1

Xhail AB (publ) under name change from IFOX Investments AB

(publ)

Investment Memorandum for

Rights Issue

May 2020

2

SUMMARY OF TERMS

Pre-emption rights: Shareholders who are registered as a shareholder in the

Company on the Record Date have preferential rights to,

for each one (1) share held, subscribe for three (3) new

shares. Subscription rights: Shareholders in the Company receive three (3)

subscription rights for each one (1) share held. One (1) subscription right is required to subscribe for one (1) new share.

Subscription price: SEK 0.12 per share. No commission is paid.

Record Date: 20 May 2020

Subscription by payment with pre-emption

rights: 25 May–8 June 2020

Trading in subscription rights: No trading in subscription rights is arranged

Payment date for subscription without

pre-emption rights: According to instructions on the contract note.

SHARE INFORMATION Ticker symbol: -

ISIN-code for the share: SE0001934480

ISIN-code for the subscription rights: SE0014402632

ISIN-code for the BTA: SE0014402640

DEFINITIONS IFOX Investments AB (publ), with Swedish corporate ID no 556112-6797 resolved to change its name from

IFOX Investments AB (publ) to Xhail AB (publ) at an extraordinary general meeting on May 13, 2020 (the

“EGM”). “Xhail”, "IFOX", "the Group" or "the Company" hereinafter refer to IFOX Investments AB (publ),

under name change to Xhail AB (publ), including its subsidiaries Score Music Interactive Ltd, Score Music

Productions Ltd and Xhail Inc (after closing of the Company´s acquisition of all shares in Score Music

Interactive Ltd).

"Euroclear" hereinafter refers to Euroclear Sweden AB, Swedish corporate ID no. 556112-8074.

The "Offer" or the "Rights Issue" refers to the offer for subscription of a maximum of 209 254 632 shares in

the Company as resolved by the EGM.

The "Investment memorandum" refers to the present document, which has been drawn up for the Offer.

“SMI” refers to Score Music Interactive Ltd.

FORWARD-LOOKING STATEMENTS The Investment memorandum contains forward-looking statements that reflect the Board of Directors of

Xhail’s current view of future events and financial developments. Such forward-looking statements can

primarily be found in the following sections: "Summary", "Risk factors", "Business Concept, Vision, Objectives

and Strategies" and "Business Description". The words "intend", "expect", "shall", "could", "believe",

"estimate", "anticipate", "plan" and similar expressions are indicative of forward-looking statements.

Even if the Company believes that the expectations reflected in the forward-looking statements are

reasonable, no warranty can be made as to whether these expectations will come true. Forward-looking

statements express nothing more than the Company's estimates and assumptions at the time of the

Investment memorandum. Readers are encouraged to look at overall presentation of information in the

Investment memorandum and simultaneously have in mind that future results, developments or successes

may vary significantly from the Company's expectations. The Company does not promise to publicly update

or revise forward-looking statements as a result of new information, future events or other things beyond

the extent required by law.

3

MARKET INFORMATION The Investment memorandum contains information about Xhail's industry, including historic market data

and industry forecasts. The Company has obtained this information from several sources, including trade

publications. The trade publications specify that the historic information has been obtained from various

sources deemed reputable, but no warranty is given that the information is correct or complete. The

Company cannot warrant that the information is correct. Industry forecasts are by nature subject to

significant uncertainty and no warranty can be made that such forecasts will come true.

Information from third parties has been reproduced exactly and, as far as the Company can know and

ensure by comparison with other information published by the third party in question, no information has

been omitted in a way that could make the reproduced information false or misleading. In addition to

information from third parties, Xhail also makes internal estimates and assumptions concerning the

Company's market. Said estimates and assumptions have not been verified by independent experts and the

Company cannot warrant that a third party or one of Xhail's competitors that uses other data collection

methods, analyses or calculations of market data will get or generate the same results. In light of this

background, we call the reader's attention to the fact that the Investment memorandum, particularly with

regard to market statistics, is subject to uncertainty and that no warranty can be given for its accuracy.

The Investment memorandum has been drawn up by the Board of Directors of Xhail for the Offer. The Investment memorandum has not been drawn up

in accordance with Commission Regulation (EU) No 2017/1129 (the Investment memorandum Regulation) as the rights issue is made to an amount less

than € 2.5 million and therefore is excluded from registration obligations. The Investment memorandum has therefore not been approved and registered

with the Swedish Financial Supervisory Authority (Finansinspektionen). The offer to purchase shares in Xhail in accordance with the Investment

memorandum is not intended for the general public in any other country besides Sweden. The Offer is intended for the Company's shareholders and the

degree of disclosure of the Investment memorandum is reasonable in proportion to the type of issue involved. The Offer is also not intended for people

whose participation in the Offer requires additional investment memorandums, registration steps or other actions besides those stipulated by Swedish

law. The Investment memorandum and other documents related to the Offer may not be distributed in a country where such distribution or the Offer

requires actions as mentioned above or violates regulations in said country. An application to purchase shares in breach of the above may be deemed

invalid and disregarded. The shares that are subject to the Offer have not and will not be registered under the United States Securities Act of 1933 in its

current wording, or according to applicable law in the United States, Australia, Japan, Canada, New Zealand or South Africa and may not be offered or

transferred, directly or indirectly, to people resident in one of these countries or on behalf of such a person except in exceptional cases that do not require

registration under the Securities Act or corresponding laws. Disputes arising from the Offer, the content of the Investment memorandum or associated

legal circumstances shall be settled exclusively in Swedish court. Exclusively Swedish law is applicable for the Investment memorandum and the Offer

made by the Investment memorandum. The Investment memorandum is made available electronically on the websites of Xhail (www.xhail.se) and Eminova

(www.Eminova.com), as well as in printed form at the offices of Xhail and Eminova. Paper copies of the Investment memorandum may be ordered free of

charge from Xhail and Eminova upon request.

4

TABLE OF CONTENTS

HOW THE RIGHTS ISSUE WORKS ........................................................................................................................... 5

IMPORTANT DATES ................................................................................................................................................. 6

BACKGROUND AND MOTIVE ................................................................................................................................... 8

RISK FACTORS ......................................................................................................................................................... 9

TERMS AND INSTRUCTIONS ................................................................................................................................. 12

INTERVIEW WITH PETER SWARTLING, CEO .......................................................................................................... 16

INTERVIEW WITH FOUNDER MICK KIELY .............................................................................................................. 17

MARKET OVERVIEW .............................................................................................................................................. 18

DIGITAL MEDIA ...................................................................................................................................................... 18

MUSIC MARKET OVERVIEW .................................................................................................................................. 19

MARKET DYNAMICS .............................................................................................................................................. 20

INTERNATIONAL COPYRIGHT SYSTEM AND THE DIGITAL MARKETPLACE .......................................................... 20

DIGITAL REVENUE ................................................................................................................................................. 20

PHYSICAL REVENUE .............................................................................................................................................. 21

PERFORMANCE RIGHTS REVENUE ........................................................................................................................ 21

SYNCHRONISATION REVENUE .............................................................................................................................. 21

SUMMARY ............................................................................................................................................................. 21

BUSINESS CONCEPT, MISSION, VISION, OBJECTIVES AND STRATEGIES ............................................................ 22

THE COMPANY ...................................................................................................................................................... 24

HOW XHAIL WORKS .............................................................................................................................................. 24

THE PRODUCT ....................................................................................................................................................... 24

COMPETITION ........................................................................................................................................................ 25

ORGANISATION ..................................................................................................................................................... 26

SUMMARY OF FINANCIAL DEVELOPMENT ........................................................................................................... 27

WORKING CAPITAL ................................................................................................................................................ 33

OPERATIONAL TRENDS ......................................................................................................................................... 33

SHARES, SHARE CAPITAL AND OWNERSHIP STRUCTURE ................................................................................... 34

SHARES AND SHARE CAPITAL .............................................................................................................................. 34

CHANGES IN EQUITY ............................................................................................................................................. 35

OWNERSHIP STRUCTURE ..................................................................................................................................... 37

BOARD OF DIRECTORS, SENIOR EXECUTIVES AND AUDITORS ............................................................................ 39

LEGAL ISSUES AND SUPPLEMENTARY INFORMATION ........................................................................................ 42

ARTICLES OF ASSOCIATION .................................................................................................................................. 44

5

HOW THE RIGHTS ISSUE WORKS

1. You are granted subscription rights ("SR"). You get three (3) SR for each one (1) share held in the

Company on the Record Date.

2. You can exercise your SR to subscribe for new shares in the Company. One (1) SR is required to

subscribe for one (1) new share.

If you exercise all your SR to subscribe for new

shares, use the pre-printed payment slip you

received from Euroclear. You do not need to fill

out and submit an application form in that case.

If you have purchased, sold or transferred SR

to/from your securities account, a special

application form must be used in support of

subscriptions. A special application form is used

to subscribe for shares by making a simultaneous

cash payment via a bank or securities institution

of your choice. A special application form has

been sent to the shareholders who were

registered as shareholders of Xhail on the record

date and it can be ordered from Eminova.

If you wish to exercise your SR to subscribe for

new shares, one (1) SR is required to be able to

subscribe for one (1) new share for SEK 0.12 per

share. For example, if you owned one share on

the Record Date, then you receive three (3) SR

and are entitled to subscribe for three (3) new

shares for a total of SEK 0.36.

3a. If you have Xhail (IFOX) shares in a securities

account with Euroclear, the number of SR you

have is displayed on the “issue statement” (Sw:

“emissionsredovisning”) from Euroclear.

3b. If you have Xhail (IFOX) shares in a custody

account with a bank or securities institution, you

will get information about the Offer from your

asset manager. Follow the instructions you get

from your asset manager.

If you only exercise a part of your SR to subscribe

for new shares, you can order your bank or your

securities institution to sell the SR you have not

exercised, if possible. No trading is arranged for

the SR as the Company’s shares are not listed. In

the event that not all SR are exercised, the shares

will be allotted within the scope of the Rights

Issue’s maximum amount as described in “Terms

and instructions”. To apply for subscription of this

type, fill in the special application form (II) to

subscribe for shares in Xhail without pre-emption

rights. This application form can be ordered from

Eminova at www.eminova.se.

1 share

Subscription

right

Subscription

right

Subscription

right

Subscription

right

0.12 SEK 1 Paid share

6

IMPORTANT DATES

2020-05-25

HERE'S WHAT TO DO

*Please note the rules for people resident in the US, Australia, Japan, Canada, New Zealand or South Africa in the section entitled

"Terms and Instructions".

SUBSCRIPTION FOR SHARES WITHOUT PRE-EMPTION

RIGHTS1

1 Allotment will occur as described in the section entitled "Terms and Instructions".

You have a securities

account i.e. are a directly

registered shareholder

You live in

Sweden

You live outside of Sweden*

Use the application form sent to you. Submit the application

form to the address listed on the application form and in the

section entitled "Terms and instructions".

You have a custody

account

i.e. are a directly

registered shareholder

If you have your Xhail (IFOX) shares in

one or more custody accounts with a

bank or a securities institution, you will

receive information from your asset

manager(s) about the number of

subscription rights you have received.

Follow the instructions you get from

your asset manager(s).

You have a securities

account i.e. are a directly registered

shareholder

You have a custody account i.e. a directly registered

shareholder

Fill out a special application form (II). Send the application form to the address listed in

the section entitled "Terms and instructions". The application form must be received by

Eminova by 8 June 2020.

Subscriptions and payments for shares must

be directed to your respective asset manager.

Follow the instructions you get

from your asset manager(s).

If you wish to exercise all of your subscription rights, use

the pre-printed payment slip from Euroclear that was sent to

you.

If you have purchased, sold or transferred subscription

rights to/from your securities account, fill in the special

application form attached to the mailing.

Subscription period

2020-06-08

7

OFFER FOR SUBSCRIPTION FOR SHARES

The EGM of Xhail resolved on 13 May 2020 to

pass a resolution on a new issue of shares with

preference for the Company's shareholders. The

resolution will result in an increase in the

Company's share capital by a maximum of SEK

2, 092,546.32, from SEK 697,515.44 to a

maximum of SEK 2, 790,061.76, via a new issue

of a maximum of 209,254,632 shares. The

number of shares will therefore increase from

69,751,544 shares to a maximum

of 279, 006,176 shares, which leads to a

maximum dilution of 75.0 percent of the capital

and of the votes. Shareholders that do not

participate in the Rights Issue will see their

holdings diluted but will get value from their

existing shares from a future listing.

In addition, the EGM resolved to authorise the

Board of Directors of the Company to, up until the

next annual general meeting, in order to,

amongst other things, accommodate an over-

subscription in the Rights Issue, pass a resolution

to issue an additional 200,000,000 shares worth

a maximum of SEK 24 million with deviation from

shareholders’ pre-emption rights on essentially

the same terms as the Rights Issue which at full

subscription would result in an increase of the

share capital with a maximum of SEK 2,000,000

(the “Over-subscription Option”). The Over-

Subscription Option will, if used, be directed

towards legal or nor legal persons who are not

qualified investors of no more than 149 in total.

The EGM further resolved to perform a directed

share issue, with deviation from the pre-emption

rights of the shareholders, of a maximum

of 250, 000,000 shares at a subscription price of

SEK 0.12 per share, which at full subscription

would result in an increase of the share capital

with a maximum of SEK 2,500,000 (the “Directed

Share Issue”). The Directed Share Issue is

directed at a number of previously contacted

investors, no more than 149 in total. The EGM

also resolved to perform a directed share issue

towards the shareholders of SMI of a maximum of

1,900,000,000 shares for the payment of the

acquisition of all shares in SMI (via set-off of loan

notes at a subscription price of SEK 0.12 per

share) which would result in an increase of the

share capital by a maximum of SEK 19, 000,000

(the “Set-Off Share Issue”).

The shareholders of Xhail are hereby invited to,

with pre-emption rights, subscribe for shares in

the Rights Issue in accordance with the terms and

conditions in the Investment memorandum.

Shareholders receive three (3) subscription rights

for each one (1) existing share held in the

Company as of the Record Date. One (1)

subscription right is required to subscribe for one

(1) new share in the Company at a subscription

price of SEK 0.12 per share. The Offer will bring

in approximately SEK 25.1 million before

deduction of issuing costs of approximately SEK

1.4 million added with underwriting fees of 10%,

corresponding to SEK 2.4 million. A cash

payment must be made during the period from 25

May 2020 to 8 June 2020 to subscribe for shares

using pre-emption rights. A special application

form must be used during the same period to

subscribe for shares without using pre-emption

rights. In the event that not all shares with pre-

emption rights are subscribed for, subscription

without pre-emption rights will be possible as

described in the section entitled "Terms and

instructions".

UNDERWRITING

GUARANTEE Under an underwriting guarantee, a consortium

has undertaken to subscribe for shares of the

Offer worth up to SEK 25.1 million if they have not

been subscribed for with or without the use of

subscription rights. The Directed Share Issue

stands, as of May 21st 2020, at approximately

SEK 8.7 million, including SEK 4 million from CEO

Peter Swartling and Ricard Constantinou. For

more information about the underwriting

commitment, see the section entitled "Legal

issues and supplementary information".

Besides this, please refer to this Investment

memorandum that was drawn up by the Board of

Directors of Xhail for the Offer. The Board of

Directors of Xhail is responsible for the content of

the Investment memorandum. Information about

the board members of Xhail can be found in the

section entitled "Board of directors, senior

executives and auditors". The Board of Directors

of Xhail hereby affirms that the board has taken

all reasonable pre-cautionary measures to ensure

that the information in the Investment

memorandum, as far as the board knows,

corresponds to the facts and that nothing has

been omitted that could affect the meaning of the

Investment memorandum.

Stockholm, May 25, 2020

Board of Directors

Xhail AB

8

BACKGROUND AND MOTIVE

The former IFOX Investments AB (publ) under

name change to Xhail AB (publ) has decided to

make sweeping changes to the Company's

operations. The Company's past operations

which included exploration for minerals in the

Nordic region was completely spun out through

distribution to the Company's shareholders. The

follow-on business of management of operations

in Russia and sales mandates for assets will now

be fully replaced with the business of SMI, an

acquisition that shall be completed after closing

of the Rights Issue.

The first Letter of Intent for the acquisition of all

shares in SMI was signed in December 2019, and

the process of Due Diligence, securing financing,

agreeing on the SPA and preparing the whole

group and the different companies for the new

future has been very active since.

SMI was started in 2013 by Mick Kiely, an Irish

musician, producer and composer. The

Company holds a number of important patents

relating to the method of creating a new music

composition. The first patent was granted in 2013

and further patents have been added along the

way.

The first part of the product, instrumental music,

is in an advanced beta-stage and has some

paying clients for some time, within production

music (commercials, presentation and TV

scoring). The product, which creates

instrumental music under the patented method,

is ideal for putting music to videos on YouTube,

Instagram, TikTok and social media, and with all

rights cleared. The user easily edits the music to

create a track that matches their video project.

Everyone can make great, rights-cleared music

for their videos. This is a large market and the

Company sees great potential in this application.

The upgrade of the product, to include a

revolutionizing method to wrap instantly-created

music around a vocal track or melody, is under

development, under joint command by the

existing teams in Los Angeles, Dublin and

Stockholm. With the finished product, anyone can

make a great song.

The financing for the market roll-out, further

development of the platform and so forth has

been secured by the Swedish team and thus the

Rights Issue is underwritten and committed to the

full amount of SEK 25.1 million and the Directed

Share Issue at the moment stands at SEK 8.7

million, including a commitment of SEK 4 million

from CEO Peter Swartling and Board Member

Ricard Constantinou. A listing on a relevant stock

exchange in Stockholm will be sought to be

completed after the summer 2020.

The business of the Company is truly global, and

thus the Company strategy is to first build a solid

business and then perform a second listing in

New York within a target period of five years.

The proceeds of the Rights Issue are expected to

be SEK 25.1 million before issuing costs2. In total,

with the Over-subscription option and the

Directed Share Issue, the total potential fund

raising at this time is SEK 79.1 million.

Stockholm, May 25, 2020

Board of Directors

IFOX Investments AB (publ) (under name

change to Xhail AB (publ))

2 Costs attributable to remuneration for the issuing house

and underwriting compensation as well as other estimated transaction costs incurred by the Rights Issue (issuing

costs) will be deducted from the issue amount of approximately SEK 25.1 million. These costs are estimated at approximately SEK 1.4 million, added with SEK 2.4 million for underwriting compensation.

9

RISK FACTORS

An investment in shares always involves a

certain degree of risk. A number of factors affect

and may come to affect the result and financial

position of IFOX Investments AB (publ) under

name change to Xhail AB (publ) and the value of

the shares in the Company (the “Shares”).

Below is a description of risk factors, which Xhail

considers to be the most relevant to an

assessment by a prospective investor of whether

to invest in the Shares. However, potential

investors should note that the below risk factors

are neither exhaustive nor ranked in order of

importance. The intention is to describe risks

that are linked to Xhail’s operations and to

describe the risks related to the investments in

the Shares. Before making a decision to invest in

the Shares, any potential investor should

carefully consider the risk factors outlined below,

as well as any other information provided (such

as any publicly available financial and other

information of Xhail).

In addition, an investor must, alone or together

with its financial and any other adviser it deems

appropriate, engage in an analysis of the global

market conditions and general information about

the relevant markets and companies from its

own perspective.

An investor should have adequate knowledge to

evaluate the risk factors as well as sufficient

financial strength to assume these risks. The risk

factors below are not exhaustive and additional

risk factors presently not known to the Company

may affect the Company’s future ability to pay

interest, principal or make any other payments in

respect of the Shares.

Risk factors can deviate from such assessments

and assumptions.

The valuation of a company like Xhail is heavily

affected by assessments and assumptions as

well as communications made by the

management. The Company is a holding

company and the Group’s operations are mainly

run through its subsidiaries. The Company is

hence dependent on its subsidiaries to fulfil its

obligations. The Group intends to provide the

Company with liquidity by way of intra-group

loans, dividends or other transfers of value in

order for the Company to fulfil its obligations.

However, if the subsidiaries do not provide

liquidity, or due to other circumstances,

conditions, laws or regulations are prevented

from providing liquidity to the Company, there is

a risk that the Company will not fulfil its

obligations.

Financing

Xhail is financed mainly through equity, but also

has an interest-bearing Loan Note (as defined

under the section “Legal Issues and

Supplementary Information”). There are certain

obligations under the Loan Note. This means

that the lenders could be entitled to demand

repayment in advance if the relevant Group

Companies do not fulfil such obligations. If such

demand is made it could adversely affect Xhail’s

financial position. Xhail and its subsidiaries are

dependent on their ability to refinance existing

financings as these fall due and to obtain

additional financing at market terms. In case

Xhail and its subsidiaries are unable to refinance

existing financings or obtain additional financing

at market terms, as a result of a deficiency in the

capital market or for any other reason, this could

adversely affect Xhail’s operations, result and

financial position.

Liquidity risk

Liquidity risk is defined as the risk of not having

access to sufficient liquidity or credit

commitments to cover its payment obligations,

including payments of interest. A lack of liquidity

to cover payments due could adversely affect

Xhail’s business and financial position. The

Rights Issue, together with the added Directed

Share Issue, is intended to secure the financing

for the Group for at least 12 months. Exchange

rate fluctuations may in the future affect Xhail's

result and financial position.

Organisational risks

Xhail has a relatively small organisation, which

leads to a dependence on key persons. Xhail’s

future development is to a large extent

dependent on the experience, knowledge and

commitment of management and other key

personnel and its ability to recruit, retain and

develop other qualified senior executives and

key employees. Xhail operations and results

could be adversely affected should one or

several of such key persons terminate their

employment.

Operational risks

Operational risk describes the risk of incurring

10

losses in the continued operations due to

insufficient routines. This among other things

could be the lack of internal control, appropriate

administrative systems and competence

development. If the routines prove to be

inadequate there is a risk that Xhail incurs losses

which could have an effect on Xhail's operations,

earnings and financial position.

Environmental risk

Xhail does not run any business that requires

permission under any environmental code

Taxes and changes in legislation

Changes in legislation related to corporate

income tax and other taxes could adversely

affect Xhail’s future result. The Group’s loss

carry forward as of 31 December 2019 totals to

an amount of SEK 69 million. Changes to the

ownership of the Company resulting in a change

of control of the Company can lead to limitations

(in whole or in part) of the possibility to use such

carry forwards. Changes in legislation or case

law can affect the possibility to use such carry-

forwards. The above described risks are

primarily relating to Swedish tax but there is also

similar legislation in Ireland and the USA, where

Xhail also operates and is subject to taxation.

Amended or new legislation relating to taxes in

one or more of such jurisdictions could have an

adverse effect on Xhail’s result and financial

position. Xhail has a tax process in the Swedish

court system, which in a negative outcome

would result in a tax payment of SEK 3.9 million.

The amount has been reserved in the books

since 2018.

Other disputes

Xhail could become involved in future disputes.

The results of any pending or future

investigation, proceeding, litigation or arbitration

brought by private parties, regulatory authorities

or governments could affect Xhail operations. In

addition, if an unfavourable decision were to be

given against Xhail, significant fines, damages

and/or negative publicity could adversely affect

Xhail’s result and financial position.

Competition

Xhail will operate in a competitive sector. Xhail’s

future competitive potential is dependent on,

amongst other things, Xhail’s ability to predict

future changes and its ability to quickly respond

to present and future market needs. Xhail

competes against a number of strong

companies, which could gain market shares at

the expense of Xhail. Consequently, it may

become necessary for Xhail to make costly

investments, restructurings or price reductions

in order to adapt to a new competitive situation,

which could adversely affect Xhail’s operations,

result and financial position.

RISKS RELATED TO THE SHARES

Equity investments can contain elements

resulting in particular risks for potential investors.

Xhail’s financial position is affected by numerous

risk factors, some of which have been outlined

above.

Liquidity risk

Xhail will apply for listing of the Shares on a

suitable exchange or multilateral trading facility.

However, there is a risk that the Shares will not

be admitted to trading. If Xhail fails to procure a

listing of the Shares in time, investors holding

Shares on an investment savings account (an

ISK or IS-account) will no longer be able to hold

the Shares on such account, thus affecting such

investor’s tax situation. Even if the Shares are

admitted to trading, there a risk that there is not

always active trading in the Shares. This can

result in shareholders not being able to sell their

Shares when they wish to or at a price

comparable to similar investments having an

existing and functioning secondary market. A

lack of liquidity in the market could have an

adverse effect on the market value of the

Shares.

Currency risk

The Shares will be denominated and payable in

SEK. If investors in the Shares measure their

investment returns by reference to a currency

other than SEK, an investment in the Shares will

entail foreign exchange-related risks due to,

among other factors, possible significant

changes in the value of the SEK relative to the

currency by reference to which investors

measure the return on their investments

because of economic, political and other factors

over which Xhail has no control. There is a risk

that depreciation of the SEK against the

currency by reference to which investors

measure the return on their investments could

cause a decrease in the effective price of the

Shares and could result in a loss to investors

when the return on the Shares is translated into

the currency by reference to which the investors

measure the return on their investments.

Government and monetary authorities may

impose (as some have done in the past)

exchange controls that could adversely affect an

applicable exchange rate or the ability of the

11

Company to make payments in respect of the

Shares. As a result, there is a risk that investors

may receive less dividend than expected, or no

dividend.

Clearing and settlement in Euroclear Sweden’s

account-based system

The Shares will be affiliated to and will continue

to be affiliated to Euroclear Sweden’s account-

based system. Consequently, no physical shares

have been or will be issued. Clearing and

settlement relating to the Shares, as well as

payment of any dividend, will be performed

within the account-based system. The

shareholders are therefore dependent on the

functionality of the account-based system.

General risks

Every potential investor should be aware that by

purchasing Shares, it risks losing the entire or

parts of its investment in the event of Xhail’s

liquidation, company reorganisation or

bankruptcy.

Changes in legislation

The Terms and Conditions for the Rights Issue

are based on Swedish legislation applicable at

the date hereof. The impact of potential future

change in legislation may result in risks which

are not possible to foresee. Changes in

legislation, case law or administrative practice

may have a negative effect on the value of the

Shares.

12

TERMS AND INSTRUCTIONS

PREFERENTIAL RIGHTS ISSUE IN IFOX

INVESTMENTS AB (PUBL) UNDER

NAME CHANGE TO XHAIL AB (PUBL) The EGM of IFOX Investments AB (publ) (org.nr 556658-6796) has on 13th of May 2020 resolved to perform a rights issue with preferential rights for current shareholders in agreement with the board’s proposal. The rights issue includes a maximum of 209 254 632 shares and can yield the company SEK 25 110 555,84 at full subscription. The rights issue is 100% covered by subscription commitments and underwriting agreements, i.e. to a figure amounting to SEK 25 110 55,84. These commitments and agreements are not covered by collateral, restriction of funds or similar arrangements.

RECORD DATE The record date at Euroclear Sweden AB (“Euroclear”) for identification of who shall receive subscription rights in the rights issue is the 20th of May 2020. Last day of trading of the Company’s share including rights to receive subscription rights is the 18th of May 2020. First day of trading of the Company’s share excluding rights to receive subscription rights is the 19th of May 2020.

SUBSCRIPTION PERIOD Subscription of shares shall take place during the period starting on the 25th of May 2020 up until and including the 8th of June 2020. The board of the Company has the right to prolong the subscription period. The Board of Directors of the Company does not have the right to cancel the rights issue once the subscription period has commenced.

SUBSCRIPTION PRICE The subscription price is 0,12 SEK per share. No

brokerage fees will be charged.

SUBSCRIPTION RIGHTS Shareholders of the Company obtains three (3) subscription rights for every one (1) held share. One (1) subscription right is required to subscribe for (1) new share. Subscription rights that are not used for subscription of new shares by the 8th of June 2020, will be removed from all depository accounts

without compensation. No notification of such removal will be published.

TRADING IN SUBSCRIPTION RIGHTS There will be no trading in subscription rights.

PAID AND SUBSCRIBED SHARES

(“BTA”) Subscription through payment is registered at Euroclear as soon as possible, which normally is a few business days after payment. Thereafter the subscriber will acquire a notification with confirmation of the booking of BTA on the depository account. Subscribed-and-paid shares are called BTA until the share issue has been registered at the Swedish Companies Registration Office (“SCRO”).

TRADING IN BTA AND CONVERSION

TO SHARES There is no trading in BTA’s. When the share issue is registered at the SCRO the BTA will be converted to shares. No notification will be sent out from Euroclear regarding the conversion.

SHARE TRADING There is no trading in the share.

PRE-EMPTION RIGHTS FOR

SUBSCRIPTION Those who on the record date of the 20th of May 2020 are registered as shareholders of the Company have pre-emptive rights to subscribe for three (3) new shares for every one (1) existing share.

DIRECTLY REGISTERED

SHAREHOLDERS, HOLDINGS IN

EUROCLEAR ACCOUNT The shareholders or shareholders’ representatives that on the record day are registered in the share register kept by Euroclear on behalf of the Company will receive a pre-printed share issue report with a payment slip, a special application for subscription form and an application form for subscribing without subscription rights (Sw “Teckning utan stöd av teckningsrätter”) attached. A Euroclear notice regarding registration of subscription rights on securities account will not be sent out.

13

NOMINEE SHAREHOLDERS,

HOLDINGS IN DEPOSITARY

ACCOUNTS Shareholders which have their shares in the Company registered as nominee shares at banks or other nominees obtains no share issue notification. Subscription and payment shall instead be made in accordance with instructions from the nominee.

SUBSCRIPTION WITH SUBSCRIPTION

RIGHTS, DIRECTLY REGISTERED

SHAREHOLDERS Subscription shall take place through payment to the specified account (Sw. “bankgiro”) on the payment slip no later than the 8th of June 2020 and in accordance with one of two alternatives:

1) Pre-printed payment slip, share issue report This is used if all obtained subscription rights will be utilized. Subscription is done through payment in accordance with the pre-printed payment slip. Observe that no additional measures are required to subscribe and that the subscription cannot be cancelled.

2) Special application form If another amount of subscription rights, other than the number that is evident from the pre-printed share issue report shall be requested, for example if a number of subscription rights have been bought or sold, this special application form shall be used. Subscription occurs when the special application form as well as payment has been received by Eminova Fondkommission. The reference number when paying is the application form’s number. Incomplete or incorrect information in the application form can result in the application being voided. The application form shall be sent by regular mail (NOT registered post), e-mail, or fax. Please note that the subscription is binding and cannot be recalled. The special application form can be acquired from Eminova

Fondkommission AB, tel 08-684 211 00, fax 08-684 211 29, email info@eminova.se.

SHAREHOLDERS NOT RESIDING IN

SWEDEN

DIRECTLY REGISTERED

SHAREHOLDERS ENTITLED TO PRE-

EMPTION SUBSCRIPTION NOT

RESIDING IN SWEDEN Directly registered shareholders entitled to pre-emption rights for subscription currently not residing in Sweden who cannot use the pre-printed payment slip (share issue report) can pay in SEK through SWIFT according to the instructions below. Subscription takes place when the special application form as well as payment have arrived to Eminova Fondkommission. Eminova Fondkommission AB Biblioteksgatan 3, 3 tr 111 46 Stockholm, Sverige BIC/SWIFT: NDEASESS IBAN: SE0730000000032731703067

SHAREHOLDERS RESIDING IN SOME

UNQUALIFIED JURISDICTIONS Shareholders residing in a country where involvement in the share issue is wholly or partially subject to legal restrictions have no rights to participate in the share issue (for example Australia, Hong Kong, Japan, Canada, New Zealand, Singapore, South Africa, USA, Switzerland). These shareholders will not obtain subscription rights, the share issue report or any other information regarding the share issue. Eminova has the right to deny subscribers residing in countries where Eminova does not conduct business.

SUBSCRIPTION WITHOUT PRE-

EMPTIVE SUBSCRIPTION RIGHTS AND

ALLOTMENT If not all shares are subscribed for with support from pre-emptive subscription rights, the Board of Directors shall, within the limits of the share issue’s highest monetary amount (25 110 555.84 SEK), decide on the allotment of the remaining shares. The application to subscribe for shares without pre-emptive subscription rights shall

14

be done through the application form ”Teckning utan stöd av teckningsrätter” which is available to download on eminova.se. If more than one application form is received, the first received will be the only one considered. No form of payment shall be made in connection with the application! Note that the application is binding. (Important information about ISK, IPS and capital insurance accounts can be found under “Other”) If the application calls for the subscription of shares amounting to a value of EUR 15 000 or more, a filled-out KYC form and certified copy of valid identification shall be sent together with the application form. Additionally, if the application is made by a legal entity, a current (no older than 3 months) certificate of incorporation showing authorized signatories shall accompany the application form in addition to the KYC and identification documents. Notification of allotment of shares is given by transfer of a contract note. Payment shall be made according to instructions on the contract note; it is never charged from the advised depository or securities account. If the payment is not received in the stipulated time, the shares can be transferred or allotted to someone else. If the sales price at this time is lower than the price of the offer, the person originally allotted these shares can be wholly or partially responsible for the difference. No notification will be given to those who are not allotted shares. Allotment shall be given according to the following: Firstly, allotment of shares subscribed for without pre-emption rights to subscribe for shares shall be given to those who already have subscribed for shares with support of pre-emption rights. In case of over-subscription, in relation to the amount of subscription rights each applicant has used for subscription. In case this is partially or wholly unfulfillable, the remainder of the allotment will be conducted through a draw of lots. Secondly, allotment shall be given to others who have applied to subscribe for shares without support from pre-emption rights. In the case of over-subscription, allotment will follow pro rata in relation to the number of

requested shares and if this partially or wholly cannot be completed it will be finalized through a draw of lots. Lastly, remaining shares shall be allotted to those who have underwritten the share issue, in accordance to their underwriting agreements or similar agreements.

OTHER Subscription of shares, with or without pre-emption rights, is not recallable and the subscriber cannot cancel the subscription.

REGARDING SUBSCRIPTION TO ISK,

ISP OR CAPITAL INSURANCE In case the depository or securities account is connected to capital insurance, ISP or ISK (investment savings account), special rules apply regarding subscription. The subscriber must contact its bank and/or nominee and follow the instructions given by them regarding subscription/payment. If this is done incorrectly, shares will not be able to be delivered to these types of depositories or securities accounts. Subscription is binding and the application form cannot be recalled. It is the subscriber’s responsibility that the subscription is done in a correct way, such that delivery of shares to the given depository or securities account can be completed.

REGARDING DELIVERY OF

SUBSCRIBED SECURITIES Improper or incomplete information in the application form, registration processing at the SCRO, late payments from investors, routines at depository or nominee banks, or other factors that Eminova cannot control, can cause delays regarding the delivery of shares to depository or securities account. Eminova has no responsibilities for losses or other consequences that can arise due to the time of delivery of the subscribed shares.

PUBLICATION OF THE OUTCOME OF

THE SHARE ISSUE Publication of the outcome of the share issue will be published in a press release by the Company as soon as it is possible after the subscription period.

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RIGHT TO DIVIDENDS The new shares entails the right to receive dividend for the first time on the record date for the dividend that occurs closest in time after the new shares have been registered at the SCRO.

SHARE REGISTER The Company’s share register with information about the shareholders is kept and managed by Euroclear Sweden AB, Box 191, 101 23 Stockholm, Sweden.

APPLICABLE LEGISLATION The shares are issued under the Swedish

Companies’ Act (Aktiebolagslagen) (2005:551)

and is governed by Swedish law.

The rights of the shareholders regarding

dividends, voting rights, pre-emption rights, and

so on, are controlled partly by the Company’s

articles of association, which are available on the

Company’s website, and partly by the Swedish

Companies’ Act (Aktiebolagslagen) (2005:551).

16

INTERVIEW WITH PETER SWARTLING, CEO You recently joined Xhail - can you tell us a bit

about your background and how you think it can

be useful in the development of the company?

I have been active at the highest levels of the

Music Industry for over 30 years, covering all

aspects of the business.

I’m no artist, instead my focus has always been

on the business and commercial side, as a

senior executive and producer. My main focus

has been to generate new business, build

brands, and to make sure stakeholders get paid.

That is the experience and contribution I will

bring to the already fierce Xhail crew. They have

created a truly unique and powerful product,

now is the time to bring this product to the

market and, after years of development, start

making money.

What was your reaction when you first were

introduced to the Xhail platform?

I was just blown away! I couldn’t believe how

clever and powerful the Xhail platform is when it

creates music and how great it sounds. Creating

and editing is effortless and demands no musical

experience or instrumental skills of the user yet

offers endless modifications. Xhail delivers world

class results.

What will be your major focus during the coming

year?

We have promised the shareholders a listing on

a Swedish stock exchange, so that will be my

first objective. In parallel, I intend to introduce

Xhail to people I know in the music and movie

business. We bring a totally new concept to the

market, so we need to demonstrate what Xhail

can do and let people hear the great music it

produces.

How do you think Xhail will change how music is

produced?

Xhail generates so many solutions to various

aspects of music creation. During the BETA test

period focus was on the B2B segment. Here

Xhail offers the opportunity for a vast number of

individuals in the commercial realm to create

music for their projects. Directors of movies, TV

series, commercials and trailers can now, by

way of simply clicking and selecting, create any

emotional setting they wish for their projects.

And it sounds just as great as the cumbersome

and expensive process of hiring outside

composers and producers. In truth, a game

changer.

Looking at the implementations and

opportunities within the B2C segments are mind

blowing, now that we are to bring Xhail to the

market.

“The opportunities within the B2C

segments are mind blowing.”

Peter Swartling, CEO

17

INTERVIEW WITH FOUNDER MICK KIELY Can you tell us about your background

and how you came up with the idea to start Xhail?

I’ve been an active musician and composer for over

30 years, beginning my career in the band scene,

where I learnt music production skills old school. I

started with two-inch multitrack and a razor blade,

but then came Atari and Cubase 2.0 and my life was

set to change forever.

I started to compose for TV and moved along to the

high end of video games. This is when Xhail’s

concept began. A solution uniting composers and

musicians in a new and exciting way while producing

high quality “content”. In early 2013 we filed for

patents, incorporated our company and by the

summer we had opened our doors and began the

Xhail build.

How do you think Xhail will change how music is

produced?

The process of how music is created and produced

has not changed much in decades. It still takes the

same length of time and cost to create a two-minute

music track as it did ten or even twenty years ago.

While the demand for music continues to

exponentially increase.

The Xhail technology will greatly increase the speed

at which anyone can produce music, allowing

people to produce more music in a shorter time

frame. Being paid for a higher music output ratio

means a musician or composer can now earn more

by creating more music in the same time frame as

before, balancing the output quantity with a higher

revenue turnover.

At the same time non-musicians will now, for the

first time, be able to create music.

Musicians will passively gain revenue from this

usage in a way not ever received or even possible before.

“Xhail will greatly increase

the speed at which any

individual can produce

music.”

Mick Kiely, Founder

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MARKET OVERVIEW

DIGITAL MEDIA The digital market has entered a new phase of

development. The lines that once separated the

entertainment and media, technology and

telecoms industries are becoming more and

more blurred. Major content producers have

become vertically aligned and integrated with

distribution platforms that allow them to access

end customers more efficiently, and Internet and

telecoms giants are starting to create content

and build local integrated ecosystems.

The distinctions between segments are blurring,

such as the distinctions between print and

digital; video games and sports; terrestrial, cable

and online TV; and social and traditional media.

The worldwide explosion in mobile access is

seeing mobile devices become the primary

means of accessing content and services for

consumers across virtually all markets. That is

the reason why smartphones and tablets have

become not only a convenient way to access

information, but one of the most important

channels for brands too. Users of digital media,

games, video and music is estimated to grow

from 4.6b, 2019, to 5.7b 2024.

Today’s consumers are rejecting one-size-fits-all

content experiences. For years the media

industry delivered a few media products to a

wide audience in mass media formats, creating

a shared experience and a certain sense of

community. Nowadays, that huge community no

longer exists. The community created by a

media product is narrower, generating such a

personal experience that sometimes the

community consists of only one person. This

audience fragmentation in terms of age, location

and interests results in strong demand for media

content tailored to specific expectations. The

media industry cannot offer the same product for

everyone anymore: it must create content for

groups—groups so small that they require

absolutely personalized content to be included.

AI technologies for analysing and personalising

products and services are increasingly in

demand. Services are adapting to these

technologies and to customer behaviour. Thus,

large media firms face the tension of producing

content for everyone (global) but, at the same

time, for specific groups (local). Content needs

to be specific enough so that it moves

audiences, but loose enough so that it can

connect with more than one group. Adaptation

and localization are key.

Access to end customers

Social media and technology platforms are

outpacing traditional content creators in

capturing both the attention of consumers and,

thanks to consumer insights, a rising share of

Source: www.statista.com, Digital Media Report 2019

19

their spending.

Content creators are forced to compete and

build partnerships with existing platforms, and to

connect end customers through their own

distribution channels.

Content production is also becoming more

decentralized with the emergence of new

distribution channels. YouTube alone has more

than one billion views per day. Solopreneurs,

who are basically digital media entrepreneurs

that rely on social media for their business,

depend on sources of revenue that vary from

online advertising—as with many YouTubers—to

private sponsorship from a TV channel or

telecom industry, and e-commerce

opportunities.

Revenues in digital media are estimated to

increase by more than USD 24b with in the

coming five years, where digital music and video

on demand is forecast to grow by 27% and 22%

respectively.

MUSIC MARKET OVERVIEW The music industry is at the forefront of the

rapidly evolving digital marketplace. Music and

engagement with music is fuelling growth of the

digital economy, enabling different digital online

services to boost turnover, generate traffic and

gain scale. Music right holders have worked

hard to license their work to the hundreds of

digital services that serve customers globally.

Today consumers have easy access – legally –

to more music than ever before. In 2018, the

global recorded music market grew by 10%. It is

the fourth consecutive year of global growth.

The growth of the recorded music market was

predominantly powered by a sharp rise, 33%, in

paid streaming, that now accounts for 37% of

total market revenue.

Developments within the online digital music

marketplace are further evidence of the pace of

change within the industry. Digital music

markets have diversified and developed. The

popularity of download services, while still high,

is flat-lining and even declining while streaming

services such as Spotify are growing. Streaming

services have become an increasingly important

sales channel and source of revenue for record

labels and artists.

The exclusive rights recognized in the 1996

WIPO Internet Treaties (the WIPO Copyright

Treaty (WCT) and the WIPO Performances and

Phonograms Treaty (WPPT)) have enabled

these positive developments. Nevertheless, the

digital marketplace is not in balance. While the

broad availability of music is driving innovation

and the growth of new digital services, music

right holders are not benefitting fairly or

proportionally from the increased use of their

music. Restoring balance to the market is a high

priority for the creative industries.

Source: www.statista.com, Digital Media Report 2019

20

MARKET DYNAMICS Over the past 20 years the music industry has

changed radically. In most markets physical

product sales have declined sharply, while

revenues from digital services have grown

rapidly. However, although revenues paid by

digital services to record companies have

increased, they have not completely offset falling

CD sales.

The fastest growing geographical markets are in

Asia and Latin America (South Korea, Brazil)

with Asia becoming the second largest region for

physical and digital music combined.

The composition of revenue has changed

dramatically during the past two decades, where

the revenue from physical sales has dropped

from USD 23.3b to 4.7b. Digital music,

streaming and download, has in parallel grown

from zero to 11.2b in 2018, equivalent to 58.6%

of total recorded music revenue.

INTERNATIONAL COPYRIGHT SYSTEM

AND THE DIGITAL MARKETPLACE All the largest online services operate in multiple

territories, making it necessary for record

companies to review their artist agreements to

ensure they control all necessary rights in all

territories. In turn, the services have had to

secure licenses covering all territories in which

they operate. The emergence of so many new

services and new operating models

demonstrates both the efforts made by right

holders and digital services and the resilience of

the international copyright system.

Internationally harmonized rights – brought

about by the 1996 WIPO Internet Treaties –

have facilitated the global expansion of digital

music services. The legal and commercial

certainty they afford at the international level has

helped make it possible for digital services to

launch and reach consumers in new markets.

These treaties have made the process of

clearing and licensing rights in each of many

territories easier. In addition, these rights are

now universally recognized and right holders

now have greater confidence in licensing their

rights to digital services in new territories.

DIGITAL REVENUE Overall digital revenues grew by 21% to

US$11.2 billion in 2018, crossing the US$10

billion mark for the first time ever and now

accounting for 59% of total recorded music

revenues. Within this format, the picture was

varied with streaming pushing growth up

strongly (increasing by 34% to US$8.9 billion),

while downloads saw a decline of 21%, dropping

to 8% of the total market.

Paid audio streaming was again a key driver

(+33%), with almost all markets reporting growth

in this area. Digital now makes up more than

50% of revenue in 38 markets.

21

PHYSICAL REVENUE Physical format revenue saw continued decline

in 2018, dropping by 10% and now accounting

for around a quarter of the total market (25%).

As in the previous year, the majority of markets

saw a decrease in physical format revenues, but

a small number of markets bucked the trend,

posting growth (India +21%; Japan +2%; South

Korea +29%), and physical revenues still

constitute a significant percentage of the market

in some countries (representing 71%, 47% and

35% of the market in Japan, Poland and

Germany respectively). Revenues from vinyl also

sustained their upward trajectory, posting

growth for the thirteenth consecutive year,

growing 6% and maintaining a 4% share of the

overall market.

PERFORMANCE RIGHTS REVENUE Revenues from performance rights - use of

recorded music by broadcasters and public

venues - climbed in 2018, seeing an increase of

10%. Totalling US$2.7 billion, performance

rights revenue represents 14.0% of total

recorded music industry revenues.

SYNCHRONISATION REVENUE Synchronisation - the revenue from the use of

music in advertising, film, games and TV -

posted growth of 5%, a more modest rate than

the previous year (15%) but maintaining a 2.3%

share of the total music market

SUMMARY The media landscape has fundamentally

changed during the last decade, when

consumers have adopted digital media and

services. Consumers of digital media is

constantly growing, especially of digital music

and video on demand. The music industry has

adapted and recovered from the downfall of

physical record sales and digital and streaming

services now constitute the largest share of

recorded music revenue, 59%. The international

copyright system is now universally recognized

and rights demand that artists’/creators’

property rights are respected.

22

BUSINESS CONCEPT, MISSION, VISION, OBJECTIVES AND

STRATEGIES

BUSINESS CONCEPT The Company has identified a number of verticals

in both the B2C and B2B spaces.

B2C

The main use of the platform within B2C is

anticipated to be in two forms:

1. Instrumental music created by a user is

added to a video, viewed on YouTube,

Instagram, TikTok or similar social media

platform. The music is rights-cleared and

will thus not be taken down due to

breach of rights.

2. When development of the addition to the

platform (music/song creation around a

vocal track), it is anticipated that the

platform will be used to create songs,

that can be published in social media or

even on music platforms like Spotify,

Apple Music, Amazon Music and so

forth. Everyone can, in theory, be the

creator of a hit song.

The business model for B2C is currently

being researched and tested but will

generally consist of subscriptions and rights.

It is anticipated that there will be a free

version and different levels of subscription

models. In addition to subscription revenues,

when a generated track is used in either

broadcast or online, Xhail will generate

revenue from the rights associated with that

track. For example, YouTube pays a small

amount for the music rights for each view.

With an increasing number of views from

tracks generated, the revenue can be

substantial.

B2B

Within B2B, there are a number of current and

potential applications and revenue streams.

The revenue model broadly encompasses a

subscription income but can also be from the

rights. The platform is currently used by clients for

presentations, audio branding, ads, TV

soundtracks, trailer production, generally what

can be called production music.

The Company sees potential in bulk track

creation for production music libraries, a

significant global business, where you can buy a

ready track for use in your production. Further in

potential exists playlists in music platforms (where

a share of revenue from the playing of the tracks

are split with the music platform. Main focus

would initially be instrumental music, which is

used globally in restaurants, Spa’s, gyms, yoga

centres, etc.). Track generation for top-line

songwriters is also a high potential business

opportunity. The number of applications of the

technology is almost endless, the key is to focus.

23

STRATEGY The strategy of the Company is to complete a

ready consumer product within less than 12

months and launch this on a broad scale. The

project to market launch is directed from Los

Angeles and encompass collaboration with some

of the World’s leading companies and individuals

in the field.

It is anticipated that the majority of the Company’s

revenue will come from the B2C market and

therefore this is the main focus of the Company

for the foreseeable future.

Within B2B, which is a more ready product, the

initial focus, which is currently worked on, is to

continue the same business as before and add

some business that is already possible with the

existing platform. When the B2C business has

launched, more resources will be allocated to

growing the B2B revenue.

OBJECTIVE The objective is to build a large and sustainable

business for the Company. It is also with the

Company’s current plan that a listing in New York

shall be executed within 5 years, provided that

the business has grown according to the

Company’s expectations. The business is global,

and the Company’s business will be initially

focussed on the US market. Sweden is

considered by the Company to be an excellent

starting place for a business within music and

tech.

.

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BUSINESS DESCRIPTION

THE COMPANY Xhail is the most advanced music Artificial

Intelligence-related platform in the world.

The technology uses musical mathematics to

select and combine stems (single instrument

performances) into fully finished songs of any

chosen style, mood and instrumental

alternatives.

Every new song or music track created is unique

and rights cleared. Xhail puts music creation in

the hands of non-musicians, it produces music

originating from material by real musicians. The

technology is cloud-based and is capable of

creating new music copyright of stunning quality

and proportion in real-time.

The technology is protected by several strong

patents, securing an important piece of the

industry for music creation.

HOW XHAIL WORKS Music is emotional storytelling that transcends

language, yet Xhail works in a very similar way to

writing a story in words. The English alphabet

has only 26 letters or characters, yet these

letters combine to create over 470,000 unique

words. Xhail also uses single characters (stems,

which is each a single element in a song, like a

guitar, a bass etc) to exponentially create music.

The Xhail platform presently has slightly less

than 100,000 stems (characters) created by

professional musicians. The database of stems,

already the World’s largest, will be heavily

expanded. Xhail’s technology uses musical

mathematics to select and combine comparable

characters to create a music track that makes

sense when it is heard. If we were to randomly

select letters of the English alphabet and put

them together in a purely random or uneducated

way, they will likely not make readable sense but

if we intelligently select letters in an educated

way, then they assemble into readable words

that make sense.

The Xhail platform selects several musical

characters from millions of individual characters

and assemble them into a new music creation.

The fact that every character is created by a real

musician and that these musicians do not know

each other is of no importance to how the

technology works.

Xhail is a musically intelligent software and the

music created is always pleasing to the user’s

ear and relevant to the user’s wishes, such as

style, mood or tempo. If you want a new pop

song you get a new pop song and if you want a

new orchestral film score, then that is exactly

what you get.

Xhail has successfully secured global patents

that not only protect the Xhail technology but

also potentially block others from entering the

music AI space entirely. Xhail is the only musical

AI-related platform being used commercially by

Hollywood entertainment corporations.

THE PRODUCT Each user, business or consumer, will be able to

create and host content on the platform to

arrange unique music using the Xhail technology

with either their own content or to collaborate

with others. As a cloud-based technology, Xhail

will facilitate its community of users to create,

share, collaborate, sell, buy and enjoy music, all

on a single platform.

Xhail is already in use and is becoming

increasingly more in demand as it continues to

be adopted by professional producers in

Hollywood. Xhail users already include a large

brokerage firm in the US, a TV network, Asylum

Entertainment and others.

Currently is worked on a further development of

the Xhail platform that allows singers,

songwriters, producers and DJ’s to create music

in any style or genre based on just acapella

vocals. The Beta version is estimated to be

launched during fall 2020.

The Power of Collaboration

Xhail Model:

Xhail operates a system whereby its contributors

(artists/musicians) produce stems and imports

them into the Xhail database. Contributors are

contracted in a way that Xhail owns all rights in

and to the Stems produced on the Xhail Platform,

including the copyrights which remain SMI’s sole

and exclusive property. Xhail has no further

liability to the artist in relation to money owed.

25

Xhail allows Composers, Producers and

Musicians to benefit from the placement of their

music on the Xhail platform to multiple

opportunities thus providing new and perpetual

revenue streams.

COMPETITION The potential amount of applications for Xhail’s technical platform gives a quite broad spectrum of competitors. The main competitors in the B2C space are divided into the following. For instrumental music, competitors are companies like Epidemic Sound, Killer Tracks and so forth but also music creation tools like Splice, Focusrite and so forth. In the upcoming platform version including music created around a vocal track or melody, competitors are mainly deemed to be apps like Smule, the Voice and other karaoke-type apps. The B2B competition is more fragmented and includes track libraries but also the traditional way to make production music.

Artists Xhail

Production Co.

Broadcaster PRO

26

ORGANISATION

EMPLOYEES Once closing of the Company’s acquisition of all

shares in SMI has taken place after the

completion of the Rights Issue, the Group will

(based on figures as of 13 May 2020) have 11

employees. Legal structure

The figure represents the legal structure of IFOX

Investments AB (publ) under name change to

Xhail AB (publ) after closing has taken place of

the Company´s acquisition of all shares in Score

Music Interactive Ltd. The acquisition and

disposal of the old operations were approved at

an extraordinary general meeting in the Company

on 13 May 2020.

The parent company, IFOX Investments AB

(publ) under name change to Xhail AB (publ)

(Swedish corporate ID no. 556658-6797), has its

registered office in Stockholm Municipality,

Stockholm County, Sweden.

.

27

SUMMARY OF FINANCIAL DEVELOPMENT

A summary of the financial trends for IFOX Investments AB is presented below for the period from 1 July

2019 to 31 March 2020. No information in the Investment memorandum has been reviewed or audited by

the Company's auditor. The auditor's reports have been incorporated into the annual reports for the

respective year and do not have any comments. The accounts shown below have been drawn up in

accordance with the Swedish Annual Accounts Act (Årsredovisningslagen) and the general advice of the

Swedish Accounting Standards Board (Bokföringsnämnden). Where there has not been any general advice

from the Swedish Accounting Standards Board, guidance has been received from the recommendations of

the Swedish Financial Accounting Standards Council (Bokföringsnämnden), and where applicable, from

statements made by FAR (Institute for the Accountancy Profession in Sweden). The interim report for the

period from July 1 to March 31, 2020 has not been reviewed or audited by the Company's auditors.

Since the Company is changing its operations via the acquisition, the historic numbers have a limited value

for analysing the Company. The Company’s financial year is between July 1 to June 30.

XHAIL AB (IFOX INVESTMENTS AB)

PROFIT AND LOSS STATEMENT, 9 MONTHS AND Q3

Amount in SEK 2020 Q3 2019 Q3 01-07-2019

31-03-2020

01-07-2018

31-03-2020

Net sales 50,000 50,000 450,001 450,000

Other operating income 0 0 0 0

Total operating income 50,000 50,000 450,001 450,000

Raw materials and consumables 0 0 0 0

Other external expense -145,371 -61,928 -645,425 -336,535

Costs of personnel -191,972 , -192,844 0

Depreciation/amortisation of tangible fixed assets 0 0 0 0

Other operating expenses 0 0 0 -13,472

Total expense -337,342 -61,928 -838,268 -350,007

Operating profit -287,342 -11,928 -388,268 99,993

Financial income 0 0 28,142 132,750

Financial cost 0 0 85,659 79,235

Financial items - net 0 0 113,801 211,985

Net income before tax -287,342 -11,928 -274,467 311,978

Tax 0 0 0 0

Profit/loss for the period -287,342 -11,928 -274,467 311,978

28

SUMMARY OF BALANCE SHEET ASSETS

Amount in SEK 31-03-2020 31-03-2019

Intangible fixed assets

Fixed assets 0 0

Total 0 0

Tangible fixed assets

Machinery and other technical assets 0 0

Total 0 0

Financial fixed assets

Shares in subsidiaries 0 0

Other long-term receivables 0 0

Total 0 0

Total fixed assets 0 0

Current assets

Inventories, etc. 0 0

Total 0 0

Current receivables

Current tax receivables 0

Other receivables 7,256,284 5,661,314

Prepaid expenses 17,638 18,888

Total 7,273,922 5,680,202

Cash and cash equivalents 220,587 49,775

Total current assets 7,494,509 5,729,977

TOTAL ASSETS 7,494,509 5,729,977

EQUITY AND LIABILITIES

Amount in SEK

Equity

Share capital -697,515 -697,515

Share premium reserve -79,818,715 -79,818,715

Other reserves

Retained earnings 78,648,798 79,381,579

Profit/loss for the period 274,467 -311,978

Total equity attributable to the parent company's shareholders -1,592,966 -1,446,629

Long-term liabilities

Loans 0 0

Lease liabilities 0 0

Other long-term loans 0 0

Total 0 0

Current liabilities

Prepayments from customers 0 0

Accounts payable -70,958 -63,111

Leasing liabilities 0 0

Other current liabilities -1,959,364 -350,000

Accrued expenses and deferred income -3,871,221 -3,870,236

Total -5,901,543 -4,283,347

TOTAL EQUITY AND LIABILITIES -7,494,509 -5,729,977

29

SCORE MUSIC INTERACTIVE LIMITED Irish Company law requires the directors to prepare financial statements for each financial year. Under the

law the directors have elected to prepare the financial statements in accordance with Companies Act 2014

and accounting standards issued by the Financial Reporting Council including FRS 102, the Financial

Reporting Standard applicable in the UK and Ireland (Generally Accepted Accounting Practice in Ireland).

Under company law, the directors must not approve the financial statements unless they are satisfied that

they give a true and fair view of the assets, liabilities and financial position of the company as to the financial

year end and of the profit or loss of the company for the financial year and otherwise comply with the

Companies Act 2014.

CONSOLIDATED PROFIT AND LOSS STATEMENT FOR THE FINANCIAL YEAR 01-04-

2019 TO 31-03-2020

Amount in EUR 01-04-2019

31-03-2020

01-07-2018

31-03-2019

Net sales 72,835 76,181

Other operating income 12,236 21,822

Total operating income 85,071 98,003

Administrative expenses -1,603,428 -1,730,855

Total expense -1,603,428 -1,730,855

Operating profit -1,518,357 -1,632,852

Financial income 0 0

Financial cost -97,815 -27,991

Financial items – net -97,815 -27,991

Net income before tax -1,616,172 -1,660,843

Tax 0 0

Profit/loss for the period -1,616,172 -1,660,843

Other comprehensive income:

Items that may be classified to profit/loss for the period: 0 0

Exchange rate differences when translating foreign operations -6,800 -,210

Other comprehensive income for the period -6,800 -,210

Total comprehensive income for the period -1,622,972 -1,661,053

30

CONSOLIDATED BALANCE SHEET

ASSETS

Amount in EUR 31-03-2020 31-03-2019

Non-current Assets

Intangible assets 1 1

Tangible assets 14,181 29,019

Total 14,182 29,020

Long-term assets

Debtors 15,222 24,689

Total non-current assets 29,404 53,709

Current assets Debtors 50,081 97,639

Cash and cash equivalents 10,691 24,063

Total current assets 60,772 121,702

TOTAL ASSETS 90,176 175,411

EQUITY AND LIABILITIES

Amount in EUR

Equity

Called up share capital -263 -263

Share premium -4,887,406 -4,887,406

share option reserve -883,179 -692,267

Forex reserve 34,659 27,859

Profit/loss account 8,357,939 6,741,770

Total equity attributable to the parent company's shareholders 2,621,750 1,189,693

Long-term liabilities

Loans 0 0

Lease liabilities 0 0

Other long-term loans 0 0

Total 0 0

Current liabilities

Accrued expenses and deferred income

Short term loans

-806,499

-1,905,435

-307,893

-1,057,211

Total -2,711,934 -1,365,104

TOTAL EQUITY AND LIABILITIES -90,176 -175,411

31

INFORMATION

CONSOLIDATED ACCOUNTS On April 15, 2020, IFOX Investments AB (publ)

under name change to Xhail AB (publ)

announced that the Company had signed an

agreement to acquire all of the shares of Score

Music Interactive Ltd and dispose of previous

operations. IFOX Investments is in the process of

changing its name to Xhail AB (publ). The

acquisition and disposal of the old operations

were approved at an extraordinary general

meeting on 13 May 2020. As of July 1, 2020,

Score Music Interactive Ltd and all its subsidiaries

will be included in Xhail AB's consolidated

accounts.

INVESTMENTS Xhail made in previous fiscal years investments in

exploration for minerals and gas mainly in the

Nordic region via a now disposed subsidiary in the

2010-2017 period. After that, Xhail has made no

significant investment until the Company signed

an agreement to acquire all of the shares of Score

Music Interactive Ltd for a maximum of SEK 228

million from the current owners. This investment

will be financed by a non-cash issue executed

upon resolution of an extraordinary general

meeting on 13 May 2020 and will complete after

closing of the Rights Issue.

Xhail currently does not have any other ongoing

investments or commitments to make future

investments above and beyond the investments

being made as part of the Company's

development work. Apart from the above, Xhail

does not have any future investments which its

executive bodies have already made clear

commitments to.

REVENUES AND EXPENSES It is estimated that future revenues will come from

subscription revenue, license revenue, as well as

intellectual property rights.

The costs of establishing operations and project

development have historically been primarily

borne by the parent company. These costs

primarily consisted of personnel expenses. Since

the Company is changing its operations and

disposing of past operations, it is estimated that

costs will primarily transform in the coming years

into overhead costs for continuing development

of the software developed by Score Music

Interactive ltd and for keeping the parent

company and its subsidiaries up and running.

FIXED ASSETS Xhail's fixed assets had a carrying amount of SEK

5,213,000 as at 30 September 2019. The main

part of the Company's fixed assets consisted of

financial assets which involved interests in group

companies, other long-term securities holdings

and other long-term receivables. After the

disposal of the past operations, the Company's

fixed assets will consist of the acquired holding of

Score Music Interactive Ltd.

TANGIBLE FIXED ASSETS The Company's tangible fixed assets consist of

equipment. The equipment is valued at cost less

accumulated depreciation. Tangible fixed assets

are depreciated linearly over their expected

useful life, taking substantial residual values into

account. A depreciation period of three to ten

years is applicable for equipment. After the

disposal, the Company no longer has any tangible

fixed assets.

INTANGIBLE FIXED ASSETS

CURRENT ASSETS The Company's current assets totalled SEK

7,494,509 on March 31 2020, of which cash and

bank balances accounted for SEK 220,587.

FINANCIAL POSITION AS AT MARCH,

2020 Xhail's total assets equalled SEK 7,494,509 as at

31 March 2020. The Company’s cash and bank

balances were valued at SEK 220,587. The

Company’s equity totalled SEK 1,592,966. The

Company’s current liabilities amounted to SEK

2,711,930, of which SEK 2,711,930 was interest

bearing.

EQUITY AND DEBT Xhail' debt as at March 31, 2020 is reported

below.

32

NET DEBT Xhail AB’s net debt as at March 3, 2020 is reported below.

(TSEK) 31-03-2020

(A) Cash 220,587

(B) Cash equivalents 0

(C) Readily saleable securities 0

(D) Total liquidity (A)+(B)+(C) 220,587

(E) Current receivables 7,273,922

(F) Current bank debt 0

(G) Current component of non-current liabilities 0

(H) Other current liabilities 5,901,543

(I) Total current liabilities (F)+(G)+(H) 5,901,543

(J) Net short-term debt (I)-(E)-(D) -1,592,966

(K) Long-term bank loans 0

(L) Bonds issued 0

(M) Other non-current liabilities 0

(N) Long-term debt (K)+(L)+(M) 0

(O) Net debt (J)+(N) -1,592,966

33

WORKING CAPITAL The Board of Directors of Xhail estimates that the

existing working capital linked to the new

acquisition is not sufficient for the Company's

current needs in the coming twelve-month period,

since the Company's working capital needs for

the coming twelve-month period exceed the

Company's short-term and long-term financial

resources. The existing working capital, as of the

date of the present Investment memorandum, is

estimated to be sufficient for conducting the

Company's operations according to the

applicable business plan for about 1 month. The

working capital deficit for the coming twelve-

month period is estimated to be approx. SEK 20

million before investments in development,

stems, market launch and so forth. The Company

will adapt the plans based on the amount raised.

Development of the platform is expected to cost

another SEK 20 million, at least. Given that the

present Rights Issue is fully subscribed, the board

estimates that the Company's basic working

capital will be sufficient for the coming six-month

period. To be able to do additional works as per

above, the Company will have to be supplied with

further capital and therefore the option to raise

further capital through the Over-subscription

Option in the Rights Issue as well as completion

of the Directed Share Issue is essential. The

capital contributions are intended to be used

primarily for development of the technical

platform, market launch and other marketing and

branding events as well as operating capital. If the

Rights Issue is not completed, the Company may

be forced to seek other financing options in the

form of e.g. further share issues or opening a

credit facility. In addition, the Company may need

to revise its rate of expansion in its existing

business plan and review the Company's

organisation and cost structure.

OPERATIONAL TRENDS There are no key trends with regard to

production, sales and stocks, costs and sales

prices during the past fiscal year until the date of

the Investment memorandum. Since the

Company has changed its operations in

conjunction with the acquisition of Score Music

Interactive Ltd, comparisons between current

trends and future trends are rendered impossible.

The Company is not aware of any trends,

uncertainties, potential changes or other

requirements, commitments or events that can

be expected to have a significant effect on future

business prospects.

No key changes have affected the markets the

Company operates on since the end of the period

covered by the most recent public audited annual

report. Since the Company has changed its

operations in conjunction with the acquisition of

Score Music Interactive Ltd, comparisons

between current trends and future trends are

rendered impossible.

34

SHARES, SHARE CAPITAL AND OWNERSHIP STRUCTURE

SHARES AND SHARE CAPITAL The Articles of Association of the Company were

adopted at the extraordinary general meeting on

13 May 2020 but have not yet been registered

with the Swedish Companies Registration Office.

According to the articles of association applicable

at the time of the most recently communicated

historic financial information, the share capital is

to be in Swedish kronor and the share capital is

to be a minimum of SEK 690,000 and a

maximum of SEK 2, 760,000 divided up into a

minimum of 69,000,000 shares and a maximum

of 276, 000,000 shares. Each shareholder is

entitled to vote on the basis of the full amount of

shares owned and represented by said

shareholder at the general meeting. The share

capital of Xhail totals SEK 697,515.44 divided up

into a total of 69,751,544 shares. All shares have

a quota value (Sw. kvotvärde) of SEK 0.01 and

provide equal rights to a share in Xhail's votes,

assets and profit. The shares are issued in

Swedish kronor and have been issued in

accordance with the Swedish Companies Act.

Xhail is signed up for Euroclear's account-based

securities system, and therefore, no physical

share certificates will be issued. All rights linked

to the Company's shares are bestowed upon the

people registered in the share register maintained

by Euroclear.

Any decisions on dividends are made by the

general meeting (upon proposal by the board or

shareholders). Pay-outs are managed by

Euroclear. Dividend entitlements are bestowed

upon the people who were registered as owners

in the share register maintained by Euroclear as

of the record date set by the general meeting. If a

shareholder cannot be reached by Euroclear, the

shareholder's claim on the Company with respect

to the dividend amount remains and is only limited

by the statute of limitations. In the event of

expiration of the statute of limitations, the

dividend amount will be surrendered to Xhail.

There are not any special procedures or

restrictions for shareholders resident outside of

Sweden.

In the event of liquidation, shareholders are

entitled to a share of the surplus in proportion to

the number of shares held. In the event of a new

subscription of shares shareholders have

preference in proportion to the number of shares

held if nothing else is decided by the general

meeting.

The shares of Xhail are not subject to an offer

submitted as a result of mandatory bid rules, a

right of squeeze-out or a right of sell-out. No

public takeover bids have been submitted for the

shares of Xhail during the current or the previous

fiscal year. Xhail does not hold any of its own

shares.

There are not any post-sale purchase rights

clauses, rights of first refusal or other limitations

on the right to transfer shares of the Company by

law, the Company's articles of association or a

contract or other act the Company is a party to.

As far as the Company knows, there are not any

other contracts to which the Company is not a

party, such as contracts between shareholders,

which could result in limitations on the right to

transfer the Company's shares.

35

CHANGES IN EQUITYThe Company's share capital has changed

according to the table below since the Company

was founded:

ChangeAmount of

change (SEK)

Share cap ital

after change

(SEK)

Reg is tered

Current

Share Issue2 092 546,32 2 790 061,76

Decrease -69 054 028,56 697 515,44 2017-06-02

Share Issue 3 938 099,00 69 751 544,00 2017-05-17

Share Issue 3 483 333,00 65 813 445,00 2017-05-02

Share Issue 3 425 035,00 62 330 112,00 2017-04-27

Share Issue 3 784 000,00 58 905 077,00 2016-05-19

Share Issue 1 311 746,00 55 121 077,00 2016-05-19

Share Issue 2 446 693,00 53 809 331,00 2015-10-27

Share Issue 7 000 000,00 51 362 638,00 2015-09-17

Share Issue 4 945 467,00 44 362 638,00 2015-03-16

Share Issue 14 149 000,00 39 417 171,00 2015-02-16

Share Issue 3 670 040,50 25 268 171,00 2014-10-07

Share Issue 1 999,32 21 598 130,50 2014-10-07

Share Issue 10 500 000,00 21 596 131,18 2014-08-12

Share Issue 15 639,56 11 096 131,18 2014-07-03

Share Issue 36 666,67 11 080 491,62 2014-07-03

Share Issue 6 344 378,25 11 043 824,95 2014-03-20

Share Issue 666 666,66 4 699 446,70 2014-03-20

Share Issue 3 302 103,66 4 032 780,04 2014-03-20

Decrease -2 192 029,10 730 676,38 2014-03-20

Share Issue 1 453 952,40 2 922 705,48 2009-09-01

Share Issue 200 000,00 1 468 753,08 2009-06-30

Share Issue 58 333,32 1 268 753,08 2007-09-19

Share Issue 33 333,32 1 210 419,76 2007-09-14

Share Issue 553 086,44 1 177 086,44 2007-01-08

Share Issue 24 000,00 624 000,00 2006-03-29

Share Issue 360 000,00 600 000,00 2005-08-02

Share Issue 100 000,00 240 000,00 2005-08-02

Share Issue 40 000,00 140 000,00 2005-08-02

Formation 100 000,00 100 000,00 2004-03-30

36

AUTHORIZATIONS AND DILUTION As a result of the extraordinary general meeting

held on 13 May 2020 resolving to approve the

acquisition of all of the shares of Score Music

Interactive Ltd, the EGM also resolved on the Set-

Off Share Issue - a new share issue of a maximum

of 1,900,000,000 shares, directed towards the

shareholders of SMI, for the payment of the

acquisition of all shares in SMI (via set-off of loan

notes at a subscription price of SEK 0.12 per

share) which would result in an increase of the

share capital by a maximum of SEK 19,000,000.

The shares issued in the Set Off Share Issue will

be subscribed for on a separate subscription list

shortly after the closing of the Rights Issue. The

board believes that the proposed subscription

price is justified given that it is equal to the

subscription price for existing shareholders to

subscribe for shares in the Rights Issue. The

board will resolve on allotment of the newly issued

shares in the Set-Off Share Issue to shareholders

of SMI after the board has resolved on allotment

in the Rights Issue.

In addition, the EGM resolved on an Over-

subscription Option - authorising the Board of

Directors of the Company to, up until the next

annual general meeting, in order to, amongst

other things, accommodate of an over-

subscription in the Rights Issue, pass a resolution

to issue an additional 200 000 000 shares worth

a maximum of SEK 24 million with deviation from

shareholders' pre-emption rights on essentially

the same terms as the Rights Issue which at full

subscription would result in an increase of the

share capital with a maximum of SEK 2,000,000.

The Over-Subscription Option will, if used, be

directed towards legal or nor legal persons who

are not qualified investors of no more than 149 in

total.

The EGM further resolved to perform the

Directed Share Issue - a share issue with

deviation from the pre-emption rights of the

shareholders, of a maximum of 250,000,000

shares at a subscription price of SEK 0.12 per

share, which at full subscription would result in an

increase of the share capital with a maximum of

SEK 2,500,000.

The right to subscribe for shares in the Directed

Share Issue will be granted to a number of

beforehand identified non-qualified investors

(legal or no legal persons), of no more than 149

in total. The subscription price will be SEK 0.12

per share, which is equal to the subscription price

of the Rights Issue. The reason for the deviation

from the shareholders' pre-emption rights is that

the board of directors have, after contacts with

the main shareholders in the Company,

concluded that it was not possible to raise

additional capital through a rights issue in

addition to the Rights Issue and the Over-.

Subscription Option but noted that there was a

significant interest from external investors to

invest in Xhail. In addition, the Directed Share

Issue will result in a broadening of the shareholder

base and in the Company getting additional

shareholders as well as additional funds to

develop the Company's assets.

37

OWNERSHIP STRUCTURE The number of shareholders of Xhail totalled

approximately 6,800 as at 31 March 2020. The

following table displays information concerning

the Company's ownership structure. The table is

based on the Company's owners as of 31 March

2020.

THE OWNERSHIP IN SMI IS THE FOLLOWING AS PER 21 MAY 2020:

Score Music Interactive Ltd Ownership List, 21 May 2020 Shares %

MDMK Ltd (Mick & Moira Kiely) 10 031 35%

Bridge Brothers LLC 5 594 19%

Sigura Unlimited Company 2 075 7%

Amatano (no 2) Company 1 320 5%

Others 9 971 34%

Total 28 991 100%

Xhail AB Post Transaction (approx, based on SEK 55m raise) Shares %

MDMK Ltd (Mick & Moira Kiely) 520 968 726 21%

Bridge Brothers LLC 384 520 334 16%

FEPI International 250 000 000 10%

Sigura Unlimited Company 130 174 270 5%

Amatano (no 2) Company 68 555 350 3%

Other exisiting shareholders SMI 545 781 320 22%

Investors Rights Issue and Directed Issue 459 254 632 19%

Current Owners Swedish Company 69 751 544 3%

Total 2 429 006 176 100%

38

DIVIDEND POLICY The magnitude of future dividends depends on

the Company's future financial performance,

financial position, capital needs and cash flows.

The Company expects to be in an expansive

investment phase in the coming years, and any

distributable funds will therefore in all likelihood be

reinvested in the business. As a result, the Board

of Directors of Xhail estimates that no cash

dividends will be distributed to the shareholders

in the next two years. After that, the board will

conduct a review of the dividend policy. The

target is to give 50% of profits as dividend in the

long term.

OPTION PROGRAMME CEO Peter Swartling has subscribed for an option

programme (warrants with attendant subscription

for new shares) whereby he can subscribe for

80,000,000 shares in the Company at a price of

SEK 0.36 per share during the period 2022-07-

01 to 2023-06-30. He has paid an option

premium for the options. The option programme

will be registered at the Swedish Companies

Registration Office in connection with the

registration of the Rights Issue,

The Board of Directors will conduct a review of

the whole Group’s incentive and propose a new

incentive program for the key employees during

2020.

39

BOARD OF DIRECTORS, SENIOR EXECUTIVES AND AUDITORS

The Company has a current Board of directors, and has elected a new Board of Directors, to be registered

in connection with closing of the acquisition of SMI.

FUTURE BOARD OF DIRECTORS*

Name

Member

since Birth year Position

Number of

shares in

The Company

prior to Rights

Issue

Independent of

Company and

group

management

Independent

of major

shareholders

Michael Doron 2020 1961 Chairman of the

Board of

Directors

0 Yes Yes

Mick Kiely 2020 1964 Board Member 0 No No

Alexander H.

Dessauer

2020 1966 Board Member 0 Yes Yes

Ricard Constantinou 2020 1966 Board Member 0 Yes Yes

Anders Thorsell 2013 1973 Board Member 13 354 553 Yes Yes

*To be registered at the Swedish Companies registration authority in connection with closing of the

acquisition of SMI.

Michael Doron, Chairman. Extensive track record in financial services and part of numerous

successful IPOs in NY. Other achievements include several executive positions in Delta Airlines,

as well as starting several companies. He is based in Stockholm and USA

Mick Kiely, Director. Founder of Xhail in 2013 and its main owner. Background as businessman,

musician and composer for TV, film, advertising and video games. He is based in Los Angeles

and Dublin

Alexander H. Dessauer, Director. Investor and social entrepreneur. Early participant in

innovative technologies, both in the US and overseas. A Duke University graduate and 20-year

executive Board member of Best Buddies International, an IDD global NGO. He is based in

Miami.

Ricard Constantinou, Director. Entrepreneur, business developer and Investor. Founder of

Panini Internazionale, the K-Märkt Group, etc. He is based in Stockholm.

Anders Thorsell, Director. CEO of Nickel Mountain Resources AB (publ). Entrepreneur with

extensive background in corporate finance and management at investment banks. He is based

in Stockholm.

40

CURRENT BOARD OF DIRECTORS The Board of Directors of Xhail currently consist of three members including the chairman.

Name

Member

since Birth year Position

Number of

shares in

The Company

prior to Rights

Issue

Independent of

Company and

group

management

Independent

of major

shareholders

Per Weithz 2017 1972 Chairman of the

Board of

Directors

994 139 Yes Yes

Anders Thorsell 2013 1973 Board Member 13 354 553 No No

Thomas Häggkvist 2019 1974 Board Member 0 Yes Yes

SENIOR EXECUTIVES

Peter Swartling, Group CEO. Will be registered

as CEO after completion of the acquisition of

SMI. Mr. Swartling has been in leading positions

within the music industry in Sweden and New

York for 30 years, and has been the CEO of a

number of companies. He is based in

Stockholm.

Mick Kiely, Chief Creative Officer. He is based

in Los Angeles.

Jens Bruno, Acting Group CFO. Previously CFO

and CEO of a number of public and private

ventures. He is based in Stockholm.

Conor Tee, CTO SMI. He is based in Dublin.

Killian Magee, Head of Music Curation. He is

based in Dublin.

Tom FitzGerald, CFO SMI. He is based in

Dublin.

Crevan Higgins, Financial Controller SMI. He is

based in Dublin.

Andreas Carlsson, Business Development. One

of the world’s leading songwriters and

producers, as well as a successful businessman.

He is based in Los Angeles.

OTHER INFORMATION ABOUT THE

BOARD OF DIRECTORS AND THE

MANAGEMENT TEAM

All members of the Board of Directors and the

management team have their office address at

Xhail AB, Eriksbergsgatan 10, 114 30 Stockholm,

Sweden. No board posts are limited in time in any

other way besides what is stipulated in the

Swedish Companies Act (2005:551). There are

no family ties between board members, members

of management or the Company's auditors other

than that Killian Magee is the son of Mick Kiely.

There are no conflicts of interest between the

obligations of the above board members or senior

executives to Xhail and their private interests or

other obligations.

None of the board members or senior executives

have been convicted in fraud-related cases in the

past five years. None of them have been in

bankruptcy, liquidation or receivership either,

except for Jens Bruno, that was a board member

in Across Agri AB, which has been in bankruptcy

since 2018 and is now closed. There is no

information in laws or orders by authorising

authorities (including approved professional

societies) about charges and/or punishments

instituted against board members or senior

executives and they have not been banned by a

court from being a member of an issuer's

administrative, management or supervisory

bodies or from having leading or comprehensive

functions at an issuer during at least the past five

years.

The fact that certain people on the board and the

management team have financial interests in the

Company via shareholdings or option holdings is

shown by the list above.

AUDITORS At the 2019 annual general meeting, Authorised

Public Accountant Johan Erlandsson, birth year

1968 (from Revisorsgruppen i Malmö AB), was

elected to a term of office of four (4) years.

Erlandsson is a member of FAR SRS.

41

REMUNERATION FOR BOARD OF

DIRECTORS AND SENIOR

EXECUTIVES The managing director, Peter Swartling, is

employed by the Company and receives

remuneration according to contract, having a

salary of SEK 150,000 per month plus standard

pension benefits. 30 vacation days per year.

Swartling has signed up for an incentive program,

detailed above. The contracts stipulated a six-

month notice period for either party and a nine-

month severance pay, unless the board by a 75%

majority deem the CEO to be a “bad leaver”.

Remuneration for the board until the end of the

2021 annual meeting will be SEK 300,000 per

board member, with the exception that members

employed by the Company or having a

consultancy of at least 50% will not receive a

board fee.

The board remuneration is decided by resolution

of the annual general meeting. There is no

contract between the Company and a board

member or a senior executive that entitles

him/her to any benefits after their post has ended

above and beyond what is specified above with

respect to remuneration for managing directors in

the event of dismissal by the Company. The

Board member Anders Thorsell’s wholly-owned

company Connector Corporate Finance AB has

agreed to set-off a claim of SEK 1.5 million against

the Company, versus a SEK 1.0 million set-off

against shares in the Rights Issue at a

subscription price of SEK 0.12 per share.

There is no contract between the Company and

a board member or a senior executive that

entitles him/her to any benefits after their post

ends. Neither the Company nor its subsidiaries

have any provisioned or accrued amounts for

pensions and similar benefits after leaving the

Company.

BONUSES The Group does not have any contracts or

agreements concerning bonus compensation.

OTHER BENEFITS The Group does not have any contracts or

agreements concerning other benefits.

42

LEGAL ISSUES AND SUPPLEMENTARY INFORMATION

UNDERWRITING COMMITMENTS Xhail has received an underwriting commitment

from external investors who have committed to

ensure that the Rights Issue is subscribed by up

to SEK 24.1 million and a commitment for

subscription agreements amounting to SEK 1.0

million from Board Member Anders Thorsell’s

company Connector Corporate Finance AB.

Further, the Directed Share Issue is per May 21st

committed to an amount of no less than SEK 5

million.

The underwriting commitments are irrevocable.

As remuneration for their underwriting

commitment, the underwriter receives

compensation of 10 percent of the underwritten

amount. The underwriting compensation is paid

regardless of whether the underwriting guarantee

needs to be used or not. The Company has not

required the underwriter to furnish security for the

guarantee by depositing cash equivalents,

pledging securities, presenting bank guarantees

or in another manner. The underwriter is

nonetheless aware that the guarantee is a legally

binding obligation to the Company and

undertakes to keep the necessary funds available

in the event that the underwriting guarantee is to

be used. There is thus a risk that the underwriting

commitment is not met in full.

SPA In April 2020 a Share Purchase Agreement (the

“SPA”) was agreed between the main

shareholders of SMI and IFOX. IFOX commits to

pay SEK 228,000,000, for 100% of the shares of

SMI on a debt-free basis. However, under certain

conditions specified in the SPA, the purchase

price for the shares may be adjusted downwards.

The consideration is to be paid by the issuance of

debt notes corresponding to the final purchase

price for the shares in accordance with the SPA,

to immediately be converted/set-off to newly

issued shares in IFOX at a subscription price of

SEK 0.12 per share. The SPA includes standard

warranties for an SPA of this kind. IFOX further

commits to perform certain actions to enable the

acquisition and also commits to secure a net

financing of no less than SEK 24 million. After

completion of the Rights Issue, the acquisition

under the SPA shall be completed.

NMR AGREEMENTS The Company had a series of agreements with

Nickel Mountain Resources AB (publ) (“NMR”):

1. Share Purchase Agreement from 2017

regarding IFOX sale of all outstanding

shares in Mezhlisa Resources Cyprus

Ltd (“Mezhlisa”) (the “Tomsk SPA”);

2. Mandate Agreement 2017 regarding the

potential sale of NMRs subsidiary

Mezhlisa or the sale of Mezhlisa’s

shareholdings in its subsidiary OOO

Bakcharneftegaz;

3. Mandate Agreement regarding the

potential sale of NMRs subsidiary Nickel

Mountain AB or the sale of Nickel

Mountain AB’s nickel project in Sweden;

4. A management agreement, whereby the

Company was performing management

services for the management of a certain

asset within NMR.

Under the Tomsk SPA, NMR has claimed

compensation for damages from the Company

amounting to a total sum of SEK 1 700 000 due

to inaccuracy of a warranty representation in the

Tomsk SPA. As of the date of this Investment

memorandum a total amount of SEK 1 350 000

has been paid in compensation to NMR. The

remaining amount of SEK 350,000 is to be paid

after the completion of the Rights Issue. After

such payment has been made in full, NMR has

declared they have no further claims on the

Company. Agreements under 2, 3 and 4 above

have been terminated in May 2020 by the parties

to such agreements and there are no remaining

obligations for the Company under these

agreements.

LOAN NOTE SMI has a loan note of €1,230,000 (€1,332,822

including accrued interest per May 20, 2020)

that runs with an annual interest of 6% per

annum. The Loan Note has a pledge over the

Intellectual Property rights of SMI. The Company

can repay the loan at any time. The Loan Note is

currently in default since 30 April 2020, but the

principal holder Bridge Brothers LLC has

declared its intentions to prolong the Loan Note

for a certain period of time in order to facilitate

the transaction.

INTELLECTUAL PROPERTY RIGHTS

The Xhail mother patent has granted patents in

US, China, Russia, Ireland, Japan and India.

Examiner has indicated grants in Australia and

43

Europe with patents pending in all other territories

globally with a priority date of 9 April 2013 which

is the date against which the novelty and

inventiveness of the Xhail technology is assessed.

Other patents (new and continuations) have been

granted in the US. Based on the ongoing success

in securing global patent rights for the technology

it is clear that Xhail has a technology that is far

ahead of its time. The Xhail IP is regarded as a

critical building block for future development in

the music AI space generally. The Board believes

that all machine learning (or AI) solutions in the

future will require the unique tagging system

protected by the IP.

Patents are acknowledged and commended for

their broadness and strength making it

increasingly difficult for development by

competitors in a space of huge interest to the

entertainment industry. The Xhail patent for vocal

stem application of the platform was granted in

US in 2019. International Patent Application

lodged in 2019.

DISPUTES The Company is party to a tax process whereby

the Swedish Tax Authority has declared that they

would not accept VAT deductions during the

period January 2016 to May 2017 and wanted to

disallow deductions of in total SEK 3.9m.

Deduction before that was accepted, as was

deductions after that period, despite the business

being the same. The Company has since

reserved the full amount in the books. The case is

currently in the lower administrative court of

Stockholm. Proceedings have not yet taken

place.

Besides this, the Company is not a party in any

legal proceedings or arbitration proceedings

(including not yet settled cases or cases the

Company is aware can arise) in the past twelve

months and that recently had or could have

significant effects on the Company's financial

position or profitability.

TRANSACTIONS WITH ASSOCIATED

COMPANIES When group companies deliver products or

provide services to other companies in the

Group, the Company applies what it deems to be

market pricing and market terms. As far as the

board of directors knows, no transactions with

associated companies have taken place within

the Company during the past three-year period.

SHAREHOLDER'S AGREEMENTS As far as the Board of Directors knows, there are

not any shareholders' agreements concerning the

shares of the Company. As far as the Board of

Directors knows, there are not any other

agreements or equivalent transactions that could

lead to a change in control over the Company.

LOCK-UP AGREEMENTS As far as the Board of Directors knows, there are

not any lock-up agreements within the Company.

Such can be put in place for certain key

shareholders ahead of a listing.

OTHER COMPANY INFORMATION The Company's Swedish corporate ID no. is

556658-6797. The Company is public (publ) and

has its registered office in Stockholm

Municipality, Stockholm County, Sweden. The

Company was registered with the Swedish

Companies Registration Office on 30 March

2004. The Company's legal form is governed by

the Swedish Companies Act (2005:551).

Shareholder rights associated with the shares

may only be changed in accordance with this

regulatory framework. The Company is not listed

on any exchange, whereby it has no obligations

to follow the Code of Corporate Governance and

de facto does not do so.

DOCUMENTS KEPT AVAILABLE FOR

INFORMATION PURPOSES The Articles of Association of Xhail, as well as all

reports, historic financial information, valuations

and opinions prepared by an expert are available

at the Company's premises in paper form for

inspection during the term of validity of the

Investment memorandum. Information about

Xhail is also available on the Company's website,

www.xhail.seDocuments incorporated by

reference

Investors should read all information incorporated

in the Investment memorandum by reference and

the information to which the reference refers

should be read as part of this Investment

memorandum. The parts of the documents listed

below not incorporated by reference are not a

part of this Investment memorandum. The

information listed below shall be deemed

incorporated in the Investment memorandum by

reference. Copies of the Investment

memorandum and the documents incorporated

by reference can be obtained electronically from

Xhail via the Company's website: www.xhail.se

44

ARTICLES OF ASSOCIATION

On May 13 2020 the EGM decided on two new sets of Articles of Association. The first is implemented to

make room for the Rights Issue, the Directed Share Issue and the Over-Subscription Option, to change

the name of the Company, to change the object of the Company’s activities and the accounting year for

the Company to calendar year. The second set of Articles of Association, found below the first new set, is

to make room in the number of shares and share capital in the Set-Off Share Issue with regards to the

acquisition of all shares in SMI. At the date of this Investment memorandum neither of the below

mentioned articles of associations have been registered at the Swedish Companies Registration Authority.

Articles of Association of XHAIL Number 1.

BOLAGSORDNING FÖR XHAIL AB (PUBL)

556658-6797

ARTICLES OF ASSOCIATION OF XHAIL AB (PUBL)

556658-6797

§1 Företagsnamn

Name of the company

Bolagets företagsnamn är Xhail AB (publ).

The name of the company is Xhail AB (publ).

§2 Styrelsens säte

Registered office of the board of directors

Styrelsen skall ha sitt säte i Stockholm.

The board of directors shall have its registered office in Stockholm.

§3 Verksamhet

Object of the company’s activities

Bolaget skall ha till föremål för sin verksamhet att leverera affärsutvecklingstjänster,

bedriva förvaltning av aktier och andelar samt bedriva handel med finansiella instrument

såsom aktier och därtill relaterade värdepapper, obligationer och valutor, fast och lös

egendom och därmed förenlig verksamhet.

The object of the company’s activities is to deliver business development services,

administration of shares and conducting trading with financial instruments, such as shares

and associated securities, bonds and currencies, moveable and immoveable property and

other activities compatible therewith.

§4 Aktiekapital

Share capital

Aktiekapitalet skall vara lägst 3 000 000 kronor och högst 12 000 000 kronor.

The share capital shall be not less than SEK 3,000,000 and not more than SEK

12,000,000.

§5 Antal aktier m.m.

Number of shares

45

Antalet aktier skall vara lägst 300 000 000 och högst 1 200 000 000.

The number of shares shall be not less than 300,000,000 and not more than

1,200,000,000.

§6 Styrelse

Board of Directors

Styrelsen består av lägst tre och högst sju ledamöter med högst en suppleant.

The board of directors shall consist of not less than three and not more than seven

members with not more than one deputy member.

§7 Revisorer

Auditors

Bolaget skall ha en eller två revisorer med eller utan revisorssuppleanter eller en eller två

revisionsbolag. Uppdraget som revisor gäller till slutet av den årsstämma som hålls under

det fjärde räkenskapsåret efter det då revisorn utsågs.

The company shall have one or two auditors with or without deputy auditors or one or two

audit companies. The assignment as auditor applies until the annual general meeting held

during the fourth financial year after the year the auditor was elected.

§8 Kallelse

Notice of general meeting

Kallelse till årsstämma samt kallelse till extra bolagsstämma där fråga om ändring av

bolagsordningen kommer att behandlas skall ske tidigast sex och senast fyra veckor före

stämman. Kallelse till annan extra bolagsstämma skall utfärdas tidigast sex och senast två

veckor före stämman.

Notice of annual general meeting and notice of extraordinary general meeting where

amendment of the articles of association is addressed shall be made at earliest six weeks

and at latest four weeks prior to the general meeting. Notice of other extraordinary general

meeting shall be issued at earliest six weeks and at latest two weeks prior to the general

meeting.

Kallelse till bolagsstämma skall ske genom annonsering i Post- och Inrikes Tidningar och

genom att kallelsen hålls tillgänglig på bolagets webbplats. Samtidigt som kallelse sker

skall bolaget genom annonsering i Svenska Dagbladet upplysa om att kallelse skett.

Notices of general meetings shall be made by announcement in the Swedish Official

Gazette (Sw. Post- och Inrikes Tidningar) and by making the notice available on the

company’s website. At the same time as notice is given it shall be announced in Svenska

Dagbladet that a notice has been made.

För att få deltaga i bolagsstämma skall aktieägare anmäla sig hos bolaget senast den dag

som anges i kallelsen till stämman. Denna dag får inte vara söndag, annan allmän helgdag,

lördag, midsommarafton, julafton eller nyårsafton och inte infalla tidigare än femte

vardagen före stämman.

To participate in general meetings, the shareholder must notify the company no later than

the date specified in the notice of the general meeting. Such day may not be a Sunday,

other public holiday, Saturday, Midsummer’s Eve, Christmas Eve or New Year’s Eve and

46

may not occur earlier than the fifth weekday prior to the general meeting.

§9 Årsstämma

Annual general meeting

På årsstämma skall följande ärenden förekomma till behandling:

The following matters shall be addressed at the annual general meeting:

1. Val av ordförande vid stämman.

Election of chairman of the meeting.

2. Upprättande och godkännande av röstlängd.

Preparation and approval of the voting register.

3. Godkännande av dagordning.

Approval of the agenda.

4. Val av en eller två justeringsmän

Election of one or two persons to verify the minutes.

5. Prövning av om stämman blivit behörigen sammankallad.

Determination of whether the meeting has been duly convened.

6. Framläggande av årsredovisning och revisionsberättelse samt, i förekommande fall,

koncernredovisning och koncernrevisionsberättelse.

Presentation of the annual report and auditor's report and, where applicable, the

consolidated annual report and the consolidated audit report.

7. Beslut

Resolutions

a. om fastställelse av resultaträkning och balansräkning samt, i förekommande

fall, koncernresultaträkning och koncernbalansräkning,

on adoption of the balance sheet and income statement and, where

applicable, the consolidated balance sheet and the consolidated income

statement,

b. om dispositioner beträffande bolagets vinst eller förlust enligt den fastställda

balansräkningen,

on allocation of the company's profit or loss according to the adopted balance

sheet,

c. om ansvarsfrihet åt styrelseledamöter och verkställande direktören.

on discharge from liability for board members and the managing director.

8. Bestämmande av antalet styrelseledamöter och, i förekommande fall,

styrelsesuppleanter, revisorer och revisorssuppleanter som skall väljas på stämman.

Determination of the number of board members and, where applicable, deputy

47

members, and the number of auditors and deputy auditors to be elected at the

general meeting.

9. Fastställande av arvoden åt styrelsen, och i förekommande fall, revisorerna.

Determination of remuneration for the board of directors and, where applicable, the

auditors.

10. Val av styrelse och, i förekommande fall, styrelsesuppleanter, revisorer,

revisorssuppleant eller revisionsbolag.

Election of the board of directors and, where applicable, deputy board members,

auditors, deputy auditors or audit company.

11. Annat ärende som ankommer på stämman enligt aktiebolagslagen eller

bolagsordningen.

Any other business that are to be addressed on the meeting pursuant to the Swedish

Companies Act or the articles of association.

§10 Avstämningsförbehåll

CSD clause

Bolagets aktier skall vara registrerade i ett avstämningsregister enligt lagen (1998:1479)

om värdepapperscentraler och kontoföring av finansiella instrument.

The shares of the company shall be registered in a CSD register in accordance with the

Central Securities Depositaries and Financial Instruments Accounts Act (Sw. lagen

(1998:1479) om värdepapperscentraler och kontoföring av finansiella instrument).

§11 Räkenskapsår

Financial year

Bolagets räkenskapsår skall vara 0101-1231.

The company's financial year shall be 0101-1231.

48

ARTICLES OF ASSOCIATION OF XHAIL NUMBER 2. BOLAGSORDNING FÖR XHAIL AB (PUBL)

556658-6797

ARTICLES OF ASSOCIATION OF XHAIL AB (PUBL)

556658-6797

§1 Företagsnamn

Name of the company

Bolagets företagsnamn är Xhail AB (publ).

The name of the company is Xhail AB (publ).

§2 Styrelsens säte

Registered office of the board of directors

Styrelsen skall ha sitt säte i Stockholm.

The board of directors shall have its registered office in Stockholm.

§3 Verksamhet

Object of the company’s activities

Bolaget skall ha till föremål för sin verksamhet att leverera affärsutvecklingstjänster,

bedriva förvaltning av aktier och andelar samt bedriva handel med finansiella instrument

såsom aktier och därtill relaterade värdepapper, obligationer och valutor, fast och lös

egendom och därmed förenlig verksamhet.

The object of the company’s activities is to deliver business development services,

administration of shares and conducting trading with financial instruments, such as shares

and associated securities, bonds and currencies, moveable and immoveable property and

other activities compatible therewith.

§4 Aktiekapital

Share capital

Aktiekapitalet skall vara lägst 20 000 000 kronor och högst 80 000 000 kronor.

The share capital shall be not less than SEK 20,000,000 and not more than SEK

80,000,000.

§5 Antal aktier m.m.

Number of shares etc.

Antalet aktier skall vara lägst 2 000 000 000 och högst 8 000 000 000.

The number of shares shall be not less than 2,000,000,000 and not more than

8,000,000,000.

§6 Styrelse

Board of Directors

Styrelsen består av lägst tre och högst sju ledamöter med högst en suppleant.

The board of directors shall consist of not less than three and not more than seven

members with not more than one deputy member.

§7 Revisorer

49

Auditors

Bolaget skall ha en eller två revisorer med eller utan revisorssuppleanter eller en eller två

revisionsbolag. Uppdraget som revisor gäller till slutet av den årsstämma som hålls under

det fjärde räkenskapsåret efter det då revisorn utsågs.

The company shall have one or two auditors with or without deputy auditors or one or two

audit companies. The assignment as auditor applies until the annual general meeting held

during the fourth financial year after the year the auditor was elected.

§8 Kallelse

Notice of general meeting

Kallelse till årsstämma samt kallelse till extra bolagsstämma där fråga om ändring av

bolagsordningen kommer att behandlas skall ske tidigast sex och senast fyra veckor före

stämman. Kallelse till annan extra bolagsstämma skall utfärdas tidigast sex och senast två

veckor före stämman.

Notice of annual general meeting and notice to extraordinary general meeting where

amendment of the articles of association is addressed shall be made at earliest six weeks

and at latest four weeks prior to the general meeting. Notice of other extraordinary general

meeting shall be issued at earliest six weeks and at latest two weeks prior to the general

meeting.

Kallelse till bolagsstämma skall ske genom annonsering i Post- och Inrikes Tidningar och

genom att kallelsen hålls tillgänglig på bolagets webbplats. Samtidigt som kallelse sker

skall bolaget genom annonsering i Svenska Dagbladet upplysa om att kallelse skett.

Notices of general meetings shall be made by announcement in the Swedish Official

Gazette (Sw. Post- och Inrikes Tidningar) and by making the notice available on the

company’s website. At the same time as notice is given it shall be announced in Svenska

Dagbladet that a notice has been made.

För att få deltaga i bolagsstämma skall aktieägare anmäla sig hos bolaget senast den dag

som anges i kallelsen till stämman. Denna dag får inte vara söndag, annan allmän helgdag,

lördag, midsommarafton, julafton eller nyårsafton och inte infalla tidigare än femte

vardagen före stämman.

To participate in general meetings, the shareholder must notify the company no later than

the date specified in the notice of the general meeting. Such day may not be a Sunday,

other public holiday, Saturday, Midsummer’s Eve, Christmas Eve or New Year’s Eve and

may not occur earlier than the fifth weekday prior to the general meeting.

§9 Årsstämma

Annual general meeting

På årsstämma skall följande ärenden förekomma till behandling:

The following matters shall be addressed at the annual general meeting:

1. Val av ordförande vid stämman.

Election of chairman of the meeting.

50

2. Upprättande och godkännande av röstlängd.

Preparation and approval of the voting register.

3. Godkännande av dagordning.

Approval of the agenda.

4. Val av en eller två justeringsmän

Election of one or two persons to verify the minutes.

5. Prövning av om stämman blivit behörigen sammankallad.

Determination of whether the meeting has been duly convened.

6. Framläggande av årsredovisning och revisionsberättelse samt, i förekommande fall,

koncernredovisning och koncernrevisionsberättelse.

Presentation of the annual report and auditor's report and, where applicable, the

consolidated annual report and the consolidated audit report.

7. Beslut

Resolutions

a. om fastställelse av resultaträkning och balansräkning samt, i förekommande

fall, koncernresultaträkning och koncernbalansräkning,

on adoption of the balance sheet and income statement and, where

applicable, the consolidated balance sheet and the consolidated income

statement,

b. om dispositioner beträffande bolagets vinst eller förlust enligt den fastställda

balansräkningen,

on allocation of the company's profit or loss according to the adopted balance

sheet,

c. om ansvarsfrihet åt styrelseledamöter och verkställande direktören.

on discharge from liability for board members and the managing director.

8. Bestämmande av antalet styrelseledamöter och, i förekommande fall,

styrelsesuppleanter, revisorer och revisorssuppleanter som skall väljas på stämman.

Determination of the number of board members and, where applicable, deputy

members, and the number of auditors and deputy auditors to be elected at the

general meeting.

9. Fastställande av arvoden åt styrelsen, och i förekommande fall, revisorerna.

Determination of remuneration for the board of directors and, where applicable, the

auditors.

10. Val av styrelse och, i förekommande fall, styrelsesuppleanter, revisorer,

revisorssuppleant eller revisionsbolag.

Election of the board of directors and, where applicable, deputy board members,

auditors, deputy auditors or audit company.

51

11. Annat ärende som ankommer på stämman enligt aktiebolagslagen eller

bolagsordningen.

Any other business that are to be addressed on the meeting pursuant to the Swedish

Companies Act or the articles of association.

§10 Avstämningsförbehåll

CSD clause

Bolagets aktier skall vara registrerade i ett avstämningsregister enligt lagen (1998:1479)

om värdepapperscentraler och kontoföring av finansiella instrument.

The shares of the company shall be registered in a CSD register in accordance with the

Central Securities Depositaries and Financial Instruments Accounts Act (Sw. lagen

(1998:1479) om värdepapperscentraler och kontoföring av finansiella instrument).

§11 Räkenskapsår

Financial year

Bolagets räkenskapsår skall vara 0101-1231.

The company's financial year shall be 0101-1231.

52

ADDRESSES

HEAD OFFICE Xhail AB (publ)

Eriksbergsgatan 10

114 30 Stockholm

Sweden

ACCOUNT OPERATOR Euroclear Sweden AB

Box 7822

103 97 Stockholm

Sweden

Tel: +46 8 402 90 00

AUDITOR Johan Erlandsson

Revisorsgruppen i Malmö AB

Slottsgatan 20

211 33 Malmö

Sweden

Tel: +46 40 664 63 80