Maha Capital AB (publ)

Hello and welcome to Investor Studios quarterly reports. Today we have Mahacapital, which released its Q2 report for 2025 this morning. Maha's CEO Roberto Marchiori will present the results and current events during the quarter. Those of you who are watching live can ask questions to the management and we will answer them at the end of the presentation. If you do not have an answer to your question, we refer you to Roberto, nice to see you and I believe you're in a cloudy Sao Paulo.

Nice to see you again. Good afternoon for you. Yes, here is a cloudy day.

Well, we have a brilliant sunshine, but much colder than you have. So please, without further ado, go ahead.

Thank you, Carlo. So thank you, everyone. A nice good morning for you or good afternoon if you are in Sweden. I'm going to start here the third quarter presentation. So talking about the main highlights of the quarter, We end up the quarter with a very strong balance sheet of more than $108 million in cash. Also, in terms of cash balance and looking for the credit operation of Q, we already have more than $52 million of approved lines, credit lines, with an average yield of 18% annualized. Also, very important for the quarter, and considering our shift on our strategy, we divested of Bravo Energia for $78 million. We also divested of Illinois Basin Acid for $3.5 million, plus now up to $600,000. This will be also important for us going forward to enhance even more or a balance sheet and releasing dry powder for us to use in the credit side of our new strategy. And also, I think it's important to mention here that we reduce around 35% year over year on our recurring GNA. So, I mean, we are still working to have a more efficient and linear structure. We're talking here a little bit about Q, right? So on the business combination, we are having base acquiring the credit operations and also the technology from QWorld. And now we are working and waiting for the HM to approve this transaction. On the business side, I think we already mentioned with Paulo in the last two webcasts, but I think it's also very important to remember, right? So we have WorkQ, which is basically the local currency credit platform. So we can optimize the client's working capital cycles on the buyer and on the seller side. And also we have as other main product and core business, the Global Trade Card, where we always call GTC, which is a US denominated credit card operation. to provide B2B and travel and entertainment cross-border payments to optimize these payments in a broader scale. So I think the main message of the court is that we are shifting from the oil and gas to focus on Q credit operations. So talking about the little bit, a little bit and again about Q, so talking about the footprint. So the footprint and geography reach considering the Q multi-market credit issues, we can provide credit solutions across Latin America and Canada. So in the green marks here, we have the local operations, talking about work here in Canada, Mexico, and Brazil. We have a Q's head office located in Miami, United States. And then we have on the GTC on the blue marks here, their penetration inside Latin America. So providing US credit lines on Colombia, Peru, Bolivia, and Chile. Of course, we want to also bring this for other countries in Latin America. So some here, we have GDC license, comparing the whole Latin America and also Canada, while WorkU currently has the license to operate in Canada, Mexico, and Brazil. And talking a little bit about what's the difference between our Q and GTC, basically together, they are a very robust suite of corporate financing payment solutions for our clients, issuing in multiple currencies to help our clients to manage these together with their suppliers and optimize these working capital cycles, B2B and T&E, the travel and entertainment expenses globally. So when we look for Q, WorkU is a working capital and inventory optimization, again, in local currency. So we have this solution for Mexican pesos, BRL, Canadian dollars. We can provide terms from up to 120 days. We can collect both interchange interest rates depending on the buyer's side and the supplier's side. And the value proposition here is basically streamline the payment between buyers and suppliers where we can anticipate suppliers receivables from the term of their clients and also give more additional terms for the buyers to pay and accommodate the cash flow necessities. On the global trade card front is a complimentary solution for our clients. That's important to mention where we can provide this cross-border payments for T and E and B2B. The currency is U.S. denominated. We also can extend additional terms, but the normal is to have a credit card solution. So, I mean, it's an average of 45 days considering the invoices. We also can benefit on the GTC, the interchange fee and the interest rate if we provide the additional extension of the term. And this is basically a very important additional solution for international acquisitions, right? Where we can accommodate and facilitate the financing payment process across different jurisdictions. So this is an enhancement of a very value proposition for our clients. So both together is a very unique combination. And then we can act as a one-stop shop for the client as it's in the short term. I decided to bring here a little bit about Q credit operational and historical performance. So since we started our relationship with Q, where we set the loan agreement in July, 2025, the portfolio, the outstanding credit has increased around 18%. So we started with around $30 million And now we are with end of October with $36 million in lending, outstanding credit. And below in the chart, we also show the potential revenues that we are talking about, where we see here yields, annualized yields ranging between 18s to 20s, high 20s, and bringing this monthly revenue, which this will not be comprehended into our financial statements, but of course, After closing, we expect to bring this revenue inside our net income in P&L. During October, both solutions working with GTC, we have approved around $52 million in lines. Of course, this can present us a potential transaction volume of around $300 million. Since September, we increased not only the approved credit line, but also the potential of annual transactions. We have the same average and compounded average annual yield of 18% annualized. And we have now a balance between GTC and WorldQ around $60 million, which represents around 30% of the portfolio into GTC. and also 70% or $36 million on the work yield local current solutions. As you can see, we have a higher annualized average yield on the work yield side and a lower average yield on the GTC side. So this is why it's also important to have both solutions so we can have a combined yield of 80% per year. Talking about timeline and when we expect to conclude the business combination and also the capital raise. So we signed the business combination documents during October. Now we are still working on the relisting process together with NASDAQ. We've been working hard and we expect to have a conclusion this during December. And then, of course, we expect to have the EGM, the extraordinary general meeting between December and January. Of course, we have Christmas Eve and New Year's Eve, so we need to accommodate this to approve the transaction and also conclude the $27 million capital raise in the same time. And next year, we expect also to conclude, I don't know if everyone remembers, we also have additional tranche of $80 million capital raise, which expect to conclude this and also implement the listing process in the U.S. So we expect to have everything concluded by next year. And before we walk you through the financial highlights, I think it's important to remember, considering that we sold the American operation in Illinois and also Brava, you can see that our financial statements now are a little bit different from the previous ones because we classified the U.S. operation as asset held for sale. So just pointing and highlighting this because now we are not showing revenues anymore, basically expenses and financial incomes. So just to highlight these points so everyone can better understand why we are changing a little bit the structure of our presentation. So here, talking about our financial highlights, we are focusing in this slide on the G&A and each of them. So if you'll see the first portion of this slide here, we can show here the decrease on the G&A side, a part of our quarter. I think the important message is we are totally focused on we keep this very stream and very lean structure going forward. we can see a reduction of 35% if you compare to Q3 last year, and around 18% if you compare to last quarter, which is a very good news considering the hard work we've been doing inside of Maha. In terms of EBITDA, even though we still have this negative impact, mainly because of the GNA, the lack of revenues, and also some additional non-cash expenses, we end up the quarter with around $3 million of negative EBITDA. But the positive news, we have the realized gain on Brava shares before we sell the position of around $7 million, and we end up the quarter with a net income of around $4 million. So I think this is the positive news of the quarter. And again, I think looking for the future, we can expect some changes in the figures. Going to the cash flow build up that we like to show and show here this strong balance sheet and dry powder. So we started the quarter with $88 million of net cash plus Brava shares. We have basically the main deviations during the quarter was the cash flow from financing. So we raised a 12.5 million debt by the time because we were holding Brava shares as collateral. Even though it was a liquid position, we want to bring more cash to start operating the Q transaction by the time of July in the loan agreement. And then we started to also make some loans into the GTC program in the context of the loan agreement. So these were the main impacts when you look for the cash flow from financing. We also recognize here the Brava shares realized gain. This, of course, is important because after the sell, this turned into cash. And we end up the quarter with a cash plus credits to Q under the loan agreement structure of around $121 million, being a net cash plus credit of $93.8 million if you discount the bank debt and also the co-investors that we collected for the loan agreement. But then as subsequent events, we fully prepaid the debt because this debt was a margin loan. So once we have as collateral Bravo shares, we have flexibility to use this cash, but after we decided to sell Bravo shares, we need to fulfill the collateral with cash. We didn't have the flexibility anymore. We were just going to pay interest going forward. So we decided to fully prepaid this debt because by this time now, it didn't make sense to hold it. And then, as we mentioned before, we also sell the Illinois Basin Acid. So we collect the purchase price of $3.5 million. We are still waiting for the additional earnouts to crystallize. Zernaut is linked to WTI, so we're just going to wait one year of the transaction to calculate Zernaut and collect. So we end up the quarter with 97.3 net cash plus credit, and this shows us the robust and strong balance sheet that we have to provide credits going forward inside the Q transactions. So my final remarks here, so I think the business combination itself is a very powerful combination between Maha and Q, because now we create a tech-enabled credit solution with a very high scalable platform with robust balance sheets and dry powder to provide credit going forward. This transaction enables, establish, sorry, a capital-backed credit platform to expand and also accelerate growth across very different regions operating under an American missions license provided by Q inside the business combination. And looking forward, the transaction is very important because marks an important milestone inside our new strategy and new positioning to the market. Marra is very well positioned to capture a very significant significant growth avenue and potential finds and benefits from these attractive high yields that we can find across Latin America on the B2B credit segment. We also benefit from the unique stamp provided by American Express Network while we also, going forward, we will enhance with AI-driven the underwriting process advanced analytics technology, and also data monetization capabilities. And also, I think one very important thing to look for is our US listing next year so we can improve our capital structure. So after these final remarks, I end up here in my presentation. So again, we made a very quick one so we can have more time on the Q&A. So thank you, Carlo.

Well, thank you. And we have received a couple of questions ahead and I can see that people are busy here on the chat line as well. And I will start with some questions around the legacy business, as I recall it. And we have some questions about Venezuela. You have extended your option in Venezuela until May 2025, as I believe. What are your thoughts about this call option?

We extended the call option maturity until May next year at zero cost. I think this is important. And we also reduced it to zero. We don't have any costs related to Venezuela anymore. I think my opinion is the geopolitical situation is very unpredictable. It's very tough when you look at what's going on there. Of course, we hope things improve very soon there, not only because of this business, but also because of the people there. And I believe once things get better, I think we will bring more updates to the market and what we plan. as an alternative for the call option.

And a follow-up question here is that, obviously, you're following your call option, but will you consider not only using the option as, let's say, a bargain chip, but will you be able to develop Venezuela, given the fact that you are now very focused on the financial side in Kyiv?

I think considering the current environment and the geopolitical situation, it's very tough to try to make this call option and start operating this asset. So once we have a better situation there, and I hope this will come very soon, then we will reevaluate what can we do considering the new strategy and also what can we bring more value considering the call time will tell thank you and if you could talk through the investment in in bolivia and in the bolivian pipeline please oh sure i think the bolivian pipelines is a kind of transaction that we like very much because if you look the numbers last year we collect twelve hundred thousand dollars out of one million dollar investment so this is around 20 yield This year, we collect around $400,000, the double of last year. So now we already reach almost 60% dividend yield. So I think we are very happy to keep it. It's a cash cow portfolio generation company. So I think the idea is to keep this and keep milking the cow, if I say.

And we try to round up the legacy business here with all the divestments lately. And let's say you're going forward with zero cost in Venezuela. Are you able to give us an update on how many? How's your staff situation? Surely there must be fewer on the employment payroll when you're moving from, let's say, the heavy oil industry into the financial business. Or will we see that later in coming quarters?

No, that's a good question. I think we show that the work has been done to reduce more than 35% of recurring G&A. Of course, we will reduce even more if you're considering the current structure of MAHE standalone, because we will not have any more, some no recurring expenses. But I mean, once we make the business combination and conclude the operation, we will need to see a new G&A going forward, because when you bring the credit operation G&A inside, So we will not be comparable, but we will work as much as hard as now to also keep FuelWorld in a very resilient operation.

And I will now move on to a couple of comments that we received or questions on the financial side, and then we will come back to focus on Keogh here. But if I'm not mistaken, you did raise a US$12.5 million loan in the beginning of Q3, and you repaid it in the beginning of Q4 this year. Walk us through there. What happened and why?

I think I pointed out this point, but Basically, when we were working towards the loan agreement to GTC, we didn't at the time want to sell Brava shares, and we increase our liquidity by raising a margin loan using Brava shares as collateral. Once we sell the Brava shares, of course, the bank will lose its guarantee, right? So we need to bring all this cash and invest as collateral for the bank. We will not have the flexibility and this available liquidity to use it to kill. And also we will have the burden of having the interest rates reducing our cash. So considering this change into the strategy and the self-profit shares, we decided to prepay the debt, which was more valuable considering the position for us.

And we have a question about the restricted cash. Even without the marginal loan, your restricted cash has increased substantially. Could you elaborate on what your plans are for releasing this cash?

Perfect. We have a significant increase on the cash. I will explain why. The first part of it was related to the bank debt, because remember, we prepaid the debt as a subsequent event. This amount was released, which was around $12.5 million, right? So almost half of the restricted cash. The other part was related to the contingencies we have related to Petroconcavo's sale in the beginning of 2023. We are also working with BravaShares to collateralize the bank guarantee. Then after the sale of Bravo, we have the same impact into these guarantees. So now we are working with the bank so we can release this cash collateral next year.

Right. And we have a couple of questions regarding the Nasdaq relisting. And I believe you were giving us a timeline here saying December 2025. And then you had the AGM, which is in January, February. So we should expect the timeline to be what, the first Q1 2026 for a relisting?

The releasing, we expect between Q2 and Q3 next year. Because first we need to focus on the business combination, right? As I mentioned earlier before, we are working together with NASDAQ to complete the releasing process. We expect to conclude this between end of December. And then we have the process of calling the AGN. And then we need to wait like one month or so so we can have the jam and approve the transaction we first are holding.

And I have a viewer question here, which is perhaps a little bit tricky to answer, but it's an easy one to ask. And that is, have you any indication about the Nasdaq viewing of the relisting as you are, let's say, a new co combined with Keo? Have you received any feedback?

Yeah, I made a conference in Brazil to talk about challenges in our experience related to listing Brazilian companies in NASDAQ avenues, right? I mean, even though we are listed in Sweden, as we intend to list in the US, they invited us to make some comments and share our experience with the audience. And then I talk with NASDAQ team, and basically they totally support us. They are giving some ideas. Of course, I cannot mention this right now, but once the time comes, I'll be fully very happy to share here the next steps and the plans for the U.S. instinct. But I think we are on the right path, and hopefully during Q2 or Q3, we can conquer Manhattan as well.

Okay, and let's move on to Keo here and we have a couple of questions here. One is if you can give us some sort of feel for the operations to improve and grow services in Latam and what kind of work Well, what would that mean if when you expand your work regarding, let's say workforce and location and so on. But if we start with geographical on that time, you had one slide where you went through the geographical areas. But if you could, you remind us there.

No, perfect. No, the commercial and sales team is a very important element here to bring clients. But we need to think on the work queue and also on the legitimacy, right? Work here, basically, we can have a sales team spread between Mexico, Brazil, Canada. They can work together because, again, it's a local currency program. And GTC program, considering it has several jurisdictions, we also need to find senior executives, which they already know the right path to the clients. But we don't need actually to have a very – significant and huge amount of individuals. I think we can have a short commercial team spread between the several products. But at the end of the day, this will be important going forward for our growth.

And if we tie that into the previous questions about the, let's say, the old company's workforce and the new workforce, could you give us a feel in the market for, let's say, salary costs going forward? Would that be equal to the old company or would it be less lesser because you have fewer people or would it be higher because you have more skilled people, if I could be so bold?

Sure. No, I think in terms of cost per person would be similar or even lower. I don't want to show these numbers right now. We are still re-evaluating all the new organization. There's some work so I can execute between now and closing. So once we have the conclusion of the transaction, I will show more information for the market.

Yeah. And also, I have one question here, if you could just repeat that. The cooperation with the American Express, if you explain that to a layman like myself, how does it work?

Basically, Q-World, I think, is the first or even the unique fintech that has American Express license to issue credit not only in local queries, but also on the GTC program. So having these licenses is a very powerful tool to get access to a very robust network from American Express, right? I mean, you have very well and unique suppliers, which can indirectly bring you robust corporate clients, but also this proves that the operational side, the technology, are also robust. It's not everyone that can have American Express license. So I think it's important to stand here for the investment thesis and also to provide us this scalable avenue towards the goal that we imagine that we can have.

And we have a couple of questions about the capital raise already. So maybe we could just clarify that. Are both the $25 million and the $8 million agreed with the financiers? Or are there, I mean, will we need more information and decisions from the financiers?

For now, the plan is to stick with this $35 million capital raise, right? The $27 million At closing of the business combination, then we'll have the $80 million additionally between now and the release team on the US. And of course, this is a very important thing to mention because remember, we want to deploy our capital so we can have the benefit of the track record of the portfolio, and then we can bring senior lenders to the to the perimeter here of this operation we can leverage our structure and benefit for lower cost of debts going forward so this equity is very important for these early stages of the the the growth of the portfolio and then we will work not only to to think on liquidity strategy but also on this senior facilities to provide low costs and attractive terms credits senior lenders.

And I will tie your answer into one question here. When and if are you forecasting to be self-financed and how much credit do you need to have lent out to earn your upkeep or will you continue to have a leverage on your capital as it were to increase your portfolio?

Again, I think what we are thinking in terms of strategies, once we grow the portfolio, not only are we going to start to benefit from these revenues out of the yields that we are mentioning, but also on the other side, we will still have also the track record to show for the senior lenders What's the key stats, the credit stats from this portfolio? And once we prove that these stats are good in terms of default and the liquidity and so on. So, I mean, they are good corporate clients. Then you have access on the debt capital markets to raise senior lender loans with a very attractive cost of debt, term and other costs. Terms and conditions, which will be important on this growth story is equity story that we are showing to reach this from 6 to 10 billion dollars in total analyzed buildings.

And another question as you had various geographical areas with various let's say interest rates here. Are you considering let's say borrowing in low interest rates countries like Canada and the US and then lending out to high interest rates countries like Brazil or in any Latin American countries? Or will you mitigate the loans so you don't have to worry about the currency effects?

That's a very good question. I think once the time comes, we are going to provide this information to the market, right. But I think, again, first, we need to grow the portfolio, show the stats. And then of course, we are going to evaluate the best strategy depending on the balance between portfolio so remember we have a license operating brazil in canada i mean they have different interest rate different cost of debts for sure but i think once we grow the portfolio once we know the cost between average jurisdiction or even a apparent insurance level we will decide what's the best for us in terms of cost but for sure if there's a loan availability so we can provide credit among several jurisdictions and hedge the effects exposure will be something that we are going to evaluate And of course, choose the best option for us.

So it will be a dynamic process. I will round off with a couple of share related questions here. And when it comes to any sort of coverage of you now, do you have any plans on initiating coverage or indeed, are there any broker firms looking at you since you have transformed from an oil service company into a financial company? Are you able to answer that question?

No, this is a very good question, right? I think our investors knew us from the oil and gas operations. Now we are doing this very significant shifting in terms of investment pieces. So what I can say is, of course, we are working to provide more intel to the market. We are working to have this assessment and also this... teach and lessons for the shareholders to better understand or going forward business plan or what's behind, what can we provide in terms of potential revenues, costs and so on. So we are working to this and hopefully soon we'll have more news to be published to the market.

And we have another final question here that came in. Are you considering a dividend now or in the future? And do you have a policy there for the new code?

I think we need to reconvene this after the business combination inside the board. This is up to the board to decide. But of course, once we have a better view on the future, on the cash flow projections, this will be for sure reconsidered by the war.

Well, Roberto, thank you for that. I'm conscious of the time here. There are a couple of questions about the offering price on NASDAQ, but I'm sure that you will be communicating that via press releases and other channels. So with that, I will thank you. Invigorating and nice to see you again. So thank you for that, Roberto.

Thank you very much, Karl. Thank you everyone for watching us.

And we thank you for asking questions. Let's say thank you to all of you who asked questions. And if you have any further questions, we will refer you to the Maha Capital site. So with that, thank you and see you later. Bye.