Tendential and manipulative article in the newspaper Capital (second in a row)

A little over a year ago, just before the public offering of BSE: WIN, this same 'author' from the same 'media' created something that was defined in an official letter from the board of directors of Karol to the 'media' as 'manipulative and false'. The 'media' quietly removed the extreme manipulations and untruths, which anyone could check in the commercial register and even allowed themselves not to publish the entire text of the signed letter from the board of Karol. This manipulation of course did not prevent the WIN offering from being overwritten 2.43 times.

The title of This new 'material' from July 1, 2023 is even more manipulative and practically absurdly false! Apparently, the otherwise ostentatious 'economic media' do not know what a 'bounced check' means. For their information and for the information of others (if there are any here who do not know), a bounced check means buying something and paying with a check that cannot be cashed. WIN has no such purchases. We did not buy anything without paying for it.

Starting from the title and going through the entire text, anyone with a little critical thinking will understand that this is a biased, manipulative and false article.

However, unlike the similar biased text published in June 2022 before the public offering of WIN, this one brings losses to WIN investors (which I am) and we will do everything in our power and within the law to protect the rights of all our investors!

For everyone's information, here is what I was asked by the author of this material and what I answered. And what they wrote - I leave to his/her conscience and the relevant authorities:

On Fri, Jun 9, 2023 at 8:00 AM Slavcho Kuzmov <ххххххххх@capital.bg> wrote:

Hello,
Mr. Rusev,

I am writing to you in connection with several questions that I shared earlier.

1. Do you plan to invest through Webit Investment Network in companies from the upcoming Webit event?

2. How many companies have you invested in so far through Webit, what share have you acquired and do you have more capital for investments?

3. Of the five companies last year in which you announced that you would invest 500 thousand euros each, how many of them do you still plan to invest in, since only one has been officially announced, and that for 900 thousand dollars? What made you change your mind?

4. What are the results of the vote held on 22.02.2023 in the shareholders' council, since they were not uploaded to the stock exchange's information website?

5. Would you raise additional public capital from investors to invest in more startups?

Regards,

Slavcho Kuzmov

Capital

On Thu, Jun 15, 2023 at 11:23 AM Dr. Plamen Russev <хххххх@webit.org> wrote:

Hello Slavcho,

Thank you for your interest in Webit Investment Network.

Below you will find the answers to your questions. From the Founders Games finalists, I understand that you have also looked for them. If you need contacts - we will be happy to connect you with them.

Regards,

Plamen Russev

1. Are you planning to invest through 'Webit Investment Network' in companies from the upcoming Webit event?

The upcoming Webit in Sofia is a special edition that we are funding to add value to Bulgaria and is a relatively small format - about 1500-2000 visitors. This edition will not host Founders Games. This year's finals will be during COP28 in Dubai and in Davos during the World Economic Forum week. As part of this edition, however, on June 28 at the National Palace of Culture, Webit is hosting InvestX - the first-of-its-kind international investment forum in Bulgaria with participants such as the Director General of the European Investment Bank, representatives from BlackRock, ADIA and dozens of others. Some of the Founders Games finalists are invited to attend and connect with investors from all over the world, as this is part of our program for support and development.

2. How many companies have you invested in so far through 'Webit', what share have you acquired and do you have more capital for investment?

If your question concerns the company, which is publicly traded on the Beam market of the Bulgarian Stock Exchange - Webit Investment Network (BSE: WIN), so far it has made 2 investments in VUZ and Elephant in a Box.

3. Of the five companies last year in which you announced that you would invest 500 thousand euros each, how many of them do you still plan to invest in, since only one has been officially announced, and that for 900 thousand dollars? What made you change your mind?

For the past 13 years, Founders Games has established itself as one of the largest programs and competitions for growing companies in the world. The valuation of those that reach the third round and continue to the semi-finals and finals is between 30 million and 300 million dollars. The companies that reach the finals have very strong business models, market realization, intellectual property (where applicable) and teams, as well as social and environmental impact. According to the rules of the Founders Games, the investment prize is given only after a final study (Due Dilligence), and the investment by WIN is made after a decision by the Board of Directors. The protection of public funds that we invest through WIN is guaranteed on several levels:

1. the collective intelligence of hundreds of investors from all over the world who participated in the evaluation and selection of candidates in 5 rounds and over a period of 6 months

2. WIN's investment process, including detailed research and analysis

3. Final decision of the WIN Board of Directors

Some of the publicly announced conditions for investment in a company that has reached the finals are:

1. Complete coincidence of the data presented during the program with those we find during the final study (including accounting, legal, market, team, intellectual rights, etc.)

2. Availability of revenues (market realization)

3. Serious growth in revenues compared to previous years (at least 60%-80% growth each year is desirable)

4. Presence of an independent, lead investor - one who has written part of the investment round under clear rules and a realistic market valuation

5. Presence of the possibility that WIN, through the Webit network, can help the company develop even better and faster

Of course, these are only a small part of the investment criteria that the selection and investment process goes through to reach a deal.

The market is currently characterized by declining company valuations. The reasons are complex and I will not go into details, but I will just mention that global venture financing in the first quarter of 2023 reached $76 billion - marking a 53% year-on-year decline from $162 billion compared to the first quarter of 2022. This even includes the mega investments of $10 billion mainly from Microsoft in OpenAI and $6.5 billion in Stripe. Without these two large deals, venture financing in the first quarter would have decreased even more dramatically, close to $60 billion, or a decline of over 60%.

In such an environment, of course, company valuations and the number of completed financings also fall. The lack of fresh capital in growing companies leads to a loss of competitive positions and a restructuring of competition. In this complex environment and the new paradigm that artificial intelligence imposes in all areas and will continue to become an increasingly important factor for a company's success - the right investment decision becomes even more important. This is how we approach the investment of WIN's public resource. That is why the investments made so far are precisely in companies that meet our extremely high criteria, in line with the reality of the market.

An example is the company VUZ, in which the WIN Board decided to increase the investment from $500,000 to $900,000. In addition to achieving and exceeding the 2022 revenue target a week ago during the official event of the highest valued and first trillion-dollar company in the history of the human species - Apple, founder Khaled Zaatarah spread the news that he had become the first platform for 360-degree 'immersive' content, a partner of Apple Vision Pro. This is global recognition for VUZ and for our decision as investors. It also connects the company's already great growth with the success of Apple, and this for an investor is a dream come true and very good news for WIN shareholders.

Our goal is not simply to invest the money of WIN shareholders (among whom I am with a significant share of personal funds), but to bring a very high return to our shareholders - incomparable in size with any other asset class, which is the characteristic of venture capital. For this, especially in these market realities, we make a very careful and special selection. Both companies in which we have invested so far with WIN prove it.

From the last selection, the rounds of CH4 Global and iSchool, with which we are in the final stages, are at a very advanced stage. Pomello, which is one of the fastest growing fintech companies in the world with investors such as Sequoia, Tiger Global and many others and with a total of $63 million in investments in 2 years of existence, has not yet opened the next investment round and we are in a waiting phase there.

4. What are the results of the vote held on 22.02.2023 in the shareholders' council, as they were not uploaded to the exchange's information website?

On 22.02.2023, the in-person meeting of WIN's shareholders did not remove any of the companies from the selection announced and presented in Davos during the World Economic Forum 2023. All of the companies that reached the finals and were proposed for voting were approved according to the rules of the Investors' Council.

5. Would you raise additional public capital from investors to invest in more startups?

Technically speaking, we do not invest in startups, but scaleups - this is a term used for the companies in which WIN invests and their stage of development and financing. According to the rules of Founders Games, the organizer has a $6M right of first refusal in the companies that win the status of finalists in the program. In other words, it has an exclusive right to invest up to $6M in each company. By contract, the organizer transferred part of this right to Webit Investment Network. As was widely commented during the campaign for the WIN IPO itself, for the first time retail investors are granted the right to access an asset class such as these - fast-growing companies (scaleups) in financing rounds from A to B to C. Characteristic of this stage of a company's development is that the risk is significantly reduced and there is evidence of their sustainable development. While investments in the earliest stages are marked by a risk of failure of over 95%, at the stage at which WIN invests, the risk is many times lower, and our process of selection through Founders Games and making an investment decision should reduce it to a minimum, while at the same time providing the opportunity for the sought-after ten-fold return (10x) on the investment (which is one of the criteria we look at in the evaluation).

In other words, under appropriate market conditions, WIN has the infrastructure and the ability to successfully allocate (invest) annually the maximum permitted by the rules of this specific European directive (and adopted by the Parliament) - eight million euros. These eight million euros can be raised from the Beam market of the Bulgarian Stock Exchange through an increase in WIN's capital. The very raising of these funds is a matter of market realities and investor confidence. WIN shareholders, by their decision, duly announced publicly, authorized a capital increase of up to 50 million leva upon a decision of the Board of Directors.

IMPORTANT!

All companies that apply to Founders Games participate voluntarily and do not pay any fees. During the program, they receive exposure to hundreds of investors and feedback from them. This is a dream come true for every company founder and that is why we have candidates from all over the world. Those who reach the third round, semi-final and final also receive the right to personal meetings with at least ten top global investors from the Webit community, who are world-renowned names in the industry. This in itself is a huge value and opportunity for them, it opens doors and possibilities. In addition, the finalists also receive access to the top Webit community, and from 2022 to the unofficial Davos program, as well as special badges that give them access to high-security areas during the WEF, they present to over 250 investors, media and top corporate leaders who attend the Founders Games grand finals. All this, along with the potential investment they receive, is an important condition for their continued and future success, which is the goal of Webit. Not only very successful companies reach the finals, but also companies that generate a positive social and/or environmental impact with their activities.

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