Arcario discloses material changes to accounts since publication of the 2023 Q4 interim report.

The 2023 Q4 interim report was issued on 27 February 2024. During the preparation of the annual report and finalization of the statutory audit of the 2023 group accounts a material subsequent event has occurred that impacts the 2023 financial statement.

Two accounting mistakes were corrected and a few re-classifications (i.e. not impact on the result) were included.

Arcario AB accounts have also been impacted by the same subsequent event and one item has been reclassified without any impact on the result.

GROUP ACCOUNTS

Subsequent event

• The bitcoin halving on 19 April 2024 has made Green Data’s bitcoin mining operations with the current setup unviable. The bitcoin mining equipment has been written down to a value corresponding to the expected resale value. This has resulted in fixed assets decreasing from SEK 35,856K to SEK 3,984K.

Accounting mistakes

• The interim report overstated losses from associated companies. This has resulted in financial assets increasing from SEK 13,431K to SEK 20,610K.
• Customer crypto assets and corresponding liabilities were valued at the wrong exchange rate resulting in an overstatement of cost of sale and an understatement of interest income and other financial income, the net P&L impact of this adjustment is an improvement of SEK 469K.

Reclassifications and group eliminations

• Internal transactions and test trades to validate K33’s new trading platform were not eliminated in the interim report leading to inflated revenue and cost of sale for the group. Total net sales and cost of sales were both overstated by SEK 29,300K. This has resulted in Net Sales decreasing from SEK 183,393K to SEK 154,093 and Cost of Sale decreasing from 175,674K to SEK 144,727K.
• Interest rates on internal loans were not eliminated in the interim report leading to inflated interest income and interest expense by SEK 10,372K respectively. This has no impact on the group’s result for the year.

EBT bridge between 2023 Q4 interim report and 2023 Annual report.

(SEK ‘000)

Reported EBT in 2023 Q4 Interim report -65 378

Write down of bitcoin mining equipment -31 821

Correction of associated companies’ error 6 695

Crypto revaluation 469

Other 38

Expected EBT in 2023 Annual Report -89 997

ARCARIO AB ACCOUNTS

Subsequent event

• The decision to wind down the bitcoin mining operation in Green Data is a strong indication that the receivables in Arcario AB towards Green Data cannot be paid in full. Receivables have been written down to zero resulting in a one-off charge of SEK 47 198K. This has resulted in current receivables decreasing from SEK 111,407K to SEK 64,196K.

Reclassification

• The SEK 217M impairment charge for shares in subsidiaries was erroneously classified as a depreciation in the 2023 Q4 Interim report. This item will instead be classified as a non-recurring amortization of current assets. This has no impact on the company’s result for the year.

All changes are solely related to Q4 2023 and have no impact on reported results or financial position for any preceding quarter.

Updated Profit & Loss for 2023 and Balance Sheet as of 2023-12-31 for the Group and Arcario AB attached.

For further information contact:
Torbjørn Bull Jenssen, CEO, Arcario AB
E-mail: ir@arcario.com
Web: ir.arcario.com

About Arcario
Arcario is an industrial investment company within the digital asset space, committed to shaping the future of finance as we know it. The company boasts a diversified portfolio that includes K33, a research-led digital assets brokerage, Green Data, an eco-friendly Bitcoin mining operation, and minority stakes in LN Markets, a Bitcoin exchange leveraging the Lightning Network and Finpeers, a startup democratising access to private financial markets through tokenization. The Company is listed on Nasdaq First North Growth Market and Mangold Fondkommission is Certified Adviser.