energy investments in a larger joint operation, Xpecunia shareholders benefit from increased long-term potential as the group expands with an additional scalable business area. The Board of Directors has always advocated risk management and strengthening cash flow in combination with expansion as a common thread.

Assessment Statement

Creturner as a company is young, but development has been ongoing for several years and significant successes have been achieved. The transaction is proposed to be completed at the company’s valuation, SEK 60 millionin which the external shareholders of Creturner have invested SEK 5.5 million in cash upon issue in March 2022. Xpecunia’s board of directors has agreed with the company’s auditor and has checked with the competent bodies and ordered an independent valuation statement to AG Equity Research AB. This assessment statement is attached to this press release.

Technical development within Creturner

There is continuous technical development within Creturner, both in IT and technology, which has the potential to bring further significant benefits to the new group. This development has come relatively far and will be reported when it matures. For reasons of competition and intellectual property rights, it is not yet ready to communicate further. The costs of these initiated projects are lower a million crowns in the budget.

Market development within Creturner and future prospects

Creturner is growing rapidly with six people dealing with the market, five of whom have variable compensation only. Digital direct marketing is expected to be implemented in 2023 for individuals and businesses. The emphasis today is on adapting a standardized offer to the needs of the professional market, hence the establishment of many customer contacts in very different sectors. The reception has always been positive, among other things, a five-year agreement has been concluded with a leading travel agent. The value of this deal is five million SEK annually. When the client completes its launch in the fall, Creturner will release the name. There is an offer book with end customers which currently amounts to SEK 7 million. For 2022, turnover will naturally be relatively low, below SEK 10 million, and yet with a positive result that is expected, in 2023, invoicing should increase sharply. It is important to understand that climate offsetting is a mostly recurring business relationship. Customers buy a commitment from Creturner which commits to providing climate compensation in an agreed future.

This model benefits Creturner as it brings in cash flow that allows for further equipment expansion and recurring volumes. The difference in implementation between, for example, planting trees as climate compensation, which takes place over a very long period of time and consists in practice of a slowly expected CO2 borrowing calculated by model of the atmosphere, is that the Creturner model is fast, accurate, and permanent. The residual biomass that Creturner converts was already on its way to the atmosphere and is instead retained in a veritable carbon sink. Both companies’ assessment is that the real-world climate measurement market will continue to grow at a rapid pace.

The share of related parties is subject to the approval of the general meeting

The CEO of Xpecunia holds a 34% stake in Creturner and this circumstance means, according to Swedish company law called “Lex Leo”, that a decision on the implementation of the proposed acquisition must be taken during a general assembly. At such a general meeting, the related parties have no voting rights on the matter. If the general meeting votes against the proposal, the transaction cannot be carried out. Larger external shareholders as well as Xpecunia’s lenders have spoken positively about the deal as they see it as beneficial for Xpecunia shareholders.

The advice of Xpecunia Nordic AB

stockholm 09/12/2022

Contact information
CEO: Daniel Mostrom – +46-70-7446901
[email protected]
Address: Taptogatan 6, 115 27 Stockholm, Sweden
www.xpecunia.com
Xpecunia Nordic AB (publ) company registration number: 559152-3013

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