TrustBuddy to update group accounts – increasing year-end result and reducing amortizationsStockholm, 2013-08-20 08:00 CEST --
TrustBuddy International AB (publ) ("TrustBuddy" or the "Company") today announces the following information.
Summary
TrustBuddy changes its goodwill, which arose in connection with the reverse merger with 360 Holding AB (publ) in June 2011. The size of the goodwill at the time of transaction was approx. SEK 89 million, which have led to the Company having a year-end result of SEK 8,9 million lower than had otherwise been the case. The Company's auditors is currently working to adjust the previous group accounts. The result of the work will affect TrustBuddy's group accounts in a materially positive direction, among other will the negative year-end result result from 2011 and 2012 increase. Further positive effects are that the group accounts will in a more accurate way reflect the business' good profitability.
The reduction of goodwill and the increase of profits will have no impact on the Company over time, other than the increase of tax payable on profits. The change in goodwill has occurred as a result of the Company's transition to become a Swedish regulated credit market company (Sw: kreditmarknadsbolag). It has now been resolved that all necessary accounting adjustments shall be carried out during second and third quarter 2013 and also be applied in coming quarterly reports.
Background
On 30 June 2011 TrustBuddy (then named "360 Holding") carried out an acquisition of TrustBuddy AB, whereby 360 Holding AB (publ) became the legal parent company to TrustBuddy AB and in connection therewith changed its name to TrustBuddy International AB (publ). The transaction was also recorded with TrustBuddy International AB as parent company and TrustBuddy AB as its subsidiary. The purchase price was SEK 90 million according to the share purchase agreement. As a result from the acquisition, among other, a goodwill item appeared in the parent company of about SEK 89 million which is being amortized with ten per cent – SEK 8,9 million – annually over ten years. The merger was carried out by way of 360 Holding AB (publ) acquired TrustBuddy AB and the group accounts have since such time reflected this. However, there are reasons to report the group differently from an accounting point of view and the Company's auditors have therefore during some time investigated this and have now reached an opinion in the matter.
Adjusted group accounts
In light of the aforementioned TrustBuddy announces the following. The Company's auditors are now of the opinion that the group accounts ever since the acquisition on 30 June 2011 have included to high amortizations as a result of that the previously mentioned goodwill item has been continuously amortized. The group should instead and more accurately have been accounted as if TrustBuddy AB acquired 360 Holding AB (publ), and not in the way currently recorded. The precise effects of this mistake is yet not clear and is a work ongoing and the Company will further on announce to the market how the correct group accounts should be structured. What is clear, however, is that since the previous recorded goodwill item, which arose as a result from the acquisition no longer should be included in the parent company's balance sheet, this will have a corresponding positive effect on the income statement since such balance sheet item no longer should be amortized. Which the further effects the adjustments will bring are, as mentioned, not yet clear and will be announced when such information is available.
For further information, please contact:
Jens Glasø, CEO, TrustBuddy International AB (publ)
+47 40 40 47 50, investorcare@trustbuddy.com
http://trustbuddy.com/
http://trustbuddyinternational.com/
About TrustBuddy International AB (publ)
TrustBuddy International AB (publ) is one of the first in the world to focus on arranging loans and capital provision between buddies in Scandinavia in an organised manner. The company is listed at NASDAQ OMX First North in Stockholm. Mangold Fondkommission AB is TrustBuddy International AB (publ):s Certified Adviser and market maker, contact number: +46 8-503 015 50.
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