Follow-up: Thank you for attending the Seedrs Investor workshop at Lendwill!

Dear investors,

Thank you a lot for joining the investor workshop today! Below is the summary of the meeting.

• Time spent: 50 min
• Slide deck: here

The points we discussed are below in the order of discussion.

1. CEO update regarding the Norwegian FSA feedback:

1. Certain elements of the Lendwill application (more specifically, Trust Points, Quizzes, and Educational articles) inside the product were not well received by the Norwegian FSA. As a result, our application did not go through after the 8-month long process.

We consulted with four professional lawyers in Norway, and all of them expressed a strong opinion that the FSA letter had factual mistakes. Their misinterpretation of certain features and of our intentions as a company led to the subjectively negative view of the product. 

Our lawyers have argued that the decision letter must be appealed and deemed invalid because of factual mistakes and a lack of legal arguments from the FSA. So, our battle is definitely not over yet.

We have hired Tore Mydske from Thommesssen on the case, and together with Camilla Wollan from DLA Piper, they have drafted and submitted the appeal to the FSA. The FSA has confirmed the receipt of the appeal. We also requested a meeting.

• Here is more information about Tore Mydske: https://www.thommessen.no/en/people/tore-mydske

2. What we decided to do:

We had 2 options: to wait for the FSA feedback on our letter or to explore alternative options. We have had 3 board meetings and thoroughly discussed all options, including completely stopping all processes and cutting costs. After having looked at all alternatives, we decided to explore alternative markets and, after careful consideration, we chose Lithuania as our test market in the EU. Since Norway was always supposed to be our test market, we decided to switch the order of activities to keep the momentum going and rapidly internationalize to the EU.We will apply for the P2P license first, and then for the PI license. 

• The PI license is passportable across the EU and EEA
• The waiting time for the initial feedback from the Central Bank of Lithuania (the regulator that issues licenses, FSA equivalent) for hte P2P license is 40 days after which we will know any potential concerns that the regulator has with regards to our business model, operations, plans etc.
• The time it takes to get the P2P license is up to 3 months.
• The costs are about 200K NOK for the entire licensing process, including preparation of the documents, establishing a company in the EU, Central Bank fees etc.

In the last 2 weeks, the Lendwill team has had meetings with:

• Fintech Association of Lithuania (affiliated with the Ministry of Finance),
• Invest Lithuania
• 5 Lithuanian law firms that came recommended by Invest Lithuania through the Central Bank to discuss licensing times and costs
• Morten Kroslid, one of our active investors who has had business in Lithuania for 15 years
• the Vice Minister of Finance at the Embassy of Lithuania in Oslo

We have also been communicating with the Central Bank of Lithuania. All our communication has been positive. 

The Central Bank has been actively giving us advice and sharing knowledge with regard to different license tiers and future developments of the relevant legislation. The Fintech Association of Lithuania has also highlighted to us that the Central Bank of Lithuania is one of the most forward-leaning in Europe.

3. What we will need to adapt in the product for the EU launch:

• PSP (payment service provider to initiate money transfers) - Neonomics - Readiness TBC by JAN 2022
• Credit assessment - Creditinfo (potential vendor, analyzing others too)
• KYC during onboarding - identified potential vendors (Checkin.com, Onfido etc.)
• AML - Pliance (existing vendor, worldwide support)
• Euro currency support
• Translation agency / freelancer's support to translate all legal pages into Lithuanian in the app (apart from English)

4. The board represented by the Chair of the Board, Linn-Cecilie Linnemann, expressed their support of the strategic plan of the company to pursue Lithuania as an alternative market:

• Linn-Cecilie has highlighted that the board had carefully reviewed a variety of alternatives before settling with the plan.
• The new plan will require bridge financing, and the entire board has decided to also support the plan with an additional investment. All existing investors have also been invited to support the Lendwill team.

5. Our Product Owner Vishnu Kumar has also shared the latest progress on the product. The following features have been added in the latest sprint:

• Third-party credit assessment of all borrowers using our partner CreditSafe - smooth and painless process for borrowers to undergo a credit check.
• The transition from Lendonomy to Lendwill. The app is now being tested internally.
• Admin panel enhancement: a thorough overview of defaulted loans.
• Performance optimization. The speed of the app has significantly increased. The impact will be noticeable in the November release.
• Quick Tour to onboard new users: will be released in November.

6. We asked for trust and support from the investor group:

We have a runway until mid-April 2022, but the new plan will take away about 3 months of our standard runway. So, to be able to last until September 2022 and to launch the product in the EU, we need your support. We are therefore opening a bridge investment round.

We are raising 200K EUR. More information is coming soon via Seedrs.

Thank you for the great workshop and your proactive involvement!

Best regards,

The Lendwill AS team