By 2023 Crown Energy has in practice disposed of or relinquished its oil industry projects. However, one licence area remains contracted to Crown but is subject to the terms of the October 2021 Sale and Purchase Agreement (SPA) that will be finished by October 2026, if not sooner. Crown Energy is now actively seeking to invest in sustainable businesses within the HealthTech and green sectors.
With the acquisition of SmartTee and the AccYouRate Group of companies in February of 2023 Crown Energy started what is a transitional journey towards operating a green and sustainable business. However, AccYouRate is only the beginning, and we are now turning our aim towards the green sector where we want to be a part of the many exciting new fields with significant growth potential. We are committed to ensuring that our investments are made into projects that have a positive impact on humanity, the Earth and on our legacy.
Crown has by now received 107 MUSD in payments relating to the sale of the oil & gas assets in accordance with the SPA of October 2021. In addition, 73 MUSD more is due to be paid in instalments of 8 m USD each 6 months and a final payment of 33 MUSD. Depending on the steps taken for the development of the license by the buyer there is an option of an earn-out of up to 270 M USD to Crown from that transaction. There is also material value in the Angolan asset development and services business, both cash on accounts and with regards to the real estate assets, as shown in our previous Reports. The investment into AccYouRate has so far meant outgoing payments of 75 M EUR in a first instalment and 9 M paid in a second installment. The total purchase price is set to EUR 163 million and is due to be fully paid by 2026. With reference to the mutual ambitions and aims for the company between Crown and the seller, who remains as owner of 15 % of SmartTee the current payment schedule is subject to further commercial discussions, as disclosed in Q3 Report 2023.
AccYouRate is a very exciting company with a unique groundbreaking technology to measure health indicators and to build a world class data base of health-related information.
The company is working diligently on scaling up its manufacturing facility while improving the CE certificates and preparing submissions for FDA approval. In addition to this, work is being carried out to enhance the protection of immaterial rights of the products by focusing on further patent submissions. With the goal of sourcing a large professional network and relevant competence AccYouRate is currently establishing a world renown board of advisors.
Work is being performed to continue development of AccYouRate´s app (front end) and back-end dashboard platforms. In parallel the AccYouRate software (algorithms) is developed for the different market segments being targeted. The company has launched AccYouRate AI, an Israeli entity that applies artificial intelligence (AI) techniques to analyse the medical data generated by the sensorised garment. Namely, AccYouRate AI uses machine learning (ML) and deep learning (DL) tools, to develop and refine the algorithms that form the basis of the decision-making layer.
In addition, the company is diligently developing its unique offering (ecosystem) for the different market segments (Well-being/sport, Defense, Health, Occupational medicine). There are advanced negotiations with several companies and stakeholders.
There are different options for financing being considered for the future. For the time being it is being funded by the parent company.
We are currently reviewing different options for how to best capitalise on the investments made and how to extract the value out of these assets for the benefit of our growth and our shareholders. The entire Crown group is a part of the new and exciting green transition, and our Angolan operations are no exception. We are engaged in identifying new opportunities, both in the current real estate operations but also towards our new green investment goals. A plan will be in place and the market advised during the course of 2024.
Crown Energy is expanding rapidly, and that growth led to certain challenges with regards to integration of financial reporting. Crown Energy is determined to incorporate a stable finance department in all our subsidiaries, and we have already taken several steps towards that goal. Crown Energy has enhanced the team both locally and, in its subsidiaries, to improve and develop better and more efficient processes to manage the reporting schedule. We are working hard and are actively improving our processes across the Group to be able to publish Reports in a time more convenient to the market and our shareholders.
We are subject to the terms of a Non-Disclosure Agreement and are still not allowed by the buyer to reveal its name. Both our auditors and legal advisors are informed of the Buyer’s details and are actively supporting us. We will publish the name when we are allowed to. However, we have to date received 107 M USD, in accordance with the payment schedule disclosed at the signing of the SPA in 2021.
In our Reports we continuously disclose the status of this project. The Angolan Government buyer has several times changed the tenant that is supposed to occupy the C-view business park. That meant that the property has not yet been completely finalised and as such no tenant has assumed the economic control over the property. Over the years we have worked hard to secure full payment and additional inflation compensation that our subsidiary is entitled to. Crown Energy still has the title to the property and will be able to recognise the sale as profits in our local income statement as soon as the title is transferred to the buyer in accordance with local accounting standards. According to IFRS the sale will be recognised when the economic control is transferred to the buyer.