Untitled

ANNUAL REPORT 2022

European Healthcare

Acquisition & Growth

Company B.V.

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CONTENTS

Report of the Board of Directors

Financial Statements

Other Information

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REPORT OF THE BOARD OF DIRECTORS

This annual report of European Healthcare Acquisition & Growth Company B.V. (the “Company")

for the financial year ended 31 December 2022 consists of the report of the board of directors of

the Company (the “Board” and the “Board Report”), including the responsibility statement and

other mandatory statements by the Board, the financial statements of the Company (the “Financial

Statements”) and the accompanying notes (the “Annual Report”).

As disclosed on 22 December 2022, the Company entered into a business combination agreement

with Croma-Pharma GmbH (the "Business Combination Agreement"). If the business

combination between the Company and Croma-Pharma GmbH (the "Business Combination") will

be approved at the Business Combination AGM (as defined below):

i. the Company will be converted into a limited company (naamloze vennootschap);

ii. the Company will be renamed from European Healthcare Acquisition & Growth

Company B.V. to Croma N.V.;

iii. the Company will have a two-tier board structure with a management board and a

supervisory board instead of a one-tier board structure; and

iv. the place of effective management of the Company will be moved from Germany to

Austria. After the Business Combination AGM, the domiciliation of the Company will be

moved to Austria and the management board and the supervisory board will be acting

as the management and governing bodies of Croma N.V. The statutory seat of the

Company will remain in the Netherlands.

The combined entity is hereinafter also referred to as "Croma N.V."

This Annual Report does not include the financial results of Croma-Pharma GmbH as this Annual

Report relates to the financial year 2022 before the Business Combination was completed. As a

result, the audited financial results for the financial year 2022 for Croma-Pharma GmbH will be

published separately. The first financial results of Croma N.V. will be the half year 2023 interim

financial results.

1. ABOUT EUROPEAN HEALTHCARE ACQUISITION & GROWTH

COMPANY B.V.

1.1. General

The Company was incorporated on 9 July 2021 in Amsterdam, the Netherlands, as a Dutch

operators-led special purpose acquisition company incorporated under the laws of the Netherlands

as a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid)

with its business address in Munich, Germany.

The Company was admitted to listing and trading on Euronext Amsterdam (the “Admission”), the

regulated market operated by Euronext Amsterdam N.V. (“Euronext Amsterdam”) on 18 November

2021 pursuant to a private placement (the “Private Placement”) in which it raised € 200 million in

gross proceeds (the “Proceeds”) in accordance with the terms and conditions set out in the

Company’s prospectus which has been issued on 16 November 2021 (the “Prospectus“). Payment

for the Class A Ordinary Shares (as defined below) and the Public Warrants (as defined below)

(“Settlement”) took place on 22 November 2021 (the “Settlement Date”).

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The Company has been established for the purpose of entering into a business combination with

an operating business in the form of a merger, share exchange, asset acquisition, share purchase,

reorganisation or similar business combination with, or acquisition of, one or more target companies

or businesses with the purpose of creating a single business. The Company focuses on companies

or businesses with principal operations in Europe in the healthcare sector, with a special focus on

the subsectors Biotechnology and Specialty Pharma, Pharma Services, Medical Technology and

Medical Devices, Diagnostic and Lab Services, Bioinformatics as well as Life Science Tools (the

“Specific Healthcare Sectors”). The Company intended to acquire the shares in one or more target

companies and subsequently provide management services to the target(s) for remuneration.

Since the Private Placement, the Company focused on finding the right target company for a

business combination and on 22 December 2022 the Company entered in the Business

Combination Agreement.

The Company will hold its annual general meeting during the second half of Q2 2023 and propose

the Business Combination for consideration and approval by its shareholders (Class A Ordinary

Shareholders (as defined below) and holders of the Founder Shares (as defined below)) (the

“Business Combination AGM”). In the envisaged transaction structure a resolution passed by a

simple majority of the votes cast is required to effect the Business Combination.

The Company recorded an after-tax loss of € 30,095k over the period from 1 January 2022 until 31

December 2022. The Company has not recorded any operational revenues. The result is

attributable to the fair value adjustments of both the Founder Warrants and Public Warrants (each

as defined below), the recognition of the deferred underwriting costs, operational costs in relation

to the identification of the Business Combination and the negative interest rate payable on the

Escrow Account (as defined below).

1.2. Company structure

1.2.1. Sponsors

The founders of the Company are BAUR I&C GmbH, RNRI GmbH, CCC Investment GmbH, SO I

GmbH, PS Capital Management GmbH and Winners & Co. GmbH (the “Sponsors”, also referred

as the “Founders”) which are affiliates of the Company’s directors, Dr. Cornelius Baur, Dr. Thomas

Rudolph, Dr. Axel Herberg, Dr. Stefan Oschmann, Mr. Peer M. Schatz and Mr. Stefan Winners,

respectively.

1.2.2. Capital structure

The Founders hold 6,666,666 convertible class B shares at a nominal value of € 0.01 per share (the

“Founder Shares”). The Founder Shares represent 25% of the Company's voting rights (not taking

into account any Treasury Shares (as defined below)).

The Company completed its Private Placement for the issuance of 20,000,000 public units (the

“Public Units” and each a “Public Unit”) at a price per Public Unit of € 10.00 in 2021. Each Public

Unit consists of (i) one class A ordinary share with a nominal value of € 0.01 per share (the “Class

A Ordinary Shares”, and each a “Class A Ordinary Share”, also referred to as the “Public Shares”

or the “redeemable Ordinary Shares”, and a holder of one or more Class A Ordinary Shares, a

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“Class A Ordinary Shareholder”); and (ii) one-third (1/3) of a redeemable class A warrant (each

whole warrant a “Public Warrant” and together the “Public Warrants”, also referred to as the

“Market Warrants”).

Class A Ordinary Shareholders may redeem all or a portion of their Class A Ordinary Shares upon

the completion of the Business Combination, subject to complying with applicable law and

satisfaction of certain conditions. The gross repurchase price of a Class A Ordinary Share in

connection with a Business Combination is equal to its pro rata share of funds in the Escrow Account

determined two trading days prior to the Business Combination AGM, which is anticipated to be

€ 10.00 per Class A Ordinary Share.

1.2.3. Escrow

The Proceeds are held on an escrow account held at Deutsche Bank Aktiengesellschaft (the

“Escrow Account”). The Escrow Account was subject to a negative interest rate of -0.5% until the

end of July 2022 (the "Negative Interest"). In July 2022 the interest rate went up to 0%. On 2

November 2022 the interest rate increased to 1.5% and on 21 December 2022 to 2%.

1.2.4. Costs

The Sponsors have provided € 11.6 million to the Company through the purchase of the Founder

Shares, the Founder Warrants (as defined below) and the Additional Sponsor Subscription (as

defined below).

At Settlement, the Sponsors: (i) paid an additional purchase price for the Founder Shares in the

aggregate amount of € 1,400,000 that will be used, inter alia, to cover remuneration costs during

the first 12 months after Settlement; (ii) subscribed for 5,128,000 class B warrants at a price of

€ 1.50 per warrant (the “Founder Warrants”) (up to € 6,768,000 in the aggregate) in a separate

private placement that occurred on the Settlement Date (the “Sponsors Capital At-Risk”) which

Sponsors Capital At-Risk will be used to finance the Company’s working capital requirements and

other running costs and expenses, except for some commissions as further detailed in the

Prospectus that will, if and when due and payable, be paid from the Escrow Account, until the

completion of the Business Combination; and (iii) subscribed to 1,640,000 Founder Warrants which

were issued to the Sponsors at Settlement at a price of € 1.50 per Founder Warrant, for an

aggregate purchase price of € 2,460,000 (the “Additional Sponsor Subscription”). The proceeds

of the Additional Sponsor Subscription are, and will be, used to cover any Negative Interest, up to

an amount equal to the proceeds from the Additional Sponsor Subscription to allow, in case of a

liquidation of the Company after expiry of the business combination deadline, (which will expire 24

months after the first day of trading (the "Business Combination Deadline")), or in case of

redemptions of Class A Ordinary Shares in the context of a Business Combination, for a redemption

of up to € 10.00 per Class A Ordinary Share.

The Sponsors agreed to pay an additional sum if the Company does not consummate a business

combination within the first 12 months after Settlement as additional purchase price for the Founder

Warrants subscribed for under the Sponsors Capital At-Risk, which will be used to pay the

Company's remuneration costs payable after the first 12 months following the Settlement until the

completion of the Business Combination or the Business Combination Deadline. In September

2022, the Sponsors paid an additional purchase price of € 1,205k. This payment did not result in

the issuance of any additional Founder Warrants.

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For any excess portion of the Additional Sponsor Subscription remaining after completion of the

Business Combination and the redemption of Class A Ordinary Shares, the Sponsors may elect to

either (i) request repayment of the remaining cash portion of the Additional Sponsor Subscription

by redeeming the corresponding number of Founder Warrants subscribed for under the Additional

Sponsor Subscription in which case the Company may keep the remaining cash portion of the

Additional Sponsor Subscription for discretionary use. Founder Warrants will have substantially the

same terms as the Public Warrants, except that they will not be redeemable, may be exercised on

a cashless basis, and are subject to certain lock-up arrangements.

1.3. The Board

1.3.1. One-tier board

Prior to completion of the Business Combination, the Company maintains a one-tier board

consisting of executive and non-executive directors. The executive directors are responsible for the

day-to-day management of the Company. The non-executive directors supervise and advise the

executive directors. The Board as a whole is responsible for the strategy and the management of

the Company. Following Admission, the Board comprises two executive directors (the “Executive

Directors”) and four non-executive directors (the “Non-Executive Directors”, and together with

the Executive Directors, the “Directors”). The composition of the Board has not changed in the

financial year 2022.

Each Director has a duty to the Company to properly perform the duties assigned to them and to

act in the Company’s corporate interest. Under Dutch law, the corporate interest extends to the

interests of all the Company’s stakeholders, including the Company securities holders, creditors

and employees.

The Board is responsible for the governance structure of the Company. As at the date of this Annual

Report, the provisions of Dutch law, which are commonly referred to as the “large company regime”

(structuurregime), do not apply to the Company. The Company does not intend to voluntarily apply

the “large company regime”.

1.3.2. Directors

The Board is comprised of professionals with experience in management, venture capital,

healthcare and capital markets. The Company intends to leverage the Directors’ extensive

operational capabilities, significant investment experience and global networks to both identify a

pipeline of opportunities and drive value in the Business Combination.

As of Admission, Dr. Cornelius Baur has been appointed as Executive Director. Dr. Cornelius Baur

is the Chief Executive Officer of the Company (“CEO”) and is also the Company’s compliance

officer. With effect as of 1 December 2021, Dr. Thomas Rudolph has been appointed as Executive

Director and is the Chief Investment Officer of the Company (“CIO”) and the company secretary.

With effect as of Admission, Mr. Peer M. Schatz became a Non-Executive Director. With effect as

of 16 November 2021, Mr. Stefan Winners, Dr. Axel Herberg and Dr. Stefan Oschmann have been

appointed as Non-Executive Directors. As of Admission, Mr. Stefan Winners has been appointed

as chairman of the Board (“Chairman”) and Dr. Axel Herberg has been appointed as vice chairman

of the Board. Mr. Stefan Winners and Mr. Peer M. Schatz are non-independent Non-Executive

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Directors. Both Dr. Axel Herberg and Mr. Stefan Oschmann are independent Non-Executive

Directors.

The Company will be effectively managed in Germany. After completion of the Business

Combination it is envisaged that the Company's place of effective management will be moved from

Germany to Austria.

1.3.3. The Executive Directors

Dr. Cornelius Baur (male, born in 1962, German) is the CEO of the Company. He started his career

at McKinsey & Company in 1990, where he advised companies in the automotive, high-tech and

healthcare sectors for more than 30 years. He worked in New York, Boston and Cleveland, United

States, and Munich, Germany. He was elected partner in 1996, senior partner in 2001 and managing

partner for Germany and Austria in 2014, a position he held until early 2021. He served on

McKinsey’s global shareholder committee for six years, thereof three years as chair of the finance

committee, and from 2018-2021 he was also a member of the global executive team of McKinsey.

During his time as a partner at McKinsey, Dr. Baur led various value creation programs for clients

in healthcare and other industries as well as for private equity clients.

Dr. Baur completed an apprenticeship as an industrial clerk (Stammhauslehre) with Siemens

Aktiengesellschaft in Munich, Germany. He holds a master’s degree and a doctoral degree in

management from the Ludwig Maximilian University of Munich, Germany in collaboration with BMW

AG, Munich, Germany.

Dr. Thomas Rudolph (male, born in 1973, German) is the CIO of the Company. After completing

Medical School and completing his doctoral thesis (oncology and molecular diagnostics), he started

his career at McKinsey & Company in 2001, where he was advising companies in the

pharmaceuticals and medical products practice. He was elected partner in 2007 and Senior Partner

in 2013. During his 20 years at McKinsey, he has advised most European private equity funds with

healthcare exposure and many other investors in healthcare. Since 2012 Thomas led McKinsey’s

European Healthcare Transaction Team. Since taking over that role the team has grown

significantly and was involved in several of the largest healthcare transactions in EMEA in recent

years. Dr. Thomas Rudolph personally conducted various due diligences across most sectors of

healthcare and led the support of various exit processes. Besides his private equity/investor support

role, he recently led McKinsey’s German healthcare practice.

Dr. Rudolph studied medicine at the University of Tuebingen, Germany, and at Tulane University,

Louisiana, United States. He received his doctoral degree from the University of Tuebingen in 2000.

1.3.4. The Non-Executive Directors

Mr. Stefan Winners (male, born in 1967, German) is Chairman of the Board. He started his career

in 1993 at Roland Berger Strategy Consultants as a management consultant. From 2000 to 2005,

he was a member of the management board and managing director of CyPress GmbH, a subsidiary

of Vogel Business Media GmbH & Co. KG. In 2005, Mr. Winners joined the Burda Group, where he

held various positions until 2020. From 2005 to 2012, he was chief executive officer and chairperson

of the executive board of HolidayCheck Group AG (formerly TOMORROW FOCUS AG) and from

2012 to 2019, he was member of the executive board of Hubert Burda Media Holding

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Geschäftsführung SE and chief executive officer and chairperson of the board of directors of Burda

Digital SE. In 2021, Mr. Winners joined Lakestar SPAC I SE as chief executive officer and chief

financial officer.

Mr. Winners holds an MBA from the University of Passau, Germany, and completed an Advanced

Management Program (AMP) at Harvard Business School, United States.

Dr. Axel Herberg (male, born in 1958, German) is vice chairman of the Board. Dr. Herberg is the

chairman of the supervisory board at Gerresheimer AG where he also served as chief executive

officer from 2000 to 2010. He started his career at Thyssenkrupp AG in 1986 in strategic planning

until 1988. From 1988 to 1992, he was a consultant with McKinsey & Company. In 1992, Dr. Herberg

joined Gerresheimer AG as Head of Controlling and in 1996 became a member of the management

board. In 2010, he left Gerresheimer to join The Blackstone Group, first as a senior managing

director until 2017 and senior advisor from 2017 to 2019. He is currently active as a private investor

and, next to his position as Chairman at Gerresheimer AG, holds various other supervisory and

advisory board positions, including at Vetter Group and Axplora Group.

Dr. Herberg received a diploma in mechanical engineering from the University of Aachen, Germany,

and a degree in economics from the University of Hamburg, Germany, and a doctoral degree in

economics.

Dr. Stefan Oschmann (male, born in 1957, German) joined the U.S. pharmaceutical company MSD

Merck Sharp & Dohme in 1989, where he held a range of executive positions until 2011. Among

others, he served as vice president of MSD Europe, managing director of MSD Germany, senior

vice president for worldwide human health marketing, member of the senior management and

corporate officer responsible for Europe, the Middle East, Africa and Canada and, finally, president

of MSD’s emerging markets. In 2011, Dr. Oschmann joined Merck KGaA. Among others, he led the

healthcare business of Merck KGaA, where he headed the biopharma, consumer health,

allergopharma and biosimilars divisions, he served as vice chairperson of the executive board and

deputy chief executive officer of Merck KGaA and in 2016, he was appointed chief executive officer

and chairperson of the executive board of Merck KGaA until April 2021.

Dr. Oschmann graduated and holds a doctoral degree in veterinary medicine from the Ludwig-

Maximilians-University of Munich, Germany.

Mr. Peer M. Schatz (male, born in 1965, Swiss) is a managing director of PS Capital Management

GmbH and serves as a supervisory board member of Siemens Healthineers and as chairman of the

supervisory board of Centogene N.V. and the advisory board of Resolve BioSciences GmbH. Prior

to October 2019, Mr. Peer Schatz was chief executive officer of QIAGEN N.V. He joined QIAGEN

in 1993 when the company had under 30 employees and revenues of approximately $2 million.

Under his direction, QIAGEN grew to employ more than 5,200 people in over 35 locations around

the world and to record annual revenues of over US$ 1.6 billion. He led more than 40 acquisitions

for QIAGEN as well as its listings on NASDAQ (1996), NYSE (2018) and the Frankfurt Stock

Exchange (1997). Between 2017 and 2020 he co-chaired the Precision Medicine Council of the

World Economic Forum and also served as a founding member of the German Corporate

Governance Commission between 2001 and 2011.

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Mr. Schatz holds a master’s degree in economics and social sciences from the University of St.

Gallen, Switzerland, and an MBA in Finance from the University of Chicago’s Booth School of

Business.

1.4. Background and strategy

1.4.1. Background

The Company's intention was to complete a Business Combination with a target company or

business that primarily focuses on one of the Specific Healthcare Sectors. The Company believed

there were many potential targets that met these criteria that could become attractive public

companies with long-term growth potential and attractive competitive positioning, leveraging its

strategic and transactional experience and bringing advice and attention to potential business

combination targets. Certain non-binding criteria and guidelines for selecting and evaluating

prospective target businesses were set out in the Prospectus and are further discussed in the

Company's shareholder circular which will be published prior to the Business Combination AGM

(the "Shareholder Circular").

On 22 December 2022 the Company entered into the Business Combination Agreement. The

Business Combination Agreement is subject to final approval of the Company's general meeting at

the Business Combination AGM.

To implement its strategy, the Company leveraged the broad expertise and unique networks of the

Sponsors’ principals to identify and execute a Business Combination, which the Company believes

will result in an acquisition and positive transformation that enhances the overall value of its target.

The Directors and their networks have been developed through:

 experience sourcing, structuring, acquiring, operating, integrating and selling businesses;

 expertise operating and executing transactions across a wide range of sectors and complex

industries, including healthcare, pharmaceuticals and media, across multiple geographies and

under varying economic and financial market conditions;

 expertise in accessing the capital markets, including determining financing solutions;

 experience at management and board level in operating global, renowned corporations;

 global network of relationships with potential target management teams and financing sources;

and

 experience advising companies and boards on complex matters ranging from operational

strategy to strategic growth opportunities.

1.4.2. Strategy

Consistent with its strategy, the Company identified the following general criteria and guidelines to

evaluate prospective target companies or businesses for a business combination:

 strong and capable, public-ready management team;

 platform potential for bolt-on deals and external growth opportunities through geographic

expansion, benefitting from access to capital markets and that are natural candidates for a

listing in Europe;

 high switching barriers to entry or strong competitive advantage;

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 business model with downward risk protection;

 recurring revenue with growth prospects and profitability;

 companies in which the Directors can add further value; and

 strong ESG commitment.

These criteria and guidelines were not intended to be exhaustive. Any evaluation relating to the

merits of a particular initial business combination might be based, to the extent relevant, on these

general criteria and guidelines as well as other considerations, factors and criteria that the Company

deems relevant.

1.4.3. Competitive strengths

The Company believes it has the following competitive strengths:

 Significant Management and Healthcare Consulting Experience

The Directors have significant experience in leading, advising and driving growth of

healthcare and pharmaceuticals companies. The Company believes that this breadth

of experience provides a competitive advantage in evaluating acquisition opportunities

as well as consulting businesses in the Specific Healthcare Sectors and enabling

access to key decision makers, including owners, executives and private equity funds.

Additionally, it provides the Company with critical post-Business Combination support

to successfully navigate in the target business while adhering to public company

governance requirements.

 Extensive Sourcing Avenues and Strategic Industry Relationships

As a result of the Directors’ extensive experience as principals, consultants and

investors, the Company’s team has developed a broad array of contacts in the Specific

Healthcare Sectors, including professionals, clients and senior advisors. The

Company believes the Directors offer unique sourcing prospects bolstered by a broad

network of global relationships as a result of their extensive experience as principals,

consultants and investors.

 Deep Industry Experience

The Directors have long and successful track records in a broad range of industries,

including healthcare and pharmaceuticals. This includes managing large corporations

within the healthcare and pharmaceutical space as well as driving organic and external

growth of smaller scale growth companies The Company will seek to capitalise on the

strong fundamentals of the healthcare industry driven by the following structural

trends:

a. increasing government focus and expenditure on public health in the context of

the current COVID-19 crisis and to reduce the risk of future pandemics going

forward;

b. ageing population, increasing chronic diseases, increasing health awareness and

the need for broader access to healthcare globally;

c. continued technical breakthrough and disruption driving innovation and R&D

spend; and

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d. digitalisation becoming a key structural component of healthcare across sub-

sectors.

 Significant Corporate and Transaction Experience

The Directors have deep technical knowledge across mergers and acquisitions,

portfolio management, venture capital, private equity, corporate finance and strategic

advisory. The Directors have a strong track record of identifying, valuing, completing

diligence on, and executing business combinations. In addition, they have a deep

understanding of executing and completing post-merger integration.

 Strong Financial Position and Flexibility

With the Escrow Account initially in the amount of € 200 million and a public market

for the Class A Ordinary Shares, the Company offers a target business a variety of

options to facilitate a future business transaction and fund the growth and expansion

of business operations. Because the Company is able to consummate an initial

business transaction using equity, debt, cash or a combination of the foregoing, the

Company has the flexibility to design an acquisition structure to address the needs of

the parties. The Company has not, however, taken any steps to secure third party

financing and would expect to do so only in connection with the completion of the

Business Combination.

 SPAC and De-SPAC Experience

The Director Mr. Stefan Winners has first-hand experience in sponsoring and

managing a SPAC and identifying suitable targets. Lakestar SPAC I SE at which Mr.

Stefan Winners served as chief executive officer successfully sourced a de-SPAC

transaction with HomeToGo GmbH in September 2021 and was the first technology

SPAC in the European market since 2010.

1.5. Research and development

Due to the nature of the Company as a special purpose acquisition company it does not conduct

any research and development activities.

1.6. Non-financial information

Given the nature of the Company as a special purpose acquisition company, the Company will

provide non-financial information, including (i) a description of the relevant policies pursued by the

Company, (ii) the principle risks relating to environmental, social and employee matters, human

rights, anti-corruption and anti-bribery, and (iii) the non-financial key performance indicators

relevant to the business of the Company, all to the extent relevant, after the completion of the

Business Combination.

1.7. Progress

In 2022 the Company continued its search for a potential target company to enter into a business

combination with. The Company has entered into several discussion and has had various meetings

with potential target companies which resulted in the negotiations with Croma-Pharma GmbH. This

led to the signing of the Business Combination Agreement on 22 December 2022. The Company

believes it will pursue a sound investment for all stakeholders involved and meet the purpose of

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agreeing a transaction and propose a Business Combination to the Business Combination AGM. At

the Business Combination AGM the shareholders will have a decisive vote in respect of the

proposed Business Combination.

The Business Combination Agreement was signed during the reporting period (the full year 2022),

but as the Business Combination is not yet effectuated the Financial Statements only include the

financials of the Company and not the financials of Croma-Pharma GmbH.

1.8. Financial developments 2022

The Company listed on Euronext Amsterdam on 18 November 2021 raising € 200 million by a

Private Placement. Some of the financial highlights as at 31 December 2022 are:

 Escrow Account plus bank account balance: € 202,067k

 Trading price Class A Ordinary Shares: € 9.95 (closing price)

 Trading price Public Warrants: € 0.25 (closing price)

The Company recorded an after-tax loss of € 30,095k over the period from 1 January 2022 until 31

December 2022. The Company has not recorded any operational revenues. The result is

attributable to the fair value adjustments of both the Founder Warrants and Public Warrants, the

recognition of the deferred underwriting costs, operational costs in relation to the identification of

the Business Combination and the negative interest rate payable on the Escrow Account.

2. RISK MANAGEMENT

2.1. Risks and uncertainties

Below is a summary of certain of the risks relating to the Company, particularly as a special purpose

acquisition company prior to the completion of a Business Combination and relevant with respect

to the Annual Report, our risk appetite, the likelihood and potential impact thereof. Further reference

is made to the description of risks relating to the Company included in the Prospectus, particularly

risks that may be of relevance to the Company after the completion of a Business Combination and

risks relating to our securities.

Additional risks not known to us, or currently believed not to be material, could later turn out to have

a material impact on our business, revenue, assets, liquidity, capital resources or net income. The

Company’s risk management objectives and policies are consistent with those disclosed in the

Prospectus.

Risk

category

Risk description Risk

appetite

Likelihood

Potential

impact

Financial The Sponsors own up to 6,768,000 Founder Warrants,

accordingly, Class A Ordinary Shareholders will experience

immediate and substantial economic dilution upon the

exercise of such Founder Warrants

Medium Medium Medium

Financial The Company will be constrained by the potential need to

finance redemptions of Class A Ordinary Shares in advance

of a Business Combination

Low Low High

Financial

The Company may not obtain the envisaged PIPE financing

Low Low High

Financial The Company may be again exposed to negative interest

rates and the risk of default by bank resolution proceedings

which could have a material adverse effect on the funds

available for re-distribution to Class A Ordinary

Shareholders

Low Low High

Financial/

Strategic

If the shareholders of the Company vote against the

Business Combination at the Business Combination AGM,

the time available to search for another business

combination is limited.

Medium Low High

Operational

The Company’s success is dependent upon a small group

of individuals and other key personnel

High Low High

2.2. Main risks and uncertainties

To the extent possible, for each risk factor described below, we set out how we believe we mitigate

these risks. However, we may not be successful in deploying some or all of these mitigating actions

effectively. If circumstances occur or are not sufficiently mitigated, our business, financial condition,

results of operations and prospects could be material adversely affected. In addition, risks and

uncertainties could cause actual results to vary from those described, which may include forward-

looking statements, or could impact our ability to meet our objectives or be detrimental to our

financial condition or reputation.

2.2.1. Even if the Company completes the Business Combination, any operating or other

improvements proposed and implemented may not be successful and they may not

be effective in increasing the valuation of any business acquired

In accordance with the target business profile, the Company may focus on completing a Business

Combination. The Company may not be able to propose and implement effective operational or

other improvements for the target business with which the Company completes a Business

Combination. In addition, even if the Company completes a Business Combination, general

economic and market conditions or other factors outside the Company’s control could make the

Company’s operating strategies difficult or impossible to implement. Any failure to implement these

improvements successfully and/or the failure of the improvements to deliver the anticipated benefits

could have a material adverse effect on the Company’s business, financial condition, results of

operations and prospects and ability to pay dividends to its shareholders.

The Company believes that the long-standing presence, operational experience and in-depth

knowledge of the healthcare sector of the Directors should provide the Company with an advantage

in selecting a suitable target to complete a Business Combination with. The extensive experience

of the Directors reaches from capital markets to public and private M&A transactions and due

diligence investigations both on a hands-on business analytic level as well as a senior executive

level.

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2.2.2. The Sponsors own up to 6,768,000 Founder Warrants and, accordingly, Class A

Ordinary Shareholders will experience immediate and substantial economic

dilution upon the exercise of such Founder Warrants

The capital structure is designed to align the interests of the Sponsors and the other shareholders

and, as a consequence, the trading price of the Class A Ordinary Shares on Euronext Amsterdam

will be a key factor for the return of Founder Shares held by the Sponsors.

Following Settlement, the Sponsors own 6,666,666 Founder Shares and 6,768,000 Founder

Warrants (consisting of 5,128,000 Founder Warrants from the Sponsors Capital At-Risk and

1,640,000 Founder Warrants from the Additional Sponsor Subscription). The Sponsors committed

to the Company not to transfer, assign, pledge or sell (i) the Founder Shares at any time, (ii) any

Class A Ordinary Shares resulting from the conversion of Founder Shares until one year after such

conversion, and (iii) the Founder Warrants until thirty (30) days following the completion of the

Business Combination (in each case other than to certain permitted transferees). The Founder

Warrants will become exercisable thirty (30) days after completion of the Business Combination,

and, upon that date, Founder Warrants as well as any Class A Ordinary Shares resulting from their

exercise will become freely transferable without any further restrictions.

The number of Class A Ordinary Shares that the Sponsors will eventually hold depends on the

exercise of Founder Warrants into Class A Ordinary Shares. Assuming the full exercise of the Public

Warrants and Founder Warrants, the Sponsors may hold a stake of approximately 33.5% in the

Company. The Class A Ordinary Shareholders would suffer a dilution of their proportionate

ownership interest and voting rights in the Company of approximately 11.34%, assuming that all

Public Warrants prior to their exercise were still held by the initial Class A Ordinary Shareholders

(assuming that no Public Warrants prior to their exercise were held by such initial Class A Ordinary

Shareholders, Class A Ordinary Shareholders would suffer a dilution of their proportionate

ownership interest and voting rights in the Company of approximately 33.5%). The capital structure

including convertible instruments such as, or similar to, the Founder Shares, Founder Warrants and

Public Warrants is specific to the Company as a special purpose acquisition company and

shareholders investing in a different type of company would not necessarily be exposed to such

significant dilution risks.

The Company acknowledges the risk of dilution. In order to mitigate this risk, the Board will closely

monitor that the issue of shares in the capital of the Company will at all times be aimed at long term

value creation and as such be in the interest of the Company and its stakeholders as a whole,

whether such issue takes place in relation to the completion of a Business Combination or to

incentivise management in the future.

2.2.3. The Company could be constrained by the need to finance redemptions of Class A

Ordinary Shares from any Class A Ordinary Shareholders that decide to redeem

their Class A Ordinary Shares in advance of a Business Combination

The Company may only be able to proceed with a Business Combination if it has sufficient financial

resources to pay the cash consideration required, or satisfy any minimum cash conditions under

the transaction agreement, for such Business Combination taking into consideration the amounts

due to the Class A Ordinary Shareholders who elect to redeem their Class A Ordinary Shares in

advance of the Business Combination (“Redeeming Shareholders”). Although a Class A Ordinary

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Shareholder, or a group of Class A Ordinary Shareholders acting in concert, deemed to be holding

in excess of 15% of issued Class A Ordinary Shares loses the ability to redeem all such Class A

Ordinary Shares in excess of 15% of the issued Class A Ordinary Shares, there could still be a

significant number of Redeeming Shareholders or redeemed shares in case of a contemplated

Business Combination. In such event, financing the redemption of Class A Ordinary Shares held by

Redeeming Shareholders would reduce the funds available to the Company to pay the consideration

payable pursuant to the Business Combination and, as such, the Company may not have sufficient

funds available to complete the Business Combination, or to satisfy any minimum cash conditions

under the transaction agreement.

In the event that the aggregate cash consideration the Company would be required to pay for all

Class A Ordinary Shares that are validly submitted for redemption plus any amount required to

satisfy cash conditions pursuant to the terms of the Business Combination exceed the aggregate

funds available to the Company, the Company will not complete the Business Combination or

redeem any Class A Ordinary Shares, and all Class A Ordinary Shares submitted for redemption

will be returned to the applicable Redeeming Shareholders, and the Company instead may search

for an alternate Business Combination. The Company may decide to raise additional equity and/or

debt, which could increase its overall financing costs and dilute the interests of non-Redeeming

Shareholders, or not to complete the Business Combination, which each may adversely affect any

return for investors.

The Company will seek to mitigate this risk by working with multiple scenarios in its discussions

with potential target companies and will generally seek Class A Ordinary Shareholders’

concessions, under strict wall-crossing procedures, prior to formally proposing a potential Business

Combination to the Business Combination AGM.

2.2.4. The Company may not obtain the envisaged PIPE financing

The Business Combination is subject to a closing condition in the Business Combination Agreement

that the Company needs to have a minimum cash amount of €100,000,000 available. If the

envisaged amount of PIPE financing is not obtained or if a large number of Class A Ordinary

Shareholders redeem their Class A Ordinary Shares, it is possible that there will not be an amount

of €100,000,000 available, in which case the Company and the shareholders of Croma-Pharma

GmbH are not obligated to consummate the transactions contemplated by the Business

Combination Agreement. However this closing condition may be waived by the Company and the

shareholders of Croma-Pharma GmbH acting jointly.

When publishing this Annual Report it is not yet clear which amount of PIPE financing will be

obtained by the Company.

As set out under paragraph 2.2.3 the current articles of association of the Company (the "Articles

of Association") provide that a Class A Ordinary Shareholder, or a group of Class A Ordinary

Shareholders acting in concert, deemed to be holding in excess of 15% of issued Class A Ordinary

Shares loses the ability to redeem all such Class A Ordinary Shares in excess of 15% of the issued

Class A Ordinary Shares. By limiting the ability of holders of Class A Ordinary Shares to redeem to

no more than 15% of the Class A Ordinary Shares, the Company believes it will limit the ability of a

small group of holders of Class A Ordinary Shares to unreasonably attempt to block the Company's

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ability to complete the Business Combination, particularly in connection with the Business

Combination that requires as a closing condition that the Company has a minimum amount of cash.

The Company believes that the long-standing presence, operational experience and in-depth

knowledge of the healthcare sector of the Directors has provided the Company with an advantage

in selecting a suitable target to complete a business combination with and the Company believes it

has found a suitable partner in Croma-Pharma GmbH.

2.2.5. If the Shareholders of the Company vote against the Business Combination at the

Business Combination AGM, the time available to search for another business

combination is limited.

The Business Combination is subject to the approval of the Business Combination AGM. If the

Business Combination AGM does not vote in favour of the Business Combination, there will be very

limited time left until the Business Combination Deadline. This time may not be sufficient to select

another target for a business combination. Furthermore, the Company would not have the capital

available to cover any costs to pursue an alternative business combination. As such refinancing

would be required.

Pursuant to the Prospectus, the Sponsors could make a proposal to the shareholders of the

Company to prolong the time to search for a target and extent the Business Combination Deadline.

The Company believes that the long-standing presence, operational experience and in-depth

knowledge of the healthcare sector of the Directors has provided the Company with an advantage

in selecting a suitable target to complete a business combination with and the Company believes it

has found a suitable partner in Croma-Pharma GmbH. The risk that the Business Combination AGM

will vote against the Business Combination is considered to be low. The Company therefore expects

that the Business Combination AGM will vote in favour of the Business Combination.

2.2.6. Before the Company uses the proceeds of the Private Placement in connection with

the Business Combination, it may be again exposed to negative interest rates and

the risk of default by bank resolution proceedings of the bank holding the Escrow

Account

The Company intends to use the proceeds of the Private Placement for the Business Combination.

However, it cannot predict how long it will take to complete the Business Combination. Before the

Company completes the Business Combination, it intends to hold the proceeds in the Escrow

Account.

Although the current interest rate is positive, the interest rate was negative in the past and the

Company’s funds may be subject to negative interest rates in the future while it seeks to complete

the Business Combination, which it would need to pay, primarily due to the current investment and

interest environment. Delays in acquiring the target in the Business Combination may therefore

cause the Company to incur increased costs due to negative interest rates. Apart from the Additional

Sponsor Subscription, the Company has not established any specific policies or procedures to avoid

the accrual of negative interest on the funds on the funds deposited in the Escrow Account. In

addition, the Company is subject to the risks of default by bank resolution proceedings of the bank

holding the Escrow Account, in which case the Company may not be able to reclaim a substantial

amount or all of the proceeds in the Escrow Account.

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This financial risk for our shareholders is largely mitigated by the fact that the Company holds the

Additional Sponsor Subscription of € 2,460,000. To further mitigate this risk, the Company is

committed to complete a Business Combination rather sooner than later, but it will not compromise

on key deal terms solely to avoid increased costs due to negative interest rates.

2.2.7. The Company’s ability to successfully complete the Business Combination and to

be successful thereafter is dependent upon a small group of individuals and other

key personnel. The loss of key personnel could negatively impact the target

business’ success

The Company’s ability to successfully complete the Business Combination and the targets business’

future success depends, in part, on the performance of a small group of individuals. While each

possesses significant experience in targeting potential business opportunities, except for Mr. Stefan

Winners, none of these individuals have been previously involved with a special purpose acquisition

company. These individuals are of key importance to complete the Business Combination. The

Company believes that its success depends on the continued service of this key personnel and,

except for Dr. Cornelius Baur and Dr. Thomas Rudolph, such key personnel is not required to

commit any specified amount of time to the Company’s affairs and, accordingly, they may have

conflicts of interest in allocating their time among various business activities, including identifying

potential business combinations and monitoring the related due diligence.

This risk is mitigated by the fact that the Company has well experienced, highly qualified Directors,

whose skills are complementary. The Directors are personally involved both at an investment level

(being the Sponsors' principals) and at board level and are dedicated to complete the Business

Combination.

2.3. Risk management and control systems

The Board is responsible for the control environment, including risk management and internal

control systems in order to properly manage the strategic, operational and other risks and

uncertainties that could have a material adverse effect on the Company’s business and day-to-day

operations. The applicable risks and uncertainties for the Company are evaluated on a periodic

basis by the Board.

The Company considers the risk of fraud and other dishonest activities within the Company to be

limited given the structure of the Company and the trust among the Sponsors' principals who are

the Directors. Furthermore, the Company does not engage with customers. Moreover, the Proceeds

are held on the Escrow Account and may only be released under very strict conditions. The

Company has a set of internal control measures and compliance policies, including amongst others,

an authorisation policy, sufficient level of segregation of duties, approval of bank payments, and a

reporting and monitoring framework.

In accordance with best practice provision 1.4.3 of the Dutch Corporate Governance Code and

assuming that the general meeting of the Company will vote in favour of the Business Combination,

the Board is of the opinion that, to the best of its knowledge:

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 the report of the Board provides sufficient insights into any deficiencies in the

effectiveness of the internal risk and control systems, and no deficiencies in the

effectiveness of the internal risk and control systems have been identified;

 the internal risk management and control systems of the Company provide reasonable

assurance that the financial reporting as included in the financial statements do not

contain any material inaccuracies;

 there is a reasonable expectation that the Company will be able to continue its

operations and meet its liabilities for at least twelve months, therefore, it is appropriate

to adopt the going concern basis in preparing the financial reporting; and

 there are no material risks or uncertainties that could reasonably be expected to have

a material adverse effect on the continuity of the Company’s operations in the coming

twelve months.

3. DUTCH CORPORATE GOVERNANCE CODE

The Company is subject to the Dutch Corporate Governance Code (the “DCGC”) which is available

on: https://www.mccg.nl/publicaties/codes/2016/12/8/corporate-governance-code-2016-en The

DCGC is based on a "comply or explain" principle. The deviations from the DCGC are:

3.1. Best practice provision 2.1.6: diversity

The Board presently does not meet the prescribed ratio between male and female members. When

the Directors were selected, the Company could not find a female that met the requirements for a

position on the Board. The Company fully recognises the benefits of having a diverse Board, but it

is of the opinion that the current composition of the Board does not impact its functioning.

The Company recognizes the benefits of having a diverse Board and sees diversity in the Board as

an important element in maintaining a competitive advantage. As such, the Board has adopted a

diversity policy (the “Diversity Policy”). This Diversity Policy will be taken into account when

considering the appointment and reappointment of the Directors.

The Board comprises two Executive Directors and four Non-Executive Directors, in total six

Directors, of which all are men. The Company's objectives are to improve the gender diversity in

the Board when a vacancy arises. After completion of the Business Combination, it is envisaged

that Croma N.V. will have a two tier board. The management board will comprise two managing

directors and the supervisory board will comprise six supervisory directors.

3.2. Best practice provision 2.1.7, 2.1.8 and 5.1.1: independence of the Non

Executive Directors

The DCGC provides that a majority of the Non-Executive Directors should be independent. The

Company has two Non-Executive Directors that are independent (Dr. Stefan Oschmann and Dr.

Axel Herberg) and two Non-Executive Directors that are non-independent (Mr. Stefan Winners and

Mr. Peer M. Schatz) (also refer to Section 12.3 (Independence of the Non-Executive Directors) of

the report of the Non-Executive Directors). Prior to his appointment as a Non-Executive Director of

the Company, Mr. Winners (as shareholder of the Sponsor Winners & Co. GmbH) was involved in

the incorporation of the Company and also provided consultancy advice to the Company in

connection with the preparation of the Private Placement. Accordingly, Mr. Winners will not qualify

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as “independent” within the meaning of best practice provision 2.1.8 DCGC. Moreover, Mr. Schatz

has performed management duties as CEO of the Company from the incorporation of the Company

until 17 November 2021 and will therefore also not qualify as “independent” within the meaning of

best practice provision 2.1.8 DCGC. Nevertheless, the Company deems the balance of the Non-

Executive Directors sufficient. The Company aims to comply with this provision after completion of

the Business Combination.

3.3. Best practice provision 2.1.9 and 5.1.3: Independence of the Chairman of the

Board

The DCGC recommends that the chairman of the board should be independent. With effect as of

the date of Admission, Mr. Stefan Winners has been appointed as Chairman. As described above,

Mr. Winners does not qualify as “independent” within the meaning of best practice provisions 2.1.8

and 5.1.3 DCGC (also refer to Section 12.3 (Independence of the Non-Executive Directors) of the

report of the Non-Executive Directors). Nevertheless, the Company has appointed Mr. Winners as

Chairman as it considers Mr. Winners suitable for this position. The Company aims to comply with

this provision after completion of the Business Combination.

3.4. Best practice provision 2.2.6, 2.2.7 and 5.1.5: evaluation of the Non-Executive

Directors

Best practice provisions 2.2.6 (evaluation by the supervisory board) and 2.2.7 (evaluation of the

management board): the Company does not comply with best practice provisions 2.2.6 and 2.2.7,

which provide that the Board should evaluate its own functioning, the functioning of the various

committees of the Board and of the individual Board members at least once per year. Given the

nature of the Company and as such the limited activities and absence of an operating business this

was not considered relevant at this stage. After completion of the Business Combination, it is

envisaged that evaluations will take place.

3.5. Best practice provision 4.3.3: majority requirements for dismissal and

overruling binding nominations

The Directors are appointed by the general meeting upon the binding nomination of the Board. The

general meeting may only overrule the binding nomination by a resolution passed by a two-thirds

majority of votes cast, provided such majority represents more than half of the Company’s issued

share capital. In addition, except if proposed by the Board, the Directors may be suspended or

dismissed by the general meeting at any time by a resolution passed by a two-thirds majority of

votes cast, provided such majority represents more than half of the Company’s issued share capital.

The possibility to convene a new general meeting as referred to in Section 2:230(3) of the Dutch

Civil Code (“DCC”) in respect of these matters has been excluded in the Articles of Association.

The Company believes that these provisions support the continuity of the Company and its business

and that those provisions, therefore, are in the best interests of the shareholders and other

stakeholders.

4. DISCLOSURES PURSUANT TO ARTICLE 10 OF THE EU

TAKEOVER DIRECTIVE

In accordance with the Dutch Takeover Directive (Article 10) Decree (Besluit artikel 10

overnamerichtlijn, the “Decree”), the Company makes the following disclosures:

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4.1. Share capital of the Company

At 31 December 2022, the issued share capital of the Company consisted of 170,000,000 Class A

Ordinary Shares, of which 150,0000,000 Treasury Shares (as defined below), representing

approximately 96.23% of the aggregate issued share capital, and 6,666,666 Founder Shares,

representing approximately 3.77% of the aggregate issued share capital, each with a nominal value

of € 0.01 per share. No Preference Shares (as defined below) were outstanding. Any issued and

outstanding Class A Ordinary Shares, Founder Shares and Preference Shares, jointly the “Shares”.

In accordance with Dutch law and the Articles of Association, each issued Share confers the right

to cast one vote at the general meeting. Each shareholder may cast as many votes as they hold

Shares and the Board may decide that each shareholder is entitled, whether in person or

represented by a person holding a written proxy, to participate in, address and (where applicable)

exercise its voting rights at the Company's general meeting by electronic means of communication.

The Company holds 150,000,000 Class A Ordinary Shares (the “Treasury Shares”). No votes may

be cast on shares that are held by the Company or its direct or indirect subsidiaries or on shares

for which it or its subsidiaries hold depository receipts.

For information on the rights attached to the Shares reference is made to the Articles of Association

which can be found on the Company's website. To summarise, the rights attaching to the Shares

comprise pre-emptive rights upon the issue of shares (which may be limited or precluded by a

resolution of the Board), the right to attend the general meeting of the Company, and to speak and

vote at such meetings and to resolve on the entitlement to the distribution of such amount of the

Company's profit or reserves, after a proposal of the Board in this respect. Founder Shares and

Preference Shares (as defined below) are not entitled to distributions from the general share

premium reserves of the Company.

The holders of Public Warrants or Founder Warrants do not have the rights or privileges of Class A

Ordinary Shareholders and any voting rights until they exercise their Public Warrants or Founder

Warrants and receive Class A Ordinary Shares. After the issuance of Class A Ordinary Shares upon

exercise of the Public Warrants or Founder Warrants, each holder of such Public Warrants or

Founder Warrants, as applicable, will be entitled to one vote for each Class A Ordinary Share held

of record on all matters to be voted on by Class A Ordinary Shareholders. No fractional Public

Warrants or Founder Warrants will be issued and only whole Public Warrants or Founder Warrants

will trade.

4.2. Limitations on the transfer of shares

4.2.1. Anti-takeover measure

The Board is authorised to implement an anti-take-over measure exercisable following completion

of the Business Combination by granting to an outside foundation rights to subscribe for preference

shares in the Company’s capital (the “Preference Shares”) up to a maximum corresponding with

100% of the issued and outstanding share capital of the Company, excluding any Preference

Shares, outstanding immediately prior to the exercise of these subscription rights, less one share,

provided that these subscription rights shall only be granted to the foundation. Class A Ordinary

Shareholders and holders of Founder Shares do not have any pre-emptive rights upon the issuance

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of Preference Shares and holders of Preference Shares do not have any pre-emptive right in respect

of the issuance of Class A Ordinary Shares or Founder Shares. The Board refers to the relevant

provisions of the Articles of Association and the Prospectus for further details on this anti-take over

measure.

4.2.2. Sponsor lock-up

In the Sponsors Agreement (as defined below), the Sponsors have committed to the Company not

to transfer, assign, pledge or sell and are as such bound by a contractual lock-up undertaking with

respect to the Founder Shares, the Founder Warrants and the Class A Ordinary Shares obtained

by them as a result of converting Founder Shares, which undertakings and applicable exceptions

are further detailed in the Prospectus.

The approval of the general meeting of the Company is required for decisions of the Board regarding

amendment of the provisions regarding the sponsor lock-up as stated in the Sponsors Agreement

between the Company and the Sponsors. Such a resolution requires at least a majority of two-thirds

of the votes cast representing more than half of the issued share capital. A second meeting as

referred to in Article 2:230(3) of the Dutch Civil Code cannot be convened.

4.3. Substantial holdings

The Company and its shareholders are not subject to the substantial shareholdings and voting rights

notification obligations under the Dutch Financial Supervision Act (Wet op het financieel toezicht,

the “DFSA”).

4.4. Special controlling rights

No special controlling rights are attached to the Shares in the Company.

4.5. System of control for equity incentive plans

The Company does not have any equity incentive plans.

4.6. Limitations on voting rights

For all matters submitted to a vote of the Company’s shareholders, including any vote in connection

with the Business Combination, except as required by Dutch law, all shareholders of the Company

will vote together as a single class, with each share entitling the holder to one vote.

The voting rights attached to the Shares in the Company are not restricted, and neither are the

terms in which voting rights may be exercised restricted. The Sponsors will be entitled to cast a

vote on any of their Shares at the Business Combination AGM, including on a resolution to effect a

Business Combination. The Sponsors entered into a sponsors agreement with the Company dated

16 November 2021 (the “Sponsors Agreement”), pursuant to which the Sponsors and the

Company committed to vote on all Shares held by them in favour of any proposed Business

Combination.

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4.7. Agreements with shareholders which may restrict the transfer of Shares or

limit voting rights

The Company is not aware of the existence of any agreements with shareholders of the Company

which may result in restrictions on the transfer of Shares or limitation of voting rights, other than the

Sponsors Agreement as described above.

4.8. Appointment and dismissal of Directors and amendment of the Articles of

Association

4.8.1. Appointment and dismissal of the Directors

The general meeting of the Company (the “General Meeting”) shall appoint the Directors upon a

binding nomination by the Board. The General Meeting may only overrule a binding nomination by

the Board by a resolution passed by a two-third majority of votes cast, provided such majority

represents more than half of the Company's issued share capital. A resolution of the General

Meeting to appoint a Director can be adopted by simple majority of the votes cast.

The Articles of Association provide that the number of Directors is determined by the Board, but

there will be at least one Executive Director and one Non-Executive Director. Upon the appointment

of a person as a Director, the General Meeting shall determine whether that person is appointed as

Executive Director or as Non-Executive Director. The General Meeting can only appoint individuals

as Non-Executive Director.

In addition, except if proposed by the Board, the Directors may be suspended or dismissed by the

General Meeting at any time by a resolution passed by a two-third majority of votes cast, provided

such majority represents more than half of the Company’s issued share capital. The possibility to

convene a new general meeting as referred to in Section 2:230(3) DCC in respect of these matters

has been excluded in the Articles of Association. In addition, (i) the Board may suspend an

Executive Director at any time by resolution passed by a majority of at least two-thirds of the votes

cast representing more than half of the Directors in office and (ii) Executive Directors may be

suspended or dismissed by the Non-Executive Directors at any time.

In accordance with the board rules of the Company (the “Board Rules”), the Non-Executive

Directors have prepared a profile, taking account of the nature and the Company’s activities. The

profile addresses: the desired expertise and background of the Non-Executive Directors, the desired

composition of the Non-Executive Directors, the number of Non-Executive Directors and the

independence of the Non-Executive Directors. The Diversity Policy should also be taken into

account.

4.8.2. Amendment of the Articles of Association

An amendment of the Articles of Association would require a resolution of the General Meeting that

must first be proposed by the Board. A resolution to amend the Articles of Association requires a

majority of at least two-thirds of the votes cast, provided that in case of any amendments to article

5.1 and/or article 18.2 of the Articles of Association such majority shall represent more than half of

the issued share capital (with the exclusion of the possibility to convene a new general meeting as

referred to in section 2:230(3) DCC). In the event of a proposal to the General Meeting to amend

the Articles of Association, a copy of such proposal containing the verbatim text of the proposed

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amendment will be deposited at the Company’s office for inspection by shareholders and other

persons holding meeting rights until the end of the meeting.

Furthermore, a copy of the proposal will be made available free of charge to shareholders and other

persons holding meeting rights from the day it was deposited until the day of the meeting. A

resolution of the General Meeting to amend the Articles of Association that has the effect of reducing

the rights attributable to shareholders of a particular class is subject to approval of the meeting of

holders of shares of that class.

A resolution of the General Meeting to amend the Articles of Association that would materially and

adversely affect the rights of holders of Class A Ordinary Shares, shall require a majority of at least

65% of the votes cast.

4.9. The Board’s powers especially to issue shares

Pursuant to the Articles of Association, the Board has the authority to resolve to issue Public

Warrants, Class A Ordinary Shares, Founder Shares and Founder Warrants (either in the form of a

stock dividend or otherwise) and/or grant rights to acquire Class A Ordinary Shares.

As a matter of Dutch law, an issuance of Shares by the Company requires the execution of a notarial

deed to that effect.

4.10. Significant agreements and changes in the control of the Company

The Company is not a party to any significant agreements which will take effect, will be altered or

will be terminated upon a change of control of the Company as a result of a public offer within the

meaning of section 5:70 of the DFSA.

4.11. Redundancy agreements in the event of a public takeover bid

The Company has not concluded any agreement with the Directors that provides for any severance

pay in the case of termination of such agreement in connection with a public bid within the meaning

of Article 5:70 of the DFSA.

5. SHAREHOLDINGS OF EXECUTIVE DIRECTORS AND NON-

EXECUTIVE DIRECTORS

The Sponsors' principals are the Directors of the Company and indirectly hold the following financial

instruments in the Company:

 Dr. Cornelius Baur holds, indirectly through BAUR I&C GmbH, 1,266,666 Founder Shares

and 1,285,920 Founder Warrants;

 Dr. Thomas Rudolph holds, indirectly through RNRI GmbH, 1,266,666 Founder Shares

and 1,285,920 Founder Warrants;

 Dr. Axel Herberg holds, indirectly through CCC Investment GmbH, 1,266,666 Founder

Shares and 1,285,920 Founder Warrants;

 Dr. Stefan Oschmann holds, indirectly through SO I GmbH, 1,266,666 Founder Shares

and 1,285,920 Founder Warrants;

 Mr. Peer M. Schatz holds, indirectly through PS Capital Management GmbH, 1,266,666

Founder Shares and 1,285,920 Founder Warrants; and

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 Mr. Stefan Winners holds, indirectly through Winners & Co. GmbH, 333,336 Founder

Shares and 338,400 Founder Warrants.

6. REMUNERATION

This remuneration report summarises the guidelines and the principles followed by the Company in

order to define and implement the Remuneration Policy (as defined below). In addition, this

remuneration report provides the remuneration paid to the Executive Directors and the Non-

Executive Directors for the year ended 31 December 2022.

6.1. Remuneration Policy

The remuneration policy of the Company was adopted by the General Meeting on 16 November

2021 (the “Remuneration Policy”). This Remuneration Policy is based on the following

remuneration principles:

i. it aims to attract, retain and motivate talented and skilled individuals while protecting and

promoting the objectives and strategy of the Company, with due observance of the long-

term value creation for the Company and enhancement of the sustainable development

of the Company;

ii. it provides for a market competitive remuneration package that is focused on achieving

sustainable financial results aligned with the long-term strategy of the Company and

fosters alignment of interests of Directors with shareholders;

iii. it aims to prevent Directors from acting in their own interests and taking risks that are not

in line with the strategy and risk appetite of the Company;

iv. it is designed in the context of competitive market trends, statutory requirements,

corporate governance best practices, the societal context around remuneration and the

interests of the Company's shareholders and stakeholders;

v. it takes into account the nature of the Company as a "special purpose acquisition

company"; and

vi. it is simple, clear and transparent.

The Non-Executive Directors are responsible for the implementation and monitoring of the

Remuneration Policy. In 2022, the Company has complied with the Remuneration Policy.

Following a Business Combination, the remuneration of the Directors, if any, shall be disclosed in

the Shareholder Circular published in connection with the Business Combination AGM.

Even though the Company is not in principle in favour of making exceptions to the principles

underlying the Remuneration Policy, the Company, upon recommendation of the Non-Executive

Directors (in the absence of a remuneration committee), shall be allowed to temporarily derogate

from the Remuneration Policy in exceptional circumstances as defined by the DCC. Exceptional

circumstances only cover situations in which the derogation from this Remuneration Policy is

necessary to serve the long-term interests and sustainability of the Company as a whole or to assure

its viability. The rationale and details of any such deviation will be disclosed in the Company's

Annual Report.

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6.2. Remuneration of the Executive Directors

The authority to establish the remuneration of the Executive Directors is vested with the Non-

Executive Directors, with due observance of the Remuneration Policy and applicable provisions of

law.

The remuneration of the Executive Directors only consists of an annual fixed fee. Executive

Directors will not receive any variable remuneration and will not be granted shares and/or rights to

(subscribe for) shares.

Dr. Cornelius Baur and Dr. Thomas Rudolph have been appointed as Executive Directors and will

receive an annual gross remuneration for their services in such capacity of € 470,000 each (plus

the reimbursement of reasonable out-of-pocket expenses, including reasonable travel expenses,

and any VAT payable thereon, provided that the underlying receipts/invoices are provided to the

Company).

The Company has taken out a directors' and officers' liability insurance for the benefit of the

Directors.

6.3. 2022 remuneration of the Executive Directors

The remuneration of the Executive Directors is in accordance with the Remuneration Policy. There

are no loans, advances or guarantees provided by the Company to or on behalf of an Executive

Director.

The following table summarise the remuneration received by the Executive Directors for the years

ended 31 December 2022 and 2021.

Executive Director Year Fixed fee Other benefits Total

remuneration

Dr. Cornelius Baur 2022 € 470,000 € 13,555 € 483,555

2021 € 56,502 € 505.00 € 57,007

Dr. Thomas Rudolph 2022 € 470,000 € 12,000 € 482,000

2021 € 40,140 € 225.96 € 40,366

6.4. Remuneration of the Non-Executive Directors

The remuneration of the Non-Executive Directors shall be determined by the General Meeting, with

due observance of the Remuneration Policy and applicable provisions of law. The Non-Executive

Directors shall from time to time submit a clear and understandable proposal on their remuneration

to the General Meeting.

The remuneration of the Non-Executive Directors reflects the time spent and responsibilities of their

roles.

The remuneration of the Non-Executive Directors only consists of an annual fixed fee. Non-

Executive Directors will not receive any variable remuneration and will not be granted shares and/or

rights to (subscribe for) shares.

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The Non-Executive Directors, except for Mr. Stefan Winners, will receive an annual gross

remuneration for their services as Non-Executive Director of € 40,000 each, and Mr. Stefan

Winners, who serves as Chairman, will receive an annual gross remuneration for his services as

Chairman and Non-Executive Director of € 240,000 (in each case plus reimbursement of reasonable

out-of-pocket expenses, including reasonable travel expenses, any VAT payable thereon, provided

that the underlying receipts/invoices are provided to the Company). Mr. Winners will continuously

provide advice to the Company, and the Company expects to benefit from Mr. Winners deep

experience in SPAC and de-SPAC life-cycle management, in particular for Lakestar SPAC I SE.

The Company has taken out a directors' and officers' liability insurance for the benefit of its

Directors.

6.5. 2022 remuneration of Non-Executive Directors

The remuneration of the Non-Executive Directors is in accordance with the Remuneration Policy.

There are no loans, advances or guarantees provided by the Company to or on behalf of a Non-

Executive Director.

The following table summarises the remuneration received by the Non-Executive Directors for the

years ended 31 December 2022 and 2021.

Non-Executive Director Year Fixed fee Consultancy

fee

Total remuneration

Mr. Stefan Winners

2022 € 240,000 N/A € 240,000

2021 € 28,000 € 173,831 € 201,831

Mr. Peer M. Schatz 2022 € 40,000 N/A € 40,000

2021 € 5,000 N/A € 5,000

Dr. Axel Herberg 2022 € 40,000 N/A € 40,000

2021 € 5,000 N/A € 5,000

Dr. Stefan Oschmann 2022 € 40,000 N/A € 40,000

2021 € 5,000 N/A € 5,000

6.6. Service agreements

The Executive Directors and the Chairman have entered into a service agreement with the

Company, as disclosed in the Prospectus.

There are no existing or proposed service agreements or letters of appointment between the other

Directors and the Company.

6.7. Severance arrangements

The Directors will not be entitled to any severance pay and are not eligible to participate in a pension

scheme or other pension related benefits (see Section. 4.11 of this Board Report).

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7. CONFLICTS OF INTEREST

Under Dutch law and the Articles of Association, a Director shall be prohibited from taking part in

any discussion or decision-making that involves a subject or transaction in relation to which such

Director has a direct or indirect personal conflict of interest with the Company and its business. The

Articles of Association provide that if as a result of these rules, no resolution of the Board can be

adopted, the resolution can nonetheless be adopted by the Board as if none of the Directors had a

conflict of interest. In that case, each Director is entitled to participate in the discussion and

decision-making process and to cast a vote. These rules apply equally with respect to decision-

making relating to related party transactions (as defined by Dutch law) in which a Director is

involved.

During 2022, no conflict of interests matters occurred with respect to the Company and the

Directors.

8. RELATED PARTY TRANSACTIONS

The Company has a related party transactions policy providing for procedures for Directors to notify

a potential related party transaction (the “Related Party Transactions Policy”). Potential related

party transactions shall be subject to review by and prior approval of the Non-Executive Directors

in accordance with Dutch law. The Non-Executive Directors may approve the related party

transaction only if it determines that it is in the interests of the Company and its stakeholders.

Related party transactions include transactions between the Group and “related parties” as defined

in the Related Party Transactions Policy including, one or more shareholders representing 10% of

the issued share capital in the Company, a director and any parties qualifying as such in accordance

with IFRS (IAS 24 – Related Party Disclosures) (as defined below).

In September 2022, the Founders paid € 1,205k as additional purchase price for the Founder

Warrants subscribed for under the Sponsors Capital At-Risk, to cover remuneration costs payable

after the first 12 months after Settlement.

Besides, the Company has not entered into related party transactions.

9. CODE OF CONDUCT AND ETHICS

The Board has a code of conduct and ethics (the “Code of Conduct and Ethics”).

The Company is committed to the principles of non-discrimination, respect for human rights and

individual freedoms. Harassment, which includes unwanted sexual advances, subtle or overt

pressure for sexual favours, badgering, innuendos and offensive propositions, are not tolerated.

The Company is committed to conduct its purpose in accordance with the highest business, ethical,

moral and legal standards, in good faith, with due care and in the best interests of the Company

and its stakeholders, and the Company seeks similar standards in any legal entity it would pursue

to enter into a Business Combination with.

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10. AUDIT

10.1. Financial statements

Result appropriation the Company realised a loss of € 30,950k. The proposal to the General Meeting

is to recognise this loss in other reserves. The Directors have signed the financial statements to

comply with their statutory obligation pursuant to article 2:101, paragraph 2, of the Dutch Civil Code.

10.2. External auditor

The Board has evaluated the activities performed for the Company by Deloitte Accountants B.V. It

is apparent that Deloitte Accountants B.V. is capable of forming an independent judgment

concerning all matters that fall within the scope of its auditing task; there is a good balance between

the effectiveness and efficiency of their actions, for example in relation to auditing costs, risk

management and reliability.

11. STATEMENT OF THE BOARD

The Board is responsible for preparing this Annual Report in accordance with applicable laws and

regulations. This Annual Report comprises the Board Report, the Consolidated Financial

Statements and some other information.

The Board has prepared the Annual Report in accordance with International Financial Reporting

Standards (“IFRS”) as adopted by the European Union and the relevant provisions of Part 9, Book

2 of the DCC. In preparing the Annual Report, the Directors are required to:

 select suitable accounting policies and then apply them consistently;

 make judgements and accounting estimates that are reasonable and prudent;

 state whether applicable IFRS as adopted by the European Union and the relevant

provisions of the DCC have been followed, subject to any material deviations disclosed

and explained in the annual report; and

 prepare the annual report on a going concern basis, unless it is inappropriate to presume

that the Company will continue in business.

The Board is responsible for keeping adequate accounting records that are sufficient to show and

explain the Company’s transactions and disclose, with reasonable accuracy at any time, the

financial position of the Company and enable them to ensure that the annual report complies with

applicable law. The Board has assessed whether the risk assessment executed showed any

material failings in the effectiveness of the Company’s internal risk management and control

systems. Though such systems are designed to manage and control risks, they can provide

reasonable, but not absolute, assurance against material misstatements. Based on this

assessment, to the best of our knowledge and belief, no material failings of the effectiveness of the

Company’s internal risk management and control systems occurred and the internal risk and control

systems provide reasonable assurance that the Financial Statements do not contain any errors of

material importance.

With reference to section 5:25c of the DFSA, the Board confirms that, to the best of its knowledge:

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 the Company’s Financial Statements, which have been prepared in accordance with IFRS

and the relevant provisions of the DCC, give a true and fair view of the assets, liabilities,

financial position and profit or loss of the Company;

 the Board Report gives a true and fair view on the situation on the balance sheet date, the

development and performance of the business and the position of the Company and

includes a description of the principal risks and uncertainties that the Company faces; and

 having taken all matters considered by the Board and brought to the attention of the Board

during the financial year into account, the Directors consider that the Annual Report, taken

as a whole is fair, balanced and understandable. The Directors believe that the disclosures

set out in this Annual Report provide the information necessary for shareholders to assess

the Company’s position, performance, business model and strategy.

After conducting a review of management analysis, the Directors have reasonable expectation that

the Company has adequate resources to continue in operational existence for the foreseeable

future. For this reason, the Directors consider it appropriate to adopt the going-concern basis in

preparing this Annual Report.

12. REPORT OF THE NON-EXECUTIVE DIRECTORS

This is the report of the Non-Executive Directors of the Company over the financial year 2022, as

referred to in best practice provision 5.1.5 of the DCGC.

The Board is a one-tier board, comprising both Executive Directors having responsibility for the day-

to-day management of the Company and Non-Executive Directors not having such day-to-day

responsibility. The tasks of the executive and non-executive directors in a one-tier board such as

the Board may be allocated under or pursuant to the articles of association, provided that the

general meeting has stipulated whether such director is appointed as executive or as non-executive

director and furthermore provided that the task to supervise the performance by the directors of

their duties can only be performed by the non-executive directors. Regardless of an allocation of

tasks, all directors remain collectively responsible for the proper management and strategy of the

company (including supervision thereof in case of non-executive directors).

It is the responsibility of the Non-Executive Directors to supervise the policies carried out by the

Executive Directors and the general affairs of the Company and its affiliated enterprise, including

the implementation of the strategy of the Company regarding long-term value creation. In so doing,

the Non-Executive Directors act solely in the interest of the Company.

With a view of maintaining supervision on the Company, the Non-Executive Directors regularly

discuss the long-term business plans, the implementation of such plans and the risks associated

with such plans with the Executive Directors.

Details of the current composition of the Board, including the Non-Executive Directors, and its

committees are set forth in Sections 1.3 (The Board) and 12.5 (Board committees).

12.1. Supervision by the Non-Executive Directors

The Non-Executive Directors supervised the policies carried out by the Executive Directors and the

general affairs of the Company. In doing so, the Non-Executive Directors have also focused on the

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effectiveness of the Company’s internal risk management and control systems, the integrity and

quality of the financial reporting and the Company's long-term business plans, the implementation

of such plans and the risks associated.

The Non-Executive Directors supervised the adoption and implementation of the strategies and

policies by the Group, reviewed this Annual Report, including the Company’s financial results,

received updates on legal and compliance matters, and they have been regularly involved in the

review and approval of transactions entered into with related parties. The Non-Executive Directors

have also reviewed the reports of the Board and its committees. Furthermore, the Non-Executive

Directors regularly discussed the target selection and the long-term business plans of the potential

targets.

12.2. Internal audit function

The Company does not have an internal audit function. The need for an internal audit function is

assessed on a yearly basis by the Non-Executive Directors. The Non-Executive Directors concluded

that an internal audit function is not necessary due to the nature of the Company as a special

purpose acquisition company.

12.3. Independence of the Non-Executive Directors

Each non-executive director owes a duty to the Company to properly perform his duties and to act

in the Company's corporate interest. Under Dutch law, the Company's corporate interest extends

to the interests of all its stakeholders, including its shareholders, creditors and employees. Pursuant

to best practice provisions 2.1.7 and 2.1.8 of the DCGC, at most one non-executive director does

not have to meet the independence criteria as set out in the DCGC.

The Company deviates from best practice provision 2.1.7 as it has two Non-Executive Directors

that are non-independent Mr. Stefan Winners and Mr. Peer M. Schatz, as further described in

Section 3.2 (Best practice provision 2.1.7, 2.1.8 and 5.1.1: independence of the Non Executive

Directors).

12.4. Functioning of the Board (evaluation accountability)

As set out in Section 3.4 of this Annual Report, no evaluations have taken place in 2022. After

completion of the Business Combination it is envisaged that evaluations will take place.

12.5. Board committees

12.5.1. Audit Committee

The Company has an audit committee (the “Audit Committee”), which exercises the duties as

prescribed in the decree on the establishment of an audit committee in organisations of public

interest (Besluit instelling auditcommissie bij organisaties van openbaar belang).

The Audit Committee consists of the following Non-Executive Directors: Dr. Axel Herberg

(chairman), Dr. Stefan Oschmann (deputy chairman) and Mr. Stefan Winners.

The duties of the Audit Committee include:

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 informing the Board of the results of the statutory audit and explaining how the statutory

audit has contributed to the integrity of the financial reporting and how the Audit

Committee has fulfilled this process;

 monitoring the financial reporting process and making proposals to safeguard the integrity

of the process;

 monitoring the effectiveness of the internal control systems, the internal audit system and

the risk management system with respect to financial reporting;

 monitoring the statutory audit of the annual accounts, and in particular the process of

such audit;

 monitoring the independence of the external auditor; and

 adopting procedures with respect to the selection of the external auditor.

The Audit Committee advises the Board and prepares decision-making on matters such as the

supervision of the integrity and quality of the financial reporting and the effectiveness of the internal

risk management and control systems. Audit Committee rules that govern the Audit Committee have

been adopted by the Non-Executive Directors and are available on the Company's website

(www.ehc-company.com).

In 2022, two (2) meetings of the Audit Committee have taken place. The Audit Committee reported

to the Non-Executive Directors in accordance with the DCGC. The Audit Committee discussed

amongst others the financial statements for the financial year 2021, the interim financial statements

for the period of 1 January 2022 up to and including 30 June 2022, the cash balance of the Company

and the negative interest rate turning positive.

As set out in Section 3.4 of this Annual Report, the Non-Executive Directors did not evaluate and

supervise the performance of the Audit Committee in 2022.

12.5.2. Other committees

The Board may decide to install committees whenever it deems appropriate. Currently, other than

the Audit Committee, the Board has not installed any committees as this is not required under Dutch

law or the DCGC based on the current composition of the Board. If the Board would in the future

consist of more than four Non-Executive Directors, it should, in addition to the existing Audit

Committee, appoint from among its members a remuneration committee and a selection and

appointment committee to remain in compliance with the DCGC.

In accordance with best practice provision 2.3.2 of the DCGC, if the Board decides not to establish

a remuneration committee or a selection and appointment committee, the best practice provisions

applicable to such committee(s) apply to all the Non-Executive Directors.

12.6. Meetings and attendance

The Board held five (5) regular meetings in 2022. All Directors attended all the meetings, as such

the absenteeism rate is zero.

13. LOOKING AHEAD

The Non-Executive Directors wish to thank the Executive Directors for their dedication and

commitment in aiming to realise a Business Combination prior to the Business Combination

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Deadline and their efforts with regard to the transaction with Croma-Pharma GmbH. The Non-

Executive Directors continue to advise and support the Executive Directors on the completion of

the Business Combination.

On behalf of the Board of

European Healthcare Acquisition & Growth Company B.V.

Dr. Cornelius Baur

Mr.

Stefan Winners

CEO Chairman of the Board

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FINANCIAL STATEMENTS

200000129/29415593.2

European Healthcare Acquisition & Growth Company B.V.,

Financial statements

for the year ended 31 December 2022

Contents

Page

Statement of profit or loss and other comprehensive income……………………….………. 35

Statement of financial position…………………………………………………………….….…. 36

Statement of changes in equity………………………….………………………………….….… 37

Statement of cash flows……..………………….………….………………………………….…. 38

Notes to the financial statements………………………………………………………………… 39

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The accompanying notes form an integral part of these financial statements.

European Healthcare Acquisition & Growth Company B.V.

Statement of profit or loss and other comprehensive income

for the year ended 31 December 2022

2022 2021

€000 €000

Notes

Personnel expenses 5.6 (1,244) 0

Deferred underwriting fee 5.7 (6,000) 0

Other operating expenses 5.1 (2,931) (1,013)

Operating loss

(10,175) (1,013)

Fair value adjustments of warrants 5.2 (13,692) (669)

Effective interest on ordinary shares subject to redemption 5.3 (6,068) (703)

Interest income 5.4 649 0

Interest expenses 5.5 (809) (141)

Finance costs, net

(19,920) (1,513)

Loss for the period

(30,095) (2,526)

Other comprehensive income 0 0

Total comprehensive loss for the period, net of tax

(30,095) (2,526)

Earnings per share

Basic and diluted earnings per share 7 (4.51) (1.51)

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The accompanying notes form an integral part of these financial statements.

European Healthcare Acquisition & Growth Company B.V.

Statement of financial position

as at 31 December 2022

31 December 2022 31 December 2021

€000 €000

Notes

Assets

Current assets

Other receivables 11 290 0

Deferred cost 11 249 510

Cash and cash equivalents 12 204,316 207,892

204,855 208,402

Total assets

204,855 208,402

Equity and liabilities

Equity

Issued capital 13 67 67

Share premium 13 7,971 6,767

Accumulated deficit 13 (32,621) (2,526)

Total equity

(24,583) 4,308

Non-current liabilities

Redeemable ordinary shares 8 0 188,435

Market warrants 9 0 8,500

Founder warrants 10 0 4,907

0 201,842

Current liabilities

Redeemable ordinary shares 8 194,503 0

Market warrants 9 14,227 0

Founder warrants 10 12,872 0

Trade and other payables 15 1,836 2,121

Deferred underwriting fee 16 6,000 0

Interest payable 0 131

229,438 2,252

Total liabilities

229,438 204,094

Total equity and liabilities

204,855 208,402

200000129/29415593.2

European Healthcare Acquisition & Growth Company B.V.

Statement of changes in equity

for the year ended 31 December 2022

Issued Share Accumulated

capital premium deficit Total

(Note 13) (Note 13) (Note 13)

equity

€000 €000 €000 €000

At inception 0 0 0 0

Loss for the period 0 0 (2,526)

(2,526)

Other comprehensive income 0 0 0

Total comprehensive loss

0 0 (2,526)

(2,526)

Shares issued 67 6,767 0

6,834

At 31 December 2021 67 6,767 (2,526) 4,308

At 1 January 2022 67 6,767 (2,526) 4,308

Loss for the period 0 0 (30,095)

(30,095)

Other comprehensive income 0 0 0

Total comprehensive loss

0 0 (30,095)

(30,095)

Additional share premium 0 1,205 0

1,205

At 31 December 2022 67 7,971 (32,621) (24,583)

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The accompanying notes form an integral part of these financial statements.

European Healthcare Acquisition & Growth Company B.V.

Statement of cash flows

for the year ended 31 December 2022

2022 2021

€000 €000

Notes

Operating activities

Loss for the period (30,095) (2,526)

Adjustments to reconcile net loss to cash flows:

Fair value adjustments of warrants 5.2 13,692 669

Effective interest on ordinary shares subject to redemption 5.3 6,068 703

Interest paid, net 5.4 160 131

Working capital adjustments:

Decrease (+) / increase (-) in deferred costs 11 261 (510)

Increase in deferred underwriting fee 16 6,000 0

Decrease (+) / increase (-) in other working capital 15 725 2,121

Net cash flows from operating activities (3,189) 588

Financing activities

Proceeds from issued units 8 0 200,000

Transaction costs related to issuance of ordinary shares 8 (1,430) (4,268)

Transaction costs related to issuance of founder shares 13 (2) (47)

Proceeds from issued founder shares and founder warrants 10, 13 0 11,619

Proceeds from payments of additional share premium 10, 13 1,205 0

Interest paid, net (160) 0

Net cash flows from financing activities (387) 207,304

Net decrease / increase in cash and cash equivalents (3,576) 207,892

Cash and cash equivalents at 1 January 207,892 0

Cash and cash equivalents at 31 December

12 204,316 207,892

200000129/29415593.2

1. CORPORATE INFORMATION

European Healthcare Acquisition & Growth Company B.V. (the "Company” or “EHC”) was

incorporated on 9 July 2021 in Amsterdam, the Netherlands, as a Dutch operators-led special

purpose acquisition company incorporated under the laws of the Netherlands as a private company

with limited liability (besloten vennootschap met beperkte aansprakelijkheid) with its business

address in Munich, Germany. The financial statements of the Company for the period ended 31

December 2022 were authorised for publication on 24 March 2023 in accordance with a resolution

of the Directors.

The Company is registered with the Netherlands Chamber of Commerce under the number

83366180 since 9 July 2021. The registered office of the Company is located at Theresienhoehe

28, 80339 Munich, Germany.

EHC was admitted to listing and trading on the regulated market of Euronext Amsterdam on 18

November 2021 pursuant to a private placement (“Private Placement”) in which it raised €200

million (“Proceeds”) in gross proceeds in accordance with the terms and conditions set out in the

Company’s Prospectus which has been issued on 16 November 2021.

The Founders of the Company are BAUR I&C GmbH, RNRI GmbH, CCC Investment GmbH, SO I

GmbH, PS Capital Management GmbH and Winners & Co. GmbH (the “Sponsors”) which are

affiliates of the Company’s Directors, Dr. Cornelius Baur, Dr. Thomas Rudolph, Dr. Axel Herberg,

Dr. Stefan Oschmann, Peer Schatz and Stefan Winners, respectively.

As of the date of the Private Placement, Peer Schatz served as Chief Executive Officer (“CEO”) of

the Company. With effect as of the date of admission, Dr. Cornelius Baur has been appointed as

CEO and Peer Schatz became a non-independent non-executive director. With effect as of 1

December 2021, Dr. Thomas Rudolph has been appointed as Chief Investment Officer (“CIO”) of

the Company. The CEO and the CIO are the executive directors of the Company.

The board of directors (“Board”) of the Company also includes Stefan Winners (non-independent

non-executive director) as well as Dr. Axel Herberg and Dr. Stefan Oschmann (independent non-

executive directors). With effect as of the date of the admission, Peer Schatz became a non-

independent non-executive director. Also, with effect as of the date of admission, Stefan Winners

has been appointed as chairman of the Board. The non-executive directors together with the

executive directors are the directors of the Company. The Company is effectively managed in

Germany.

The Company has been established for the purpose of entering into a business combination with

an operating business in the form of a merger, share exchange, asset acquisition, share purchase,

reorganisation or similar business combination with, or acquisition of, one or more target companies

or businesses with the purpose of creating a single business (a “Business Combination”). The

Company intends to focus on companies or businesses with principal operations in Europe in the

healthcare sector, with a special focus on the subsectors Biotechnology and Specialty Pharma,

Pharma Services, Medical Technology and Medical Devices, Diagnostic and Lab Services,

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Bioinformatics as well as Life Science Tools (the “Specific Healthcare Sectors”). The Company

intends to acquire the Shares in one or more target companies and subsequently provide

management services to the target(s) for remuneration.

The Company intends to seek a suitable target for the Business Combination in the Specific

Healthcare Sector. The Company will have 24 months from the first day of trading to consummate

a Business Combination. Otherwise, the Company will be liquidated and distribute all of its assets

to its shareholders.

On 22 December 2022 the Company has entered into a Business Combination Agreement with

Croma-Pharma GmbH.

The Company has the legal ownership of the Private Placement cash. In order to ensure that the

Proceeds are used for no other purpose than the situations as disclosed, the Company entered into

an escrow agreement with Deutsche Bank AG (the "Escrow Agreement"). Following the Private

Placement, 100% of the Proceeds have been transferred to an escrow account (the "Escrow

Account"). Pursuant to the Escrow Agreement, the amounts held in the Escrow Account will

generally not be released unless and until the occurrence of the earlier of a Business Combination

or liquidation.

The Company has 20,000,000 redeemable Ordinary Shares issued and outstanding as at 31

December 2022 which are traded on the regulated market of Euronext Amsterdam under the symbol

“EHCS” since 18 November 2021. Likewise, the Company’s 6,666,666 Market Warrants are also

traded on the regulated market of Euronext Amsterdam under the symbol “EHCW”.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1. Basis of preparation

These financial statements have been prepared in accordance and compliance with International

Financial Reporting Standards (“IFRS-EU”) and interpretations adopted by the European Union,

where effective, for financial years beginning 1 January 2022 and also comply with the financial

reporting requirements included in Part 9 of Book 2 of the Dutch Civil Code.

The Company was incorporated on 9 July 2021. The period from 9 July 2021 to 31 December 2021

is the first year of incorporation. In accordance with the articles of association the reporting year is

the calendar year.

Following the Business Combination, the Company intends to provide management services to the

target(s) for remuneration. The Company’s operations are not affected by significant seasonal or

cyclical patterns.

2.2. Going concern

These financial statements have been prepared on a going concern basis. The Company has a 24-

month period to complete a Business Combination. The costs relating to the search for a target

company and the completion of a Business Combination are expected to be covered by the

proceeds from the issuance of the Founder Shares and Warrants and the Additional Sponsor

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Subscription. However, the Company cannot assure any investors in the Company that this

expectation is accurate. Any investor in the Company should always consider the risk factors set

out in the Prospectus and in this Annual Report.

If the Company does not complete a Business Combination within 24 months from the settlement

date of the Private Placement (the “Business Combination Deadline”), the Company shall, within

no more than three months after such 24-month period, convene a general meeting for the purpose

of adopting a resolution to dissolve and liquidate the Company and to delist the Ordinary Shares

and Market Warrants. In the event of a liquidation, the distribution of the Company’s assets and the

allocation of the liquidation surplus shall be completed, after payment of the Company’s creditors

and settlement of its liabilities, in accordance with the rights of the Founder Shares and the Ordinary

Shares and in accordance with a pre-determined order of priority. There will be no distribution of

proceeds or otherwise with respect to any of the Market Warrants or the Founder Warrants, and all

such Market Warrants and Founder Warrants will automatically expire without value upon

occurrence of such a liquidation. The Company was able to sign a Business Combination

Agreement with Croma-Pharma GmbH in 2022. Based on the analysis performed by the

management, the Business Combination with Croma-Pharma GmbH would offer a very positive

perspective for the Company since Croma-Pharma GmbH has already established a good position

in the medical skin care market. However, if the Business Combination fails to close the conditions

would then indicate the existence of a material uncertainty, which may cast significant doubt about

the company’s ability to continue as a going concern.

The (financial) risk for our shareholders is largely mitigated by the fact that the Company holds

€202.1 million (less negative interest) in the Escrow Account, which can only be released upon

meeting strict requirements. The Company has raised proceeds from the sale of the Founder Shares

and Founder Warrants amounting to €12.8 million. The cash balance as of 31 December 2022 is

sufficient to cover working capital and other running costs and expenses. The deferred underwriting

fee will be paid from the cash on the Company’s escrow account following the successful closing

of the Business Combination with Croma-Pharma GmbH.

2.3. New standards, interpretations and amendments not adopted by the

Company

The following Standards and Interpretations became effective for annual reporting periods

beginning on or after January 1, 2022:

 Reference to the Conceptual Framework – Amendments to IFRS 3

 Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16

 Onerous Contracts – Costs of Fulfilling a Contract – Amendments to IAS 37

 IFRS 1 First-time Adoption of International Financial Reporting Standards – Subsidiary as

a first-time adopter

 IFRS 9 Financial Instruments – Fees in the ’10 per cent’ test for derecognition of financial

liabilities

 IAS 41 Agriculture – Taxation in fair value measurements

None of these new Standards and Interpretations had a material impact on our financial statements.

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Certain new accounting standards and interpretations have been published that are not mandatory for

31 December 2022 reporting periods and have not been early adopted by the Company. These

standards are not expected to have a material impact on the Company in the current or future reporting

periods and on foreseeable future transactions:

 IFRS 17 (including the June 2020 and December 2021 amendments to IFRS 17):

Insurance Contracts)

 Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor

and its Associate or Joint Venture

 Amendments to IAS 1: Classification of Liabilities as Current or Non-current

 Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies

 Amendments to IAS 8: Definition of Accounting Estimates

 Amendments to IAS 12: Deferred Tax related to Assets and Liabilities arising from a

Single Transaction

2.4. Summary of significant accounting policies

International accounting standards include IFRS, IAS (International Accounting Standards) and

their interpretations (Standing Interpretations Committee) and IFRICs (International Financial

Reporting Interpretations Committee).

The repository adopted by the European Commission is available on the following internet site:

https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company-reporting-and-

auditing/company-reporting/financial-reporting_en

2.4.1. Functional and presentation currency

These financial statements are presented in Euro, which is the Company’s functional currency. All

amounts have been rounded to the nearest thousand, unless otherwise indicated (“€000” or “€ k”).

2.4.2. Basis of measurement

These financial statements have been prepared on a historical cost convention, unless stated

otherwise.

2.4.3. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial

liability or equity instrument of another entity. The Company recognises a financial asset or a

financial liability when it becomes a party to the contractual provisions of the instrument. Purchases

or sales of financial assets that require delivery of assets within the time frame generally established

by regulation or convention in the marketplace (regular way trades) are recognised on the trade

date i.e. the date that the Company commits to purchase or sell the asset.

Financial assets: The Company classifies its financial assets as subsequently measured at

amortised cost or measured at fair value through profit or loss on the basis of both:

 the entity’s business model for managing the financial assets; and

 the contractual cash flow characteristics of the financial asset.

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The Company initially measures a financial asset at its fair value plus, in the case of a financial

asset not at fair value through profit and loss, transaction costs.

Financial assets measured at amortised cost: This is the category most relevant to the Company.

A debt instrument is measured at amortised cost if it is held within a business model whose objective

is to hold financial assets in order to collect contractual cash flows and its contractual terms give

rise on specified dates to cash flows that are solely payments of principal and interest on the

principal amount outstanding. Financial assets at amortised cost are subsequently measured using

the effective interest rate (EIR) method and are subject to impairment. Gains and losses are

recognised in profit and loss when the asset is derecognised, modified or impaired.

The Company includes in this category cash and cash equivalents.

Financial liabilities: The financial liabilities are classified, at initial recognition, as financial

liabilities at fair value through profit or loss or financial liabilities at amortised cost.

The Company’s financial liabilities include trade and other payables, interest-bearing loans and

borrowings.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings

and payables, net of directly attributable transaction costs.

Financial liabilities measured at amortised cost: This is the category most relevant to the

Company. After initial recognition, interest-bearing loans and borrowings are subsequently

measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss

when the liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees

or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in

the statement of profit or loss.

The Company includes in this category redeemable Ordinary Shares, interest-bearing loans and

borrowings and trade and other payables.

Financial liabilities measured at fair value through profit or loss: Financial liabilities measured at

fair value through profit or loss include Warrants. These financial liabilities are initially recognised at fair

value with subsequent changes in fair value being recognised in the income statement.

Derecognition: A financial liability is derecognised when the obligation under the liability is discharged

or cancelled or expires. When an existing financial liability is replaced by another from the same lender

on substantially different terms, or the terms of an existing liability are substantially modified, such an

exchange or modification is treated as the derecognition of the original liability and the recognition of a

new liability. The difference in the respective carrying amounts is recognised in the statement of profit

or loss.

Impairment of financial assets: The Company has chosen to apply an approach similar to the

simplified approach for expected credit losses (“ECL”) under IFRS 9 to its financial assets.

Therefore the Company recognises a loss allowance based on lifetime ECLs at each reporting date.

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The Company’s approach to ECLs reflects a probability-weighted outcome, the time value of money

and reasonable and supportable information that is available without undue cost or effort at the

reporting date about past events, current conditions and forecasts of future economic conditions.

2.4.4. Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at banks and on

hand and short-term highly liquid deposits with a maturity of three months or less, that are readily

convertible to a known amount of cash and subject to an insignificant risk of changes in value. Bank

overdrafts that are repayable on demand and form an integral part of the Company’s cash

management are included as a component of cash and cash equivalents for the purpose of the

statement of cash flows. The carrying amounts of these approximate their fair value. This includes

the cash & cash equivalents which are stored on the Company’s Escrow Account.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and

short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered

an integral part of the Company’s cash management.

2.4.5. Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an

orderly transaction between market participants at the measurement date. The fair value

measurement is based on the presumption that the transaction to sell the asset or transfer the

liability takes place either:

 in the principal market for the asset or liability;

 in the absence of a principal market, in the most advantageous market for the asset or

liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants

would use when pricing the asset or liability, assuming that market participants act in their economic

best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability

to generate economic benefits by using the asset in its highest and best use or by selling it to

another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which

sufficient data are available to measure fair value, maximising the use of relevant observable inputs

and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are

categorised within the fair value hierarchy, described as follows, based on the lowest level input

that is significant to the fair value measurement as a whole:

 Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or

liabilities

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 Level 2 - Valuation techniques for which the lowest level input that is significant to the fair

value measurement is directly or indirectly observable

 Level 3 - Valuation techniques for which the lowest level input that is significant to the fair

value measurement is unobservable

For the purpose of fair value disclosures, the Company has determined classes of assets and

liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of

the fair value hierarchy, as explained above.

2.4.6. Taxes

Income tax recognised in the statement of profit or loss and other comprehensive income includes

current and deferred tax.

(i) Current tax

Current income tax assets and liabilities are measured at the amount expected to be recovered

from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are

those that are enacted or substantively enacted at the reporting date in the countries where the

Company operates and generates taxable income.

Current income tax relating to items recognised directly in equity is recognised in equity and not in

the statement of profit or loss and other comprehensive income.

(ii) Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and

liabilities in the financial statements and the corresponding tax bases used in the computation of

taxable profit.

Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax

assets are generally recognised for all deductible temporary differences to the extent that it is

probable that taxable profits will be available against which those deductible temporary differences

can be utilised. Deferred tax assets are tested for impairment on the basis of a tax planning derived

from management business plans.

Such deferred tax assets and liabilities are not recognised if the temporary difference arises from

goodwill or from the initial recognition (other than in a business combination) of other assets and

liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

2.4.7. Classification of the instruments issued by the Company

The Company has assessed the instruments issued by the Company whether they should be

accounted for as share-based payments within the scope of IFRS 2 or as financial instruments

within the scope of IAS 32 Financial instruments. This assessment involves consideration of all

terms and conditions attached to the instruments and as to whether the instruments were issued by

the Company for a service to the Company, potentially at a discount or subject to service or

performance conditions. The Board concluded that Ordinary Shares, Founder Shares as well as

Market Warrants and Founder Warrants should be accounted for under IAS 32.

(i) Redeemable Ordinary Shares

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The Board assessed the classification of redeemable Ordinary Shares in accordance with IAS 32

and concluded that the redeemable Ordinary Shares do not meet the criteria for equity treatment

and must be recorded as liabilities. The Ordinary Shares have certain redemption features that are

considered to be outside of the Company’s control and subject to occurrence of uncertain future

events. Accordingly, the Company classifies the redeemable Ordinary Shares as financial liabilities

at amortised cost in accordance with IFRS 9. The transaction costs are directly attributable to the

issuance of the redeemable Ordinary Shares deducted from the initial fair value and are therefore

part of the effective interest rate. Refer to Note 8 for more details.

(ii) Market Warrants

The Board assessed the classification of Market Warrants in accordance with IAS 32 under which

the Market Warrants do not meet the criteria for equity treatment and must be recorded as financial

liabilities. Accordingly, the Company classifies the Market Warrants as liabilities at their fair value

through profit and loss. Refer to Note 9 for more details.

(iii) Founder Shares

The Sponsors currently hold 6,666,666 Founder Shares at the nominal value of price of €0.01 per

Founder Share. The Sponsors paid an additional purchase price for the Founder Shares in the

aggregate of €1,400,000 that will be used, inter alia, to cover remuneration costs.

The total value of the package of Founder Shares, Founder Warrants and Additional Sponsor

Subscription issued at Settlement are intertwined and entered into in contemplation of each other,

therefore these instruments were assessed together. The price paid for each instrument cannot be

assessed in isolation. However, the total package does reflect a market transaction which should

reflect fair value. As such, for the Founder Shares issued at Settlement the total consideration paid

for the package of Founder Shares, Founder Warrants and Additional Sponsor Subscription is

considered as one transaction.

The rights and interests of the Founders differ from those of the Ordinary Shareholders. The

Founder Shares carry risks that the Ordinary Shares do not, namely the Founder Shares contribute

to the capital at risk and are subordinated to the Ordinary Shares in the event of liquidation. This

means that the Founders carry a greater risk of losing their investment and therefore have a higher

incentive to successfully complete the Business Combination.

The Board concluded that, due to the significant remaining risks associated with completing the Private

Placement and a Business Combination at the time the Founder Shares were issued, the fair value of

the Founder Shares at issue was equal to their (recalibrated) issue price of €0.01 per share for the

Shares issued at incorporation of the Company and €1.25 per share issued at Settlement. This also

does not indicate a share-based payment in the scope of IFRS 2.

The Founder Shares are not covered under the share repurchase arrangement and will only

automatically convert into Public Shares upon closing of the Business Combination on a 1:1 basis

(subject to anti-dilution provisions in certain circumstances) in the four tranches further explained

in Note 13.

For the classification assessment in accordance with IAS 32, each tranche is considered a separate

unit. As such the fixed-for-fixed requirements are met. If the share price hurdle in tranches 2 and

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onwards are never met, or the time runs out for tranche 4, then these Founder Shares will not be

converted. However, they are still entitled to voting rights and dividend rights. Each tranche is a separate

unit in accordance with IFRS 9, as the Ordinary Shares obtained through each tranche can be

transferred separately. Furthermore, the different tranches are not linked economically as each tranche

will be exercised separately.

Any conversion of Founder Shares into Ordinary Shares does not require the holder to make any

payment. Therefore, there is no contractual obligation for the Company to repay the holders of the

Founder Shares. While the Company may pay dividends to the Founders, the dividend rights of the

Founders are the same as those of the Ordinary Shareholders and the granting of dividends is at

the discretion of the Company. Thus, the Company is not contractually obligated to pay dividends.

The Founder Shares are, therefore, classified as equity instruments per IAS 32.

At initial recognition, the Founder Shares are recognised at fair value less transaction costs. No

subsequent changes to initial recognition are recognised.

(iv) Founder Warrants

The Sponsors subscribed for 5,128,000 Founder Warrants at a price of €1.50 per warrant in a

separate private placement (the “Sponsors Capital At-Risk”). The Sponsors Capital At-Risk will

be used to finance the Company’s working capital requirements (including due diligence costs in

connection with the Business Combination) and other running costs and Private Placement and

Admission expenses, except for the fixed deferred listing commission and the discretionary deferred

listing commissions (together, the “Deferred Listing Commissions”), that will, if and when due and

payable, be paid from the Escrow Account, until the completion of the Business Combination.

Management evaluated the terms of the Founder Warrants in the context of this potential scope

exclusion from IAS 32. The total value of the package of Founder Shares, Founder Warrants and

Additional Sponsor Subscription issued at Settlement are intertwined and are assessed together.

The fair value of the Founder Warrants at issue was less than the issue price of €1.50 per Founder

Warrant. However, the overpayment of the Founder Warrant is reallocated to the Founder Shares.

As such we conclude that the fair value of the Founder Warrants at issue was equal to their allocated

price.

The subscription rights are derivatives which, from the issuer's perspective, represent written call options

on its own Shares. As such, they are contracts within the scope of IAS 32.13 that give rise to a financial

asset for the holders and a financial liability or equity instrument for the issuer. As financial instruments,

they fall within the scope of IAS 32.

Upon a cashless exercise of the subscription right, EHC is obliged to deliver a number of shares

that is calculated on the basis of the quotient of (i) the fair market value of the shares minus the

exercise price (ii) divided by the fair market fair value of the shares. Hence, the number of shares

to be delivered is not fixed, but variable.

Founder Warrants are, therefore, classified as financial liability. Refer to Note 10 for further details.

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In addition, the Sponsors subscribed for 1,640,000 Founder Warrants at a price of €1.50 per

Founder Warrant, for an aggregate purchase price of €2,460k (the “Additional Sponsor

Subscription”). The proceeds of the Additional Sponsor Subscription will be used to cover any

negative interest on the funds held in the Escrow Account, up to an amount equal to the proceeds

from the Additional Sponsor Subscription to allow, in case of a liquidation of the Company after

expiry of the Business Combination Deadline or in case of redemptions of Ordinary Shares in the

context of a Business Combination, for a redemption at €10.00 per Ordinary Share. For any excess

portion of the Additional Sponsor Subscription remaining after completion of the Business

Combination and the redemption of Ordinary Shares, the Sponsors may elect to either (i) request

repayment of the remaining cash portion of the Additional Sponsor Subscription by redeeming the

corresponding number of Founder Warrants subscribed for under the Additional Sponsor

Subscription, or (ii) to keep the Founder Warrants subscribed for under the Additional Sponsor

Subscription in which case the Company may keep the remaining cash portion of the Additional

Sponsor Subscription for discretionary use. Founder Warrants will have substantially the same

terms as the Market Warrants, except that they will not be redeemable, may be exercised on a

cashless basis, and are subject to certain lock-up arrangements.

Also, since the Company did not consummate a Business Combination within the first 12 months,

the Sponsors, i.e. the Founders, paid an additional sum as additional purchase price for the Founder

Warrants subscribed amounting to €1,205k that was and will be used to pay the Company’s

remuneration costs becoming payable after the first 12 months until the completion of the Business

Combination or the Business Combination Deadline. Such payments of an additional purchase price

will not result in the issuance of any additional Founder Warrants.

The total value of the package of Founder Shares, Founder Warrants and Additional Sponsor

Subscription issued at Settlement are intertwined and are assessed together. The fair value of the

Additional Sponsor Subscription at issue was less than the issue price of €1.50 per Founder Warrant.

However, the overpayment of the Founder Warrant was reallocated to the Founder Shares.

The Additional Sponsor Subscription consists of derivatives which, from the issuer's perspective,

represent written call options on its own shares. As such, they are contracts within the scope of IAS

32.13 that give rise to a financial asset for the holders and a financial liability or equity instrument

for the issuer. As financial instruments, they fall within the scope of IAS 32. The Additional Sponsor

Subscription is classified as financial liability and shown under Founder Warrants in the statement

of financial position.

2.4.8. Cash flow statement

The cash flow statement has been prepared using the indirect method, whereby profit or loss is

adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or

future operating cash receipts or payments, and items of income or expense associated with

investing or financing cash flows. Non-cash transactions are not included in the statement of cash

flows. EHC has chosen to present interest paid on cash and cash equivalents as operating cash

flows.

The cash stored on the Escrow Account meets the definition of IAS 7.6 and is therefore included as

cash and cash equivalents in the cash flow statement.

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2.4.9. Operating segments

The activities of the Company are considered to be a single operating segment under IFRS 8. Hence

no further segmental disclosures are included in the financial statements.

3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES

AND ASSUMPTIONS

The preparation of financial statements in conformity with IFRS requires management to make

judgements, estimates and assumptions that affect the application of accounting policies and the

reported amounts of assets, liabilities, income and expenses.

Actual results and outcomes may differ from management’s estimates and assumptions due to risks

and uncertainties, including uncertainty in the current economic environment due to the current

economic uncertainties amongst other driven by the invasion of Russia in Ukraine and the

development of the coronavirus.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting

estimates are recognised in the period in which the estimates are revised and in any future periods

affected.

a. Significant Judgements

Accounting judgements were required regarding the accounting of Founder Shares and Founder

Warrants: A key consideration for the accounting treatment of these financial instruments is whether

the instruments should be accounted for by applying IAS 32 or IFRS 2. The distinction between

applying IFRS 2 or IAS 32 is important, because the classification as debt or equity can be different

depending on whether IFRS 2 or IAS 32 applies. It has been concluded that the financial instruments

shall be analysed in accordance with IAS 32 and that IFRS 2 is not applicable for the accounting of

the Founder Shares and Founder Warrants.

For the classification assessment in accordance with IAS 32, each tranche of Founder Shares is

considered a separate unit. As such, the fixed-for-fixed requirements in accordance with IAS 32 are

met and Founder Shares are accounted for as equity.

Regarding the Founder Warrants the Company is obliged to deliver a number of shares that is

calculated on the basis of the quotient of (i) the fair market value of the shares minus the exercise

price (ii) divided by the fair market fair value of the shares. Hence, the number of shares to be

delivered is not fixed, but variable. As a result, Founder Warrants are to be classified as financial

liability.

b. Significant estimates

Significant areas of estimation in applying accounting policies that have the most significant effect

on the amounts recognised in the financial statements are:

c. Valuation of the instruments issued by the Company (see notes 8, 9 and 10)).

The Market and Founder Warrants - The fair value of the Market Warrants at the issue date (see

note 8). The Market and Founder Warrants have been valued by applying a binomial tree model,

which is considered a generally accepted valuation methodology for these instruments. The

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Company is of the opinion that there has been too limited trades in the Company’s Market Warrants

that the value for which they are traded on Euronext is representative for the fair value of the

instrument. The main area’s of estimation uncertainty within the binomial tree model is the estimated

volatility and the success probability of the Business Combination. Within disclosure note 10 we

have disclosed the sensitivities on these inputs of the binomial tree model.

4. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Board has the overall responsibility for the establishment and oversight of the Company’s risk

management framework. The Company’s risk management policies are established to identify and

analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor

risks and adherence to limits. Risk management policies and systems are reviewed regularly to

reflect changes in market conditions.

The Company was newly formed and currently generates no revenue. The Company does not have

any foreign currency transactions. Hence, currently the Company does not face foreign currency

risks.

4.1. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations

associated with its financial liabilities that are settled by delivering cash or another financial asset.

The Company’s objective when managing liquidity is to ensure, as far as possible, that it will have

sufficient liquidity to meet its liabilities when they are due, under both normal and stressed

conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

As at 31 December 2022, the Company has sufficient funds to pay its obligations.

4.2. Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or

customer contract, leading to a financial loss. The Company is currently exposed to credit risk from

its financing activities, including deposits with banks and financial institutions. No specific

counterparty risk is being assessed as cash and cash equivalents are mostly deposited with a BBB+

(Fitch) or A2 (Moody’s) rated bank. Holders of the redeemable ordinary shares are compensated

for the negative interest on the escrow account by the founders of the Company.

4.3. Market risk

Market risk is the risk that changes in market prices – e.g. interest rates and equity prices – will

affect EHC’s income or the value of its holdings of financial instruments. The objective of market

risk management is to manage and control market risk exposures within acceptable parameters,

while optimising the return.

5. OTHER EXPENSES

5.1. Other operating expenses

The other operating expenses of €2,931k incurred in 2022 (2021: €1,013k) mainly include legal fees

as well as fees for tax, accounting, auditor’s and consulting services.

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5.2 Fair value adjustments of warrants

Market Warrants and Founder Warrants are recognised at fair value and re-measured to fair value

at each reporting period.

As at 31 December 2021, the following valuations were as follows applied:

 Market Warrant: €1.275 per Market Warrant

 Founder Warrant: €0.725 per Founder Warrant

As at 31 December 2022, the following valuations were applied:

 Market Warrant: €2.134 per Market Warrant

 Founder Warrant: €1.902 per Founder Warrant

Please refer to note 9 and note 10 for further details regarding Market Warrants and Founder

Warrants.

5.3 Effective interest on ordinary shares subject to redemption

The initial fair value of the Ordinary Shares issued at Settlement is €9.60 per share. The allocated

transaction costs amount to €4,268k. Assuming 24 months till maturity gives an effective interest

rate of 3.35%. Consequently, an effective interest expense of €6,068k (€2021: €703k) has been

recorded.

5.4 Interest income

Interest income includes interest for the balances held in the Escrow Account (€649k, 2021: nil).

5.5 Interest expenses

Interest expenses include negative interest for the balances held in the Escrow account 809k (2021:

€141k).

For the period ended

31 December 2022

For the period ended

31 December 2021

€000 €000

Fair value loss Market Warrants (5,727) (500)

Fair value loss Founder Warrants (7,965) (169)

(13,692) (669)

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5.6 Personnel expenses

Personnel expenses of €1,244k are mainly related to the salaries of the Executive Directors of the

Company.

5.7 Deferred underwriting fee

Since the probability of a Business Combination was assumed to be 75% the deferred underwriting fees

of €6,000k have been recorded as an expense in 2022.

6. INCOME TAXES

The reconciliation between actual and theoretical tax expense is as follows:

The tax rate used in reconciliation above is the tax rate (32.96%) as the Company is domiciled in

Munich, Germany.

Deferred tax assets on tax loss-carryforwards and temporary differences have not been recognised

in respect of the loss incurred within the period ended 31 December 2022 because it is not probable

that future taxable profit will be available against which the Company can utilise the benefits

therefrom. Unused tax losses of the Company can be used without a time limit.

7. EARNINGS PER SHARE

Basic earnings per share (“EPS”) is calculated by dividing the profit or loss for the period attributable

to ordinary equity holders of the parent by the weighted average number of ordinary shares

outstanding during the period.

Diluted EPS is calculated by dividing the profit or loss attributable to ordinary equity holders of the

parent by the weighted average number of ordinary shares outstanding during the period plus the

weighted average number of ordinary shares that would be issued on conversion of all the dilutive

potential ordinary shares into ordinary shares.

The following table reflects the income and share data used in the basic and diluted EPS

calculations:

For the period ended

31 December 2022

For the period ended

31 December 2021

€000 €000

Profit/(Loss) for the period after tax (30,095) (2,526)

Income tax 0 0

Profit/(Loss) for the period before tax (30,095) (2,526)

Theoretical tax charges, applying the tax rat of 32.96% 9,919 833

Losses for which no deferred tax has been created 9,919 833

Income tax 0 0

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8. REDEEMABLE ORDINARY SHARES

The Company has completed its Private Placement on 18 November 2021 for the issuance of

20,000,000 Redeemable Ordinary Shares (or “Ordinary Share”) and 6,666,666 Market Warrants.

The 20,000,000 units (the "Units"), each consisting of one Ordinary Share and 1/3 Market Warrant,

were placed at a price of € 10.00 per Unit representing a total placement volume of €200 million.

Ordinary shareholders may request redemption of all or a portion of their Ordinary Shares in

connection with the Business Combination, subject to the conditions and procedures set forth in the

Articles of Association. Ordinary Shares will only be redeemed under the following conditions, (i)

the Business Combination is approved by the general meeting of shareholders and subsequently

consummated, (ii) a holder of Ordinary Shares notifies the Company of its request to redeem a

portion or all of its Ordinary Shares in writing by completing a form approved by the Board for this

purpose that will be included with the convening notice for the general meeting of shareholders and

such notification is received by the Company not earlier than the Publication of the notice convening

the general meeting of shareholders for the approval of the Business Combination and not later

than two business days prior to the date of the general meeting of shareholders convened for the

purpose of approving the Business Combination, and (iii) the holder of Ordinary Shares transfers

its Ordinary Shares to a trust depositary account specified by the Company in the notice convening

the general meeting of shareholders.

Each Ordinary Share that is redeemed shall be redeemed in cash for a price equal to the aggregate

amount on deposit in the Escrow Account related to the proceeds from the Private Placement of

the Ordinary Shares and Market Warrants, divided by the number of the then outstanding Ordinary

Shares, subject to (i) the availability of sufficient amounts on the escrow account and sufficient

distributable profits and reserves of the Company.

The Ordinary Shares are classified as a financial liability and therefore must be measured at fair

value at initial recognition and will then subsequently be accounted for at amortised cost.

The Market Warrants are classified as a derivative financial liability and therefore measured at fair

value both at initial recognition and subsequently, with the change in fair value being recognised in

profit or loss.

As at 31 Dec

2022

As at 31 Dec

2021

Loss attributable to Founder equity holders: (30,095) (2,526)

Weighted average number of founder shares for basic and diluted EPS 6,666,666 1,676,265

Basic and diluted EPS (4.51) (1.51)

Number of potential further shares not considered because they are antidilutive:

Redeemable Ordinary Shares 20,000,000 20,000,000

Market Warrants and Founder Warrants 13,434,666 13,434,666

Total 33,434,666 33,434,666

200000129/29415593.2

In the Private Placement, institutional investors subscribed on an arm’s length basis for the Unit,

where each Unit comprised of one Ordinary Share and one third of a Market Warrant, at €10 per

each. The Company considers this to be the combined fair value of one Ordinary Share and one

third of Market Warrant at initial recognition.

As the lowest level significant input in the Ordinary Share and Market Warrant valuation on initial

recognition is unobservable, these are both Level 3 valuations.

The calculation of the effective interest rate on the Ordinary Shares incorporates the proportion of

the direct issue costs attributable to the Ordinary Shares. The proportion of these costs attributable

to Market Warrants has been recognised in administrative expenses and finance expenses

respectively.

The amortised cost of the Redeemable Ordinary Shares was derived as follows:

Refer to notes 9 and 10 for the table with changes in level 3 items.

9. MARKET WARRANTS

The Company issued 6,666,666 Market Warrants which may be exercised to subscribe for Ordinary

Shares, and which are accounted for as a financial liability at fair value through profit or loss in

accordance with IAS 32. Refer to Note 8 for details on the fair value measurement at initial

recognition.

From 18 November 2021, the Ordinary Shares and Market Warrants have been separately listed

and traded on Euronext Amsterdam. Due to a lack of liquidity in the Market Warrants during the

period leading up to 31 December 2022 and afterwards, there was no recent quoted price at which

As at 31 December

2021

€000

Proceeds from public units 200,000

Fair value of Market Warrants on inception (8,000)

Assigned costs of issuance (4,268)

Subtotal: Amount of the liability at initial recognition 187,732

Interest expense relating to Redeemable Ordinary Shares 703

Redeemable Ordinary Shares, amortized costs as at 31 Dec. 2021 188,435

As at 31 December

2022

€000

Redeemable Ordinary Shares, amortized costs as at 1 January 2022 188,435

Interest expense relating to Redeemable Ordinary Shares 6,068

Redeemable Ordinary Shares, amortized costs as at 31 Dec. 2022 194,503

200000129/29415593.2

trading in the Market Warrants took place and as such the pricing of these Warrants does not

provide a reliable indication of the fair value of the Warrants at the year end.

Therefore, a binomial option pricing model valuation was used again, applying a volatility of 40%

and adjusting for a 75% probability of a successful Business Combination, to determine the fair

value of the Warrants at €2.134 as of 31 December 2022 given the most recent transaction price of

an Ordinary Share of €9.95 as of 30 December 2022.

The probability of a successful Business Combination increased from 50% to 75% as at 31

December 2022 since the Company was able to sign a Business Combination agreement with

Croma-Pharma GmbH in December 2022.

The sensitivity of the valuation to changes in the two unobservable inputs are:

Input Sensitivity Market Warrant value

Volatility estimate (40%) +/-10% +€0.34/-€0.49 +16%/-23%

Success probability (75%) +/-15% +€0.43/-€0.43 +20%/-20%

The impact on the liability for the Market Warrants would be:

As the lowest level significant input in this valuation is unobservable, this is a Level 3 valuation.

The following table presents the changes in level 3 items for the Market Warrants for the period

ended 31 December 2022:

10. FOUNDER WARRANTS

Founder Warrants are categorised as financial liabilities at fair value through profit or loss as of the

admission date of the warrant agreement. They are initially recognised at fair value and are

subsequently measured at fair value through profit or loss, with any fair value gains or losses being

recognised in the statement of profit or loss.

The fair value measurement of the Founder Warrants at initial recognition was determined by

reallocating the total consideration paid by the Sponsors over the different founder instruments and

transferred based on their stand-alone fair values.

Impact on Liability (in €k) - Market Warrants

60% 75% 90%

30% -5,427 -3,227 -1,027

Volatility

40% -2,827 0 2,840

50% -1,027 2,307 5,573

Business Combination Successfactor rate

Market

Warrants

€000

Opening balance 31 December 2021

8,500

Issuance of instruments 0

(Gains)/losses recognised in statement of profit or loss 5,727

Closing balance 31 December 2022

14,227

200000129/29415593.2

Therefore at initial recognition, alternative valuation techniques were used to determine these fair

values at inception. Using an option pricing model, after applying a 50% discount for the lock-up

period, a volatility of 40% and a 50% probability of a successful Business Combination, at inception

the fair value of the Founder Warrants was estimated to be €0.70.

Since the Founder Warrants are not publicly traded and there are no comparable quoted financial

instruments, alternative valuation techniques were used to determine their fair value at the year

end.

Using an option pricing model whilst after applying a 25% discount for the lock-up period, a volatility

of 40% and a 75% probability of a successful Business Combination, at 31 December 2022 the fair

value of the Founder Warrants was estimated to be €1.902 (given the most recent transaction price

of an Ordinary Share of €9.95 as of 30 December 2022).

The sensitivity of the valuation to changes in the two unobservable inputs are:

Input Sensitivity Founder Warrant value

Volatility estimate (40%) +/-10% +€0.45/-€0.47 +23%/-25%

Success probability (75%) +/-15% +€0.84/-€0.68 +44%/-36%

The impact on the liability for the Founder Warrants incl. Additional Subscription would be:

As the lowest level significant input in this valuation is unobservable, this is a Level 3 valuation.

The following table presents the changes in level 3 items for the Founder Warrants for the period

ended 31 December 2022:

All losses in the table above are unrealised and relate to the Market Warrants and Founder Warrants

held at the balance sheet date. Gain/losses are recorded in the line item “Fair value adjustment of

warrants” in the statement of profit or loss and other comprehensive income.

Impact on Liability (in €k) - Founder Warrants

60% 75% 90%

30% -6,714 -3,194 1,069

Volatility 40% -4,616 0 5,672

50% -2,721 3,032 10,003

Business Combination Successfactor rate

Founder

Warrants

€000

Opening balance 31 December 2021 4,907

Issuance of instruments 0

(Gains)/losses recognised in statement of profit or loss 7,965

Closing balance 31 December 2022

12,872

200000129/29415593.2

11. OTHER RECEIVABLES AND DEFERRED COST

Other receivables of €290k (2021: nil) mainly include withholding corporate income tax receivables

from the interest income.

The deferred cost capitalised of €248k (2021: €510k) is related to insurance premiums paid by the

Company.

12. CASH AND CASH EQUIVALENTS

The amount of cash and cash equivalents was €204,316k as at 31 December 2022 and included

€2,250k (2021: €5,432k) of cash balance held by the Company for operating purposes and cash

balances held in escrow of €202,067k (2021: €202,460k). The use of the cash balances held in

escrow is restricted as outlined in the Prospectus.

The Company has transferred all of the gross proceeds from the Private Placement of the Units

(€200,000k) and the Additional Sponsor Subscription (€2,460k) into the Escrow Account with

Deutsche Bank Aktiengesellschaft. In case of a Business Combination, the amounts held in the

Escrow Account will be paid out in a specific order of priority as disclosed in the Prospectus.

If the Company does not consummate a Business Combination by the Business Combination

Deadline, the amounts standing to the credit of the Escrow Account will be distributed to the

Company, and, after deduction of the unused portion, if any, of the proceeds from the Additional

Sponsor Subscription, at the first priority distributed to the holders of the Public Shares.

The proceeds from the Additional Sponsor Subscription will be used to cover the negative interest

paid on the proceeds held in the Escrow Account. In 2022, an amount of €800k (2021: €141k) has

been paid for the negative interest. However, due to the increases of the interest rates, interest

income of €649k was also realised in the later part of the year.

13. ISSUED CAPITAL AND RESERVES

13.1. Share capital

The Sponsors initially held 100 Founder Shares which were issued at the nominal value of price of

€0.01 per Founder Share. The Sponsors subscribed for additional 6,666,566 Founder Shares at the

nominal value of price of €0.01 per Founder Share, representing 25% of the Company’s voting

rights (not taking into account any Treasury Shares).

In 2022, the Sponsors paid an additional purchase price for the Founder Shares in the aggregate

of €1,205k that will be used, inter alia, to cover remuneration costs. This payment of the additional

purchase price did not result in the issuance of any additional Founder Shares.

Upon and following the completion of the Business Combination, the Founder Shares shall convert

into Ordinary Shares on a one-for-one basis in accordance with the following schedule, whereby

each holder of Founder Shares will be eligible for such conversion in proportion to its holdings of

Founder Shares (and in each case to be rounded to a full number of converted Founder Shares as

determined by the Board):

200000129/29415593.2

I. 26.67% of the Founder Shares on the Trading Day (“Trading Day” being a day on which

Euronext Amsterdam is open for trading) following the completion of the Business

Combination (“Tranche 1”),

II. 26.67% of the Founder Shares upon the closing price of the Ordinary Shares exceeding

€12.00 for any 10 Trading Days within a 30 Trading Days period (“Tranche 2”),

III. 26.67% of the Founder Shares upon the closing price of the Ordinary Shares exceeding

€15.00 for any 10 Trading Days within a 30 Trading Days period (“Tranche 3”), and

IV. 20% of the Founder Shares upon the closing price of the Ordinary Shares exceeding €20.00

for any 10 Trading Days within a 30 Trading Day period, but not earlier than 720 days

following the completion of the Business Combination and provided that by that time the

Sponsors (or any of them) still hold 50% of the aggregate of Ordinary Shares converted

under Tranche 1, Tranche 2 and Tranche 3 (“Tranche 4”),

and further provided that the conversion of Tranche 4 into Ordinary Shares shall be excluded upon

and following the fifth anniversary of the completion of the Business Combination; while,

notwithstanding the foregoing, any Founder Shares transferred by private sales or transfers made

in connection with the completion of the Business Combination at prices no greater than the price

at which the Founder Shares were originally purchased, will be converted into Ordinary Shares

according to the above schedule (the “Promote Schedule”), but will continue to be subject to the

Founder Lock-Up, relating to the Founder Shares, Founder Warrants and Ordinary Shares resulting

from the conversion in accordance with the Promote Schedule.

The Founder Shares will not be listed or admitted to trading on Euronext Amsterdam and have the

same voting rights as the Ordinary Shares. Further, The Founder Shares are entitled to the general

profit reserve of the Company and therefore carry the same dividend entitlements as the Ordinary

Shares. However, they will not be entitled to the share premium reserve and, in case of a dissolution

or liquidation of the Company, holders of Founder Shares will rank behind Ordinary Shareholders

in the distribution waterfall. Holders of Founder Shares are not provided with the redemption right.

The Founders have committed not to transfer, assign, pledge or sell any of the Founder Shares and

Founder Warrants other than to Permitted Transferees (as defined in the Prospectus) in accordance

with the Founder Lock-Up (as defined below). From the consummation of the Business

Combination, the Ordinary Shares received by the Founders as a result of the conversion in

accordance with the Promote Schedule, except for Excluded shares (as defined below), will become

transferrable on the first anniversary of the Business Combination or earlier if, at any time, the

closing price of the Ordinary Shares equals or exceeds € 12.00 for any 20 trading days within any

30 trading day period (the “Founder Lock-Up”). Excluded Shares are Ordinary Shares representing

half of the first tranche of Shares converted in accordance with the Promote Schedule, that are

transferable without restrictions by the Founders from the consummation of the Business

Combination (the "Excluded Shares").

Any conversion of Founder Shares into Public Shares does not require the holder to make any payment.

Therefore, there is no contractual obligation for the Company to repay the holders of the Founder

Shares. While the Company may pay dividends to Founders, the dividend rights of the Founders are

200000129/29415593.2

the same as those of the holders of the Public Shares and the granting of dividends is at the discretion

of the Company. Thus, the Company is not contractually obligated to pay dividends.

At initial recognition, the Founder Shares are recognised at fair value less transaction costs. No

subsequent changes to initial recognition are recognised.

The initial fair value of the Founder Shares issued at the incorporation of the Company is €0.01 per

share. The initial fair value of the Founder Shares issued at Settlement is €1.25 per share.

13.2. Share premium

Payments received in excess of the nominal value of the Founder Shares are allocated to the share

premium. In 2022, an additional amount of €1,205k has been paid.

14. TREASURY SHARES

On 17 November 2021, the Company issued 150,000,000 Treasury Shares to the Sponsors at the

nominal value of €0.01 which were subsequently be repurchased by, or transferred back to the

Company for the purpose of allotting the Treasury Shares to investors around the time of the

Business Combination and when Public Warrants or Founder Warrants are exercised. Each of the

Sponsors, except for Winners & Co. GmbH will subscribe to 19% (i.e., 28,500,000 Treasury Shares)

of the Treasury Shares, and Winners & Co. will subscribe to 5% (i.e., 7,500,000 Treasury Shares)

of the Treasury Shares. As a result, the Company will hold a total of 150,000,000 Treasury Shares

in its own capital in treasury. As long as these Treasury Shares are held in treasury they do not

yield dividends, do not entitle the Company to voting rights and do not count towards the calculation

of dividends or voting percentages. The Treasury Shares are admitted to listing and trading on

Euronext Amsterdam under the ticker symbol EHCT and ISIN NL0015000K02.

15. TRADE AND OTHER PAYABLES

Trade and other payables amount to €1,836k as at 31 December 2022 (2021: €2,121k). Trade and

other payables are related to legal and other services received by the Company. The carrying amounts

of these approximate their fair value.

16. DEFERRED UNDERWRITING FEE

The amount of €6,000k includes deferred Private Placement bank fees that becomes payable after

the Business Combination, and will be paid from the proceeds of the IPO currently deposited at the

escrow account.

17. COMMITMENTS AND CONTINGENIES

None noted.

18. RELATED PARTY DISCLOSURES

Parties are considered to be related if one party has the ability to control or jointly control the other

party or exercise significant influence over the other party in making financial or operational

200000129/29415593.2

decisions. Related parties also include key management personnel, i.e. the board members,

responsible for planning, directing and controlling the activities of the Company.

Transactions with related parties are assumed when a relationship exists between the Company

and a natural person or entity that is affiliated with the Company. This includes, amongst others,

the relationship between the Company and its subsidiaries, shareholders, directors and key

management personnel. Transactions are transfers of resources, services or obligations, regardless

of whether anything has been charged.

18.1. Transaction with the Sponsors

 Fees for the CEO and CIO (€966k and 2021 €97k).

 Fees for the Non-Executive Board members (€360k and 2021: €43k).

 Proceeds from payments for additional share premium (€1,205k)

18.2. Terms and conditions of transactions with related parties

There have been no guarantees provided or received for any related party receivables or payables.

The Founders and the Company have agreed to set off the principal amount (€ 1,500k) due under

the shareholder loan agreement entered into between the Founders and the Company against part

of the aggregate subscription price for these Founder Warrants. The shareholder loan was

consequently terminated.

18.3. Remuneration of Board Members

There are no advances or loans granted to members of the Board at the end of 31 December 2022.

The remuneration for all members of the Board, which are all considered key management

personnel, in 2022 amounted to €966k (2021: €97k) for the Executive Directors and €360k (2021:

€216k) for the Non-Executive Directors. The remuneration of the members of the Board only

consists of short-term benefits.

19. AUDIT FEES

The Company incurred the following audit expenses from its auditors, Deloitte Accountants B.V.

Note that part of these expenses are included in the transaction costs related to the Private

Placement:

 Audit of the financials statements: €50k (2021: €53k);

 Other audit procedures: nil (2021: €113k).

20. EVENTS AFTER THE REPORTING PERIOD

None noted.

200000129/29415593.2

OTHER INFORMATION

1. INDEPENDENT AUDITOR'S REPORT

Deloitte Accountants B.V.

Gustav Mahlerlaan 2970

1081 LA Amsterdam

P.O.Box 58110

1040 HC Amsterdam

Netherlands

Tel: +31 (0)88 288 2888

Fax: +31 (0)88 288 9737

www.deloitte.nl

The General Terms and Conditions for Services Deloitte Netherlands, January 2020 registered at the Chamber of Commerce under

number 24362837 apply to all agreements under which Deloitte performs services, except for M&A Services.

Deloitte Accountants B.V. is registered with the Trade Register of the Chamber of Commerce and Industry in Rotterdam number

24362853. Deloitte Accountants B.V. is a Netherlands affiliate of Deloitte NSE LLP, a member firm of Deloitte Touche Tohmatsu

Limited.

200000129/29415593.2

Independent auditor's report

To the Shareholders and the Board of European Healthcare Acquisition and Growth Company B.V.

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS 2022 INCLUDED IN THE ANNUAL

REPORT

Our opinion

We have audited the financial statements 2022 of European Healthcare Acquisition and Growth Company

B.V., based in Munich.

In our opinion the accompanying Company financial statements give a true and fair view of the financial

position of European Healthcare Acquisition and Growth Company B.V. as at December 31. 2022, and of

its result for the period from January 1, 2022 to December 31, 2022 in accordance with Part 9 of Book 2

of the Dutch Civil Code.

The financial statements comprise:

1. The Company Statement of Financial Position as at December 31, 2022.

2. The statement of profit or loss and other comprehensive income, statement of changes in equity

and statement of cash flows as at December 31, 2022.

3. The notes comprising a summary of the accounting policies and other explanatory information.

Basis for our opinion

We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our

responsibilities under those standards are further described in the "Our responsibilities for the audit of

the financial statements" section of our report.

We are independent of European Healthcare Acquisition and Growth Company B.V. in accordance with

the EU Regulation on specific requirements regarding statutory audit of public-interest entities, the Wet

toezicht accountantsorganisaties (Wta, Audit firms supervision act), the Verordening inzake de

onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional

Accountants, a regulation with respect to independence) and other relevant independence regulations in

the Netherlands. Furthermore, we have complied with the Verordening gedrags- en beroepsregels

accountants (VGBA, Dutch Code of Ethics).

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

opinion.

Emphasis of Matter on material uncertainty related to going concern

The Management Board has assessed the going concern assumption, as part of the preparation of the

financial statements, and disclosed this in the Financial Statements (note 2.2 Going Concern). The

Management Board states that if the Company does not complete a business combination within 24

months after the settlement of the IPO (November 19, 2023), the Ordinary Shares and Public Warrants

will be delisted and the company must be dissolved and liquidated. Management indicates this is a

material uncertainty, which may cast significant doubt about the ability to continue as a going concern.

We have obtained management’s assessment. We have considered the fact that upon preparation of the

financial statements a Business Combination has been proposed but has not yet been closed, and is still

subject to Shareholder approval. As a result, the management assessment indicate the existence of a

material uncertainty which may cast significant doubt about the company’s ability to continue as a going

concern. Our opinion is not modified in respect of this matter.

We have outlined the responsibilities of the Board and ourselves in the “Description of responsibilities

regarding the financial statements” section further below.

Emphasis of Matter on Uncertainty of Valuation of Warrants

In disclosure note 9 and 10 management elaborated on the valuation of the market warrants and the

founder warrants. The absence of representative market data requires management to calculate the

value of the instruments based on a mathematical valuation model. The model applied is common and

uses a generally accepted valuation methodology for the valuation of these financial instruments.

Management has added a sensitivity analyses on the impact of the main assumptions that are used as

input variable in a valuation model. From the sensitivity analyses as disclosed by management it appears

that the value of the warrants are highly sensitive to the variation of particularly two unobservable

assumptions:

- The estimated chance of successfully completing a business combination; and

- The volatility of the associated underlying instrument.

Both assumptions are inherently uncertain and judgemental. The chance of completing a business

combination is uncertain until negotiations with one or more candidates are sufficiently advanced and is

ultimately dependent upon the approval of the Shareholders. The volatility associated with the underlying

candidate typically would vary with the market the candidates are operating in. Until a business

combination candidate is decided upon, no objective data on the volatility is therefore available.

Furthermore a discount to the value of the founder warrants of 25% for the lock-up period is based on

assumptions of management.

The outcome of the valuation based on the calculation, can be different from the price for which the

public warrants are traded around December 31, 2022. This is due to the inherent uncertainties on the

main variables as included in the valuation, combined with absence of more objective information that

can be used by market participants and the Company when performing the valuation of the warrants and

the limited volumes traded. The value of the SPAC is particularly derived from the cash that is available

for the business combination and from the valuation of the target company. The value of the warrants

will be primarily relevant after a business combination. In case no business combination is realized the

value of the warrants will be zero.

Based on the sensitivities calculated by management, the valuation can be EUR 15.6 million higher or

EUR 12.1 million lower then the value estimated in the financial statements, with corresponding fair

value change through profit and loss. Our opinion is not modified in this respect.

Information in support of our opinion

We designed our audit procedures in the context of our audit of the financial statements as a whole

and in forming our opinion thereon. The following information in support of our opinion was addressed in

this context, and we do not provide a separate opinion or conclusion on these matters.

Materiality

Based on our professional judgement we determined the materiality for the financial statements as a

whole at € 2.000.000. The materiality is based on 1% of the Company’s total assets. We have also taken

into account misstatements and/or possible misstatements that in our opinion are material for the users

of the financial statements for qualitative reasons.

We agreed with the Board that misstatements in excess of € 100.000, which are identified during the

audit, would be reported to them, as well as smaller misstatements that in our view must be reported on

qualitative grounds.

Scope of fraud and compliance with laws and regulations

In accordance with the Dutch Standards on Auditing, we are responsible for obtaining reasonable

assurance

that the financial statements taken as a whole are free from material misstatements, whether due to

fraud

or error. Non-compliance with law and regulation may have a material effect on the financial statements

as it may result in fines, litigation or other consequences for European Healthcare Acquisition and Growth

Company B.V.

Audit approach fraud risks

We identified and assessed the risks of material misstatements of the financial statements due to

fraud. During our audit we obtained an understanding of the entity and its environment and the

system of internal control, including:

• the risk assessment process;

• management’s process for responding to the risks of fraud and monitoring the system of internal

control;

• how the Non-Executivies exercise oversight.

We also obtained understanding of the outcomes of these processes. Note that the company is a Special

Purpose Acquisition Company. The Board of the company is pursuing a business combination (only). By

result it has no (or only limited) business activities.

In the context of the activities of the entity, we have evaluated the design and implementation of the

system of internal control and in particular the fraud risk assessment. We evaluated fraud risk factors

with respect to financial reporting fraud, misappropriation of assets and bribery and corruption.

Particularly, we have evaluated all transactions on the escrow account in relation to the offering circular.

We evaluated the design and the implementation of internal controls designed to mitigate fraud risks.

In connection with the presumed risks of financial statement fraud, we considered fraud in relation to

management override of controls, including evaluating whether there was evidence of bias by the

Executives in the Board. Our procedures include an assessment of the the selection and application of

accounting policies by the group, particularly those related to subjective measurements and complex

transactions, as these may be indicative of fraudulent financial reporting. With respect to the element of

bias, we evaluated whether the judgments and decisions made by management in making the

accounting estimates included in the financial statements represent a risk of fraudulent material

misstatement. We tested the appropriateness of journal entries recorded in the general ledger and other

adjustments made in the preparation of the financial statements.

We incorporated elements of unpredictability in our audit. We also considered the outcome of our other

audit procedures and evaluated whether any findings were indicative of fraud or non-compliance. For

significant transactions we evaluated whether the business rationale of the transactions suggests that

they may have been entered into to engage in fraudulent financial reporting or to conceal

misappropriation of assets.

We made inquiries with management, those charged with governance and with others within the

Company.

We refer to section “Risk Management and control systems” of the Report of the Board of Directors for

management’s fraud risk assessment. We obtained written representations that all known instances of

(suspected) fraud and other irregularities have been disclosed to us.

Management insights, estimates and assumptions that might have a major impact on the financial

statements are disclosed in note 3 of the financial statements.

Our procedures did not lead to indications for fraud potentially resulting in material misstatements.

Audit approach risks of compliance with laws and regulations

We assessed the laws and regulations relevant to the Company through discussion with the Executive

Directors and Non-Executive Directors and reading minutes.

As a result of our risk assessment procedures, and while realizing that the effects from non-compliance

could considerably vary, we considered the following laws and regulations: adherence to (corporate) tax

law and financial reporting regulations, the requirements of Part 9 of Book 2 of the Dutch Civil Code with

a direct effect on the financial statements as an integrated part of our audit procedures, to the extent

material for the related financial statements. We obtained sufficient appropriate audit evidence

regarding provisions of those laws and regulations generally recognized to have a direct effect on the

financial statements.

Apart from these, the Group is subject to other laws and regulations where the consequences of non-

compliance could have a material effect on amounts and/or disclosures in the financial statements, for

instance, through imposing fines or litigation.

Our procedures are more limited with respect to laws and regulations that do not have a direct effect on

the determination of the amounts and disclosures in the financial statements. Compliance with these

laws and regulations may be fundamental to the operating aspects of the business, to the Group's ability

to continue its business, or to avoid material penalties and therefore non-compliance with such laws and

regulations may have a material effect on the financial statements. Our responsibility is limited to

undertaking specified audit procedures to help identify non-compliance with those laws and regulations

that may have a material effect on the financial statements.

Our procedures are limited to (i) inquiry of the Board and others within Company as to whether the

Company is in compliance with such laws and regulations and (ii) inspecting correspondence, if any, with

the relevant licensing or regulatory authorities to help identify non-compliance with those laws and

regulations that may have a material effect on the financial statements.

Naturally, we remained alert to indications of (suspected) non-compliance throughout the audit.

Finally, we obtained written representations that all known instances of (suspected) fraud or non-

compliance with laws and regulations have been disclosed to us.

Our key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our

audit of the financial statements. We have communicated the key audit matters to the Board. The key

audit matters are not a comprehensive reflection of all matters discussed.

These matters were addressed in the context of our audit of the financial statements as a whole and in

forming our opinion thereon, and we do not provide a separate opinion on these matters.

Dutch Corporate

Governance Code and

Special Purpose

Acquisition

Companies

The Company is a Special Purpose Acquisition Company (“SPAC”) aiming to

consummate a Business Combination with a target company. The Company is not a

business in the traditional sense and has no employees. The Company has a limited

lifetime and a very specific capital structure with a number of classes of shares and

other financial instruments. The Dutch Corporate Governance Code is applicable for

all Dutch entities of which the shares are listed on regulated markets. The code

comprises of best practices of the way the responsibilities of shareholders,

management and oversight boards can be organised contributing to long term value

creation, risk management and relations with other stakeholders. Based upon the

Company’s specific business, a number of best practices are not applicable.

Furthermore, the Dutch Corporate Governance Code is aimed at two-tier board

systems. The Company has an one-tier board. The Non-Executive Directors are

responsible for independent oversight, but have short term financial incentives in the

Company similar to Executive Directors. The Non-Executive directors are valuable for

the Company as a result of their knowledge, experience in relevant industries, certain

types of transactions and/or relationships or network. As a consequence of this, there

may be a threat of their independence and/or a conflict of interest when identifying

targets or in subsequent negotiations. The Dutch Corporate Governance Code

includes best practices in connection with the information to shareholders. Within

European Healthcare Acquisition and Growth Company B.V. the Board has 25% of the

voting rights, so the level of information among the shareholders is not the same.

How our audit

responded to the key

audit matter

As part of our audit work we have reviewed paragraph Corporate Governance of the

Annual Report where managements comply or explain with the Dutch Corporate

Governance Code. Furthermore we have evaluated the implications of the deviations

from the Dutch Corporate Governance Code in our evaluation on the internal control

environment.

In conjunction with the International Standard on Auditing 720 we compared the

information with knowledge we obtained during our audit process. Furthermore we

compared the information contained in the Corporate Governance paragraph with

other parts of the financial statements for consistency. Note we have not performed

audit procedures on the Board Report.

Key observations Although the deviations from the Dutch Corporate Governance Code are numerous,

we have not identified material inconsistencies between the Corporate Governance

paragraph of the annual report and other parts of the annual report. Nor have we

identified any deviations between the knowledge obtained during the audit and the

relevant section of the annual report. It may be the case that if we had audited the

information contained in the Directors’ report we could have identified other matters.

Impact of different

classes of shares

The Company has issued different classes of shares with corresponding different risks

and rewards. The sponsors of the SPAC have put capital at risk to list the ordinary

shares and to fund the search process to find a target to enter into a Business

Combination. In return the sponsors received sponsor shares. The sponsor shares

give voting rights equal to the ordinary shares. The nominal value of the sponsor

shares, that has been paid up by the sponsors amounts to EUR 0.01 per share. Upon

a successful business combination the sponsor shares are converted to ordinary

shares. Ordinary shares have been issued within units at EUR 10 for 1 ordinary share

and 1/3 warrant. In case holders of these ordinary shares are not in favor of the

proposed business combination they can redeem these shares.

As at December 31, 2022, the ordinary shares traded for EUR 9,95 at Euronext. The

difference in price has implications for the wealth generated for the holders of the

various instruments upon the consummation of a business combination. For the

founders wealth is created in case the market value of the ordinary shares exceeds

EUR 1,92. Ordinary shareholders are not aligned with that. As a consequence of this,

there is a threat of a conflict of interest when evaluating and/or valuing potential

business combinations. The sponsors have agreed to a conditional lock-up as outlined

in the Prospectus.

In case of a business combination, sponsor shares are converted into ordinary shares

and ordinary shares are issued to the existing shareholders of the target of the

business combination. These transactions in combination with the conversion rights

of the warrants, lead to dilution for the holders of the ordinary shares as explained in

Chapter 9 of the Company’s IPO prospectus on the potential dilution scenario’s upon

consummation of a business combination.

How our audit

responded to the key

audit matter

As part of our audit work we have reviewed the disclosure in the paragraph

“Classification of the instruments issued by the Company” and have traced and

agreed the statements made within this paragraph to the underlying documentation

of the instruments. Furthermore we have specifically evaluated the disclosure of the

rights and interest of the Founder Shareholders and Public Shareholders.

Key observations Although the risks and rewards between the sponsor shares and ordinary are

substantially different, we have not identified inconsistencies between the Report of

the Board of Directors and Report of the Non-Executive Directors and other parts of

the annual report. Nor have we identified any deviations between the knowledge

obtained during the audit and the relevant section of the Report of the Board of

Directors and Report of the Non-Executive Directors. It may be the case that if we

had audited the information contained in the Report of the Board of Directors and

Report of the Non-Executive Directors we could have identified other matters.

Scope Definition,

Classification and

valuation of financial

instruments

The Company has issued various classes of shares and derivatives/Financial

Instruments. Based on the principles of IFRS the Board has determined the relevant

scope within IFRS and subsequent classification of the various financial instruments

issued upon inception and at the IPO of the Company on 19, November 2021.

The classification relates to equity or liability presentation of the instruments. Based

on the interpretation of the Board, the ordinary shares and the market warrants are

classified as liability. The ordinary shares are valued at amortized cost. The market

warrants are publicly traded at Euronext.

How our audit

responded to the key

audit matter

In connection with the verification of the scope definition and classification of the

instruments as at December 31, 2022, we have reviewed the position papers

prepared by the Board in combination with the facts and circumstances and the

principles of IAS 32 and IFRS 2. We have involved Deloitte IFRS experts.

We have evaluated if the requirements for an active market are met, which is not the

case for the market warrants and consequently the value hereof is derived from a

valuation model. A similar valuation model is applied for the founder warrants. For

the valuation of the ordinary shares we have audited the calculation of the amortized

cost. Most important management estimates impacting the amortized costs relate to

the estimate of the lifetime of the entity that is used to gross up the liability.

Key observations We concur with the presentation of the financial instruments based on our review of

the position papers. With respect to the valuation of the market and founder warrants

we concur with the valuation based upon a level 3 input. For the ordinary shares we

have verified the assumptions used for the valuation of the amortized cost.

REPORT ON THE OTHER INFORMATION INCLUDED IN THE ANNUAL REPORT

In addition to the financial statements and our auditor's report thereon, the annual report contain other

information that consists of:

• Report of the Board of Directors.

• Report of the Non-Executive Directors.

Based on the following procedures performed, we conclude that the other information:

• Is consistent with the financial statements and does not contain material misstatements.

• Contains the information as required by Part 9 of Book 2 of the Dutch Civil Code.

We have read the other information. Based on our knowledge and understanding obtained through our

audit of the financial statements or otherwise, we have considered whether the other information

contains material misstatements.

By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil

Code and the Dutch Standard 720. The scope of the procedures performed is substantially less than the

scope of those performed in our audit of the financial statements.

Management is responsible for the preparation of the other information, including the Report of the

Board of Directors and Report of the Non-Executive Directors in accordance with Part 9 of Book 2 of the

Dutch Civil Code, and the other information as required by Part 9 of Book 2 of the Dutch Civil Code.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

Engagement

We were engaged by the Board as auditor of European Healthcare Acquisition and Growth Company B.V.

on July 9, 2021, as of the audit for the period from July 9, 2021 to December 31, 2021 and have

operated as statutory auditor ever since that financial year.

No prohibited non-audit services

We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on

specific requirements regarding statutory audit of public-interest entities.

EUROPEAN SINGLE ELECTRONIC REPORTING FORMAT (ESEF)

European Healthcare Acquisition and Growth Company B.V. has prepared its annual report in ESEF. The

requirements for this are set out in the Commission Delegated Regulation (EU) 2019/815 with regard to

regulatory technical standards on the specification of a single electronic reporting format (hereinafter:

the RTS on ESEF).

In our opinion, the annual report, prepared in XHTML format, including the financial statements, of

European Healthcare Acquisition and Growth Company B.V., complies in all material respects with the

RTS on ESEF.

Management is responsible for preparing the annual report including the financial statements in

accordance with RTS on ESEF.

We performed our examination in accordance with Dutch law, including Dutch Standard 3950N

‘Assurance-opdrachten inzake het voldoen aan de criteria voor het opstellen van een digitaal

verantwoordingsdocument’ (assurance engagements relating to compliance with criteria for digital

reporting).

Our examination included amongst others:

 Obtaining an understanding of the company’s financial reporting process, including the

preparation of the reporting package.

 Identifying and assessing the risks that the annual report does not comply in all material

respects with the RTS on ESEF and designing and performing further assurance procedures

responsive to those risks to provide a basis for our opinion, including:

o obtaining the reporting package and performing validations to determine whether the

reporting package containing the Inline XBRL instance and the XBRL extension

taxonomy files has been prepared in accordance with the technical specifications as

included in the RTS on ESEF;

o examining the information related to the consolidated financial statements in the

reporting package to determine whether all required mark-ups have been applied and

whether these are in accordance with the RTS on ESEF.

DESCRIPTION OF RESPONSIBILITIES REGARDING THE FINANCIAL STATEMENTS

Responsibilities of the Board for the financial statements

Management is responsible for the preparation and fair presentation of the financial statements in

accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, management is

responsible for such internal control as management determines is necessary to enable the preparation

of the financial statements that are free from material misstatement, whether due to fraud or error.

As part of the preparation of the financial statements, management is responsible for assessing the

Company's ability to continue as a going concern. Based on the financial reporting frameworks

mentioned, management should prepare the financial statements using the going concern basis of

accounting unless management either intends to liquidate the Company or to cease operations, or has no

realistic alternative but to do so.

Management should disclose events and circumstances that may cast significant doubt on the Company's

ability to continue as a going concern in the financial statements.

The Non-Executive Board members are responsible for overseeing the Company's financial reporting

process.

Our responsibilities for the audit of the financial statements

Our objective is to plan and perform the audit assignment in a manner that allows us to obtain sufficient

and appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means we may

not detect all material errors and fraud during our audit.

Misstatements can arise from fraud or error and are considered material if, individually or in the

aggregate, they could reasonably be expected to influence the economic decisions of users taken on the

basis of these financial statements. The materiality affects the nature, timing and extent of our audit

procedures and the evaluation of the effect of identified misstatements on our opinion.

We have exercised professional judgement and have maintained professional skepticism throughout the

audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence

requirements. Our audit included among others:

• Identifying and assessing the risks of material misstatement of the financial statements, whether

due to fraud or error, designing and performing audit procedures responsive to those risks, and obtaining

audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not

detecting a material misstatement resulting from fraud is higher than for one resulting from error, as

fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of

internal control.

• Obtaining an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion

on the effectiveness of the Company's internal control.

• Evaluating the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by management.

• Concluding on the appropriateness of management's use of the going concern basis of accounting,

and based on the audit evidence obtained, whether a material uncertainty exists related to events or

conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we

conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to

the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our

opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report.

However, future events or conditions may cause a Company to cease to continue as a going concern.

• Evaluating the overall presentation, structure and content of the financial statements, including the

disclosures.

• Evaluating whether the financial statements represent the underlying transactions and events in a

manner that achieves fair presentation.

We communicate with the Board regarding, among other matters, the planned scope and timing of the

audit and significant audit findings, including any significant findings in internal control that we identified

during our audit. In this respect we also submit an additional report to the audit committee in

accordance with Article 11 of the EU Regulation on specific requirements regarding statutory audit of

public-interest entities. The information included in this additional report is consistent with our audit

opinion in this auditor's report.

We provide the Board with a statement that we have complied with relevant ethical requirements

regarding independence, and to communicate with them all relationships and other matters that may

reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Board, we determine the key audit matters: those matters that

were of most significance in the audit of the financial statements. We describe these matters in our

auditor's report unless law or regulation precludes public disclosure about the matter or when, in

extremely rare circumstances, not communicating the matter is in the public interest.

Amsterdam, March 24, 2023

Deloitte Accountants B.V.

J. Hendriks

2. PROVISIONS IN THE ARTICLES OF ASSOCIATION RELATING

TO PROFIT APPROPRIATION

Article 27. Special resolutions

27.1. The following resolutions can only be passed by the General Meeting at the proposal

of the Board:

a. the reduction of the Company's issued share capital;

b. the making of a distribution on the Shares from the Company's profits or

reserves;

c. the making of a distribution in the form of Shares in the Company's capital or

in the form of assets, instead of in cash;

d. the amendment of these articles of association;

e. the entering into of a merger or demerger; and

f. the Company's dissolution.

[…]

Article 31. Distributions

31.1. After adoption of the annual accounts, but no later than within six months from the end

of the financial year concerned, a cash distribution will be made on the preference

shares in respect of the previous financial year, which distribution will be calculated as

follows:

(i) if the payment of the preference shares has been made at the expense of the

reserves of the Company, the annual distribution for all issued preference

shares will amount to the aggregate amount of one thousand euro (EUR

1,000);

(ii) otherwise, the distribution will be a percentage equal to the average one

monthly Euribor (Euro Interbank Offered Rate) – weighted to reflect the

number of days for which the payment is made – plus a premium, to be

determined by the Board, subject to the approval of the Non-Executive

Directors, of at least one percentage point and at most four percentage points,

depending on the prevailing market conditions.

The distributions mentioned under (i) and (ii) shall be calculated over the

proportionate period of time if the relevant preference shares were issued in the

course of the financial year. Distributions in respect of the preference shares are

calculated over the paid up part of their nominal value. The making of such

distributions is subject to the provision of article 31.3.

The amounts of said distributions will be charged to the profits realised during the

financial year in respect of which it is made or, if such profits are insufficient, any

other part of the Company's distributable equity. No further distributions will be made

on the preference shares.

31.2. Distributions can be made to the extent that the Company’s equity exceeds reserves

that must be maintained by law.

31.3. A resolution to make any distribution shall not take effect as long as the Board has not

given its approval. The Board may only withhold such approval if it knows or should

reasonably foresee that, following the distribution, the Company will be unable to

continue paying its due and payable debts.

31.4. All distributions shall be made in proportion to the aggregate number of Shares, subject

to the last sentence of article 32.1.

31.5. The parties entitled to a distribution shall be the relevant Shareholders, usufructuaries

and pledgees, as the case may be, at a date to be determined by the Board for that

purpose. This date shall not be earlier than the date on which the distribution was

announced.

31.6. The General Meeting may resolve, subject to article 27 and without consent of individual

Shareholders being required, that all or part of a distribution, instead of being made in

cash, shall be made in the form of Shares in the Company's capital or in the form of the

Company's assets.

31.7. A distribution on Shares in the Company's capital shall be payable on such date and, if

it concerns a distribution in cash, in such currency or currencies as determined by the

Board. If it concerns a distribution in the form of the Company's assets, the Board shall

determine the value attributed to such distribution for purposes of recording the

distribution in the Company's accounts with due observance of applicable law (including

the applicable accounting principles).

31.8. A claim for payment of a distribution shall lapse after five years have expired after the

distribution became payable.

31.9. For the purpose of calculating the amount or allocation of any distribution, Shares held

by the Company in its own capital shall not be taken into account, unless such Shares

are encumbered with a right of usufruct or pledge that benefits a party other than the

Company. No distribution shall be made to the Company in respect of Shares held by

it in its own capital, unless those Shares are encumbered with a right of usufruct or

pledge that benefits a party other than the Company.

31.10. For all dividends and other distributions in respect of Shares included in the Statutory

Giro System the Company will be discharged from all obligations towards the relevant

Shareholders by placing those dividends or other distributions at the disposal of, or in

accordance with the regulations of, Euroclear Nederland.

Article 32. Reserves

32.1. The Company shall maintain a general share premium reserve. Share premium paid on

any Shares shall be added to the general share premium reserve. In addition, the

Company shall maintain a general profit reserve. Class B ordinary shares and

preference shares are not entitled to distributions from the general share premium

reserve of the Company.

31.1. Subject to article 27 and article 31.1 and article 31.3, the General Meeting is authorised

to resolve to make a distribution from the Company's reserves.

31.2. The Board may resolve to charge amounts to be paid up on Shares against the

Company's reserves, irrespective of whether those Shares are issued to existing

Shareholders.

Article 33. Profits

33.1. Subject to article 31.1 and article 31.3, the profits shown in the Company's annual

accounts in respect of a financial year shall be appropriated as follows, and in the

following order of priority:

a. the Board shall determine which part of the profits shall be added to the Company's

reserves; and

b. subject to article 27.1, the remaining profits shall be at the disposal of the General

Meeting for distribution.

33.2. Subject to article 31.1 and article 31.3, a distribution of profits shall be made after the

adoption of the annual accounts that show that such distribution is allowed.

33.3. The Board may resolve to make interim distributions, provided that the requirements

referred to in article 31.1 and article 31.3 have been met.