Vertical Ventures AB (publ) (under change of name to Arcane Crypto AB)

Company Description

regarding the continued listing on Nasdaq First North Growth Market, following the

acquisition of Arcane Crypto AS.

Important information about Nasdaq First North Growth Market

Nasdaq First North Growth Market is a registered SME growth market, in accordance with the Directive on Markets in Financial Instruments (EU 2014/65) as implemented in the national legislation of Denmark, Finland and Sweden, operated by an exchange within the Nasdaq group. Issuers on Nasdaq First North Growth Market are not subject to all the same rules as issuers on a regulated main market, as defined in EU legislation (as implemented in national law). Instead they are subject to a less extensive set of rules and regulations adjusted to small growth companies. The risk in investing in an issuer on Nasdaq First North Growth Market may therefore be higher than investing in an issuer on the main market. All issuers with shares admitted to trading on Nasdaq First North Growth Market have a Certified Adviser who monitors that the rules are followed. The respective Nasdaq exchange approves the application for admission to trading.

IMPORTANT INFORMATION This company description (“Company Description”) has been prepared by the board of directors of Vertical Ventures AB (publ), Reg. No. 556668-3933 (“Vertical Ventures” or the “Company”) (under change of name to Arcane Crypto AB), in relation to the planned acquisition of all the shares in Arcane Crypto AS through a directed issue of shares and Vertical Ventures’ continued listing on Nasdaq First North Growth Market. See section "Definitions" for the definitions used in this Company Description.

This Company Description does not fulfil the requirements of being a prospectus in accordance with Regulation (EU) 2017/1129 of the European Parliament and of the Council and has not been reviewed or approved by the Swedish Financial Supervisory Authority (Sw. Finansinspektionen). This Company Description does not constitute an offer to subscribe for, or otherwise acquire, shares or any other financial instrument in Vertical Ventures in either Sweden or any other jurisdiction. Distribution of this Company Description is subject to restrictions in law and other regulations. The Company Description may not be distributed in or into United States, Australia, Singapore, New Zealand, Japan, South Korea, Canada, Switzerland, Hong Kong or any other jurisdiction where such distribution requires prospectus, registration or any other actions to be taken in addition to the requirements under Swedish law. Persons who receive copies of this Company Description, or wish to invest in Vertical Ventures, must inform themselves about and follow such restrictions. Swedish law is applicable in relation to this Company Description. Disputes regarding the Company Description and thereby applicable legal circumstances shall be handled under Swedish law exclusively.

Risks An investment in shares is associated with certain risks (investors are therefore encouraged to particularly read the section ”Risk factors”). When an investor makes an investment decision, he or she must rely on his or her own analysis of the Company, including present facts and risks. Prior to an investment, potential investors ought to consult their own professional advisors to diligently evaluate an investment consideration. No individual has been authorised to provide any information or make any other statements other than those included in the Company Description. If given or made, such information or representation may not be relied upon as having been authorised by the Company nor should the Company be held responsible for such information or statements.

Forward-looking statements The Company Description contains certain forward-looking statements that reflect Vertical Ventures’ views with respect to future events and financial and operational performance. Such words as “intends,” “assesses,” “expects,” “can,” “plans,” “estimates” and other expressions that relate to indications or predictions concerning future development or trends and that are not based on historical facts constitute forward-looking statements. Forward-looking statements are, by nature, associated with known as well as unknown risks and uncertainties, given their dependence on future events and circumstances. Forward-looking statements are no guarantee of future results or trends, and the actual results could differ materially from those contained in the forward-looking statements. Factors that could result in Vertical Ventures’ actual earnings and performance deviating from the content of the forward-looking statements include, but are not limited to, the descriptions in the section “Risk factors”. Forward-looking statements in the Company Description apply only as of the date of publication of the Company Description. Vertical Ventures does not give any undertaking that the Company will disclose any updates or revisions of forward-looking statements due to new information, future events or other such matters above and beyond what is required according to applicable laws.

Information from third parties The Company Description contains information that has been obtained from third parties. All such information has been reproduced correctly. Vertical Ventures’ board of directors is responsible for this Company Description and has taken all reasonable precautions to ensure that the information provided in the Company Description complies with the actual facts. Although the board of directors believes that these sources are reliable, no independent verification has been made, so the accuracy or completeness of the information cannot be guaranteed. As far as the board of directors knows and can assure by comparison with other information published by third parties from which the information was collected, no information has been omitted in such a way that could make the information incorrect or misleading. Some figures in this Company Description have been subject to rounding. This means that some tables do not seem to sum up correctly.

List of Content Background to the acquisition of Arcane Crypto ................................................................................. 1 Risk factors ........................................................................................................................................... 3 Background and motive ....................................................................................................................... 8 Message from the future CEO .............................................................................................................. 9 Market overview ................................................................................................................................ 10 Business description ........................................................................................................................... 16 Selected financial information for Vertical Ventures ......................................................................... 23 Comments on the financial development for Vertical Ventures ........................................................ 26 Selected financial information for Arcane Crypto .............................................................................. 27 Comments on the financial development for Arcane Crypto ............................................................. 33 Pro forma financial information ......................................................................................................... 36 Auditor’s report regarding pro forma financial information .............................................................. 41 Capitalization and indebtedness ........................................................................................................ 44 Board of directors, executive management and auditor ................................................................... 46 Corporate governance ........................................................................................................................ 50 Share capital and ownership structure .............................................................................................. 53 Articles of association after the Reversed Acquisition ....................................................................... 57 Legal considerations and supplementary information ....................................................................... 59 Tax considerations .............................................................................................................................. 66 Addresses ........................................................................................................................................... 70

FINANCIAL CALENDAR Year-end report for the period 1 January – 31 December 2020

26 February 2021

Annual Report 2020 23 April 2021Annual General Meeting 7 May 2021

INFORMATION ABOUT THE SHARE Number of outstanding shares 540,072,401ISIN code SE0007614722 Short name (ticker) VEVENProposed short name (ticker) after the Reversed Acquisition

ARCANE

DEFINITIONS In this Company Description, the following definitions are, inter alia, used:Alphaplate refers to Alphaplate Ltd.

Arcane Crypto refers to Arcane Crypto AS and its subsidiaries.

Company Description refers to this company description.

Euroclear refers to Euroclear Sweden AB.

EUR, KEUR and MEUR refers to Euro, thousand Euro, million Euro.

First North refers to Nasdaq First North Growth Market.

GBP refers to British pound.

Group refers to the group in which Vertical Ventures AB (publ) is parent company.

Ijort Invest refers to Ijort Invest AB.

ITOAM refers to ITOAM Sarl.

Listing refers to the continued listing of Vertical Ventures’ shares on Nasdaq First North Growth Market.

LN Markets refers to LN Markets, a derivatives market operated by ITOAM Sarl.

NOK, KNOK and MNOK refers to Norwegian krona, thousand Norwegian kronor, million Norwegian kronor.

Puremarkets refers to Puremarkets Ltd.

SEK, KSEK and MSEK refers to Swedish krona, thousand Swedish kronor, million Swedish kronor.

Trijo refers to the crypto exchange operated by Ijort Invest AB.

USD, KUSD and MUSD refers to US dollars, thousand US dollars, million US dollars.

Vertical Ventures or the Company

refers to, depending on the context,Vertical Ventures AB (publ) (under change of name to Arcane Crypto AB) or the group in whichVertical Ventures AB (publ) is parent company.

TECHNICAL TERMS In this Company Description, the following technical terms are, inter alia, used: bitcoin refers to both the digital asset and the network of nodes running

software compatible with the bitcoin core implementation.

Bitcoin Lightning Network refers to both the technology and the network of nodes running software compatible with the BOTLT specifications.

cryptocurrency refers to digital assets with intrinsic value.

digital assets refers to uniquely identifiable digital objects (i.e. collections of binary data) where cryptographic signing is used to both prove ownership and to initiate transfers. Digital assets can represent both other assets (extrinsic value), and only itself (intrinsic value).

fiat-currency refers to national currencies issued by central banks.

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Background to the acquisition of Arcane Crypto On 4 August 2020, Vertical Ventures entered into an agreement regarding the acquisition of all shares in Arcane Crypto through a directed issue of shares in Vertical Ventures (the “Reversed Acquisition”). The Reversed Acquisition is subject to approval of the extraordinary general meeting in Vertical Ventures, to be held on 11 January 2021. The Reversed Acquisition, if approved, will significantly change the Company and its operations, and this Company Description is intended to describe the Company after the implementation of the Reversed Acquisition. For this purpose, important sections of this Company Description, such as “Risk factors”, “Market overview” and “Business description” have been prepared as if the Reversed Acquisition has been approved and implemented.

Vertical Ventures Vertical Ventures, founded in 2004, is a Swedish public limited liability company which has been listed on First North since 2008. Vertical Ventures’ business concept is to run projects and companies in various market verticals within loyalty through its own projects and active co-ownership. Vertical Ventures divested its operating business, the loyalty platform Wifog, to Transiro Int. AB during the autumn of 2019. Following the divestment, Vertical Ventures has had a strategic goal to identify and invest in new growing businesses.

The board of directors of Vertical Ventures has made the assessment that the planned Reversed Acquisition will give Vertical Ventures further potential to develop positively. The board assesses that a solution like the proposed Reversed Acquisition is the best alternative for the shareholders of Vertical Ventures.

Arcane Crypto Arcane Crypto, founded in 2009, is a Norwegian limited liability company with main office in Oslo, Norway. Arcane Crypto, with the current business lines since 2018, operates internationally with local offices in Stockholm and London.

Arcane Crypto’s vision is to support the financial system of the future. Arcane Crypto develops and invests in projects focusing on bitcoin and digital assets in order to build a bridge between the new digital economy and the traditional economy. Arcane Crypto operates in a fast growing sector,1 where there are few other publicly traded alternatives. The Reversed Acquisition and the Listing offers an opportunity to achieve liquidity and flexibility for the individual shareholders in Arcane Crypto.

The Reversed Acquisition On 4 August 2020, Vertical Ventures entered into a share purchase agreement regarding the acquisition of all shares in Arcane Crypto through a directed issue of at most 7,327,666,667 shares in Vertical Ventures. The Reversed Acquisition is subject to the approval of the extraordinary general meeting in Vertical Ventures on 11 January 2021.

After the completion of the Reversed Acquisition, Arcane Crypto’s shareholders will have a holding of approximately 93.1 percent of the shares and the votes in Vertical Ventures and

1 “The global cryptocurrency market is expected to grow with a CAGR of 32 percent from 2019 to 2024”, Research And Markets, Cryptocurrency Market Report: Trends, Forecast and Competitive Analysis: https://www.researchandmarkets.com/reports/5002945/cryptocurrency-market-report-trends-forecast.

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Vertical Ventures’ existing shareholders will have a holding of approximately 6.9 percent of the shares and the votes in Vertical Ventures.

As a result of the Reversed Acquisition, Vertical Venture’s share capital will increase with at most approximately SEK 26,736,632.13 and the number of shares in the Company will increase with at most 7,327,666,667 shares. After the Reversed Acquisition is completed, the number of shares in Vertical Ventures will amount to at most 7,867,739,068 shares, each with a quotient value of SEK 0,003648724.

Changes in Vertical Ventures’ board and management Major shareholders in Vertical Ventures proposes that Jonatan Raknes, Viggo Leisner, Kristian Kirkegaard and Anna Svahn are elected as new members of the board of directors in Vertical Ventures for the period until the date of the annual general meeting 2021, with Jonatan Raknes as chairman of the board. The executive management of Vertical Ventures after the Reversed Acquisition will consist of Torbjørn Bull Jenssen (CEO), Eva Lawrence (COO) and Per-Olov Östberg (CFO). More information regarding the proposed board of directors and the executive management can be found below in the section “Board of directors, executive management and auditor”.

Change of name To further emphasize the significant change to the Company the Reversed Acquisition will bring, it has been proposed by the board that the Company will change name to Arcane Crypto AB. The name change is subject to approval by the extraordinary general meeting to be held on 11 January 2021.

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Risk factors In this section, the risks related to the Company is described as they would be after the Reversed Acquisition.

An investment in the Company’s shares is associated with certain risks. There are several risk factors that either can or could affect the Company’s business after the acquisition of Arcane Crypto, both directly and indirectly. Described below are the risk factors and other factors deemed to be material to the Company’s operations, financial development and the future development after the acquisition of Arcane Crypto. The risk factors described below are limited to such risks that are specific to the Company and/or its shares and that are deemed material in order to make a well-founded investment decision. The probability that the risks occurs has been assessed on a qualitative scale with the designations low, medium high and high. The risk factors that are considered to be most important as of the date of the Company Description are presented first in each category, with the rest of the risk factors presented without any ranking. The assessment of the probability and potential extent of negative impact is based on the board's knowledge and perception as of the date of the Company Description. The probability and extent of risks that can be realized may deviate from the board's assessment as of the date of the Company Description, partly because the risks are beyond the Company's control. If the risks were to be realized, the share price could fall and investors could lose part or all of their investment.

An investment in the Company's shares is suitable only for investors who understand the risk factors associated with this type of investment and who can afford to lose a portion or all of the investment. Information on risk factors is presented as of the date hereof and is subject to change, completion or amendment without notice.

Risks relating to the Company

The Company operates in a largely unregulated and fast-growing industry with political risks The Company operates in the crypto industry, which is still largely unregulated and subject to continual and rapid technological and regulatory changes. There are considerable uncertainties related to the development of the crypto markets, including its future size, and the future success of the Company's business is therefore difficult to predict. The legal status of cryptocurrencies varies between different countries and is very much in transition. There exists a lack of regulatory consensus concerning the regulation of cryptocurrencies in Europe. Future regulatory or political developments could adversely affect markets for cryptocurrencies, their adoption and ultimately, their prices.

In the event of political decisions impacting the markets where the Company is active (e.g. primarily the EU, and in particular in UK, Sweden or Norway) that bans or adversely restricts the use of cryptocurrencies in a material way, or imposes new, regulatory requirements that would require material resources to comply with, the value of the Company’s portfolio companies risk being materially adversely affected. Such decision would also adversely impact the business lines within Arcane Crypto (e.g. Arcane Technology, Arcane Media, Arcane Research and Arcane Assets), by impairment of investments made to develop technology (Arcane Technology, including Teslacoil Solutions AS), reduced revenues from advertising (e.g. Arcane Media), declining consulting fees (e.g. Arcane Research) and/or reduced or barred right to levy management fees (Arcane Assets AS).

The Company assesses that there is a low probability that the risk occurs, and that the risk, if it would occur, would have a high adverse impact on the Company’s operations.

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Future commercialisation The Company is still to a large extent in a pre-commercial phase and the Company's success is inter alia dependent on the successful commercialisation of its products and services. No assurance can be given that the Company will be able to successfully commercialise its projects. Risks relating to the successful commercialisation of the Company's business solutions may increase by external factors, such as increased competition, unexpected changes in regulation or the materialisation of any of the risk factors mentioned herein. If projects cannot be commercialized, it may result in impairment of investments made to develop technology (which appear in the balance sheet as intangible assets). It would also adversely impact the Company’s future potential earnings.

Several of Arcane Crypto’s portfolio companies are developing services that have not yet been commercialised and the companies are currently not profitable. There is a risk that one or more of the portfolio companies will not succeed in commercialisation, in whole or in part, and that they will never be profitable or that the profit will be limited, which could entail a risk that the Company’s invested funds would be lost, completely or in part, which could adversely impact the Company’s position.

The Company assesses that there is a medium high probability that the risk occurs, and that the risk, if it would occur, would have a medium high adverse impact on the Company.

Dependence on key persons and employees Within the Company there are key persons and employees who are important for a successful development of the Company’s business. The Company is dependent on qualified and motivated personnel within all functions. It is essential that the Company manages to attract and retain key personnel and that the personnel experience the Company as a stimulating employer. If the Company fails to retain such key personnel or attract and gain new personnel, this will likely have a negative impact on the Company’s business.

The Company assesses that there is a medium high probability that the risk occurs, and that the risk, if it would occur, would have a medium high adverse impact on the Company’s operations.

High volatility and vulnerability to price manipulation Markets for digital currencies are neither mature nor fully developed markets with sufficient liquidity and volume to provide stable prices, leading to high slippage for large market orders, high volatility and vulnerability to price manipulation of large players in the market. In addition, markets for digital currencies in general are subject to significant price and volume fluctuations. Such fluctuations, as well as the economic situation of the financial markets as a whole, may have a significant negative effect on the market price of cryptocurrencies.

In the event of a rapid decline of the market price of bitcoin, which is the most traded cryptocurrency, or a decline in the aggregated market, the total value of the turnover in bitcoin, and the aggregated market, would be adversely impacted, which would adversely impact business models where the revenue is commissioned based. With respect to the Company, this would mean the portfolio companies Ijort Invest and ITOAM risk being adversely affected by way reduced revenues. Further, if the market price decline is significant, and lasting, the overall interest in the cryptocurrency segment may be adversely impacted, which could have an adverse, direct and indirect, impact on the Company’s portfolio holdings and the business lines within Arcane Crypto.

The Company assesses that there is a medium high probability that the risk occurs, and that the risk, if it would occur, would have a medium high adverse impact on the Company.

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Risks related to technology Malfunctions or cybersecurity breaches of technology on which the Company relies could have an adverse effect on the Company's service continuity and professional reputation. Digital asset exchanges are at a permanent risk of experiencing technical difficulties and being hacked or shut down. For users holding digital currencies through exchange accounts, this presents an ongoing risk of their currency holdings being lost.

The Company has two portfolio companies, which operates exchange related business (Ijort Invest and ITOAM), and two portfolio companies that store cryptocurrencies (Ijort Invest and ITOAM). In the event of a technological failure impacting the trade or the storage, one or more of these portfolio companies, risks being adversely, financially impacted, by cost incurred for compensating customers and/or loss of future revenue due to the adverse impact such portfolio company’s reputation.

The Company assesses that there is a medium high probability that the risk occurs, and that the risk, if it would occur, would have a medium high adverse impact on the Company.

Investments in crypto-sector related companies As at the date of this Company Description, the Company has invested in four different crypto-sector related companies in which it currently holds minority interests (Alphaplate, Ijort Invest, Puremarkets and ITOAM). There can be no assurance that the Company's partners in such companies will continue their relationships with the Company in the future, that any agreements entered into have encountered for all situations or potential conflicts between shareholders or that the Company will be able to pursue its stated strategies with respect to its joint ventures and the markets in which they operate. Furthermore, the partners in such companies may have economic or business interests or goals that are inconsistent with those of the Company. It is further emphasised that the Company to a large extent relies on agreements with these companies as suppliers and customers as part of its business.

The Company assesses that there is a low probability that the risk occurs, and that the risk, if it would occur, would have a medium high adverse impact on the Company’s operations and earnings.

Limited number of merchants that accept cryptocurrency Cryptocurrencies are a relatively new concept and their long-term outlook is likely to remain uncertain for the foreseeable future. The eventuation of any of the risks raised in this Company Description would be highly likely to adversely impact the cryptocurrency industry in general as well as the Company’s investments in this industry. The number of businesses and public entities that accept cryptocurrency is limited. The acceptance of cryptocurrencies other than bitcoin remains uncommon. Despite frequent predictions of wider adoption, no assurance can be made that more businesses or merchants will begin accepting cryptocurrency in the future. This limitation on the use of cryptocurrencies as a medium of exchange should be regarded as a long-term investment risk. In the event merchants do not start to accept cryptocurrency as payments more widely in the future, this could result in a flattened or declining interest in the cryptocurrency sector as such, which would impact the Company adversely. In particular, the Company’s portfolio holdings that develop technology to reform that payment market (e.g. Teslacoil Solutions AS) would be adversely impacted, since the acceptance of cryptocurrency in a commercial context is important for cryptocurrency technology to take an increased share of the payments market. If this does not happen, the value of the Company’s investments in these portfolio companies may decline, which would impact the Company’s financial position.

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The Company assesses that there is a low probability that the risk occurs, and that the risk, if it would occur, would have a medium high adverse impact on the Company’s earnings.

Risks related to open source The Company's business incorporates “open source” software, and such software is also likely to be incorporated in the future. Such open source software is generally licensed by its authors or other third parties under open source licenses. If the Company fails to comply with these licenses, the Company may be subject to certain conditions, including requirements that the Company offers services that incorporate the open source software for no cost, that the Company make available source code for modifications or derivative works that the Company create based upon, incorporating or using the open source software and that the Company licenses such modifications or alterations under the terms of the particular open source license. If an author or other third party that distributes such open source software were to allege that the Company has not complied with the conditions of one or more of these licenses, the Company could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from the sale of the Company’s services that contained the open source software and required to comply with the foregoing conditions, which could disrupt the distribution and sale of some of the Company’s services.

The Company rely to a large extent on "open source" software. No assurance can be given that the necessary open source software will continue to be available to the Company and/or its suppliers or that the Company's reliance on open source licences will not be challenged.

The Company assesses that there is a low probability that the risk occurs, and that the risk, if it would occur, would have a medium high adverse impact on the Company’s operations.

Legal and regulatory risks

Risk of failure to adhere to regulatory requirements The crypto industry is largely unregulated and is subject to a rapid changes. There is a risk that the regulation in the crypto industry will rapidly change and that the Company fail to adhere to future regulatory requirements, laws or regulations. Any failure to adhere to regulatory requirements pursuant to existing and/or future laws and regulations may result in injunctions for business halts, fines or other consequences with severe negative effects on the continuation of the Company's business.

Financial risks

Risk of failure to meet commitments The Company may assume significant commitments in terms of personnel costs and/or other forms of investments (e.g. to meet certain service levels agreements in a contract) during the introduction phase of the new technology solutions. If the Company fails to meet such commitments or the income from such technology solutions does not repay such cost or investments, this could adversely impact the Company's results of operations and financial conditions. The Company's operating and maintenance costs will not necessarily fluctuate in proportion to changes in operating revenues.

Financing, liquidity and future capital requirements The Company's business and future plans require expenditure to personnel cost and other investments and, to the extent the Company does not generate sufficient cash from operations in the long term to cover such cost and investments, the Company may need to raise additional

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funds through public or private debt or equity financing to execute the Company's growth strategy and to fund capital expenditures. Adequate sources of capital funding might not be available when needed or on unfavourable terms. If funding is insufficient at any time in the future, the Company may be unable to fund maintenance requirements and acquisitions, take advantage of business opportunities or respond to competitive pressures, any of which could adversely impact the Company's financial condition and results of operations.

Insurance risks Given digital assets, cryptocurrency and blockchain are relatively new industries, no assurance can be made that appropriate insurance will be available in relation to any venture connected to the Company’s investment in these industries. Any event that the Company is not, or cannot be fully insured, could have a detrimental impact on the Company’s financial position.

Risks related to the securities

Majority shareholders with significant influence At the time of the Company Description, approximately 57 percent of the votes are controlled by the two majority shareholders, which gives them a significant influence over the Company. The major shareholders’ interest may differ materially from, or compete with, the interests of the Company or other shareholders’ interests and the major shareholders may exercise influence over the Company in a manner contrary to the interests of the other shareholders.

Marketplace The Company has applied for continued listing of its shares on First North Growth Market. An investment in a company traded on First North is a riskier investment that an investment in a company on a regulated market. First North does not have the same legal status as a regulated market and does not impose equal demands on the Company regarding for example disclosure of information or corporate governance as for companies on a regulated market. Companies on First North are governed by a specific rule book and not by the legal requirements imposed on companies on a regulated market.

Restrictions on sales of shares Shareholders representing 7.6 percent of the shares and votes in the Company after the Reversed Acquisition, has undertaken to not dispose of any shares or warrants owned at the time of this Company Description, for a period until the earlier of 27 July 2021 and the date where the Company, if the Company decides to, has raised more than MSEK 100 in equity after completion of the Reversed Acquisition. Such restrictions on share transfers may have an adverse effect on the liquidity of the outstanding shares. Further, at the lapse of the restricted period, the shareholders are free to dispose of any shares. In case of the shareholders selling significant amounts of shares, there is a risk of a decrease in the Company’s share price.

New issue of shares may affect the price of outstanding shares and lead to dilution Any future share issues may have a material adverse effect on the price of the shares. Although existing shareholders according to Swedish law have a certain preferential right in a share issue, issues may be resolved with a deviation from the existing shareholders’ preferential rights, which may lead to a dilution of the existing shareholders’ proportional ownership and voting rights.

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Background and motive The sale of its operational business was Vertical Ventures’ first milestone in its new strategic direction to convert from an operational entity to become an active investment company. Followed by the halted process with Tongdow E-commerce Ltd., partly due to Covid-19, Vertical Ventures initiated a dialoge with Arcane Crypto that subsequently lead to a letter of intent and the contemplated Reversed Acquisition. The outcome therefore being that the shareholders in Arcane Crypto will become the major shareholders in Vertical Ventures, i.e. a reverse acquisition.

The Reversed Acquisition will bring the following benefits to the Company’s shareholders:

Arcane Crypto offers exposure to a fast-growing sector, where there are few other publicly traded alternatives. Arcane Crypto believes being listed will increase transparency and bring further credibility to its business, which will be important for the future growth of the business. Furthermore, as Arcane Crypto’s business model is scalable, having efficient access to capital is key to accelerate its growth going forward.

In light of this, on 4 August 2020, Vertical Ventures entered into an agreement regarding the Reversed Acquisition. The Reversed Acquisition is subject to the approval of the extraordinary general meeting in Vertical Ventures to be held on 11 January 2021. Upon the completion of the Reversed Acquisition, Arcane Cryptos’ shareholders will have a holding of approximately 93.1 percent of the shares and the votes in Vertical Ventures and Vertical Ventures’ existing shareholders will have a holding of approximately 6.9 percent of the shares and the votes in Vertical Ventures.

For the shareholders of Vertical Ventures, the transaction described above is a way to achieve the Company’s strategic goal of identifying and investing in new growing businesses, after the sale of its previous operational business to Transiro Int. AB.

_________

The board of directors of Vertical Ventures is responsible for the contents of the Company Description. It is hereby assured that all reasonable precautionary measures have been taken to ensure that the information contained in the Company Description, as far as the board of directors is aware, corresponds to the facts and that nothing has been omitted that would affect its importance.

Stockholm, 21 December 2020

Vertical Ventures AB (publ) The board of directors

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Message from the future CEO Arcane Crypto has gone through several key phases since inception and is now preparing for scale up.

The founding idea behind Arcane Crypto was to make a solid investment in the cryptocurrency sector. Rather than singling out one idea, we wanted to build a robust portfolio. By doing so, we would not only benefit from diversification, but we would also be able to take an ecosystem approach, strengthening the different business lines through synergies and build out services spanning the individual business lines.

To achieve this, we initially aimed at becoming a centre of gravity for the industry in the Nordics, by leveraging the credibility of the founding investors and the management team. That way we could make sure we would get in contact with the best people and the best companies. This was the seeking and filtering phase.

Our view is that the strategy has been successful to date. We believe we have been able to pick from the top of the shelf in terms of both hires and investments and have built a portfolio of crypto investments, which we believe is promising.

The next phase was about fine-tuning the different business models and securing the first customers/revenue streams. Having done that, it is clear to us that the different business units both hold great promise on their own and contribute to each other. Furthermore, by combining several of the business lines, we are now well positioned to leverage bitcoin as a backbone for more efficient international payments. The market potential here is substantial,2 and we are to a large extent ready to make our entry.

This takes us to the next step of the journey, scale up, of which becoming a listed company is an important part. By going public we will get improved access to the capital market and increased recognition in the investor community and among other stakeholders. This makes us positioned for further growth. In addition, our ecosystem approach and infrastructure focus will benefit from opening up to a wider investor base.

Oslo, December 2020

Torbjørn Bull Jenssen

Future CEO, Arcane Crypto AB

2 McKinsey estimates that there currently is around 231 billion USD in revenue from cross border payments (https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/tracking%20the%20sources%20of%20robust%20payments%20growth%20mckinsey%20global%20payments%20map/global-payments-report-2019-amid-sustained-growth-vf.ashx) and the Bank of International Settlements has identified several key frictions in the traditional payments system for cross border payments (https://www.bis.org/cpmi/publ/d173.htm).

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Market overview In this section, an overview is presented of the markets that the Company is active in after the Reversed Acquisition. The information in the Company Description regarding market growth, market size and the Company’s market position is the Company’s overall assessment based on internal and external sources. The third party information has been accurately reproduced and – as far the Company is aware and can ascertain from information made public by the third party – no facts have been omitted in a manner that would make the reproduced information inaccurate or misleading. Statements in the Company Description is based on the board’s and the management’s assessment, unless any other basis is stated.

The cryptocurrency sector Arcane Crypto and its different businesses operate in the so called “cryptocurrency sector” which can be defined as the complete value chain dealing with issuance, storage, trading, and transfers of digital assets, in addition to auxiliary services such as industry specific research, advisory and media.

Cryptocurrencies and their blockchains represent a new technological infrastructure for managing value digitally, in a similar fashion to how the Internet represented a new infrastructure for managing information. As a result, the cryptocurrency sector spans across a multitude of traditional markets, such as trading, savings, and payments, where the new technology can be leveraged. In addition, the cryptocurrency sector drives the development of completely new markets, like that of bitcoin mining.

The size of the cryptocurrency sector To precisely estimate the total size of the cryptocurrency sector is an impossible task. Still, some market researchers such as Markets and Markets have attempted the impossible and estimated the overall value of what they define as the cryptocurrency market to be USD 1.03 billion in 2019, with an expected compound annual growth rate of 6.18 percent over the next five years.3

While such reports capture interesting aspects of the market development, it is important to be aware of their limitations both due to narrow definitions of the market and due to the difficulty of obtaining high quality data covering the whole sector.

To get a better understanding of the market it is therefore important to look at several different metrics. As an example, there are currently more than 1,000 different cryptocurrencies in existence, with a combined market valuation of around USD 340 billion (as of 29 September 2020).4 Bitcoin, the by far largest of the cryptocurrencies, is valued at around USD 200 billion, and there exist around 100 cryptocurrencies with a reported market value of more than MUSD 100.

All of this is value that has accrued to individuals, companies and projects who have participated in the sector. Twelve years ago, there was just an eight-page long idea on an email list for cryptographers; The Bitcoin White Paper.5 From then to now, the current valuation of the cryptocurrencies represent an average yearly value creation of USD 28.3 billion a year.

3 https://www.marketsandmarkets.com/Market-Reports/cryptocurrency-market-158061641.html. 4 https://messari.io/. 5 https://bitcoin.org/bitcoin.pdf.

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Another metric to look at is the valuation of companies. According to the “Hurun Global Unicorn list”, there are several cryptocurrency-focused companies that have grown from small start-ups, to multibillion-dollar enterprises over the last years.6

Following the strategic focus blockchains and cryptocurrency is getting in traditional industries is also a way to get a sense of the scope of what is in play. A survey by Deloitte shows that there is substantial investment appetite in blockchain solutions, with 40 percent of the companies reporting an intention to invest MUSD 5 or more in blockchain over the coming years.7 A similar survey by PWC finds that 84 percent of the respondents are actively involved with blockchain.8

To narrow down, we will in the rest of the market chapter focus on some key markets that are tightly linked to the cryptocurrency sector.

The market for trading cryptocurrencies One of the key markets related to the cryptocurrency sector is that of trading. To facilitate the exchange of cryptocurrencies between each other and against fiat currencies, a multitude of exchange platforms have been developed all over the world.

The global spot market According to TokenInsight, analysing the data from more than 250 cryptocurrency spot exchanges, the total spot trading volume in 2019 was close to USD 14 trillion.9

Based on a median market trading fee of 0.1 percent, TokenInsight estimate the daily revenue for these exchanges to be almost MUSD 40, although they warn of the risk of this being an overestimation.

Arcane Crypto’s portfolio company Puremarkets (35 percent ownership) competes in the global spot market for trading cryptocurrencies. Puremarkets is not yet live with customers, so its position in the market is yet to be established.

Arcane Crypto’s portfolio company Alphaplate (45 percent ownership) is operating in the global and Nordic spot market for trading cryptocurrencies and is currently a small player in the global market, but one of few companies with focus on the Nordic market.

The spot market in the Nordics

Although it is hard to estimate the precise trading volumes for cryptocurrencies in the Nordic spot market, a survey conducted by Arcane Research shows that around five percent of the Norwegian adults report that they already own cryptocurrencies,10 similar to the numbers found in the other Nordic countries.11 Around eleven percent of those who do not own cryptocurrencies yet (in Norway) express an interest in buying some, had it been easier. This shows substantial interest, and despite there being several exchanges and brokers available in

6 On the Hurun Global Unicorn list you find cryptocurrency-focused companies like Bitmain, Coinbase, Ripple, Kraken and more, worth several billion dollars. https://www.hurun.net/EN/Article/Details?num=A38B8285034B. 7 https://www2.deloitte.com/content/dam/Deloitte/ie/Documents/Consulting/Blockchain-Trends-2020-report.pdf. 8 https://www.pwc.com/gx/en/industries/technology/blockchain/blockchain-in-business.html. 9 https://tokeninsight.com/report/1030?lang=en. 10 See result from survey conducted by Arcane Research: https://kryptografen.no/2019/02/14/en-halv-million-nordmenn-vil-kjope-kryptovaluta/. 11 Global Digital Report 2019 by WeAreSocial https://wearesocial.com/global-digital-report-2019.

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the Norwegian and Swedish market, the weekly trading volume on Local Bitcoins, a platform for peer to peer trading, is around MNOK 1 in Norway and MSEK 4.5 in Sweden.12

Arcane Crypto’s portfolio company Ijort Invest (34 percent ownership) is one of approximately seven similar companies in the Nordic spot market for trading cryptocurrencies.

The derivatives market for cryptocurrencies Shifting the focus from the spot market to the derivatives market, another report by TokenInsight, analysing the data from 42 different cryptocurrency derivatives platforms, shows the strong growth.13 For the second quarter of 2020 they report a trading volume of USD 2.16 trillion, an increase of 2.6 percent from first quarter 2020 and 165.6 percent year-over-year.

Looking at open interest, TokenInsight found an increase from USD 2.6 billion at the beginning of the second quarter of 2020 to USD 5.53 billion at the end of the second quarter.

Arcane Crypto’s portfolio company ITOAM (7.14 percent ownership) operates in the global derivatives market for cryptocurrencies and is currently a small player.

The global payments market One of the key use cases of cryptocurrencies, is as an alternative form of payment. As a result, there is a strong link between the cryptocurrency sector and the more general payments market.

The yearly revenue of the global payments market was around USD 1.9 trillion in 2018 and expected to grow to USD 2.7 trillion in 2023 according to McKinsey.14 This is a reflection of payments being a fundamental part of every economic transaction. Even if we look at Norway alone, and just at the cross-border payments, the yearly value being transferred is around USD 560 billion according to the Norwegian Bureau of Statistics.15

Still, there are “obvious pain points in the payment industry” as summarized by TokenInsight.16 Cross border payments are in particular characterized by complexity, slow transfers and high costs, as documented by the Bank of International Settlement17 and the Financial Stability Board.18

As argued by TokenInsight in their payments report referred to above, “The emergence of blockchain technology has brought new ideas to solve the pain points of the payment industry. Centralized payment institutions, including banks, have begun to explore blockchain technology. Such explorations are focused on B2B payments, trade financing, and cross-border transfers.”

Furthermore, there are several projects among decentralized blockchain projects. TokenInsight (Ibid.) identify that 16 of the top 100 projects focus on payments.

12 See for example trading volumes reported on Coindance: https://coin.dance/volume/localbitcoins. 13 https://tokeninsight.com/report/1174?lang=en&title=2020-Q2-Cryptocurrency-Derivatives-Exchange-Industry-Report. 14 “Global Payments Report 2019: Amid sustained growth, accelerating challenges demand bold actions”, McKinsey: https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/tracking%20the%20sources%20of%20robust%20payments%20growth%20mckinsey%20global%20payments%20map/global-payments-report-2019-amid-sustained-growth-vf.ashx. 15 https://www.ssb.no/utenriksokonomi/statistikker/betalstr. 16 https://image.tokeninsight.com/levelPdf/TI-Digital_Asset_Payment_Industry_Research_Report.pdf. 17 https://www.bis.org/cpmi/publ/d173.pdf. 18 https://www.fsb.org/wp-content/uploads/P090420-2.pdf.

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In addition, there are a number of different companies finding new ways to facilitate payments by leveraging cryptocurrencies as a payment rail. Examples of this is Veem19, AZA (former Bitpesa) 20 and Coinify,21 and partnerships like the integration of the cryptocurrency exchange Bitex into the banking platform the Bantotal program,22 enabling 60 Latin American banks to use bitcoin for cross border payments.23

The Arcane Crypto business line Teslacoil (100 percent ownership) operates in the global payments market. Teslacoil is not yet live with external customers, so the position in the market is yet to be established.

The global asset management market for cryptocurrencies

According to PwC and Elwood’s 2020 Crypto Hedge Fund Report, the total assets under management (AuM) for crypto hedge funds alone passed USD 2 billion in 2019, up from USD 1 billion in 2018.24 Further, the report states that there are around 150 active crypto hedge funds worldwide as of the first six months of 2020, and that 63 percent of these were launched in 2018 or 2019. The major investors in crypto hedge funds are family offices and high net worth individuals. In average, each crypto hedge fund has 58.5 investors. Median management and performance fees for crypto hedge funds is 2 percent and 20 percent respectively.

There are around 150 active crypto hedge funds worldwide, with 52 percent of these based in the US (while many of those is domiciled in Cayman Islands). UK hosts 15 percent of the crypto hedge funds as the second most popular location. The median assets under management (AuM) is MUSD 8.2 as of the end of 2019, while the average at launch was MUSD 2. The overall assets under management is growing rapidly and new hedge funds are established so competition is somewhat hard to attract new capital. With regards to the management and performance fees, it remains stable at general asset management levels (2 percent management fee plus 20 percent performance fee).

The Arcane Crypto business line and subsidiary Arcane Assets (100 percent owned) compete in the global cryptocurrency asset management market and is currently a small player in the market.

The Norwegian online media market

The Norwegian media market is dominated by three players; Schibsted, Amedia and Polaris Media25, which controls many traditional newspapers and their digital twins after years of consolidation. Most of the traditional media houses has moved into online media and leveraging their existing brands and organisation. However, there has been a wave of new online based media players starting up in the recent years in the Norwegian market, especially within niches. The decline in revenue from traditional newspapers has started to become offset by new revenue streams from the digital/online for the largest Norwegian media players.

19 https://www.veem.com/what-is-blockchain/. 20 https://www.azafinance.com/. 21 https://www.coinify.com/payment-suite/. 22 https://www.bantotal.com/en/. 23 See article on Coindesk: https://www.coindesk.com/60-latin-american-banks-can-now-use-bitcoin-for-cross-border-payments. 24 https://www.pwc.com/gx/en/financial-services/pdf/pwc-elwood-annual-crypto-hedge-fund-report-may-2020.pdf 25 http://www.medienorge.uib.no/english/?cat=statistikk&page=avis&queryID=188

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The Arcane Crypto business line Arcane Media operates in the Norwegian online media market, but as a niche news site Arcane Media has a very low market share.

The global cryptocurrency research market

The findings in PwC and Elwood’s 2020 Crypto Hedge Fund Report is an illustration of the development in institutional grade cryptocurrency research. In 2018, 7 percent of the crypto hedge funds used third party research, while in 2019 the percentage was 38 percent26. In 2018, there was a clear lack of crypto research available in the market for these institutional investors, while during a one-year period many research companies was formed and enhanced. The cryptocurrency research providers range from data-heavy research to more fundamental and qualitative research. Many crypto exchanges have formed own research departments, such as Binance and Bitmex.

The Arcane Crypto business line Arcane Research operates in the global cryptocurrency research market and receives global attention and coverage on a weekly basis.

Competition

Competition for algorithmic traders in the cryptocurrency spot market When looking at the competition in the cryptocurrency algo-trading-market, there are two main groups of competitors:

1. Companies focusing on predictive alpha models (trading models that generate return by predicting future price movement of the traded assets) like Jump Trading and Renaissance Technologies.

2. Companies focusing on market making and liquidity-provision (trading models that generate return by offering both sell and purchase prices with a spread), such as B2C2, Enigma and Woorton.

All of the mentioned companies are larger and more established than Alphaplate (45 percent owned by Arcane Crypto), the only company in the Arcane Crypto portfolio operating in the algo-trading market.

Competition in the Nordic exchange market In terms of competition, there are several local exchanges and brokers operating in the different Nordic countries. Many, like BTCX and Safello in Sweden and Mirai EX, NBX and Kaupang in Norway, are currently only operational in one country.

The same is currently the case for Trijo Exchange (operated by Ijort Invest, which is 34 percent owned by Arcane Crypto), one of the portfolio companies in Arcane Crypto operating in Sweden. As such, their main current competitors are BTCX and Safello.

Competition in the global payments market There are a multitude of competitors in the market for global payment. In the intersection with the cryptocurrency sector, the main competitors are the payment focused projects such as Ripple, Stellar and BTCPay, big exchange operators with payment solutions such as Coinbase and Crypto.com and more dedicated payment companies such as Coinify, OpenNode and BitPay.

26 https://www.pwc.com/gx/en/financial-services/pdf/pwc-elwood-annual-crypto-hedge-fund-report-may-2020.pdf

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All of these are larger and better-established projects than the Teslacoil-solution, currently in development by Arcane Crypto.

Competition in the global asset management market for cryptocurrencies

Some of the largest players in the global cryptocurrency asset management market are Grayscale, Galaxy Digital and BlockTower Capital.

Arcane Assets was launched in the spring of 2020. Arcane Assets is both younger and smaller than many of the competitors in the space.

Competition in the Norwegian online media market

Among the established media houses, the market is consolidated and the major players, such as Schibsted, Amedia and Polaris Media control many of the nation wide and regional newspapers. The part of the online media market that cover specific niches is more fragmented and consist of smaller and newer companies.

Within the crypto niche there are a few direct competitors to Arcane Media such as Kryptovalutainvestor and Coinweb. There is also competition from more general business news sites covering the cryptocurrency market from time to time like E24, Finansavisen and Dagens Næringsliv.

Competition in the global cryptocurrency research market

There are many competitors within cryptocurrency research market worldwide, such as Binance Research, Bitmex Research and Blockdata.

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Business description In this section, a business description is presented of the Company after the Reversed Acquisition.

Overview and history Arcane Crypto develops and invests in projects, focusing on bitcoin and digital assets. By taking an ecosystem approach to the sector, the Company realize value-adding synergies while securing financial robustness.

Arcane Crypto takes the role as a so called active investor, which participates in strategic discussions and helps its investments with business development, similar to venture capital funds and private equity firms. In addition to take board member position where applicable, Arcane Crypto also provide advice and additional personnel resources if requested by the companies where Arcane Crypto hold minority positions. Arcane Crypto also use its network to get our investments in touch with potential customers, suppliers, and strategic partners.

Arcane Crypto is managed by Torbjørn Bull Jenssen and Arcane Crypto’s largest owners are Ketil Skorstad, Kristian Lundkvist and Morten Klein.

Arcane Crypto currently operates from Stockholm, London and Oslo. Arcane Research, Arcane Media and Teslacoil Solutions AS are sharing the same office location in Oslo. Alphaplate and Puremarkets are operating from sperate locations in London and Arcane Assets and Ijort Invest are sharing office space in Stockholm.

Business model Arcane Crypto has seven active businesses, of which four are minority holdings in other companies and three are operated either by Arcane Crypto or by wholly owned subsidiaries. The way the seven businesses generate revenue are described below. Arcane Crypto will have direct access to the revenue of the wholly owned businesses, while revenue from the minority holdings will benefit Arcane Crypto in the way of financial income.

Based on this set-up, Arcane Crypto will have four distinct revenue streams of which one is currently generating revenue and the remaining three are potential future sources of revenue:

Current revenue sources:

• Direct revenue in and from subsidiaries and wholly owned businesses.

Potential future revenue sources:

● Dividends from portfolio companies. ● Capital gains from portfolio companies. ● Return on capital deployed as trading capital in Alphaplate and/or invested with Arcane

Assets.27

Investment process The investment process in Arcane Crypto starts by securing deal flow. To get in contact with different companies and projects, Arcane Crypto actively seek to spread awareness of Arcane Crypto as a cryptocurrency-focused investment company through the following activities:

27 As a part of its treasury management, Arcane Crypto might allocate parts of its excess liquidity as trading capital in either Alphaplate and/or Arcane Assets. To Alphaplate, such trading capital will be provided as a secured loan. In Arcane Assets, the capital would be allocated as an investment.

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• Media presence, giving interviews and writing opinion pieces. • Presence on conferences, both as presenter and as participant.

To filter the potential projects, after contact is made, Arcane Crypto initially evaluates the projects based on the following criteria:

• Is there a clearly defined strategy for monetization/business model? • Are there operational synergies between the project and our current lines of business

and/or portfolio companies? • Does the team have the right skill set to execute the business model, and are they fully

committed to the project?

If these criteria are satisfied, Arcane Crypto does a more thorough SWOT-analysis, looking at the strengths, weaknesses and opportunities of, and threats to, the project. An important part of this is to precisely identify how synergies with Arcane Crypto’s existing lines of business can be realized. This includes analysis completed by specialist and management employed in Arcane Crypto’s current investments which are deemed to have relevant competencies of the question in matter, as well as dialogue between these persons and the team employed in a potential investment target. External resources might also from time to time be consulted for formal or informal advice.

In addition, Arcane Crypto performs a risk assessment from both a financial, regulatory and reputational perspective.

If the result of the deeper analysis is promising, the management team and chairman of board of Arcane Crypto, in cooperation with relevant legal and financial advisors, as the case may be, prepares a presentation for the board, suggesting a suitable investment structure, valuation and negotiation strategy, and executes accordingly if the board approves.

Portfolio companies

Alphaplate Ltd (45 percent ownership) Alphaplate is a UK-based trading company, using algorithms for automatic trading and focus on liquidity provision and are specializing in trading smaller currencies like SEK and NOK against bitcoin and other cryptocurrencies.

To execute these trading strategies Alphaplate has built a trading software which is monitoring trading opportunities and executing trades. This software is connected to several different cryptocurrency exchanges with APIs and include a number of different modules to calculate potential trading opportunities, execute hedging trades and related risk management. Alphaplate also hold deposits of cryptocurrencies and fiat-currencies on several crypto exchanges in order to have available trading limits to execute trades deemed profitable.

The business model to Alphaplate is very similar to traditional market making and high frequency trading companies, only Alphaplate has applied this strategy to the cryptocurrency spot market.

Alphaplate is operating in the global and Nordic spot market for trading cryptocurrencies and is currently a small player in the global market, but one of few companies with focus on the Nordic market.

Alphabet operates independently from Arcane Crypto and Arcane Crypto does not hold any board position in Alphaplate. But, when requested by Alphaplate, Arcane Crypto participate in strategic discussions and discussions regarding business development. In addition, there is

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ongoing cooperation ongoing between Alphplate and Ijort Invest on an operational level where Alphaplate act as market maker on Ijort Invest.

Business model

Alphaplate has one single source of revenue which is trading profit from buying and selling cryptocurrencies. These cryptocurrencies are mainly traded according to three strategies:

1. Spread on market making (offering both sell and buy offers on the same exchange, generating revenue by the difference in purchase and sales price of the traded cryptocurrency).

2. Arbitrage from cross exchange liquidity provision (offering both sell and buy offers on different exchanges, generating revenue by the diffeerence in purchase and sales price of the traded cryptocurrency. Such trading is usually fully hedged by completing an off-setting trade immediately when a cryptocurrency is either sold or bought).

3. Making alpha from smart hedging (predicting the short-term price movement of cryptocurrency prices, and when estimated to be profitable, not immediately completing an off-setting trade as described above).

Arcane Crypto will generate revenue from Alphaplate by way of either dividends, capital gains from the investment in Alphaplate or return on capital deployed as trading capital in Alphaplate.

Ijort Invest AB (34 percent ownership) Trijo, operated by Ijort Invest, is one of the Swedish crypto exchanges registered with the Swedish Financial Supervisory Authority. Trijo provides a simple and secure onboarding process to cryptocurrency by, amongst other factors, leveraging BankID for identification and log in. Trijo functions both as a marketplace where users can deposit either fiat currency or cryptocurrency to trade with each other, and as a so-called wallet, holding cryptocurrencies on behalf of their users. Ijort Invest maintains the Trijo-platform where users who want to sell are matched with users who want to buy, but Ijort Invest does not own or trade cryptocurrency themselves. Ijort Invest currently operates in the Nordic market for trading cryptocurrencies. Ijort Invest is one of approximately seven similar companies in the Nordic spot market for trading cryptocurrencies.

Ijort Invest also operates the news site Trijo News.

Ijort Invest operates independently from Arcane Crypto and Arcane Crypto does not hold any board position in Ijort Invest. But, when requested by Ijort Invest, Arcane Crypto participate in strategic discussions and discussions regarding business development. In addition, there is ongoing cooperation between Alphplate and Ijort Invest on an operational level where Alphaplate act as market maker on Trijo. Arcane Media and Trijo News also has an agreement which allow them to publish each other’s content on their respective news sites.

Business model

Ijort Invest currently operates two distinct lines of business:

1. Trijo Exchange (an exchange for trading of cryptocurrencies); and

2. Trijo News (a cryptocurrency newspage)

For Trijo Exchange, the revenue will come from a percentage fee on trading in addition to fees on deposit and withdrawals, and profit split with the market makers. At the date of this Company Description, Trijo Exchange has decided to not activate fees, to stimulate the growth of the user

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base. The exact timing for when fees will be activated, at what level and in what combination, is still to be determined.

For Trijo News, the revenue comes from sales of marketing space and paid content.

Arcane Crypto will generate revenue from Trijo by way of either dividends or capital gains from the investment in Ijort Invest.

Puremarkets Ltd (35 percent ownership) Puremarkets builds an interbank bitcoin and digital asset exchange targeting tier one banks. Puremarkets is built based on extensive experience from the traditional currency market, as well as cryptocurrency. Puremarkets is based in the UK. A tech provider will, on behalf of Puremarkets, build a hight frequency market where the tier one banks, as members, can connect with APIs, view trades in a common orderbook, but execute trades bilaterally. Puremarkets will operate this marketplace. Trades will be settled directly between the banks, and banks will be able to select the banks they are willing to have as counterparties in their cryptocurrency trading.

Puremarkets competes in the global spot market for trading cryptocurrencies. Puremarkets is not yet live with customers, so its position in the market is yet to be established.

Puremarkets operates independently from Arcane Crypto, but Arcane Crypto holds a board position (one of three board members) in Puremarkets. When requested by Puremarkets, Arcane Crypto participate in strategic discussions and discussions regarding business development. In addition, there is ongoing cooperation ongoing between Puremarkets and Arcane Research on an operational level where Arcane Research provide market research to Puremarkets.

Business model

The planned business model is to charge a percentage fee on trading volume going through the venue. In addition, monetization of data and other auxiliary services will be explored.

Arcane Crypto will generate revenue from Puremarkets by way of either dividends or capital gains from the investment in Puremarkets.

ITOAM Sarl (7.14 percent ownership) LN Markets is a derivatives market operated by ITOAM using the Bitcoin Lightning Network for deposit and withdrawal of the trading margin. The platform currently operates a market between bitcoin and USD, supporting up to 50x leverage. The market works by trades posting bitcoin as collateral and can take out bitcoin vs. USD derivatives position against the provided collateral. Any profit or loss from the trades are added to or subtracted from the collateral. When a trade is closed, the collateral is returned to the trader. ITOAM operates in the global derivatives market for cryptocurrencies and is currently a small player.

ITOAM operates independently from Arcane Crypto and Arcane Crypto does not hold a board position in ITOAM. Arcane Crypto has currently not provided any advice or done any other work for ITOAM, but will consider to do so if ITOAM request such assistance in the future.

Business model

ITOAM earns money on the spread by providing both sell and buy offers on LN Markets, generating revenue by the difference in purchase and sales price.

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Arcane Crypto will generate revenue from ITOAM by way of either dividends or capital gains from the investment in ITOAM.

Business lines within Arcane Crypto:

Arcane Technology, including Teslacoil Solutions AS (100 percent ownership) Arcane Technology develops a payment technology leveraging bitcoin. The main product is currently a solution called Teslacoil. Teslacoil is a software making it easy for businesses to accept bitcoin as a payment method. Teslacoil has built in native support for the Bitcoin Lighting Network, enabling instant bitcoin transfers. In addition, Teslacoil is built with integrations towards liquidity providers, which enables companies to accept bitcoin as a payment instrument, while receiving their fiat-currency of choice, without being exposed to the volatility of bitcoin. This is achieved by instantly selling the bitcoin, as they arrive. Teslacoil operates in the global payments market. Teslacoil is not yet live with external customers, so the position in the market is yet to be established.

Business model

The revenue from and business model of Teslacoil, mimics that of a traditional payment company. Customers using Teslacoil pay a setup fee to cover costs of implementation and integration, a minimum monthly fee and a percentage fee on the processed payment flow. Teslacoil is currently being integrated with two payment aggregators, but the software is currently not generating any revenue for Arcane Crypto.

Teslacoil is currently operated by Arcane Crypto directly, and all future revenue from Teslacoil will be a direct revenue for Arcane Crypto.

Arcane Media Arcane Media operates the Norwegian cryptocurrency news site Kryptografen.no with an associated podcast. Arcane Media operates in the Norwegian online media market, but as a niche news site Arcane Media has a very low market share.

Business model

Arcane Media’s business model is built around revenue from the following activities:

• selling advertisements,

• paid content marketing, and

• content productions for other companies.

Arcane Media is currently operated by Arcane Crypto directly, and all future revenue from Arcane Media will be a direct revenue for Arcane Crypto.

Arcane Research Arcane Research provides research and news within the field of cryptocurrency and digital assets. The main focus is on quantitatively driven market insight where Arcane Crypto takes data available from both open and paid sources, analyses it, write up insightful reports and research, which is partly distributed free of charge and partly distributed through paid products and bespoke research provided to clients. Arcane Research operates in the global cryptocurrency research market and receives global attention and coverage on a weekly basis.

Business model

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Arcane Research's business model is built around the following activities (all of which are currently generating income for Arcane Crypto):

• a paid newsletter,

• white label research sold to crypto exchanges,

• sponsorships, and

• consulting.

Arcane Research is currently operated by Arcane Crypto directly, and all future revenue from Arcane Research will be a direct revenue for Arcane Crypto.

Arcane Assets AS (100 percent ownership) Arcane Assets AS is a service company providing management services to a cryptocurrency hedge fund regulated under FCA through a partnership with hedge fund platform provider called AK Jensen. The fund provides eligible investor, which has the interest for cryptocurrency but not the necessary time and competence, the opportunity to attain an exposure towards bitcoin and other cryptocurrencies. The goal for the fund is to provide returns above holding a pure bitcoin exposure. Arcane Assets compete in the global cryptocurrency asset management market and is currently a small player in the market.

Business model

As a compensation for its management services, Arcane Assets receives the full management fee and success fee from the fund. The management fee is calculated as a percentage of the total assets under management. The success fee is calculated as the return against a high watermark.

Arcane Crypto will generate revenue from Arcane Assets by way of either dividends or capital gains from the investment in Arcane Assets. However, since Arcane Assets is a wholly owned subsidiary, Arcane Crypto will also have access to liquidity in Arcane Assets by way of intra-group loans and group contributions.

Authorisations and permits As of the date of this Company Description, the following authorisations and permits are applicable for Arcane Crypto’s subsidiaries:

• Ijort Invest is currently registered with the Swedish Financial Supervisory Authority’s (Sw. Finansinspektionen) as a financial institution (Sw. finansiellt institut) and has submitted an application to register with the Norwegian Financial Supervisory Authority (No. Finanstilsynet) which is currently being reviewed;

• Alphaplate has submitted an application to register with the Financial Conduct Authority (“FCA”) due to its cryptocurrency activities, and the FCA has replied that no registration is currently required for Alphaplate, but that registration shall be obtained before entering into new business relationships;

• Puremarkets has not yet registered with the FCA, since the company is not yet operational, but it will apply for registration with the FCA in connection with the start of its operations;

• ITOAM are currently in the process of applying for registration due to its cryptocurrency activities; and

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• Kaupang Krypto AS, with which Arcane Crypto has entered into a conditional share purchase agreement (see section “Legal considerations and supplementary information” for further description of the agreement) is currently registered with the Norwegian Financial Supervisory Authority (No. Finanstilsynet) as a virtual currency service provider.

Arcane Crypto is not aware of any current requirements regarding registration, authorisations or permits for Arcane Media, Arcane Research, Arcane Technology including Teslacoil and/or Arcane Assets.

Due to the rapid regulatory changes in the cryptocurrency industry in which Arcane Crypto and its subsidiaries are active, there could occur future requirement regarding registration, authorisations or permits for Arcane Crypto or its subsidiaries.

Business operations and distribution of investments In terms of the investment business, Arcane Crypto’s search for suitable investments started by the employment of the CEO Torbjørn Bull Jenssen in 2018, and investment agreements was entered into during 2019 (some tranches/amendments related to the agreements has however been completed in 2020). Both Ijort Invest and Alphaplate already had ongoing business operations in 2019.

Preparation work for the internal business lines also started in 2018, with Arcane Research becoming operational in 2018, Arcane Media in 2019 and Telecoil and Arcane Assets becoming operational early 2020.

• Arcane Research had revenue of NOK 27,389 in 2018 and NOK 7,998 in 2019. In 2020, Arcane Research has had revenue of NOK 50,796, NOK 100,443 and NOK 264,511 in Q1, Q2 and Q3 respectively.

• Arcane Media became operational in 2019 and had revenues of NOK 30,000 in 2019. In 2020 Arcane Media has had NOK 64,750, NOK 65,000, and NOK 50,750 in revenue in Q1, Q2 and Q3 respectively

• Arcane Assets (the fund) was launched in March 2020 (after approximately a one-year preparation phase) and has had NOK 67,598 and NOK 179,947 in revenue in Q2 and Q3 respectively.

As of the date of this Company Description, approximately NOK 38 million has been invested in the combined businesses of Arcane Crypto (as of Q3 2020 Arcane Crypto has another MNOK 23 cash available for operations and investments). Based direct costs and allocation of indirect cost pro rata, investment up until Q3 has been distributed between 19 percent in Alphaplate, 22 percent in Ijort Invest, 14 percent in Puremarkets, 7 percent in ITOAM, 22 percent in Teslacoil, 11 percent in Arcane Research and Arcane Media, and 4 percent in Arcane Assets.

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Selected financial information for Vertical Ventures This section presents selected financial information for Vertical Ventures regarding the financial year 1 January – 31 December 2019 and 1 January – 31 December 2018 and information regarding the income statement, balance sheet and cash flow for the period 1 January – 30 September 2020 and the period 1 January – 30 September 2019. The following selected financial information for the financial year 1 January – 31 December 2019 and 1 January – 31 December 2018 has, unless otherwise stated, been taken from Vertical Ventures’ audited annual reports. The following selected information for the period 1 January – 30 September 2020 and the period 1 January – 30 September 2019 has been taken from the unaudited interim reports for the period 1 January – 30 September 2020 and the period 1 January – 30 September 2019.

Vertical Ventures’ financial information for the financial year 1 January – 31 December 2019 and 1 January – 31 December 2018 as well as for the interim periods 1 January – 30 September 2020 and 1 January – 30 September 2019, presented below, has been prepared in accordance with the Swedish Annual Reports Act (Sw. årsredovisningslagen (1995:1554)) and BFNAR 2012:1 Annual Reports and Consolidated Financial Statements (K3).

This section should be read in conjunction with “Comments on the financial development for Vertical Ventures” and the financial reports incorporated in the Company Description.

Income statement (KSEK) 1 January - 30

September 2020

Unaudited

1 January - 30 September

2019 Unaudited

1 January - 31 December

2019 Audited

1 January - 31 December

2018 Audited

INCOME STATEMENT

Operating income

Net sales, external 7 3,526 5,045 8,030

Net sales, internal - - - -

Activated work for own account - 707 782 2,003

7 4,233 5,827 10,033

Operating expenses

Other external expenses - 2,294 - 18,893 - 20,438 - 14,748

Personnel costs 115 -2,530 - 3,044 - 5,578

Depreciation / write-downs of fixed assets - -3,048 - 3,599 - 1,650

Impairment of current assets in excess of normal

Other operating expenses -1 - - -

Operating profit - 2,173 - 20,238 - 21,254 - 11,943

Profit from financial items

Profit from shares in group companies - - 3,605 -

Profit from participations in associated companies - - - -

Profit from securities that are fixed assets, externally

- - - -

Interest income and similar income items, external 669 - - -36

Interest expense and similar income items, external

- 171 -407 -646 - 3,704

Profit after financial items - 1,675 - 20,645 - 18,295 - 15,683

Year-end appropriations

Profit before tax - 1,675 - 20,645 - 18,295 - 15,683

Profit for the year (RR) - 1,675 - 20,645 - 18,295 - 15,683

24

Balance sheet (KSEK) 2020-09-30

Unaudited 2019-09-30 Unaudited

2019-12-31 Audited

2018-12-31 Audited

ASSETS

Fixed assets

Intangible assets

Licenses and patents

Goodwill - 10,097 - 12,383

Total Intangible fixed assets - 10,097 - 12,383

Tangible fixed assets

Ongoing new construction and advances of material assets

Total Tangible fixed assets -

Financial assets

Shares in group companies -

Participations in associated companies and jointly controlled companies

2,435 - - -

Total Financial fixed assets 2,435 - - -

Total fixed assets 2,435 10,097 - 12,383

Current assets

Accounts receivable 2

Receivables from associated companies and jointly controlled companies (KF)

Other short-term receivables 467 2,918 12,551 10,453

Short-term investments

Cash and bank balances* 1,693 158 242 583

Total current assets 2,162 3,076 12,793 11,036

TOTAL ASSETS 4,597 13,173 12,793 23,419

EQUITY AND LIABILITIES

Equity

Share capital 1,971 27,004 27,004 12,952

Other contributed capital* 88,941 87,441 87,441 84,010

Balanced gain or loss - 87,231 -98,054 - 93,968 - 78,285

Profit for the year (BR) - 1,675 -16,559 - 18,295 - 15,683

Total equity 2,006 - 168 2,182 2,994

Long-term liabilities

Long-term loan* - 667 - 982

Total long-term liabilities - 667 - 982

Current liabilities

Accounts payable 488 - - -

Other current liabilities 2,103 12,674 10,611 19,443

Total short-term liabilities 2,591 12,674 10,611 19,443

TOTAL EQUITY AND LIABILITIES 4,597 13,173 12,793 23,419

25

Cash flow (KSEK*) 1 January - 30

September 2020

1 January - 30 September

2019

1 January - 31 December

2019

1 January - 31 December

2018 Unaudited Unaudited Audited Audited

Cash flow from operations

Operating result before tax - 1,988 - 5,893 - 6,565 - 14,033

Adjustment for items not included in cash flow

- -

Received/Paid tax

- -

Cash flow from operations - 1,988 - 5,893 - 6,565 - 14,033

Change in working capital

Increase (-)/Decrease (+) of short-term assets

5,391 1,158 1,343 - 8,821

Increase (+)/Decrease (-) of short-term debt

- -

Cash flow from operations 3,403 - 4,735 - 5,222 - 22,854

Investments

Acquisition of intangible /tangible assets - 2,435 - 761 - 775 - 1,840

Acquisition of financial fixed assets

- -

Acquisition of financial current assets

- -

Sale of financial fixed assets

- -

Cash flow from investments - 2,435 - 761 - 775 - 1,840

Financing

Share issue/Contribution 1,500 6,084 6,084 11,325

Loan

2,400 3,450 13,410

Amortization - 1,017 - 3,413 - 3,878 - 412

Cash flow from financing 483 5,071 5,656 24,323

Cash flow, period 1,451 - 425 - 341 - 371

Cash, BOP 242 583 583 954

Cash, EOP 1,693 158 242 583

26

Comments on the financial development for Vertical Ventures This section should be read in conjunction with “Selected financial information for Vertical Ventures” and the financial reports incorporated in the Company Description.

Profit and loss Revenue in 2019 decreased from KSEK 8,030 in 2018 to SEK 5,045 in 2019. Total operating expenses increased from KSEK 21,976 in 2018 to SEK 27,081 in 2019, mainly driven by an increase in other external expenses from KSEK 8,563 in 2018 to KSEK 17,685 in 2019. Financial items summed to a loss of KSEK 3,741 in 2018, and an income of KSEK 2,959 in 2019. Total loss after tax was KSEK 15,683 in 2018 and KSEK 18,295 in 2019.

The revenue decreased from KSEK 3,526 in the period 1 January – 30 September 2019 to KSEK 7 1 January – 30 September 2020 mainly driven by decreased activity in Vertical Ventures due to the divestment of Wifog AB.

Note that the Group’s subsidiary Savey Int AB is dormant and immaterial to the Group financials and that the subsidiary G3AB is under liquidation and that no activity has been conducted in this entity.

Balance sheet Total assets decreased from KSEK 23,419 31 December 2018 to KSEK 12,793 31 December 2019, mainly driven by the divestment of Wifog AB where activated expenses for development of KSEK 18,069 31 December 2018 decreased to KSEK 0,0 31 December 2019. Equity decreased from KSEK 2,994 31 December 2018 to KSEK 2,182 31 December 2019, due to the combination of equity injections of KSEK 22,482 during 2019 and the negative result of KSEK 18,295 after tax for that year.

Total assets 30 September 2020 decreased from KSEK 12,793 31 December 2019 to KSEK 4,597 mainly explained by decrease in short term receivables. Equity 30 September 2020 are basically unchanged from KSEK 2,182 31 December 2019 to KSEK 2,006 30 September 2020.

Significant changes after the balance date Vertical Ventures informed the market through a press release that the process of acquiring Arcane Crypto AS continues and that Arcane Crypto has signed an agreement with Bulltech AS with their intention to acquire all shares in Kaupang Krypto AS.

27

Selected financial information for Arcane Crypto This section presents selected financial information for Arcane Crypto regarding the financial year 1 January – 31 December 2019 and 1 January – 31 December 2018 and information regarding the income statement, balance sheet and cash flow for the period 1 January – 30 September 2020 and the period 1 January – 30 September 2019. The following selected financial information for the financial year 1 January – 31 December 2019 and 1 January – 31 December 2018 has, unless otherwise stated, been taken from Arcane Crypto’s audited annual reports. The following selected information for the period 1 January – 30 September 2020 and the period 1 January – 30 September 2019 has been prepared for the specific purpose of being included in this Company Description and has not been audited or reviewed.

Arcane Crypto’s financial information for the financial year 1 January – 31 December 2019 and 1 January – 31 December 2018 presented below has been prepared in accordance with Norwegian GAAP. It shall be noted that there are no significant deviations discovered applying Vertical Ventures accounting principles.

This section should be read in conjunction with “Comments on the financial development for Arcane Crypto” and the financial reports incorporated in the Company Description.

Arcane Crypto’s accounting currency is NOK and Vertical Ventures’ accounting currency is SEK. For the purpose of being included in this Company Description, the exchange rate at the date of the share purchase agreement between Vertical Ventures and Arcane Crypto has been used for conversion being 1/1. Per 30 September 2020, the exchange rate was 0,98 SEK for 1 NOK. The exchange rate at the date of the Reversed Acquisition will be applied in the final accounting.

28

Income statement (SEK*) 1 January - 30

September 2020

1 January - 30 September

2019

1 January - 31 December

2019

1 January - 31 December

2018 Unaudited Unaudited Audited Audited

Operating income and operating expenses

Revenue 890,676 21,000 37,998 27,389

Other operating income - - 16,000 0

Total operating income 890,676 21,000 53,998 27,389

Personnel expenses - 6,124,699 - 2,732,737 - 4,234,226 - 1,219,317

Depreciation of operating and intangible assets

- 51,260 - - 51,108 0

Other operating expenses - 2,321,298 - 2,435,850 - 3,588,167 - 690,704

Total operating expenses - 8,497,257 - 5,168,587 - 7,873,501 - 1,910,021

Operating profit - 7,606,581 - 5,147,587 - 7,819,503 - 1,882,632

Other interest income 20,101 5,359 40,734 412

Other financial income 453,596 - 658,895 0

Decrease in market value of financial current assets

27,017 - - 27,017 0

Other interest expenses - 278,774 - 33 - 166,590 0

Other financial expenses - 58,107 - 5,328 - 19,560 - 1,110,351

Net financial items 163,833 - 2 486,462 - 1,109,939

Operating result before tax - 7,442,748 - 5,147,589 - 7,333,041 - 2,992,571

Tax on ordinary result

Ordinary result after tax - 7,442,748 - 5,147,589 - 7,333,041 - 2,992,571

Annual net profit - 7,442,748 - 5,147,589 - 7,333,041 - 2,992,571

29

Segment Perspective The following table show the income figures related to Arcane Crypto’s different business units for the financial years 1 January – 31 December 2019 and 1 January – 31 December 2018, for the period 1 January – 30 September 2020 and the period 1 January – 30 September 2019 respectively. Profit from participation in associated companies does only reflect Arcane Crypto’s direct revenues from its investments and does not reflect the underlying revenue in Alphaplate, Ijort Invest and Puremarkets.

P/L Variable (SEK) Business line Business model 1 January - 30

September 2020

1 January - 30

September 2019

1 January - 31

December 2019

1 January - 31

December 2018

Unaudited Unaudited Audited Audited

Operating Income/Net sales external

Arcane Technology

-setup fee -minimum monthly fee -percentage fee on processed payments

0 0 0 0

Arcane Research

a paid newsletter, white label research, sponsorships and consulting.

415,750 0 7,998 27,389

Arcane Media revenue from selling advertisements, paid content marketing and content productions

180,500 5,000 30,000 0

Other NA 46,882 16,000 16,000 0

Revenue in wholly owned subsidiaries

Arcane Assets -management fee and -success fee

247,545 0 0 0

Total Operating Income

890,676 21,000 53,998 27,389

Profit from participations in associated companies

Alphaplate Revenue from dividend and/or sale of shares

0 0 0 0

Alphaplate Revenue from return on trading capital provided by Arcane Crypto

0 0 0 0

Ijort Invest (Trijo)

Revenue from dividend and/or sale of shares

0 0 0 0

Puremarkets (Pure Digital)

Revenue from dividend and/or sale of shares

0 0 0 0

Total Profit from participations in associated companies

0 0 0 0

30

Net other financial items

163,833 -2 486,462 -1,109,939

Balance sheet (SEK) 2020-09-30 2019-09-30 2019-12-31 2018-12-31

Unaudited Unaudited Audited Audited

Assets

Fixed assets

Intangible assets

Concessions, patents, licences, trademarks, and similar rights

53,426 120,207 80,138 -

Total intangible assets 53,426 120,207 80,138 -

Tangible assets

Equipment and other movables 86,682 - 42,057 -

Total tangible assets 86,682 - 42,057 -

Financial fixed assets

Investments in subsidiaries - 24,109 24,109 24,109

Investments in associated companies 4,496,972 4,496,972 4,496,972 -

Investments in shares 11,496,602 637,608 2,568,653 -

Other long-term receivables 3,678,806 2,246,521 3,469,373 -

Total financial fixed assets 19,672,380 7,405,210 10,559,107 24,109

Total fixed assets 19,812,488 7,525,417 10,681,302 24,109

Current assets

Accounts receivables 121,589 - 17,998 20,000

Other short-term receivables 924,078 103,205 593,389 -

Total receivables 1,045,667 103,205 611,387 20,000

Investments

Investments in cryptocurrencies 248,218 2,304,861 481,959 999,825

Total investments 248,218 2,304,861 481,959 999,825

Cash and bank deposits 23,530,343 268,394 607,644 1,291,811

Total current assets 24,824,228 2,676,460 1,700,990 2,311,636

Total assets 44,636,716 10,201,877 12,382,292 2,335,745

31

(SEK) 2020-09-30 2019-09-30 2019-12-31 2018-12-31

Unaudited Unaudited Audited Audited

Equity and liabilities

Equity

Share capital 130,240 119,000 125,985 100,000

Share premium reserve 24,328,016 6,179,187 12,335,785 -

Other paid-up equity - - - 2,813 -

Paid, not registered equity 26,599,989 5,908,518 - 1,100,000

Total paid-up equity 51,058,245 12,206,705 12,458,957 1,200,000

Uncovered loss - 17,723,583 - 6,657,646 - 10,266,066 - 2,933,025

Total retained earnings - 17,723,583 - 6,657,646 - 10,266,066 - 2,933,025

Total equity 33,334,662 5,549,059 2,192,891 - 1,733,025

Other long-term liabilities

Other long-term liabilities 10,177,997 4,050,000 8,763,916 1,400,000

Total of other long-term liabilities 10,177,997 4,050,000 8,763,916 1,400,000

Current debt

Trade creditors 91,676 102,430 239,764 262,070

Public duties payable 7,875 213,203 271,098 173,278

Other current debt 1,021,506 287,185 914,623 2,233,422

Total current debt 1,121,057 602,818 1,425,485 2,668,770

Total liabilities 11,299,054 4,652,818 10,189,401 4,068,770

Total equity and liabilities 44,633,716 10,201,877 12,382,292 2,335,745

32

Cash flow (SEK*) 1 January - 30

September 2020

1 January - 30 September

2019

1 January - 31 December

2019

1 January - 31 December

2018 Unaudited Unaudited Audited Audited

Cash flow from operations

Operating result before tax - 7,442,748 - 5,147,589 - 7,333,041 - 2,992,571

Adjustment for items not included in cash flow

-24,605

-88,465 0

Received/Paid tax

Cash flow from operations - 7,467,353 - 5,147,589 - 7,421,506 - 2,992,571

Change in working capital

Increase (-)/Decrease (+) of short-term assets

- 251,945 - 112,807 - 112,807 139,547

Increase (+)/Decrease (-) of short-term debt - 486,761 - 1,079,100 - 1,086,317 4,068,769

Cash flow from operations -8,206,059 - 6,339,496 - 8,620,630 1,215,745

Investments

Acquisition of intangible /tangible assets -65,166

- 120,207

Acquisition of financial fixed assets - 9,147,281 - 3,454,529 - 10,534,998 - 24,109

Acquisition of financial current assets

- 33,879 - 999,825

Sale of financial fixed assets 333,218

Cash flow from investments - 8,879,229 - 3,454,529 - 10,689,084 - 1,023,934

Financing

Share issue 38,593,906 8,770,608 11,258,957 1,100,000

Loan 1,414,081

7,366,590

Amortization

Cash flow from financing 40,007,987 8,770,608 18,625,547 1,100,000

Cash flow, period 22,922,699 - 1,023,417 - 684,167 1,291,811

Cash, BOP 607,644 1,291,811 1,291,811 0

Cash, EOP 23,530,343 268,394 607,644 1,291,811

33

Comments on the financial development for Arcane Crypto This section should be read in conjunction with “Selected financial for Arcane Crypto” and the financial reports incorporated in the Company Description.

Profit and loss Revenue in 2019 increased from SEK 27,389 in 2018 to SEK 53,998 in 2019. Total operating expenses increased from SEK 1,882,632 in 2018 to SEK 7,873,503 in 2019, mainly driven by an increase in personnel expenses from SEK 1,219,317 in 2018 to SEK 4,234,226 in 2019. Financial items summed to a loss of SEK 1,110,351 in 2018, and an income of SEK 486,462 in 2019. Total loss after tax was SEK 2,992,571 in 2018 and SEK 7,333,041 in 2019.

For the period January - September the revenue increased from SEK 21,000 in 2019 to SEK 890,976 mainly driven by increased activity in Arcane Assets, Arcane Research and Arcane Media due to launch of Arcane Assets fund and a growing interest in the Crypto markets.

Income related to both Arcane Technology and Arcane Assets was SEK 0 both in 2018 and 2019. Income related to Arcane Research was SEK 27,389 in 2018 and SEK 7,998 in 2019 and income related to Arcane Media was SEK 0 in 2018 and SEK 30,000 in 2019. Other income was SEK 0 in 2018 and SEK 16,000 2019.

Income from participation in associated companies was SEK 0 both in 2018 and 2019.

Note the company’s investments in Puremarkets, Ijort Invest (Trijo), Alphaplate and ITOAM (LN Markets, completed in Q3 2020) are all minority shareholdings and are hence not consolidated into the Company’s profit and loss.

Balance sheet Total assets increase from SEK 2,335,745 31 December 2018 to SEK 12,382,292 31 December 2019, mainly driven by increase in financial assets from SEK 24,109 31 December 2018 to SEK 10,559,107 31 December 2019. Equity increased from negative SEK 1,733,000 31 December 2018 to SEK 2,192,891 31 December 2019, due to the combination of equity injections of SEK 11,258,957 during 2019 and the negative result after tax for that year.

Total assets increase from SEK 10,201,877 30 September 2019 to SEK 44,636,716 30 September 2020, mainly driven by increase in financial assets and cash and bank deposits. Equity increased from SEK 5,549,059 30 September 2019 to SEK 33,334,662 30 September 2020, due to the combination of equity injections and the negative result after tax for the period.

Note the company’s investment in Puremarkets, Ijort Invest (Trijo), Alphaplate and ITOAM (LN Markets, completed in Q3 2020) increased the financial assets during 2020 compared to 2019. During Q3 2020, the company conducted a direct share issue in cash to 42 investors, generating proceeds of MSEK 26.6. See section “Legal considerations and supplementary information” for further description of these investment and related agreements.

Significant changes after the balance date After the balance sheet date and prior to closing of the Reversed Acquisition SEK 9,890,400 in shareholder loans will be converted to equity in Arcane Crypto. See section “Legal considerations and supplementary information” for further description of these loans and related agreements.

All significant events after the balance sheet day are accounted for in the pro forma as presented in section “Pro forma financial information”.

34

Capitalisation of Arcane Crypto in 2020 Arcane Crypto has been further capitalised with in total SEK 48,489,876, in 2020 divided between the following equity issues:

Registered (date)

Share capital

increase (SEK)

Proceeds (SEK)

Number of shares

Number of shares after equity issue

Share price (SEK)

Equity issue February 2020 08.05.2020 4,062,19 6,499,500 406,219 13,004,719 16.00

Equity issue March 2020 08.05.2020 687,50 1,100,000 68,750 13,073,469 16.00

Equity issue June 2020 no. 1 17.08.2020 937,50 1,500,000 93,750 13,167,219 16.00

Equity issue June 2020 no. 2 17.08.2020 1,567,56 2,899,987 156,756 13,323,975 18.50

Equity issue August 2020 01.10.2020 12,229,88 26,599,989 1,222,988 14,546,963 21.75

Debt conversion Ongoing (prior to closing)

4,688,39 10,197,248 468,839 15,015,802 21.75

Profitability in portfolio companies Alphaplate

Alphaplate was not profitable in 2019 and has not been profitable for the period from January – September 2020. Alphaplate has not issued any official prognosis for when it will be profitable. As described in the section “Segment Perspective”, Arcane Crypto has not received any profit from its investment in Alphaplate either as dividend and/or sale of shares or as interest/profit split on any provided trading capital. However, according to the applicable accounting rules, Arcane Crypto has deemed the development of Alphaplate sufficient to not complete any write-downs and/or impairment of its investment in Alphaplate.

Puremarkets

Puremarkets was not profitable in 2019 and has not been profitable for the period from January – September 2020. Puremarkets has not issued any official prognosis for when it will be profitable. As described in the section “Segment Perspective”, Arcane Crypto has not received any profit from its investment in Puremarkets either as dividend and/or sale of shares. However, according to the applicable accounting rules, Arcane Crypto has deemed the development of Puremarkets sufficient to not complete any write-downs and/or impairment of its investment in Puremarkets.

Ijort Invest

Ijort Invest was not profitable in 2019 and has not been profitable for the period from January – September 2020. Ijort Invest has not issued any official prognosis for when it will be profitable. As described in the section “Segment Perspective”, Arcane Crypto has not received any profit from its investment in Pure Markets either as dividend and/or sale of shares. However, according to the applicable accounting rules, Arcane Crypto has deemed the development of Ijort Invest sufficient to not complete any write-downs and/or impairment of its investment in Alphaplate.

ITOAM

ITOAM was not profitable in 2019 and has not been profitable for the period from January – September 2020. ITOAM has not issued any official prognosis for when it will be profitable. As

35

described in the section “Segment Perspective”, Arcane Crypto has not received any profit from its investment in ITOAM either as dividend and/or sale of shares. However, according to the applicable accounting rules, Arcane Crypto has deemed the development of ITOAM sufficient to not complete any write-downs and/or impairment of its investment in ITOAM.

Dilution

Arcane Crypto does not have any obligation to inject further capital into any of the portfolio companies mentioned above, but Arcane Crypto’s holding could be diluted if the portfolio companies do not become profitable before further capital is needed.

Profitability in business lines and subsidiaries (100 percent owned by, or part of, Arcane Crypto) Arcane Media

Arcane Media was not profitable in 2019 and has not been profitable for the period from January – September 2020. Arcane Crypto has not issued any official prognosis for when Arcane Media will be profitable. Arcane Media is a fully integrated business of Arcane Crypto and any profit or loss will be consolidated into Arcane Crypto’s group accounts.

Arcane Research

Arcane Research was not profitable in 2019 and has not been profitable for the period from January – September 2020, but was however close to being profitable in Q3 2020. Arcane Crypto has not issued any official prognosis for when Arcane Research will be profitable. Arcane Research is a fully integrated business of Arcane Crypto and any profit or loss will be consolidated into Arcane Crypto’s group accounts.

Arcane Assets

Arcane Assets was not profitable in 2019 and has not been profitable for the period from January – September 2020, but was however close to being profitable in Q3 2020. Arcane Crypto has not issued any official prognosis for when Arcane Assets will be profitable. Arcane Assets is a fully owned business of Arcane Crypto and any profit or loss will be consolidated into Arcane Crypto’s group accounts.

Arcane Technology, including Teslacoil Solutions AS

Arcane Technology was not profitable in 2019 and has not been profitable for the period from January – September 2020. Arcane Crypto has not issued any official prognosis for when Arcane Technology will be profitable. Arcane Technology is fully integrated into Arcane Crypto and Teslacoil Solutions is fully owned by Arcane Crypto and any profit or loss will be consolidated into Arcane Crypto’s group accounts.

36

Pro forma financial information In this section, pro forma statements are presented for Vertical Ventures’ financial statement for the period 1 January – 30 September 2020.

Purpose of pro forma accounting The pro forma financial statements have been prepared in order to present a general illustration of how Vertical Ventures’ acquisition of Arcane Crypto and related issues could have affected the consolidated balance sheet and the consolidated income statement for Vertical Ventures if it had taken place as of 30 September 2020. The Reversed Acquisition is intended to be carried out during the fourth quarter of 2020.

The pro forma information has the sole purpose of providing information and facts. This pro forma information is, by its nature, intended to describe a hypothetical situation and, consequently, is not intended to describe Vertical Ventures' factual financial position or results. Furthermore, the pro forma information is not representative in terms of what the operating results will look like in the future. Investors should thus not put too much emphasis to the pro forma information.

These pro forma accounts have the sole purpose of being used in conjunction with the Reversed Acquisition and admission for continued listing of the Company's shares on Nasdaq First North Growth Market. The pro forma accounts should be read together with the other information found in the Company Description.

Basis for pro forma accounts As Arcane Cryptos’ shareholders will take control of Vertical Ventures, the acquisition will be deemed to be a so-called reverse acquisition whereby Arcane Crypto is treated as the acquirer of Vertical Ventures from an accounting perspective. The purchase price allocation (PPA) will be performed on Vertical Ventures.

Furthermore, the pro forma accounting includes the Arcane Crypto debt conversion of approximately MSEK 10 as if they were carried out and completed as of 30 September 2020 and that consideration in the form of shares to underwriters and advisors has been paid as of that date. The equity issue for cash is currently under registration at the Norwegian authority Brønnøysundregisterne.

The applicable criteria on the basis of which the board of directors has compiled the pro forma financial information are specified in the Commission Delegated Regulation (EU) 2019/980.

Accounting policies The pro forma balance sheet has been prepared in accordance with BFNAR Annual Reports and Consolidated Financial Statements (K3) and the Annual Accounts Act (Sw. årsredovisningslagen), which are the accounting principles that is the basis for Vertical Ventures’ annual reports. The pro forma financial statements are prepared on the basis that the acquisition is reported as a reverse acquisition in accordance with K3 19.6. and Chapter 7 Section 23 of the Annual Accounts Act.

Supporting data and incorporated documents The information regarding Vertical Ventures for the period 1 January – 30 September 2020 and the period ended 30 September 2020 has been extracted from the unaudited interim reports for the period.

37

The following information for Arcane Crypto for the period 1 January – 30 September 2020 and the period that ended 30 September has been prepared for the specific purpose of being included in this Company Description and the pro forma financial statements and has not been audited or reviewed.

Arcane Crypto’s accounting currency is NOK and Vertical Ventures’ accounting currency is SEK. For the purpose of being included in this Company Description, the exchange rate at the date of the share purchase agreement between Vertical Ventures and Arcane Crypto has been used for conversion being 1/1. Per 30 September 2020, the exchange rate was 0,98 SEK for 1 NOK. The exchange rate at the date of the Reversed Acquisition will be applied in the final accounting.

In addition to this document, the Company Description consists of the referenced documents, which are incorporated by reference in section “Documents incorporated by reference” and shall be read as part of the Company Description.

Description of the transaction Prior to the Share Purchase Agreement (the “SPA”) that forms the basis for the Reversed Acquisition, Arcane Crypto had 13,778,705 shares. Thereafter, Arcane Crypto has resolved on a directed share issue of 1,122,988 shares at a subscription price of SEK 21.75 per share where 42 investors subscribed for a total amount of approximately MSEK 26.6. The total number of shares in Arcane Crypto post this share issue is 14,546,963. Subsequent to this share issue, included as an adjustment in the pro forma balance sheet, there will be a debt conversion of MSEK 10.1 for 468,839 shares at a subscription price of SEK 21.75, resulting in a total number of 15,015,802 shares in Arcane Crypto.

In the Reversed Acquisition, Vertical Ventures will acquire all 15,015,802 shares in Arcane Crypto through an issue of at most 7,327,666,667 shares. As the number of new shares in Vertical Ventures is set in the SPA, the transaction is accounted for as an in-kind acquisition, where acquisition price is set by the latest market price for the payment. The market price of Vertical Ventures’ share on closing 30 September 2020, which has been applied in the proforma financial statements, was SEK 0.147 per share. Total market value of Vertical Ventures as of 30 September 2020 was KSEK 79,391.

The transaction is accounted for as a reversed takeover in the consolidated statements and Vertical Ventures is seen as the acquired company. The price for Arcane Crypto to purchase Vertical Ventures equals the market value of Vertical Ventures at the transaction date. As there are no operations in Vertical Ventures, the purchase price can not be allocated to goodwill, hence the acquisition price is written down as another operating expense, KSEK -77,383, in the pro forma income statement.

Pro forma Group Income Statement (KSEK) – 1 January – 30 September 2020

Vertical Ventures

Arcane Crypto

Adjustments-Acquisition and

Elimination Group

Pro forma

Unaudited Unaudited

INCOME STATEMENT

Operating income

Net sales, external 7 823 - 7 823

Net sales, internal -

- -

Activated work for own account -

- -

7 823 - 7 823

38

Operating expenses

Other external expenses - 2,294 - 5,356 2,294 - 5,356

Personnel costs 115 - 3,069 - 115 - 3,069

Depreciation / write-downs of fixed assets

- - 71 - -71

Impairment of current assets in excess of normal

- - - -

Other operating expenses* -1 - - 77,383 - 77,384

Operating profit - 2,173 - 7,674 - 75,211 - 85,058

Profit from financial items

Profit from shares in group companies

- 607 - 607

Profit from participations in associated companies

- - 2,295 - - 2,295

Profit from securities that are fixed assets, externally

- - - -

Interest income and similar income items, external

669 20 - 669 20

Interest expense and similar income items, external

- 171 - 279 171 - 279

Profit after financial items - 1,675 - 9,621 - 75,709 - 87,005

Year-end appropriations

Profit before tax - 1,675 - 9,621 - 75,709 - 87,005

Profit for the year (RR) - 1,675 - 9,621 - 75,709 - 87,005

Arcane Crypto has made the following adjustments to 30 September 2020 income statement

*) Amortization of purchase price as Other operating expenses.

39

Pro forma Group Balance Sheet (KSEK) – 30 September 2020

Vertical Venture

Arcane Crypto

Debt conversion Arcane*

Acquisition (in

kind)**

Reversal legal

acquisition***

Reversed acquisitioof Vertical Ventures

****

Elimination-Group

*****

Write down

goodwill ******

Group Pro forma

Unaudited Unaudited

ASSETS

Fixed assets

Intangible assets

Licenses and patents 0 53

53

Goodwill 0

77,384 -77,384 0

Total Intangible fixed assets

0 53

0 0 0 77,384 -77,384 53

Tangible fixed assets

Ongoing new construction and advances of material assets

0 87

87

Total Tangible fixed assets

0 87

0 0 0 0 0 87

Financial assets

Shares in group companies

0 0

1,077,218 -1,077,218 79,390 -79,390

0

Participations in associated companies and jointly controlled companies

2,435 17,589

20,024

Total Financial fixed assets

2,435 17,589

1,077,218 -1,077,218 79,390 -79,390 0 20,024

Total fixed assets 2,435 17,729

1,077,218 -1,077,218 79,390 -2,006 -77,384 20,164

Current assets

Accounts receivable 2 122

124

Receivables from associated companies and jointly controlled companies (KF)

0 924

924

Other short-term receivables

467

467

Short-term investments 0 250

250

Cash and bank balances*

1,693 23,530

25,223

Total current assets 2,162 24,826 0

26,988

TOTAL ASSETS 4,597 42,555 0 1,077,218 -1,077,218 79,390 -2,006 -77,384 47,152

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(KSEK) – 30 September 2020

Vertical Venture

Arcane Crypto

Debt conversion Arcane* Acquisitio

n (in kind)**

Reversal legal

acquisition***

Reverse acquisitio

n of Vertical

VEntures ****

Elimination-Group

*****

Write down

goodwill ******

Group Pro forma

Unaudited Unaudited

EQUITY AND LIABILITIES

Equity

Share capital 1,971 131 14 26,737 -26,737 26,737 -146

28,707

Other contributed capital*

88,941 50,929 9,875 1,050,481 -1,050,481 52,654 -90,767

111,632

Balanced gain or loss -87,231 -10,214

87,231

-10,214

Profit for the year (BR) -1,675 -9,621

1,675 -77,384 -87,005

Total equity 2,006 31,225 9,889 1,077,218 -1,077,218 79,391 -2,007 -77,384 43,120

Long-term liabilities

Long-term loan* 0 10,178 -9,889

289

Total long-term liabilities 0 10,178 -9,889 0 0 0 0 0 289

Current liabilities

Accounts payable 488 92

580

Other current liabilities 2,103 1,060

3,163

Total short-term liabilities

2,591 1,152 0 0 0 0 0 0 3,743

TOTAL EQUITY AND LIABILITIES

4,597 42,555 0 1,077,218 -1,077,218 79,391 -2,007 -77,384 47,152

*) Arcane Crypto has the following adjustments to 30 September balance

*) Debt Conversion September 2020 9,889 Long-term loan **) Acquisition in kind, 7,327,666,667 shares * SEK 0.147

***) Reverse legal acquisition to account for reverse acquisition. ****) Reverse acquisition of Vertical Ventures *****) Elimination, value reverse acquisition less equity at closing date. ******) Write down goodwill.

41

42

43

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Capitalization and indebtedness The table below describes the Company’s capitalization and indebtedness at Group level as of 30 September 2020 pro forma. The information in this section has been adjusted for the effect of the Reversed Acquisition. See the section ”Share capital and ownership structure” for further information on the Company’s share capital and shares.

Equity and Indebtedness, Group Group (Amount in KSEK) as of 30 September 2020 pro forma

Current liabilities

Towards the castle

Against security

Non interest bearing liability 4,031 Total short-term liabilities 4,031

Long-term liabilities

Towards the castle - Against security - Free credits - Total long-term liabilities -

- Equity

Share capital 28,708 Other contributed capital 101,363 Other equity incl. The result of the period -86,951 Total Equity 43,120

(Amount in KSEK) as of 30 September 2020 pro forma

A. Checkout

B. Cash and cash equivalents 25,223 C. Easily realizable securities 249 D. Total liquidity (A) + (B) + (C) 25,472 E. Current receivables 1,048 F. Short-term bank liabilities - G. Short-term portion of long-term debt - H. Other current liabilities 3,743 I. Total current liabilities (F) + (G) + (H) 3,743 J. Net current liabilities (I) - (E) - (D) -22,777 K. Long-term bank loans - L. Issued bonds / convertible loans - M. Other long-term loans - N. Long-term indebtedness (K) + (L) + (M) - O. Net indebtedness (J) + (N) -22,777

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The Company had on a pro forma basis 30 September 2020 TSEK 4,031 in non-interest-bearing liabilities and zero long-term liabilities. Total equity amounted to TSEK 43,120 of which TSEK 28,707 was share capital. As of 30 September 2020, total liquidity amounted to TSEK 25,472, and current receivables and other current liabilities equalling TSEK 1,048 and TSEK 3,743 respectively. In sum, net current liabilities amounted to negative TSEK 22,777.

Working capital statement The Company believes that the existing working capital is sufficient to meet the Company’s working capital and capital expenditure needs for at least the next twelve months as of the date of the Company Description.

The Group's accounting and valuation principles The Group applies and follows accounting principles and valuation rules in accordance with the Annual Reports Act and the Swedish Accounting Standards Board's general advice BFNAR 2012:1 Annual Report and consolidated accounts (K3). The accounting principles are unchanged for both the Group and the Company in comparison with the previous year.

Trends As described in the section “Selected financial for Arcane Crypto” and “Comments on the financial development for Arcane Crypto” Arcane Crypto has experience and increase in operational cost, mainly driven by increased personnel expenses, from 2018, in 2019 and in the period until September 2020, due to increased operational activity over the period. The income has also increased significantly from 2018 to 2019 and in the period until September 2020, and more of Arcane Crypto’s business units are currently generating increasing income. Arcane Crypto is of the view that it is in a positive trend regarding it financial development.

Consolidated financial statements Vertical Ventures prepares consolidated accounts. Companies owned by Vertical Ventures through the majority of the votes at the general meeting and companies where Vertical Ventures by agreement has a controlling influence is classified as a subsidiary and consolidated in the consolidated financial statements. The subsidiaries are included in the consolidated financial statements from the date on which the controlling influence is transferred to the Group. They are excluded from the consolidated financial statements from the date of the decision the influence ceases. The consolidated financial statements are prepared in accordance with the acquisition method. The time of acquisition is the time when the controlling influence is obtained. Identifiable assets and liabilities are initially valued at fair values at the time of acquisition. The minority's share of the acquired net assets is valued at fair value. Goodwill consists of the difference between the acquired identifiable ones the net assets at the time of acquisition and the acquisition value, including the value of the minority interest, and are initially valued at the acquisition value.

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Board of directors, executive management and auditor According to the Company’s proposed articles of associations, the board of directors of the Company shall consist of at least three and no more than ten board members and no deputy board members. Presented below is the board of directors of the Company, which is proposed to be elected by the extraordinary general meeting on 11 January 2021. The board of directors is elected for the period until the date of the annual general meeting 2021.

Board of directors Name Position Independent in relation to

The Company and senior management

Major shareholders

Jonatan Raknes Chairman of the board No No

Viggo Leisner Board member Yes Yes

Kristian Kierkegaard Board member Yes Yes

Anna Svahn Board member Yes Yes

Jonatan Raknes Chairman of the board since 2021.

Education/background: Mr. Raknes holds a MSc in Business and Economics from BI Norwegian Business School. Mr. Raknes is Norwegian and resides in Oslo, Norway. Mr. Raknes is since 2014 Investment Director at the Norwegian investment company Middelborg AS. Previous work experience includes five years as Partner in Pangea Property Partners, Corporate Finance at SEB Enskilda and Associate at PwC. Mr. Raknes has extensive experience from M&As, capital raising and business development from both the Norwegian, Swedish and international capital markets, and was incremental in the establishment of the Norwegian listed companies NRC Group ASA, Techstep ASA and River iGaming Plc.

Current assignments: Chairman of the board of Arcane Crypto AS, Folksom AS and Modiola AS. Board member of Fortigo Properties AS.

Previous assignment (last five years): Board member of Folksom AS.

Holdings in the Company: 540,833,795 shares in the Company (all of which are owned indirectly through the wholly owned holding company Modiola AS and conditioned upon completion of the Reversed Acquisition).

Viggo Leisner Member of the board since 2021.

Education/background: Mr. Leisner holds a Cand. Merc. in Finance from Ålborg University and St. Cloud University Minnesota. Mr. Leisner is Norwegian and resides in Oslo, Norway. Mr. Leisner is a former investment professional for the Norwegian shipowner Arne Blystad. In his early career, Mr. Leisner worked for Equinor and after that he has six years’ experience working in the oil industry for Statoil. Furthermore, Mr. Leisner has experience from brokerage of shares and derivatives.

Current assignments: Chairman of the board of BRABank ASA and JaJa Finance Holding AS. Board member of Element ASA.

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Previous assignment (last five years): Chairman of the board of Tomsk Refining AB. Board member of Spectrum ASA and Fesil AS.

Holdings in the Company: Mr. Leisner does not hold any shares in the Company.

Kristian Kierkegaard Member of the board since 2021.

Education/background: MBA with a master’s degree in Finance from Singapore Management University (SMU) and Jönköping International Business School (JIBS). Mr. Kierkegaard is Swedish and resides in Stockholm, Sweden. Mr. Kierkegaard has been an equity analyst at Remium Fondkommission and has been running his own investment company, Kristian Kierkegaard Holding AB, since 2011. Kristian has extensive experience in financing small- and medium cap listed companies, as well as taking strategic roles through board representation.

Current assignments: CEO and chairman of the board of Kristian Kierkegaard Holding AB. Board member of Ziccum AB and A Group of Friends Investments I AB.

Previous assignment (last five years): Board member of Sthlm Börsmedia AB.

Holdings in the Company: Mr. Kirkegaard does not hold any shares in the Company.

Anna Svahn Member of the board since 2021.

Education/background: Ms. Svahn holds a BSc in Business Economics from Malmö Universitet. Ms. Svahn is Swedish and resides in Stockholm, Sweden. Ms. Svahn is CEO and Portfolio Manager at Antiloop Hedge. Prior to co-founding Antiloop Hedge, Ms. Svahn managed several discretionary portfolios for HNWIs using her proprietary asset allocation strategy Cygnus. Ms. Svahn has experience in venture capital investing from her role as the CEO of a blockchain focused VC-firm and is a regular columnist in the leading Swedish business paper.

Current assignments: CEO of and board member of A-L Hedge AB, Cyg Cap AB and Calaxy Holding AB.

Previous assignment (last five years): CEO of Blockchain AB.

Holdings in the Company: Ms. Svahn does not hold any shares in the Company.

Executive management Presented below are the persons who will constitute the executive management of the Company after the completion of the Reversed Acquisition.

Name Position Year of appointment

Torbjørn Bull Jenssen CEO (current CEO in Arcane Crypto) 2018¹

Eva Lawrence COO (current COO in Arcane Crypto) 2020¹

Per-Olov Östberg Interim CFO 2020

¹ Refers to appointment in Arcane Crypto. Year of appointment in the Company is 2021.

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Torbjørn Bull Jenssen CEO of the Company

Education/background: Mr. Bull Jenssen holds a MSc in Economics and Econometric Modeling from the University of Oslo and has studied Finance and Development Economics at SOAS, University of London. Before joining Arcane Crypto, he worked for four years as Analyst and Senior Economist in Menon Economics. Mr. Jenssen wrote his master thesis on bitcoin in 2013/2014 and is a recognized bitcoin and blockchain expert.

Current assignments: Chairman of the board of Puremarkets Ltd, Arcane Assets AS, Teslacoil Solutions AS, Trijo Norway AS and Muunilinst AS.

Previous assignment (last five years): -

Holdings in the Company: 153,642,806 shares in the Company (all of which are owned indirectly through the wholly owned holding company Muunilinst AS and conditional upon completion of the Reversed Acquisition).

Eva Lawrence COO of the Company

Education/background: A diverse career across law, trading, business development and strategy. More than eight years’ experience in finance, primarily at Morgan Stanley, where she was Head of EMEA Flow Trading for Securities Lending after working in FX Prime Brokerage. In addition, Eva is a UK qualified lawyer (she holds an LLB (Hons) Law Degree and completed the LPC), specializing in contract law, digital assets, funds and financial services.

Current assignments: -

Previous assignment (last five years): -

Holdings in the Company: 2,693,130 shares directly (conditional upon completion of the Reversed Acquisition).

Per-Olov Östberg Interim CFO of the Company

Education/background: Mr. Östberg holds a Bachelor of Business Administration from the University of Gothenburg and has studied Finance and Business controlling at Insead Fountainbleu, France. Before joining Arcane Crypto, he worked as CFO for multiple enterprises as well as CEO for a cross Nordic logistical company.

Current assignments: Chairman of the board of IPOCO AB. CFO at H&D Wireless Sweden Holding AB (publ).

Previous assignment (last five years): CFO at Mavshack AB (publ).

Holdings in the Company: Mr. Östberg does not hold any shares in the Company.

Other information about the board of directors and executive management There are no family ties between any member of the board of directors or the executive management. There is a consultancy agreement between Arcane Crypto and Middelborg AS (one of the Company’s largest shareholders after completion of the Reversed Acquisition) regarding the chairman of the board Jonatan Raknes as an employee of Middelborg AS (as further described in section “Legal considerations and supplementary information”). Other than above, there are no conflicts of interest or potential conflicts of interest between the undertakings of the board of directors and the executive management in relation to the

49

Company’s and the respective private interests of the board members and members of the executive management and/or other undertakings (however, several of the members of the board of directors and the executive management will have certain financial interests in the Company due to their direct or indirect shareholding in the Company). None of the board members are entitled to any benefits in conjunction with the termination of an assignment as a board member.

None of the board members or the executive officers have over the last five years (i) been convicted of a fraud or other financial crime related case, (ii) represented a company that has been declared bankrupt or has applied for compulsory liquidation, (iii) been subject of sanctions or accused by authorities or bodies acting for particular professional groups under public law, or (iv) been subject to injunctions against carrying on business.

All proposed members of the board and the members of the executive management are available through Arcane Crypto’s office at Munkedamsveien 45, 0250 Oslo, Norway.

Remuneration to the board of directors Remuneration to the members of the board of directors is resolved by the general meeting. At the annual general meeting held on 25 May 2020 it was resolved on remuneration of SEK 175,000 to the chairman of the board and remuneration of SEK 75,000 to other members of the board.

Executive management The CEO’s salary is currently SEK 66,666 per month. Further, the CEO is entitled to pension and has been awarded warrants in Arcane Crypto, as described in section “Legal considerations and supplementary information”. The employment can be terminated in writing subject to a mutual notice period of three months from the first day of the calendar month commencing after the notice is served.

The employment of the COO commenced on 1 August 2020. The employment can be terminated in writing subject to a mutual notice period of three months from the first day of the calendar month commencing after the notice is served.

The consultancy agreement with the CFO can be terminated subject to a mutual notice period of three months after the notice is served.

Auditor The Company’s auditor is Öhrlings PriceWaterhouseCoopers AB with Victor Lindhall as auditor in charge. Victor Lindhall is an authorised public accountant and member of FAR (the Swedish trade organisation for accounting consultants, auditors and advisors).

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Corporate governance

Corporate law, corporate governance rules and codes Vertical Ventures is a public limited liability company that is regulated by Swedish corporate law, foremost by the Swedish Companies Act (Sw. aktiebolagslagen (2005:551)). The Company follows the rules and recommendations that applies to companies with shares listed on First North. In addition to legislation, rules and recommendations, the articles of association form the basis for the governance of the Company’s operations. The articles of associations of the Company proposed to be adopted by the extraordinary general meeting on 11 January 2021 can be found in its entirety in the section “Articles of association”.

Following the Listing on First North the Company will not be required to comply with the corporate governance rules of the Swedish Corporate Governance Code (Sw. Svensk kod för bolagsstyrning). This is due to the fact that First North is not considered to be a regulated market.

First North is an alternative market, operated by the different exchanges within Nasdaq. It does not have the legal status as an EU-regulated market. Companies at First North are subject to the rules of First North and not the legal requirements for admission to trading on a regulated market.

General meetings The general meetings of the shareholders are, in accordance with the Swedish Companies Act, the highest decision-making body of the Company, and at the general meetings the shareholders exercise their voting rights on key issues, including inter alia decisions regarding adoption of income statements and balance sheets, allocation of the Company’s results, discharge from liability for the board of directors and the CEO, election of directors of the board and auditor and remuneration to the board of directors and auditor.

Subject to the provisions of the Swedish Companies Act, annual general meetings shall be held at such time and place as the directors may determine. The Company must hold an annual general meeting within six months of its financial year end. Resolutions are passed by the appropriate majority at a properly convened meeting.

A general meeting shall be called by at least such minimum notice as is required or permitted by the Swedish Companies Act. All shareholders who are directly registered in the share register, maintained by Euroclear Sweden AB in accordance with the Swedish Companies Act, and have notified the Company of their intention to participate (including any assistants) at the general meeting, no later than on the date stated in the notice of the general meeting, have the right to attend the general meeting and vote for the number of shares they hold. Shareholders may attend the general meeting in person or by proxy. Shareholders can normally register for the general meetings in several different ways, as stated in the notice of the general meeting. The Company may give such notice by any means or combination of means permitted by the Swedish Companies Act.

At any general meeting a resolution put to a vote of the meeting shall be decided on a show of hands, unless a poll is duly demanded. At any general meeting every member who is present in person or by proxy shall have one vote for each share on a poll.

No business shall be transacted at any general meeting unless a quorum is present. If a quorum is not present a chairman of the meeting can still be chosen. Two members present in person or by proxy and entitled to attend and to vote on the business to be transacted shall be a quorum.

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Shareholders who wish to have a matter addressed at the general meeting must submit a written request to the board of directors. The board of directors must normally have received the request no later than seven weeks before the general meeting.

Board of directors The board of directors is the highest decision-making body following the general meeting and the Company’s highest executive body. In accordance with the Swedish Companies Act, the board is responsible for the management and organisation of the Company, which means that the board is responsible for, among other tasks, establishing goals and strategies, ensuring that procedures and systems are in place for the evaluation of decided goals, continuously evaluating the Company’s financial position and result, and evaluating the executive management. The board is also responsible for ensuring that the annual report, consolidated financial statements of the Group and interim reports are prepared on time. The board also appoints the CEO. The directors of the board are elected every year at the annual general meeting for the period until the end of the next annual general meeting. According to the Company’s articles of association, the board of directors, insofar as it is elected by the general meeting, shall consist of at least three and no more than ten board members and no deputy board members.

The chairman of the board is elected by the general meeting and has a specific responsibility to lead the board of directors’ work and shall ensure that the work is well organised and carried out efficiently. The board of directors follows written rules of procedure, which are revised annually and adopted by the inaugural meeting with the board of directors every year. Among other matters, the rules of procedure stipulate practices of the board of directors, functions and the division of work between the directors of the board and the CEO and the established committees. In connection with the inaugural meeting with the board of directors, the board of directors also establishes instructions for the financial reporting and the CEO.

The board of directors hold meetings according to an annual schedule established in advance. In addition to these meetings, additional meetings can be convened to address issues which cannot be postponed until the next scheduled meeting. In addition to the board meetings, the chairman of the board and the CEO continuously discuss the management of the Company. The board of directors of the Company are proposed to consists of four directors elected at the general meeting on 11 January 2021, who are presented in greater detail in the section ”Board of directors, executive management and auditor”.

Chief Executive Officer The CEO is appointed by the board and has the primary responsibility for the day-to-day management of the Company and the daily operations. The division of work between the board and the CEO is set forth in the rules of procedure for the board and the instructions for the CEO. The CEO is also responsible for preparing reports and compiling information from the executive management for the meetings with the board of directors and for presenting such materials at the meetings. According to the instructions for financial reporting, the CEO is responsible for the financial reporting of the Company and shall, accordingly, ensure that the board of directors receives adequate information to enable the board of directors to continuously assess the Company’s financial position.

The CEO must continuously keep the board of directors informed of the development of the Company’s operations, the amount of sales, the Company’s financial position and result, the liquidity and credit situation, important business events and other circumstances that cannot be presumed to have an insignificant importance to the Company’s shareholders for the board of directors to be aware of (such as material disputes, cancellation of agreements that are important to the Company and significant circumstances concerning the Company’s facilities).

52

The CEO and other senior executives are presented in greater detail in the section ”Board of directors, executive management and auditor”.

53

Share capital and ownership structure

General information According to the Company’s articles of association, proposed to be adopted at the Company’s general meeting on 11 January 2021, the share capital may not be less than SEK 23,300,000 and not exceed SEK 93,200,000, and the number of shares may not be less than 6,400,000,000 and not exceed 25 600 000 000. After the Reversed Acquisition, the Company’s share capital amounts to at most 28,707,207.1797038, and there is a total of at most 7,867,739,068 shares outstanding in the Company. The shares are denominated in SEK and each share has quotient value of approximately SEK 0.00365.

The shares in the Company have been issued in accordance with Swedish law. All issued shares are fully paid and freely transferable.

The number of outstanding shares, prior to the completion of the Reversed Acquisition, is 540,072,401 shares. The shares are traded under the ticker VEVEN with ISIN-kod SE0007614722 at First North. After the contemplated Reversed Acquisition, the Company’s corporate name is proposed to be changed to Arcane Crypto AB and the ticker is proposed to be changed to ARCANE. Mangold Fondkommission AB, telephone number 08-503 015 50, is the Certified Adviser of the Company.

Share capital trend The following table shows the share capital trend for Vertical Ventures’ share capital during the years covered by the financial overview.

Share development

Date

Quotient value

(approx.)

Change in number of

shares Total number

of shares

Share offer price

Change in share capital

Total share capital

New share issue 2018-01-25 1.9095 923,800 21,045,763 2.5 1,760,654 40,110,743 New share issue 2018-03-12 1.9095 3,000,000 24,045,763 2.5 5,717,646 45,828,389 Reduction of share capital

2018-06-26 0.05 - 24,045,763 - -44,626,101 1,202,288

New share issue 2018-06-26 0.05 160,000,000 184,045,763 0.1 8,000,000 9,202,288 New share issue 2018-08-31 0.05 75,000,000 259,045,763 0.2 3,750,000 12,952,288 New share issue 2019-02-27 0.05 215,426,118 474,471,881 0.08 10,771,306 23,723,594 New share issue 2019-03-08 0.05 28,100,520 502,572,401 0.08 1,405,026 25,128,620 New share issue 2019-03-11 0.05 25,000,000 527,572,401 0.08 1,250,000 26,378,620 New share issue 2019-03-29 0.05 12,500,000 540,072,401 0.08 625,000 27,003,620 Reduction of share capital

2020-02-07 0.00365 - 540,072,401 - -25,033,045 1,970,575

New share issue* 2021-01-11 0.00365 7,327,666,667 7,867,739,068 0.045 62,285,166.7 64,255,741.7

* This overview includes the maximum issue in the proposed Reversed Acquisition.

Ownership structure Estimated shareholder structure after the Reversed Acquisition.

Top 10 shareholders Number of shares % of shares Number of votesl % of shares

MIDDELBORG INVEST AS 2,239,718,365 28.7 % 2,239,718,365 28.7 %

TIGERSTADEN INVEST AS 1,208,548,776 15.5 % 1,208,548,776 15.5 %

KLEIN INVEST AS 596,986,355 7.7 % 596,986,355 7.7 %

MODIOLA AS 540,833,795 6.9 % 540,833,795 6.9 %

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TIGERSTADEN MARINE AS 519,044,628 6.7 % 519,044,628 6.7 %

HORTULAN AS 435,077,559 5.6 % 435,077,559 5.6 %

Nawa Invest AS 253,704,843 3.3 % 253,704,843 3.3 %

Avanza Bank AB 182,487,481 2.3 % 182,487,481 2.3 %

UFI AS 157,077,985 2.0 % 157,077,985 2.0 %

MUUNILINST AS 153,642,806 2.0 % 153,642,806 2.0 %

Sum top 10 6,287,122,594 80.6 % 6,287,122,594 80.6 %

Other 1,511,881,458 19.4 % 1,511,881,458 19.4 %

Total 7,799,004,052 100 % 7,799,004,052 100 %

Certain rights associated with the shares The rights associated with the shares issued by the Company, including those pursuant to the articles of association, may only be amended in accordance with the procedures stated in the Swedish Companies Act.

Voting rights Each share in the Company entitles the holder to one vote at general meetings of shareholders.

Preferential rights to new shares If the Company issues new shares, warrants or convertibles in a cash issue or a set-off issue, shareholders shall, as a general rule, have preferential rights to subscribe for such securities proportionally to the number of shares held prior to the issue.

Dividends and dividend policy As of the date of the Company Description, Vertical Ventures has not paid any dividends and the Company’s board of directors has not adopted a dividend policy. Resolutions regarding dividends are made by the general meeting of shareholders and dividends are paid through Euroclear Sweden. All shareholders who are registered in the share register maintained by Euroclear Sweden on the record date determined by the general meeting of shareholders are entitled to receive dividends. Dividends are normally paid as a cash amount per share, although they may also be paid in a form other than cash (cash-in-kind dividend). Dividends may only be paid in an amount that ensures there is full coverage for the Company’s restricted equity after the dividend is paid and provided that the dividend appears to be justifiable taking into account (i) the demands placed on the size of the Company’s equity due to the type of business conducted, its scope and risks, and (ii) the Company and the Group’s consolidation needs, liquidity and position in general. As a general rule, the shareholders are not permitted to decide on dividends in an amount larger than that proposed or approved by the board of directors. The right to dividends applies to shareholders who are registered as shareholders in the share register maintained by Euroclear Sweden on the record date for dividends decided by the general meeting of shareholders. Should a shareholder not be reached through Euroclear Sweden, the shareholder will continue to have a claim against the Company concerning the dividend amount and this is only limited by rules concerning a ten-year statute of limitation. After the period of limitation, the dividend amount accrues to the Company. Neither the Swedish Companies Act nor the Company’s articles of association contain any restrictions regarding the right to dividends for shareholders outside Sweden. Apart from the restrictions pursuant to banking and clearing systems, payments to such shareholders are made in the same manner as those made to shareholders domiciled in Sweden. Shareholders who are not subject

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to taxation in Sweden are normally subject to Swedish withholding tax. Refer to the section “Tax considerations”.

The general meeting of the Company has on two occasions during the past three years resolved on reduction of share capital in order to cover losses, on 22 March 2018 and on 27 December 2019. As a result, the Company will not be able to distribute dividends for a period of three years after the resolutions of the reductions have been registered, unless the share capital has been restored with an amount corresponding to the reductions or unless an authorisation is granted from the Swedish Companies Registration Office. The share capital will be restored as a result of the completion of the Reversed Acquistion.

Central securities depository The Company’s shares are issued in dematerialised form through the services of Euroclear Sweden (P.O. Box 191, SE-101 23 Stockholm, Sweden). In accordance with the Swedish Financial Instruments Accounts Act (Sw. lag (1998:1479) om värdepapperscentraler och kontoföring av finansiella instrument), Euroclear is the central securities depository and clearing organisation for the shares. Accordingly, no share certificates have been issued and any share transfers are made electronically. All shares are fully paid and denominated in the currency SEK. The ISIN code for the Company’s shares is SE0007614722.

Convertibles, warrants, authorisation to issue securities, etc.

Vertical Ventures As of the date of this Company Description, Vertical Ventures has an outstanding debt of approximately SEK 417,071 relating to lapsed convertible debt instruments issued in December 2015 (ISIN SE0007783055), with an additional amount of SEK 155,121 accrued as interest for the outstanding convertible debt. The term of the loan commenced on 4 January 2016 up to and including 30 June 2017. The right to repayment of the loan amount for the outstanding convertible loan expires ten years after the due date, which will be 30 June 2027. All outstanding convertibles bear 12 percent annual interest and the right to interest payment expires three years after the respective interest maturity date, which was 30 June 2020. The Company has notified all convertible holders and repaid the loan amount and applicable interest, with the exception of approximately 500 convertible holders. The debt will be in the Company books until the process for repayment is fulfilled or the date of expire enters.

Other than above, Vertical Ventures has no outstanding warrants, convertibles or other financial instruments.

Arcane Crypto Arcane Crypto has entered into individual warrant agreements with two employees, Torbjørn Bull Jenssen (the CEO) and Henrik Skogstrøm (the CTO). For more information, see section “Transactions with related parties”.

Other than above, Arcane Crypto has no outstanding warrants, convertibles or other financial instruments.

Authorisation Authorisation from annual general meeting 2020

The annual general meeting in the Company held on 25 May 2020 resolved on an authorisation for the board of directors, on one or several occasions for the period up until the next annual general meeting, to resolve on new issue of shares, warrants or convertibles with or without

56

deviation from the shareholders pre-emption right. Resolution of issue based on the authorisation may be made with provision of non-cash, set-off or cash consideration. The total number of newly issued shares based on the authorisation, together with the number of shares to which issued warrants or convertibles entitle, shall in total amount to a maximum of 500,000,000 shares, corresponding to an increase in the share capital of approximately SEK 1,824,361.92.

The reason for the deviation from the shareholders' pre-emption right is that the Company shall be able to acquire, or enable the acquisition of, working capital for expansion or company acquisitions. Issues based on the authorisation shall take place at market conditions.

Proposed authorisation

On the extraordinary general meeting in the Company to be held on 11 January 2021, it is proposed to be resolved on an authorisation for the board of directors, on one or several occasions for the period up until the next annual general meeting, to resolve on new issue of shares, warrants or convertibles with or without deviation from the shareholders pre-emption right. Resolution of issue based on the authorisation may be made with provision of non-cash, set-off or cash consideration. The number of shares in the Company may, based on the authorisation, increase with at most 2,500,000,000 shares.

The reason for the deviation from the shareholders' pre-emption right is that the Company shall be able to acquire working capital as well as to enable the implementation and financing of acquisitions, through set-off or non-cash issues.

Commitment regarding lock-up Arcane Crypto has on 10 August 2020 resolved on a share capital increase in Arcane Crypto where certain subscribers were offered to subscribe for shares in Arcane Crypto to a subscription price of NOK 21.75 per share. The share capital of Arcane Crypto was increased from NOK 133,239.75 to NOK 145,469.63 by issuing 1,222,988 new shares, each with a par value of NOK 0.01. The subscribers have granted a power of attorney to the chairman of Arcane Crypto and any other person appointed by him to sell all of the subscribers' shares in Arcane Crypto to Vertical Ventures through a directed issue of shares in Vertical Ventures in connection with the Reversed Acquisition.

Furthermore, the subscribers have undertaken not to dispose of any of the consideration shares or warrants in Vertical Ventures for a period until the earlier of 27 July 2021 and the date where Vertical Ventures, if Vertical Ventures decides to, has raised more than MSEK 100 in equity after completion of the Reversed Acquisition. After the contemplated Reversed Acquisition, the subscribers who have undertaken not to dispose of any shares or warrants in Vertical Ventures represents approximately 7.6 percent of the shares and votes in Vertical Ventures.

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Articles of association after the Reversed Acquisition

BOLAGSORDNING FÖR ARCANE CRYPTO AB org. nr. 556668-3933

Antagen vid extra bolagsstämma den 11 januari 2021.

§ 1 Företagsnamn

Bolagets företagsnamn är Arcane Crypto AB. Bolaget är publikt (publ).

§ 2 Styrelsens säte

Styrelsen har sitt säte i Stockholms kommun, Stockholms län.

§ 3 Verksamhet

Bolaget ska, direkt eller genom hel- eller delägda dotterbolag, investera i och idka företagsutveckling inom kryptovaluta och blockchain-teknologi samt idka därmed förenlig verksamhet.

§ 4 Aktiekapital

Aktiekapitalet ska vara lägst 23 300 000 kronor och högst 93 200 000 kronor.

§ 5 Antal aktier

Antalet aktier ska vara lägst 6 400 000 000 och högst 25 600 000 000.

§ 6 Styrelse

Styrelsen ska bestå av lägst tre (3) och högst tio (10) ledamöter utan suppleanter.

§ 7 Revisor

Bolaget ska ha en (1) eller två (2) revisorer med högst två (2) revisorssuppleanter. Till revisor ska utses auktoriserad revisor eller registrerat revisionsbolag.

§ 8 Kallelse till bolagsstämma

Kallelse till bolagsstämma ska ske genom annonsering i Post- och Inrikes Tidningar samt genom att kallelsen hålls tillgänglig på bolagets hemsida. Att kallelsen har skett ska annonseras i Svenska Dagbladet.

Aktieägare som vill delta i bolagsstämman ska dels vara upptagna i utskrift eller annan framställning av hela aktieboken på avstämningsdagen för bolagsstämman, som bestäms i enlighet med aktiebolagslagen, dels göra en anmälan till bolaget senast den dag som anges i kallelsen till bolagsstämman. Sistnämnda dag får inte vara en söndag, annan allmän helgdag, lördag, midsommarafton, julafton eller nyårsafton och får inte infalla tidigare än femte vardagen före bolagsstämman.

Aktieägare får vid bolagsstämma medföra ett eller två biträden, dock endast om aktieägaren gjort anmälan härom enligt föregående stycke.

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§ 9 Årsstämma

Årsstämma ska hållas årligen inom sex (6) månader efter räkenskapsårets utgång.

På årsstämman ska följande ärenden behandlas:

1. Val av ordförande vid stämman. 2. Utseende av protokollförare. 3. Upprättande och godkännande av röstlängd. 4. Godkännande av dagordningen. 5. Val av en eller två justeringsmän. 6. Prövning om stämman blivit behörigen sammankallad. 7. Föredragning av framlagd årsredovisning och revisionsberättelse samt i

förekommande fall koncernredovisning och koncernrevisionsberättelse. 8. Beslut om:

a. Fastställande av resultaträkning och balansräkning samt i förekommande fall koncernresultaträkning och koncernbalansräkning;

b. Dispositioner beträffande bolagets vinst eller förlust enligt den fastställda balansräkningen;

c. Ansvarsfrihet åt styrelsens ledamöter och verkställande direktör. 9. Bestämmande av antalet styrelseledamöter samt revisor och

revisionssuppleanter. 10. Fastställande av styrelse- och revisionsarvoden. 11. Val av styrelse samt revisorer och eventuella revisorssuppleanter. 12. Annat ärende, som ankommer på stämman enligt aktiebolagslagen eller

bolagsordningen. § 10 Räkenskapsår

Bolagets räkenskapsår är 0101–1231.

§ 11 Insamling av fullmakter, poströstning och utomståendes närvaro vid bolagsstämma

Styrelsen får samla in fullmakter enligt det förfarande som anges i 7 kap. 4 § andra stycket aktiebolagslagen (2005:551).

Styrelsen får inför en bolagsstämma besluta att aktieägarna ska kunna utöva sin rösträtt per post, inklusive per e-post, före bolagsstämman.

Den som inte är aktieägare ska, på de villkor som styrelsen bestämmer, ha rätt att närvara eller på annat sätt följa förhandlingarna vid bolagsstämma.

§ 12 Avstämningsförbehåll

Bolagets aktier ska vara registrerade i ett avstämningsregister enligt lagen (1998:1479) om värdepapperscentraler och kontoföring av finansiella instrument.

_____________________________

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Legal considerations and supplementary information

Legal group structure Vertical Ventures AB (publ), registration number 556668-3933, is a public limited liability company founded on 8 September 2004 and registered with the Swedish Companies Registration Office (Sw. Bolagsverket) on 13 October 2004. The Company operates in accordance with the Swedish Companies Act (Sw. aktiebolagslagen (2005:551)) and the board has its registered office in Stockholm, Sweden.

After the Reversed Acquisition, the Company will have nine direct or indirect subsidiaries in accordance with the group structure below.

* On an extraordinary general meeting in G3A AB on 30 September 2020, it was resolved on a voluntary liquidation of G3A AB, which is ongoing at the date of this Company Description. The liquidation was registered with the Swedish Companies Registration Office on 8 October 2020.

The Reversed Acquisiton On 4 August 2020, Vertical Ventures entered into an agreement regarding the acquisition of all shares in Arcane Crypto. The Reversed Acquisition is subject to the approval of the extraordinary general meeting in Vertical Ventures on 11 January 2021. The acquisition of Arcane Crypto is carried out through a directed issue of 7,327,666,667 shares in Vertical Ventures as consideration for the shares in Arcane Crypto.

After the completion of the Reversed Acquisition, Arcane Crypto’s shareholders will have a holding of approximately 93.1 percent of the shares and the votes in Vertical Ventures and Vertical Ventures’ existing shareholders will have a holding of approximately 6.9 percent of the shares and the votes in Vertical Ventures.

Material agreements Below is a summary of the material agreements that Vertical Ventures and Arcane Crypto has entered into and other agreements that has been entered into and that contains any right or obligation that is material for the Company, except for such agreements that have been entered into as part of the day-to-day business.

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Material agreements for Vertical Ventures Divestment of Wifog Sverige AB On 21 November 2019, Vertical Ventures entered into a transfer agreement regarding the sale of Wifog Sverige AB with associated trademark, loyalty platform, mobile operator and marketing pot to Transiro Int. AB. Promissory notes were issued as payment for the sale. Transiro Int. AB later resolved on a directed issue of 100,000,000 shares to Vertical Ventures at a subscription price of SEK 0.12 per share with a right to set-off. Vertical Ventures subscribed for the shares in the directed issue by set-off of the promissory notes. At the date of this Company Description, Vertical Ventures no longer holds any shares in Transiro Int. AB.

Material agreements for Arcane Crypto As at the date of this Company Description, Arcane Crypto has invested in three different crypto-sector related companies in which it currently holds minority interests. The Company will rely to a large extent on agreements with these companies as suppliers and customers as part of its business. The material terms of these agreements are set out below.

Agreement with Ijort Invest AB (Trijo) On 26 March 2019, Arcane Crypto entered into a warrant agreement regarding the exercise of warrants and ownership in Ijort Invest. Ijort Invest’s main business consists of developing, providing and maintaining a digital interface for handling blockchain assets and appurtenant news. After the exercise of the warrants, Arcane Crypto held 31 percent of the shares in Ijort Invest on a fully diluted basis. By the execution of the warrant agreement, Arcane Crypto became party to a shareholders' agreement dated 4 April 2018 regulating the shareholders' ownership and governance of Ijort Invest.

In addition to the share investments made in accordance with the warrant agreement, Arcane Crypto purchased an additional 1,667 shares in Ijort Invest on 22 October 2019. The share purchase was conditional upon Arcane Crypto making a shareholder's contribution to Ijort Invest.

At the date of this Company Description, Arcane Crypto's total ownership is 34 percent of the shares in Ijort Invest.

Arcane Crypto and Ijort Invest entered into a white label agreement dated 26 March 2019 giving Arcane Crypto an exclusive, unlimited and royalty-free right to use and implement the current and future white label version of Trijo Exchange (as defined in the agreement) in connection with Arcane Crypto’s establishment of its own cryptocurrency exchange for the Norwegian market (the Arcane Exchange), including but not limited to software, systems and other assets in connection with its operations. All net profits from the Arcane Exchange shall in the period from the date of the white label agreement and until the unconditional consummation of the transfer of the Arcane Exchange to Arcane Crypto be split between Arcane Crypto and Ijort Invest with 75/25 percent respectively for as long as the Arcane Exchange is operated by Ijort Invest as a unit under Ijort Invest, as further described in the white label agreement. According to the agreement, Ijort Invest shall ensure and provide certain services and customer support services to customer of the Arcane Exchange. Ijort Invest is at the date of this Company Description not delivering any services under the white label agreement, and Arcane Crypto will most likely not start requesting any services under the white label agreement.

Agreement with Alphaplate Ltd Arcane Crypto and Alphaplate Ltd entered into a loan agreement on 23 December 2019 under which Arcane Crypto made available to Alphaplate a loan facility in the aggregate amount of GBP 300,000 in three separate tranches of GBP 100,000 each with an interest rate of 3.5 percent

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per annum, for the purpose of financing operational running costs for Alphaplate over a 9-12 months period or such other purposes as agreed between the parties. The loan agreement of 23 December 2019 replaced and terminated the existing loan agreement of 18 September 2019. The outstanding loan amount under the original loan agreement of 18 September 2019 was according to the rights under the original loan agreement converted to shares in Alphaplate, bringing Arcane Crypto's ownership up to 45 percent of the shares in Alphaplate.

According to the loan agreement of 23 December 2019, Alphaplate shall repay each tranche drawn when Alphaplate has completed share allotments in Alphaplate of a minimum amount of GBP 1,500,000. Alphaplate may at any time repay any tranche loan amount made to it in whole or part. Arcane Crypto may decide to convert the outstanding loan amount into shares in Alphaplate with the potential of increasing Arcane Crypto’s ownership in Alphaplate up to 49 percent. The current outstanding loan amount is GBP 300,000.

On 16 March 2020, Arcane Crypto made available to Alphaplate a short-term loan facility in the aggregate amount of up to 15 BTC with an annual interest rate of 4 percent, paid quarterly in BTC. 13.3355 BTC were actually lent out to Alphaplate. Alphaplate's utilisation of tranche three under the 23 December 2019 loan agreement was, according to an addendum dated 12 May 2020, settled by Arcane Crypto's set off of the claim pursuant to the BTC loan agreement against Alphaplate's utilisation of tranche three.

On 3 January 2020, Arcane Crypto and Alphaplate entered into a first right to flow agreement, under which Alphaplate as a liquidity provider shall have the first right to provide flow/liquidity provision in cryptocurrencies, provided that Alphaplate can deliver such flow at terms equal to, or better than, other third party crypto liquidity providers. In practice, this mean that Alphaplate shall have the right as to deliver its services to other Arcane Crypto business, given that they are delivering at least as good terms and quality as any competitor. In exchange for such rights, Alphaplate is obligated to closely work together with Arcane Crypto in order to tailor-make and optimize liquidity provisions to relevant Arcane Products (as defined in the agreement). The agreement has a duration of four years from the agreement date.

Agreement with Puremarkets Ltd On 21 January 2019, Arcane Crypto entered into an agreement for the acquisition of 630 shares in the UK based company Puremarkets Ltd, equivalent to 35 percent of Puremarkets’ share capital. Puremarkets’ business is to establish a global efficient institutional electronic matching and execution service for certain cryptocurrency products in the global institutional cryptocurrency market within which major institutional market participants can execute transactions.

In connection with the acquisition of shares in Puremarkets, Arcane Crypto has entered into a shareholders' agreement dated 21 January 2019 to govern the joint shareholding in Puremarkets.

Fund Manager Agreement with AK Jensen Limited On 25 November 2019, Arcane Crypto’s wholly owned subsidiary Arcane Assets AS entered into a fund manager agreement with AK Jensen Limited ("AKJ"), a UK company acting through its Norwegian branch headquartered in Oslo.

AKJ is an investment manager as well as broker authorised and regulated by the Financial Conduct Authority and is the investment manager or the sub-investment manager for the Arcane Assets Fund Limited (the "Fund"). The agreement governs the terms on which Arcane Assets AS, as the service company, will procure that Eric Wall as the fund manager will work for AKJ and provide services as an independent consultant in connection with the Fund. All services

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are to be provided by the fund manager, and not Arcane Assets AS. Arcane Assets AS shall indemnify AKJ and keep it indemnified at all times against any costs, claims, damages or expenses incurred by AKJ, or for which AKJ may become liable, resulting from any actions or inactions by Arcane Assets or the fund manager which result in a breach in rules imposed by the Cayman Island Monetary Authority.

AKJ shall pay to Arcane Assets AS a portion of the fee which AKJ receives from the Fund as further stipulated in the agreement.

During the duration of the agreement, Arcane Assets AS shall not, and shall procure that the fund manager shall not, engage in or facilitate a crypto asset trading of any nature with any individual, broker/dealer or online trading system other than through AKJ. Furthermore, Arcane Assets AS and the fund manager are subject to certain non-competition and non-solicitation provisions.

The engagement shall continue for the life of the Fund unless terminated sooner as provided by the terms of the fund manager agreement.

Share purchase agreement with Bulltech AS On 13 October 2020, Arcane Crypto entered into a share purchase agreement with Bulltech AS as seller regarding the acquisition of all the shares in Kaupang Krypto AS (“Kaupang Krypto”). Kaupang Krypto is a Norwegian limited liability company that facilitates the buying and selling of cryptocurrencies and is registered with the Norwegian Financial Supervisory Authority. In contrast to a crypto exchange (e.g. Trijo) which has an orderbook, Kaupang Krypto is a broker which offer prices from its own inventory to each customer.

The transaction is inter alia subject to (i) completion of the Reversed Acquisition; (ii) necessary governmental approvals; (iii) approval of the Kaupang Krypto transaction by the general meeting of the seller and approval of the Kaupang Krypto transaction of the board of directors of Vertical Ventures following the completion of the Reversed Acquisition; and (iv) completion of a satisfactory due diligence review by Arcane Crypto of Kaupang Krypto.

Arcane Crypto acquires Kaupang Krypto for a consideration divided into cash and consideration shares, where part of the consideration is linked to an earn-out. NOK 1,000,000 shall be paid in cash at closing of the transaction and NOK 18,500,000 shall be settled by consideration shares in Vertical Ventures, where the subscription price shall be based on the volume-weighted average price of the Vertical Ventures share of the sixty trading days immediately preceding the date of the share purchase agreement. This would result in a dilution of approximately 2.1 percent of the number of shares and votes in Vertical Ventures after the Reversed Acquisiton has been completed. If Kaupang Krypto achieves NOK 5,000,000 in trailing 12-month (TTM) revenue within two years from the date of closing of the transaction, an additional payment of NOK 10,500,000 shall be settled by issuance of additional consideration shares in Vertical Ventures to a subscription price based on the volume-weighted average price of the Vertical Ventures share of the sixty trading days immediately preceding the date when Kapuang Krypto has achieved the required TTM revenue. The seller has accepted a lock-up for the Vertical Ventures consideration shares for a period of 24 months from the closing date of the transaction. However, the seller shall be entitled to sell shares limited upwards to SEK 3,000,000 after 1 January 2022.

Intellectual properties Neither Vertical Ventures nor Arcane Crypto are critically dependent on any intellectual property right to conduct their business.

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Neither Vertical Ventures nor Arcane Crypto have knowledge of any claims or allegations that Vertical Ventures or Arcane Crypto has infringed any intellectual property rights owned, held or used by third parties.

Disputes Neither Vertical Venture nor Arcane Crypto has been party to any legal proceedings or arbitration proceedings (including any unsettled cases or any cases that the companies knows may arise) during the past twelve months that have had, or could have, a material impact on the Company’s financial position or profitability.

Transactions with related parties Since 1 January 2018, the following transactions have been carried out between Vertical Ventures and its related parties and Arcane Crypto and its related parties. For these purposes, the term "related parties" includes persons discharging managerial responsibilities in Vertical Ventures and Arcane Crypto, board members, affiliates to such persons, major owners or another company within the respective Vertical Ventures and Arcane Crypto group at the time such transactions were conducted.

Transactions with related parties in Vertical Ventures Line of credit from Crafoord Capital Partners AB In November 2018, Vertical Ventures (as borrower) secured a line of credit from Crafoord Capital Partners AB (former City Capital Partners AB) (as lender), a company owned by the current chairman of the board, Fredrik Crafoord. The credit facility amounted to MSEK 2.5 with interest, of which an amount of MSEK 2 was used. The amount was paid back in full in 2019.

In June 2019, Vertical Ventures (as borrower) secured an additional line of credit from Crafoord Capital Partners AB (former City Capital Partners AB) (as lender). The credit facility amounts to MSEK 3 and can be used for working capital purposes. The credit facility runs until 31 December 2020 with an interest of 24 percent per annum. At the date for this presentation, the credit facility has not been used during the last two quarters and it will be closed at the date of closing of the Reversed Acquisition.

Conditional shareholder contribution On 1 July 2020, the shareholders Crafoord Capital Partners AB and Dividend Sweden AB granted Vertical Ventures a conditional shareholder contribution of SEK 1,500,000. Vertical Ventures has undertaken to repay the conditional shareholder contribution in connection with the Reversed Acquisition.

Transactions with related parties in Arcane Crypto Loan agreements with Modiola AS Arcane Crypto (as borrower) and Modiola AS (as lender), a company wholly owned by the chairman of the board, Jonatan Raknes, have on 21 January 2019, 19 December 2019, 8 January 2020 and 4 August 2020 respectively entered into separate loan agreements for an aggregated amount of NOK 750,000 for the purpose of providing liquidity to Arcane Crypto. All loans had an interest rate of three months' NIBOR + a margin of 2 percent per annum, with the exception of the loans granted 19 December 2019 and 8 January 2020 respectively which did not bear any interest for the period up to 29 February 2020, and the loan granted 4 August 2020 which did not bear any interest for the period up to 31 December 2020. As of the date of this Company Description, the aggregated loan amount under the aforementioned agreements has been repaid and there are no outstanding principal amounts or unpaid interest towards Modiola AS.

Loan agreement with Tigerstaden AS

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On 17 December 2019, Arcane Crypto (as borrower) and Tigerstaden AS (as lender) entered into an agreement for a line of credit (Sw. kassakredit) in the amount of up to NOK 10,000,000 for liquidity purposes. For the period commencing 1 January 2020, the interest rate was 3 months' NIBOR + a margin of 3 percent per annum, calculated in arrears each quarter. As per 30 June 2020, Arcane Crypto had NOK 5,574,659 outstanding under the loan (including accrued interest). Pursuant to the agreement, the due date of the loan and any accrued unpaid interest is 31 December 2020. However, as agreed between the parties on 4 August 2020, the loan and any accrued unpaid interest (except for NOK 3.5) was converted to shares in Arcane Crypto on 15 December 2020.

Loan agreements with Middelborg Invest AS On 15 January 2020, Arcane Crypto (as borrower) and Middelborg Invest AS (as lender) entered into an agreement for a line of credit (Sw. kassakredit) in the amount of up to NOK 5,000,000 for liquidity purposes. For the period commencing 1 January 2020, the interest rate was 3 months' NIBOR + a margin of 3 percent per annum, calculated in arrears each quarter. As per 30 June 2020, Arcane Crypto had NOK 4,315,741] outstanding under the loan (including accrued interest). Pursuant to the agreement, the due date of the loan and any accrued unpaid interest is 31 December 2020. However, as agreed between the parties on 4 August 2020, the loan and any accrued unpaid interest (except for NOK 19) was converted to shares in Arcane Crypto on 15 December 2020.

Consultancy agreement with Middelborg AS On 1 August 2020, Arcane Crypto entered into a consultancy agreement with Middelborg AS, the employer of chairman of the board, Jonatan Raknes, for his services for Arcane Crypto, extending beyond the role as chairman of the board of the Company. Pursuant to the agreement, Mr. Raknes shall assist Arcane Crypto in connection with business development, strategy, financing, fund raisings, and M&A-related services commencing 1 January 2020, for a monthly fee of NOK 100,000 in addition to coverage of travel expenses and other related costs. The fee is payable when the parties agree that the liquidity of Arcane Crypto has reached a sufficient level and no later than 31 December 2020. The agreement remains in force until it is terminated by either party with 14 days' written notice.

Warrant agreements with the Arcane Crypto’s CEO and CTO/head of Arcane Technology On 19 August 2020, Arcane Crypto entered into a warrant agreement with the Company's CEO, Torbjørn Bull Jensen, under which Mr. Bull Jensen has received partly remuneration for his employment with the Company in 368,480 warrants, each giving him a right to subscribe for one ordinary share in Arcane Crypto. The warrants shall vest and become exercisable after 6 months (170,068 shares at an exercise price of NOK 8.82); 12 months (113,378 shares at an exercise price of NOK 13.23) and 18 months (85,034 shares at an exercise price of NOK 17.64) from the grant date of the warrants and otherwise on the terms and subject to the conditions set out in the agreement.

On 19 August 2020, Arcane Crypto entered into a share warrant agreement with the Company's CTO, Henrik Skogstrøm, under which Mr. Skogstrøm has received partly remuneration for his employment with the Company in 245,654 warrants, each giving him a right to subscribe for one ordinary share in Arcane Crypto. The warrants shall vest and become exercisable after 6 months (113,379 shares at an exercise price of NOK 8.82); 12 months (75,586 shares at an exercise price of NOK 13.23) and 18 months (56,689 shares at an exercise price of NOK 17.64) from the grant date of the warrants and otherwise on the terms and subject to the conditions set out in the agreement.

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Certified Adviser and advisers Mangold Fondkommisison AB acts as Vertical Ventures’ Certified Adviser. Advokatfirman Glimstedt Stockholm KB is legal adviser to Vertical Ventures in connection with the Listing. Törngren Magnell & Partners Advokatfirma KB and Wikborg Rein Advokatfirma AS are legal advisers to Arcane Crypto in connection with the Listing.

Törngren Magnell & Partners Advokatfirma KB, Wikborg Rein Advokatfirma AS and Advokatfirman Glimstedt Stockholm KB receives compensation on approved invoices for services rendered in connection with the Listing. Apart from what has been described above, Mangold Fondkommission AB, Törngren Magnell & Partners Advokatfirma KB, Wikborg Rein Advokatfirma AS and Advokatfirman Glimstedt Stockholm KB have no financial or other interests in connection with the Listing.

As all information in the Company Description derives from Vertical Ventures and Arcane Crypto, Törngren Magnell & Partners Advokatfirma KB, Wikborg Rein Advokatfirma AS and Advokatfirman Glimstedt Stockholm KB disclaim all responsibility in relation to the existing and future shareholders in the Company and regarding any other direct or indirect financial consequences as a result of an investment or other decisions that are wholly or partly based on information in the Company Description. Advokatfirman Glimstedt Stockholm KB and Wikborg Rein Advokatfirma AS has performed a legal due diligence of Arcane Crypto in connection with the Listing. Törngren Magnell & Partners Advokatfirma KB has performed a limited due diligence of Vertical Ventures in connection with the Listing.

Documents incorporated by reference The documents below are incorporated by reference and constitutes a part of the Company Description and shall be read as a part thereof.

• Vertical Ventures AB’s (publ) annual report including audit report 2019.

• Vertical Ventures AB’s (publ) annual report including audit report 2018.

• Vertical Ventures AB’s (publ) interim report for the period 1 January – 30 September 2020.

• Vertical Ventures AB’s (publ) interim report for the period 1 January – 30 September 2019.

• Arcane Crypto AS’ annual report including audit report 2019.

• Arcane Crypto AS’ annual report including audit report 2018.

The incorporated documents above and the Company’s current and proposed articles of association are available at the Company’s website, www.verticalventures.se. The memorandum of association can be obtained from the Swedish Companies Registration Office (Sw. Bolagsverket).

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Tax considerations

Tax considerations in Sweden Below is a summary of certain Swedish tax issues for the shareholders in the Company, and who are subject to unlimited tax liability in Sweden (unless otherwise stated). The summary is based on current legislation and is intended only to provide general information for the time that the shares are traded on Nasdaq First North Growth Market.

For example, the summary does not cover:

• circumstances when securities are held as inventories in an economic activity,

• the special rules that apply to so-called “qualified shares” in closely held companies,

• circumstances when securities are held by a limited partnership or a partnership,

• circumstances when securities are held in an investment saving account (Sw. investeringssparkonto) or endowment insurance (Sw. kapitalförsäkring),

• the special rules regarding tax-free capital gains (including non-deductible capital losses) and dividends that may be applicable when investors hold shares subject to the Swedish participation exemption rules (Sw. näringsbetingade andelar),

• foreign companies conducting business through a permanent establishment in Sweden, or

• foreign companies that have been Swedish companies.

Furthermore, special tax provisions apply to certain categories of companies, e.g. investment companies and insurance companies. The tax consequences for each individual shareholder depend on, amongst others, the shareholder’s particular circumstances. Each shareholder is advised to consult an independent tax advisor as to the tax consequences relating to the shareholder’s particular circumstances that could arise from the shareholdings, including the applicability and effect of foreign tax legislation and provisions in tax treaties.

General Natural persons

For natural persons that are subject to unlimited tax liability in Sweden, tax is imposed on capital income, such as interest income, dividends and capital gains, in the capital income category. The tax rate for the capital income category is 30 percent.

The capital gain or the capital loss at disposal of shares and other securities is computed as the difference between the consideration, less selling expenses, and the acquisition value. The acquisition value for all shares of the same class and type shall be added together and computed collectively in accordance with the so-called average method (Sw. genomsnittsmetoden). The so-called standard method (Sw. schablonmetoden) may be used at the disposal of shares in the Company. This method means that the acquisition value may be determined as 20 percent of the consideration less selling expenses.

Capital losses on shares and other listed securities in the Company (for example subscription rights and BTA (paid and subscribed shares)) may be fully deducted against taxable capital gains realized in the same year on shares, as well as other listed securities (however not listed shares in mutual funds or investment funds that contains Swedish receivables only (Sw. räntefonder)).

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70 percent of capital losses not absorbed by the presented set-off rules are deductible in the capital income category.

If there is a net loss in the capital income category, a reduction is granted of the tax on income from employment and business operations, as well as national and municipal property tax. This tax reduction is 30 percent of the net loss that does not exceed SEK 100,000 and 21 percent of any remaining net loss. A net loss cannot be carried forward to future tax years. The computation is also affected if an investor deduction (Sw. investeraravdrag) has been made during the year.

For natural persons and estates after deceased individuals that are subject to unlimited tax liability in Sweden, a preliminary tax of 30 percent is withheld on dividends. The preliminary tax is normally withheld by Euroclear Sweden or, regarding nominee-registered shares, by the trustee.

Limited liability companies

For limited liability companies (Sw. aktiebolag) all income, including taxable capital gains and taxable dividends, is taxed as income from business operations at a rate of 21.4 percent (20.6 percent as for the financial year that commence 1 January 2021). Capital gains and capital losses are computed in the same way as described for natural persons above.

Deductible capital losses on shares and securities may only offset taxable capital gains on shares and other securities that are taxed in the same manner as shares. If a capital loss cannot be deducted by the company that has suffered the loss, it may be deducted from taxable capital gains on shares and other securities at another company, provided that the requirements for group contributions (tax consolidation) are met. Capital losses on shares and other securities that could not have been utilized during a certain year, may be carried forward (by the limited liability company that has suffered the loss) and offset against taxable capital gains on shares and other securities in the following tax year without any limitation in time.

Shareholders and holders of securities with limited tax liability in Sweden

Dividends on shares in a Swedish limited liability company that are paid to shareholders who are subject to limited tax liability in Sweden are subject to withholding tax. The same applies to payments made by Swedish limited companies in connection with, among other things, the redemption of shares and repurchase of own shares through an offer directed to all shareholders or all holders of shares of a certain kind. The tax rate is 30 percent. The withholding tax rate is however in general reduced by double taxation agreements. The tax is normally withheld by Euroclear or, in the case of nominee-registered shares, the nominee. In cases where withholding tax has been held by 30 percent, even though the shareholder is entitled to a lower withholding tax rate, the shareholder can request a refund from the Swedish Tax Agency before the end of the fifth calendar year after the payment date of the dividends.

Shareholders with limited tax liability in Sweden – and who do not conduct business from a permanent establishment in Sweden – are normally not taxed in Sweden on capital gains on the sale of shares in Swedish companies. Shareholders as well as holders of other securities may however become subject to taxation in their residence state.

According to a special rule, natural persons who are subject to limited tax liability in Sweden are subject to capital gains taxation in Sweden upon disposal of shares in the Company, if the person at any time during the calendar year of disposal or the ten calendar years preceding the year of disposal has been resident or had a continuous stay (Sw. stadigvarande vistats) in Sweden. The applicability of this rule is in many cases limited by double taxation agreements.

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Tax considerations in Norway

General This section describes certain tax rules in Norway applicable to shareholders who are resident in Norway for tax purposes ("Norwegian Shareholders"). The statements herein regarding taxation are based on the laws in force in Norway as of the date of this Company Description and are subject to any changes in law occurring after such date. Such changes could possibly be made on a retrospective basis. The following summary does not purport to be a comprehensive description of all the tax considerations that may be relevant in connection with a decision to purchase, own or dispose of shares in the Company. Investors are advised to consult their own tax advisors concerning the overall tax consequences of their ownership of the shares in the Company. The statements herein only apply to shareholders who are beneficial owners of the shares. Please note that for the purpose of the summary below, references to Norwegian Shareholders refer to the tax residency rather than the nationality of the shareholder.

Taxation of dividends

Norwegian corporate shareholders (i.e. limited liability companies and similar entities) ("Norwegian Corporate Shareholders") are, as a main rule, comprised by the Norwegian participation exemption. Under the exemption, only 3 percent of dividend income on shares in Norwegian limited liability companies is subject to tax as ordinary income (22 percent flat rate as of the year 2020), implying that such dividends are effectively taxed at a rate of 0.66 percent.

Dividend income from a company resident in a country classified as a low-tax jurisdiction, will however only be comprised by the participation exemption if the company is actually established and carry on genuine economic activities in an EEA state.

The Company is tax resident and carries out business activities in Sweden, and will thus qualify for the Norwegian participation exemption.

Dividends distributed to Norwegian individual shareholders (i.e. other shareholders than Norwegian Corporate Shareholders) ("Norwegian Individual Shareholders") are grossed up with a factor of 1.44 before taxed as ordinary income (22 percent flat rate, resulting in an effective tax rate of 31.68 percent) to the extent the dividend exceeds a tax-free allowance.

The tax-free allowance is calculated on a share-by-share basis for each individual shareholder on the basis of the cost price of each of the Company’s shares multiplied by a risk-free interest rate. The risk-free interest rate is based on the effective rate of the interest on treasury bills (Nw. statskasseveksler) with three months maturity plus 0.5 percentage points, after tax. The tax-free allowance is calculated for each calendar year and is allocated solely to Norwegian Individual Shareholders holding the shares at the expiration of the relevant calendar year. Norwegian Individual Shareholders who transfer the shares will thus not be entitled to deduct any calculated allowance related to the year of transfer. Any part of the calculated tax-free allowance one year exceeding the dividend distributed on the share ("unused allowance") may be carried forward and set off against future dividends received on (or gains upon realisation of, see below) the same share. Any unused allowance will also be added to the basis of computation of the tax-free allowance on the same share the following year.

The Company’s shares will not qualify for Norwegian share saving accounts (Nw. aksjesparekonto) for Norwegian Individual Shareholders as the shares are listed on Nasdaq First North Growth Market (and not Oslo Børs/Oslo Axess or similar foreign trading place).

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Taxation of capital gains

Sale, redemption or other disposal of the shares is considered as a realisation for Norwegian tax purposes.

As mentioned above, the Company is tax resident and carries out business activities in Sweden, and will qualify for the Norwegian participation exemption.

Capital gains derived from the realization of shares qualifying for participation exemption are exempted from taxation, i.e. capital gains on such shares will be fully exempt from Norwegian taxation. Losses incurred upon realisation of such shares are not deductible.

Norwegian Individual Shareholders are taxable in Norway for capital gains derived from the realisation of the shares, and have a corresponding right to deduct losses. This applies irrespective of how long the shares have been owned by the individual shareholder and irrespective of how many shares that are realised. Gains are taxable as ordinary income in the year of realisation and losses can be deducted from the ordinary income in the year of realisation. Any gain or loss is grossed up with a factor of 1.44 before taxed at a rate of 22 percent (resulting in an effective tax rate of 31.68 percent). Gain or loss is calculated per share, as the difference between the consideration received for the share and the Norwegian Individual Shareholder's cost price for the share, including costs incurred in connection with the acquisition or realisation of the share. Any unused tax-free allowance connected to a share may be deducted from a capital gain on the same share, but may not lead to or increase a deductible loss. Further, unused tax-free allowance related to a share cannot be set off against gains from realisation of other shares.

If a Norwegian shareholder realises the Company’s shares acquired at different points in time, the shares that were first acquired will be deemed as first sold (the "first in first out"-principle) upon calculating taxable gain or loss. Costs incurred in connection with the purchase and sale of the shares may be deducted in the year of sale.

A shareholder who ceases to be tax resident in Norway due to domestic law or tax treaty provisions may become subject to Norwegian exit taxation of capital gains related to shares in certain circumstances.

Net wealth tax

The value of the shares is taken into account for net wealth tax purposes for Norwegian Personal Shareholders. The marginal net wealth tax rate is currently 0.85 percent of the value assessed. The value for assessment purposes for the shares is equal to 65 percent of the total tax value of the Company as of 1 January of the year before the tax assessment year. However, if the share capital in the Company has been increased or reduced by payment from or to shareholders in the year before the tax assessment year, the value for assessment purposes for the shares is equal to 65 percent of the total tax value of the Company as of 1 January of the tax assessment year. The value of debt allocated to the shares (a proportional part of the shareholder's total debt) for Norwegian wealth tax purposes is reduced correspondingly (i.e. to 65 percent).

Norwegian limited liability companies and similar entities are exempted from net wealth tax.

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Addresses ISSUER Vertical Ventures AB (publ) BOX 77 182 63 Djursholm Sweden www.verticalventures.se

TARGET COMPANY Arcane Crypto AS Munkedamsveien 45 0250 Oslo Norway www.arcane.no

CERTIFIED ADVISER Mangold Fondkommission AB Box 55691 102 15 Stockholm Sweden www.mangold.se

THE COMPANY’S AUDITOR Öhrlings PricewaterhouseCoopers AB 113 97 Stockholm Sweden www.pwc.se

CENTRAL SECURITIES DEPOSITORY Euroclear Sweden AB Box 191 101 23 Stockholm Sweden www.euroclear.com