Clevon Investors AS Answers To Frequently Asked Questions Regarding The Voluntary Takeover Offer Of Clevon AS Shares To Clevon AS Shareholders

Introduction

On March 31, 2023, Clevon Investors AS, registry code 16686123, registered
address Reinu tee 48, Viljandi, Viljandi County 71020, e-mail address
[e-mail] (hereinafter the Issuer) made a voluntary takeover
offer to the existing shareholders of Clevon AS, registry code 16472103
(hereinafter Clevon), in order to take over their shares with the objective of
concentrating at least 90% + 1 of all Clevon shares in the hands of the Issuer
(hereinafter the Offer). The stock exchange announcement and the information
document for the Offer are available here:
https://view.news.eu.nasdaq.com/view?id=be438950da2c8d04572fe4251969a12ee&lang=e
n. 

Following the announcement of the Offer, the Issuer received several questions
from Clevon shareholders to whom the Offer is addressed. Furthermore, several
topics of discussion related to the Offer have been raised in the public
information space. 

Hereby, the Issuer wishes to provide answers to questions that are in the
Issuer's assessment the most common and frequently asked in relation to the
Offer. These answers to the questions must be read together with the stock
exchange announcement of the Offer and the information document of the Offer
published on March 31, 2023, and in case of possible contradictions, the
provisions of the stock exchange announcement and the information document
prevail. 

The Offer period ends on 21 April 2023 at 4:00 p.m. The shareholders of Clevon
may submit transaction orders to participate in the Offer until 21 April 2023
3:00 p.m. 

The Issuer has the right to extend or shorten the Offer period on the terms and
conditions set out in the information document of the Offer. 

Frequently asked questions

What is the aim of the Offer?

As part of the Offer, the Issuer proposes to Clevon's shareholders to exchange
their Clevon shares for the Issuer's shares with the exchange ratio of 1:1.
This will take place by making a non-monetary contribution in the form of
Clevon shares into the Issuer's share capital via AS LHV Pank. 

The aim of the Offer is to concentrate at least 90% + 1 of all Clevon shares in
the hands of the Issuer. 

If the Offer is successful, i.e., provided that the Issuer acquires a minimum
of 90% + 1 of all shares of Clevon, and further provided that the Issuer
succeeds in finding an investor who will finance the takeover of Clevon shares
for a monetary contribution, the Issuer intends to merge Clevon with itself, in
the course whereof the shares of Clevon held by the shareholders who did not
participate in the Offer, will be taken over for fair compensation. The exact
schedule and conditions for the execution of the merger depend on the results
of the Offer and the finding of an investor. 

The purpose of the Issuer's takeover of all or considerable amount of Clevon
shares is to submit a request to Nasdaq Tallinn AS to discontinue trading in
Clevon shares in the multilateral trading system First North (hereinafter First
North) managed by Nasdaq Tallinn AS. 

Why is it necessary to leave First North?

Clevon is a rapidly developing start-up company that is in constant need of
additional capital for the development of its main product, i.e., the unmanned
vehicle CLEVON 1 and the technology contained therein, as well as for the
marketing of the vehicle. 

By reason of world events (war in Ukraine, energy crisis, etc.), a situation
has arisen in the financial markets, where successful public raising of
additional capital by Clevon today and in any subsequent rounds of fundraising
has become extremely difficult. This is also confirmed by the fact that already
while listing on First North in the summer of 2022, when Clevon was publicly
raising 5 million euros, the demand for Clevon's shares was rather moderate.
Since the prospects of raising funds within the framework of the public offer
are likely not good, it was not practical in the opinion of Clevon to spend
time and resources to make a public offer. 

Therefore, Clevon is now looking for potential investors outside of First
North. Potential investors would be venture capital investors, potential
customers of Clevon and other start-up companies in synergy with whom it would
be possible to develop the CLEVON 1 vehicle further. Communication with
potential investors has shown that in order to attract capital from them for
further development, Clevon must leave First North. 

 How will Clevon's delisting from First North take place?

1. In the first phase, all Clevon shareholders will have the opportunity to
exchange their Clevon shares for the Issuer's shares at a ratio of 1:1, thereby
becoming shareholders of the Issuer. In turn, the Issuer is a shareholder of
Clevon. 

1.1. The first to transfer their Clevon shares to the Issuer were larger
Clevon's shareholders and current and former employees of Clevon, who got their
shares as part of stock option programs. They made in-kind contributions with
their Clevon shares to the Issuer's share capital upon its establishment or
immediately thereafter. 

It should be noted that as in case of the Offer, also these shareholders, who
made in-kind contributions, got their Issuer's shares at a ratio of 1:1. Nobody
of these shareholders got monies in return. 

1.2. As a second step of the first phase, the Issuer has announced the Offer,
whereby the Issuer offers all Clevon shareholders the opportunity to join the
Issuer by making a non-monetary contribution with their Clevon shares to the
Issuer's share capital via LHV Pank AS, and thus continue as Clevon investors. 

As of today, the Issuer holds 88.06% of all Clevon shares. Since the Offer is
still ongoing, the detailed information about the progress of the transaction
orders is not public. 

2. In the second phase, and on the condition that at least 90% + 1 of all
Clevon shares are concentrated under the Issuer, and on the condition that the
Issuer succeeds in finding an investor who will finance the takeover of Clevon
shares for a monetary contribution, the Issuer plans to merge Clevon with
itself, during which the shares of these Clevon shareholders who have not
participated in the Offer will be taken over for fair price. The Issuer will
continue Clevon's business as its legal successor. 

The exact schedule and conditions for the execution of the merger depend on the
results of the Offer (the more Clevon shareholders consolidate under the Issuer
and decide to continue with it, the less necessary it is to seek additional
capital in order to "buy out" the remaining Clevon shareholders, and,
therefore, the more the capital of new investors can be directed to the further
development of Clevon's business model development) and finding an investor. 

3. In the third phase, if all or a considerable majority of Clevon's shares are
concentrated under the Issuer, Clevon can submit a request to Nasdaq Tallinn AS
to discontinue trading Clevon's shares on First North. 

The second and third phases may take place in parallel depending on the results
of the Offer. 

For what price will Clevon shares be exchanged for Issuer's shares?

As part of the Offer, the Issuer proposes to Clevon's shareholders to exchange
their Clevon shares for the Issuer's shares with the exchange ratio of 1:1.
This will take place by making a non-monetary contribution in the form of
Clevon shares into the Issuer's share capital via AS LHV Pank. 

When exchanging shares, the price is not important from an economic point of
view - in any case, every Clevon shareholder who exchanges their Clevon share
will receive one share of the Issuer. The nominal value of both the Clevon
share and the Issuer's share is 0,1 euros. 

The book share price of Clevon's share is only important in order to determine
the value of the non-monetary contribution with which the Clevon share is
transferred to the Issuer's share capital. The book share price of the Clevon
share that exceeds 0,1 euros is transferred into the share premium. Given the
rules regulating the share premium, it does not matter what is the amount of a
specific share price that is transferred into the share premium. It is due to
the fact that differently from the share, the share premium does not belong to
the shareholders. Hereby we bring a example to illustrate this. 

Clevon shareholder 1 exchanges one Clevon share (with the nominal value of 0,1
euros) into one Issuer share. At the moment of the exchange, the price of
Clevon share is 1,6 euros. Clevon shareholder 2 also exchanges one Clevon share
(with the nominal value of 0,1 euros) into one Issuer share. At the moment of
this exchange, the price of Clevon share is 0,8 euros. As the result of
shareholder's 1 exchange transaction, 1,5 euros is transferred into Issuer's
share premium. As the result of shareholder's 2 exchange transaction, 0,7
euros is transferred into Issuer's share premium. In sum, the share premium of
the Issuer is 2,2 euros. According to the Commercial Code, the share premium
can be only used to cover the loss or to conduct a bonus issue. In case of a
bonus issue the shareholdings of all shareholders will be increased equally and
not depending on the size of the share premium that has occurred as a result of
contribution of a specific shareholder. For example if the whole share premium
in the amount of 2,2 euros will be transferred into the share capital as a
result of a bonus issue, then the shareholder 1 will be issued 11 additional
shares at the nominal value of 0,1 euros and the shareholder 2 will be also
issued 11 additional shares at the nominal value of 0,1 euros. The fact that
shareholder's 2 "share premium part" at the moment of exchange of Clevon share
was smaller, does not matter. This is due to the requirement of the Commercial
Code that in case of the bonus issue, the shareholder's part in the share
capital shall increase proportionally to the nominal value of his shares. 

In regard to making a non-monetary contribution, the value of the property to
be contributed is determined at of the time of making the contribution. The
value of a share in the case of a non-monetary contribution is determined based
on its ordinary value. Where a non-monetary contribution is made via AS LHV
Pank, it is possible to determine (i) what is the normal value of a Clevon
share at that moment and (ii) accordingly determine the maximum number of
shares so that the total volume of the Offer is not exceeded as well as (iii)
the book value (i.e. at with what share premium) the Clevon shares will be
transferred to the Issuer's share capital. 

The maximum total volume of the Offer is 5,000,000 euros. The maximum total
volume 5,000,000 euros does not influence the rules relating to exchange of the
shares, as explained above. 

What must a Clevon shareholder who wishes to participate in the Offer do?

If the Clevon shareholder has decided to participate in the Offer and subscribe
for the Issuer's shares, then the Clevon shareholder must during the Offer
period, i.e. until 21 April 2023 3:00 p.m., contact their securities account
manager. 

The Issuer hereby provides sample instructions on how to submit a transaction
order using the internet banking systems of the most common account managers in
Estonia, i.e. the largest Estonian banks. The corresponding sample instructions
are only intended to illustrate the process; therefore, the Issuer does not
take responsibility for the content or correctness of the instructions given by
Clevon shareholders. If you have any questions, we strongly encourage
contacting your account manager for a consultation. 

1. You must first log in to the internet banking system of the bank offering
the securities account. There you need to find a subsection that reflects your
securities account and securities transactions. There you can find instructions
for making a transaction for the Offer. However, not in all internet banking
systems it is easy to find the place to do this transaction, so we have
provided helpful instructions on how to do this transaction below. 

LHV Bank

If Clevon shares are held in a securities account opened at LHV Bank, then in
the left menu, you need to go to Raising money > Corporate events and find
information about Clevon share there. 

Swedbank

If the Clevon shares are located in a securities account opened at Swedbank,
then from the top right menu you need to select Collection, investment >Securities> Corporate events, Offers and find information about Clevon share
there. 

SEB Pank

If the Clevon shares are in a securities account opened at SEB, you need to
select Investment> Transactions> Transactions with another in the menu and find
information about the Clevon share there. 

2. Then, after you have successfully logged in and found the necessary menu,
you must fill in the instruction for the transaction order and authorize it
with the authorization tools required by the bank. In the transaction order,
you must state the desired number of shares and the unit price must be 0 euros. 

Please find further instructions for making a transaction order, including the
sample input information that is required to fill in the transaction order, in
section 5.3 of the information document for the Offer. Please note hereby that
different banks' transaction order forms may be slightly different. If you have
questions how to fill this form, we advise you contacting your account manager
for a consultation. 

What will happen if a Clevon shareholder does not participate in the Offer?

If a Clevon shareholder decides not to participate in the Offer and does not
subscribe to the Issuer's shares during the Offer period, nothing directly
happens to his shares and he remains a Clevon shareholder. Clevon shares will
also continue to trade on First North until such time as Clevon leaves First
North. 

If in the following, i.e. in the second phase (see the answer to the question
How will Clevon's delisting from First North take place?), the takeover of
Clevon's shares for a monetary contribution takes place by the Issuer, the
remaining Clevon shareholders' shares will be taken over by the Issuer in
return for fair compensation. 

At what price will the takeover of Clevon shares for monetary contribution take
place? 

Provided at least 90% + 1 of all Clevon shares are concentrated under the
Issuer and provided there is an investor who is willing to finance the takeover
for a monetary contribution, the Issuer will take the Clevon shares of those
Clevon shareholders who do not exchange their shares for the Issuer's shares
over for a fair consideration. As of today, it is not possible to accurately
predict or publish this fair price. Since the company is in a difficult
situation, the fair consideration should reflect this situation. 

What happens if the Offer is not successful?

The financial resources previously raised by Clevon are about to run out, and
in order to continue its business, Clevon urgently needs additional capital. As
explained above, this capital is not publicly available in sufficient amounts.
If Clevon fails to raise the required capital, there is a considerable risk
that it would be impossible to further develop the business model of Clevon.
The company is also likely to face payment difficulties, and insolvency cannot
be ruled out either. As a result, all Clevon shareholders, including those who
have already transferred their shares to the Issuer, may lose their investments
either completely or to a large extent. 

The Offer is conditional on the Issuer concentrating at least 90% + 1 Clevon
shares. If this condition is not met, the Issuer has the right to cancel the
Offer, which means that those Clevon shareholders who subscribed to Issuer's
shares in the course of the Offer will remain Clevon shareholders and will not
receive the Issuer's shares. 

What happens if the Offer is successful?

If the Offer is successful, i.e., as a result of the Offer, the Issuer
concentrates at least 90% + 1 of all Clevon shares, the Issuer will be able to
proceed with the next planned phases (see the answer to the question How will
Clevon's delisting from First North take place?). 

If the subsequent stages are also successful, i.e., Clevon's shares are
concentrated under the Issuer and Clevon's shares are no longer tradable on
First North, the Issuer can start involving new investors. Negotiations with
such investors are ongoing, and there are potential investors who are
interested in investing in Clevon. 

Raising additional capital will allow Clevon to continue the development and
marketing of the vehicle CLEVON 1 and to implement its business plan. 

What will change for a Clevon shareholder if he becomes a shareholder of the
Issuer and Clevon shares are no longer tradable on First North? 

The main difference between Clevon's shares and the Issuer's shares is that
because Clevon's shares are currently publicly traded on First North, this
entails: 

 -- an obligation on Clevon to distribute periodic information to shareholders
   (i.e., the disclosure of half-year and financial year reports) and
   information on important events that have an impact on Clevon's operations
   and value of Clevon's shares;

 -- the possibility to trade Clevon shares publicly on First North.


In regard to the Issuer's shares, the shareholders retain the option to
transfer them freely, if they find a corresponding buyer, but not via First
North. In addition, all major investors of Clevon want to receive money for
their investment at some point in the future. To this end, Clevon investors
plan to find buyers for their shares in the future. If larger investors sell
their shares in the future, small investors will also have the opportunity to
sell their shares under the same conditions. If Clevon's business plan
succeeds, every Clevon investor (i.e. shareholder of the Issuer) will have the
opportunity to profitably sell their shares in the future. Further in regard to
the Issuer, the obligation to disclose the audited financial year report and
other rights of shareholders in accordance with the provisions of the
Commercial Code remain. 

Moreover, it cannot be ruled out that in the future, if the economy and
Clevon's level of development favour it, Clevon will again be listed on a stock
exchange, in which case its shares will become freely tradable again. 



Arno Kütt

Clevon Investors AS member of the management board

[e-mail]