Notes to the consolidated balance sheet

Acquisition of the Sterope subsidiary

Transactie

On 5 January 2023, Alcyone acquired 60% of the shares and voting rights in Sterope Holding from major shareholder Mirach. With the acquisition of Sterope, the size of Alcyone increases significantly and the company becomes stronger and more market-worthy. The acquisition also fulfils the desire to be active in adjacent sectors and in multiple verticals. On 17 November 2022, Alcyone's shareholders approved the acquisition of Sterope at the Extraordinary General Meeting of Shareholders. Because Mirach is a major shareholder of Alcyone, this transaction is a jointly managed transaction (TUCC).

Based on the realized EBITDA 2022, the selling shareholders have been diluted by 20% in favor of the stake held by Alcyone. Dilution took place through the repurchase of treasury shares and subsequent cancellation of the treasury shares by Sterope Holding. This repurchase and withdrawal took place on April 14, 2023. As of April 14, 2023, Alcyone holds an 80% stake in Sterope Holding.

Remuneration carried forward

The transaction price for the acquisition by Alcyone of the stake in Sterope Holding amounts to € 10.65 million and is financed as follows:

• € 2.25 million through the issuance of A shares to Mirach;

• € 3.70 million through the issuance of B shares to Mirach;

• € 4.70 million by offsetting the remaining balance of the loan u/g to Mirach.

Equity instruments issued

The fair value of the issued A and B shares is determined on the basis of the weighted average of the (stock exchange) trading in Alcyone and its legal predecessor in 2022.

Acquisition-related costs

Sterope has been acquired from major shareholder Mirach through a transaction under joint management. Alcyone did not incur any material acquisition costs for this transaction under common management.

Purchase price mechanism

As of April 14, 2023, Alcyone holds an 80% stake in Sterope Holding. The positive dilution result of € 401 thousand is recognised directly in shareholders' equity attributable to shareholders.

Net sales and result after tax

As of the transaction date, Sterope has generated a turnover of € 14.329 million. The result after tax as of the transaction date amounted to € 965 thousand, of which € 731 thousand attributable to shareholders.

Goodwill impairment

With regard to the recognised goodwill, Alcyone distinguishes the following cash-generating units:

• Sterope Holding (advising healthcare professionals);

• NIS (Data Management & Application Integration) in Taygeta.

Goodwill Sterope Holding

The goodwill Sterope Holding was created in the acquisition of Sterope Holding in 2023.

The impairment analysis on the goodwill of Sterope Holding was carried out on the basis of a Discounted Cash Flow Method.

Cash flow projections are projected for revenue growth of 14% in 2024 and then 5% annual growth over the projection horizon through 2028. Historically, growth rates have averaged between 20% and 25%. Costs are rising in line with expected inflation and based on benefits related to volume growth (less proportional to revenue growth) as well as specific estimates of personnel costs related to the maintenance of the digital advice portal (mySterope).

The projection horizon covers 2024 to 2028. Over the projection horizon, a growth rate of 2% (terminal inflation) has been used, based on the ECB's long-term inflation target.

The risk-free interest rate used (equity cost rate) is 3% and is based on the risk-free interest rate published by Pablo Fernandez of 1.3% plus an additional surcharge of 1.7%. The long-term expectation of the risk-free interest rate has therefore been set by management at 3%. The market risk premium used is 6.2% and is based on a publication by Pablo Fernandez. The enterprise risk premium (Alpha) is set at 5.2% and has been determined by management on the basis of a model accepted in the market (BDO model). The cost rate of debt capital is 5.382% and is based on the cost rate of the financing available within Sterope. The average capital ratio is determined on the basis of a weighted average capital structure of comparable companies in a selected industry (Damadoran publication). The tax rates used are based on the currently transparent tax rates. Based on the above assumptions, the WACC used is 14.42%.

Based on the test performed, there is no impairment in 2023. The break-even point is at a WACC of 22.45% or an adjustment of revenue growth from 2025 onwards by -/- 17.7% over the projection horizon.

Goodwill NIS (Data Management & Application Integration)

The NIS goodwill was created with the acquisition of Sadalbari Services BV in 2018. The goodwill of € 2,273 thousand represents the difference between the acquisition price and the fair value of the identifiable assets acquired. In 2020, an impairment of € 371 thousand took place.

For the impairment analysis of the goodwill NIS (Data Management & Application Integration), a Discount Cash Flow Method (mid-year convention) was used.

With regard to the cash flow forecasts, an annual growth in revenue and a less proportional increase in costs are assumed. Due to market conditions, the annual growth forecast has fallen significantly compared to previous years' expectations. Annual revenue growth of 2% for the years 2024-2028.

The projection horizon covers 2024 to 2028. Over the projection horizon, a growth rate of 0% (terminal inflation) has been used.

The risk-free interest rate used (cost rate of equity) is 5.601% and is based on the risk-free interest rate published of 2.601% (20-year government bonds Germany) plus an additional premium of 3.0%. The long-term expectation of the risk-free rate has therefore been set by management at 5.601%. A Beta of 0.95 is used, based on a publication by Damadoran. The market risk premium used is 5.75% and is based on a publication by ABC. The enterprise risk premium (Alpha) is set at 5.868% and has been determined by management on the basis of a model accepted in the market ('BDO model'). The borrowed capital cost rate used is 5.601%. The average capital ratio is determined on the basis of a weighted average capital structure of comparable companies in the industry based on an estimate made by management. The tax rates used are based on the currently transparent tax rates. Based on the above assumptions, the WACC used is 12.943%.

Based on the test carried out, an impairment charge of €1,902 thousand was implemented in 2023. The goodwill NIS Data Management & Application Integration was valued at € nil as a result of the impairment loss.

Depreciation rates

The expected economic life and related annual depreciation rates per category of property, plant and equipment are:

Trade receivables collateral issued

Taygeta's trade debtors, amounting to € 1.1 million, have been pledged to Rabobank as collateral in the event that the credit facility is used. This funding margin was also not used in 2023.

Sterope's trade debtors amounting to € 1.9 million have been pledged to ING Bank NV as collateral for the credit facility.

Trade receivables credit risk

The expected credit risk of the receivables is structured as follows:

_{x € 1.000}

Receivables from participating interests

The item Receivables from associates (nominal € 483 thousand) concerns receivables in current account on Maia Holding BV and its 100% participations Maia BV and Maia Zorgbeveiligingen BV. Maia Holding BV c.s. (hereinafter: Maia) is a 50% participation of Sterope Holding and has its registered office in Eindhoven. Maia is a start-up and active in healthcare security. On the basis of agreements made in the articles of association and shareholders' agreement on control and voting rights, Maia has been designated as a joint venture of Sterope. Maia has been accounted for on the basis of Sterope's share of net assets using the equity method. In connection with the negative value of Maia, the item receivables from associates was written down by € 143 thousand. In addition, an additional write-down of € 146 thousand was made for suspected bad debts.

For the 2023 financial year, net revenue amounted to €1,456 thousand, the consolidated result after tax was €174 thousand negative and the consolidated balance sheet total amounted to €40 thousand.

The participation of Maia Holding BV is processed as follows:

_{x € 1.000}

Issued share capital

_{x € 1.000}

Issuance of shares

On 5 January 2023, Alcyone issued 3,700,000 A shares and 2,249,060 B shares to finance the transaction price of Sterope Holding. The fair value of the issued A and B shares is set at € 1.00, being the weighted average of the (stockbroke) trading in Alcyone and its legal predecessor in 2022. The nominal value of the A shares and B shares is € 0.10 per share. The difference of € 0.90 per share is included in the share premium reserves.

(Stock)dividend

On 14 July 2023, 701,403 new shares were issued as a stock dividend, divided into 168,869 A shares and 532,534 B shares.

Share premium reserve

_{x € 1.000}

Retained earnings

_{x € 1.000}

Transaction transaction under common management

For the transaction under common management, we refer to the notes to the consolidated financial statements, part Acquisition of subsidiary Sterope. It includes information on the treatment of the initial transaction and the treatment of the purchase price mechanism, both of which lead to a direct change in equity.

Third-party share

_{x € 1.000}

Subordinated borrowing for participants

_{x € 1.000}

The term of the subordinated borrowing ends on 1 October 2027. The interest rate is set at 5.5% - 6.0%. The interest is paid annually, provided that Sterope complies with the covenants of ING Bank NV.