Report for the Second Quarter 2022 in Katalysen Ventures

Summary of report below. Full report attached and available under Investor Relations on Katalysen.com. All currencies in SEK unless otherwise specified.

A. VENTURE DEVELOPMENT KPIs (LAST PERIOD WITHIN BRACKETS):

• New client agreements during the period: 3 (4)
• Active clients at the end of the period: 13 (11)
• Total calculated market value of Katalysen’s portfolio (shares, options, and convertibles) at the end of the period: 209.2 MSEK (195 MSEK)
• Quarterly portfolio growth (shares and options) excluding new cash invested during the period: 0.4% (5.6%)
• Value added to the portfolio from new shares and options obtained via non-cash investments during the period: 3.2 MSEK (5.4 MSEK)

B. GENERAL KPIs (Q2):

Group (parent + subsidiaries):

• Net sales: 469 000
• Profit after financial items: -5 953 000
• Balance sheet total: 102 970 000
• Solidity: 97.5%
• Earnings per share: -1.07
• Number of outstanding shares: 5 570 995

Parent:

• Net sales: 469 000
• Profit after financial items: -4 938 000
• Balance sheet total: 102 327 000
• Solidity: 98.7%
• Earnings per share: -0.89
• Number of outstanding shares: 5 570 995

C. IMPORTANT EVENTS DURING THE PERIOD:

• 2022-04-01: Katalysen announced partnership with Tetrad Capital Partners to help Indian and European growth ventures with Europe-India market entry.
• 2022-04-04: Katalysen published a supplementary memo-randum including partnership with Tetrad Capital Partners.
• 2022-04-05: Katalysen signed subscription commitments in the listing share issue (‘IPO’).
• 2022-04-06: Katalysen published a supplementary memorandum including signed subscription commitments.
• 2022-04-12: Katalysen announced that the listing share issue had been fully subscribed. A total of 12.5 MSEK was subscribed for, and 11 MSEK worth of shares was allocated to participants in the listing issue.
• 2022-04-20: Katalysen announced that portfolio venture iReality has partnered with New York-based DataArt to continue the development of a real-time tracking system for horse racing.
• 2022-04-26: Katalysen announced the complete incorporation of USA-based Katalysen Ventures Inc.
• 2022-04-27: Katalysen announced that portfolio venture Skawen will being to ramp up its European expansion following successfully closed funding.
• 2022-05-05: Katalysen announced an increased equity stake in wealth management SaaS provider Sharpfin. This following the exercising of options.
• 2022-05-12: Katalysen published a communiqué from its 2022 AGM. Important decisions included establishing and approving the Parent Company’s and Group’s income statements and balance sheets, the decision that no dividends will be paid out for the period, the re-election of the sitting Board of Directors, the decision to make minor primarily formal updates to the Articles of Association, and the approval of an authorization for the Board of Directors to issue shares and warrants corresponding to a total maximum dilution of approximately 20 percent.
• 2022-05-17: Katalysen published its quarterly-report for the first quarter of 2022.
• 2022-05-24: Katalysen announced a completed directed share issue of 250,000 shares, raising proceeds of approximately 8.75 MSEK.
• 2022-05-25: Katalysen published a flagging notification as a result of the 2022-05-24 directed share issue.
• 2022-06-23: Katalysen announced new partnership as venture developer to Traders Alloy AB to promote open finance software infrastructure.

D. IMPORTANT EVENTS AFTER THE PERIOD:

• 2022-08-04: Katalysen published information by U.S. partner Marcus Wikars, outlining some of the U.S. market entry services that Katalysen Ventures Inc. offers clients of Katalysen Ventures. InvitePeople and Meal Makers are the first two of our clients taking advantage of this new service.
• Early Q3: Katalysen can report strong progress in the partnership with Tetrad Capital Partner. As of this report’s publishing, conversations are ongoing with several successful Indian VCs regarding the provision of venture development services to their portfolio ventures. According to the agreement with Tetrad Capital Partners, Katalysen owns 40% of the not-yet incorporated partnership.
• Early Q3: Katalysen CEO Peter Almberg announced, via LinkedIn, that Katalysen Ventures is launching the Open Finance Forum. In early 2022, the EU digital finance strategy announced a proposal on open finance, which refers to the access and reuse of customer data, with consent, across a range of financial services. Open finance expands on the scope from open banking to include non-banking data, such as insurance, investments, and pension data. Just as with open banking, the best time to act and be part of the change is before the directive comes into force. As such, the purpose of the Open Finance Forum is to help generate business opportunities for its member companies. A first meeting is scheduled for September 1^st 2022. For more information, visit www.openfinanceforum.eu.

E. MANAGEMENT REPORT:

Q2 highlights:

• We have successfully listed Katalysen’s share on Spotlight Market,
• We are on track to meet our new client/project acquisition target for 2022,
• Our collaboration with Tetrad Capital Partners is proving to hold even more potential than we had initially thought,
• And, we are (despite weak public markets) still on a trajectory towards our 30% annual growth target for 2022.
• However, weak markets have also caused delays in two Series-A projects in the portfolio.

Let us more closely examine the above. During the first half of the year, and in particular during the second quarter, we have prioritized assisting current client and portfolio ventures through the rough market climate. This has included advice on how to prioritize the use of limited resources (i.e. smart cost-cutting), hands-on help in implementing effective solutions to meet funding needs, and actual funding if agreed. As a result, the overall burn rate of the portfolio has been tightened up without making large sacrifices in terms of long-term potential. We have also made holistic adjustments in our portfolio valuations, with a few rather drastic cuts (30-90%) in individual venture valuations. Despite this, the portfolio saw modest (0.4%) growth during the Q2 period (excluding new cash invested). While this leaves us short of our 7% quarterly growth target, we are still confident that we are on a trajectory toward our 30% annual growth target for 2022. We consider this possible, despite delays in the two ongoing Series A projects in the portfolio (we will have to wait a little bit longer for these projects to pay off). The following paragraphs outline some sources of our continued confidence.

During Q2, we successfully listed the Katalysen share on Spotlight Market. This was an important milestone for us, and a “2022 IPO” had been a stated target on our roadmap going as far back as 2019. Our reasons for pursuing an IPO were elaborated upon at length in the memorandum but advantages as a publicly traded company include 1) the opportunity to position Katalysen as the easiest way for retail investors to gain exposure towards a hard-to-reach segment (early-stage), 2) improved ability to create value for clients, and 3) improved access to capital markets.

Our new client/project acquisition target for the year (as previously communicated in the IPO memorandum) is to sign 6-10 new client agreements during the year. We have, since the start of the year, signed 7 new client agreements. Three of these with new ventures, and four with returning ventures. Importantly, many of these deals are expertise-only investments and create millions of SEK in value for Katalysen from day one.

As of this writing, multiple portfolio ventures are on track towards closing funding rounds at valuations that are significantly higher than in our valuation dashboard at the end of Q2. Additionally, during the quarter we have chosen to be opportunistic and extended convertibles to several ventures at what we consider attractive terms. When extending such convertibles, it is always based on the availability of a scenario under which conversion into equity is deemed the most attractive outcome.

Our confidence is also strengthened by the promising progress that is being made in collaboration with Tetrad Capital Partners(see "2022-04-01: Katalysen announces new partnership with Tetrad Capital Partners”). In this partnership, Katalysen is currently in discussions with some of the world’s most well-known venture capital funds regarding the provision of our venture development services to these VC’s portfolio ventures. In particular, discussions are focused on Katalysen providing hands-on assistance related to European-market entry for some of India’s fastest-growing scale-ups. It is worth noting that the value of this project (of which Katalysen’s share is 40%) is currently zero in our books and will remain so until the project has been incorporated. We expect this to happen during the autumn and are confident that the venture will have accrued significant value at that point.

Looking more long-term, the venture developer model is an essential prerequisite for being able to craft a larger, actionable strategic plan and forecast leading up to 2027. This because the venture developer model allows us to better forecast client success (since we are active in developing it), and it provides a predictable path for leveraging talented people to unlock new value through new deals, largely without investing cash. We will have more to share on this during the second half of the year, but it is safe to say that we are striving to become not only the most engaged early-stage investors in the Nordics but also one of the most active in terms of new deals done, both of which make commercial sense and will generate strong income streams for Katalysen.

In line with this goal and our goal to establish the Katalysen brand in the Nordics during the year, you will be able to find us at various events throughout the latter half of the year, including at Slush in Helsinki and TechBBQ in Copenhagen. Make sure to let us know if you will also be there!

Finally, we are pleased to observe that our venture developer business model works well in a depressed market, too, where both cash and especially expertise are valued highly.

Warm Summer Wishes,
Peter & Heiner

This disclosure contains information that Katalysen Ventures AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 09-08-2022 15:30 CET.