Important Notice and Basis of Preparation

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• Overview & contents
• i. Important Notice and Basis of Preparation
• 1. Executive Summary
• 2. The Opportunity
• 3. Market and Regulatory Context
• 4. Product, Technology and Security
• 5. Go-to-Market and Unit Economics
• 6. SWOT and Competitive Position
• 7. Financial Projections
• 8. Cash, Funding and the Balance Sheet
• 9. Sensitivity and Scenario Analysis
• 10. Risk Analysis
• 11. Regulatory, Compliance and Licensing
• 12. Organisation and Management
• 13. Implementation Roadmap
• 14. Key Performance Indicators
• 15. The Offer, Returns and Recommendation
• 16. Assumption Register
• A. Appendix A: Consolidated Financial Summary
• B. Appendix B: Volume, Pricing and Unit Economic Schedules
• C. Appendix C: Funding, Cash and Balance Sheet Schedules
• D. Appendix D: Risk Register
• E. Appendix E: Glossary

This document has been prepared for Switchpoint Payments (Pty) Ltd, a proposed dual-rail merchant acquirer serving two South African merchant populations that the hardware-led card-acceptance market serves poorly: independent healthcare practices, and trade counters selling building materials, agricultural inputs, electrical supplies and automotive parts. It is not an offer to sell securities, nor a solicitation of an offer to buy, and it does not constitute investment, legal, tax or regulatory advice.

Basis of the figures. The model is constructed monthly over sixty months on a merchant-cohort basis. Each monthly cohort is tracked separately, decays at the segment churn rate, and ramps to full transaction volume over four months. Revenue is calculated from maturity-weighted merchant months rather than from period-end merchant counts. The income statement, balance sheet and cash waterfall are fully articulated: the balance sheet is derived rather than plugged and balances in every year, and merchant settlement funds are held in a designated account, excluded from company cash, and matched by an equal and offsetting settlement liability.

Selling prices, allocation of volume between rails, merchant volumes and acquisition costs are modelled. Regulatory arrangements in this sector — in particular the arrangements governing third-party payment providers, the interchange determination framework and the industry body arrangements succeeding the Payments Association of South Africa — have been subject to ongoing reform. Any party relying on this document should independently verify the current regulatory position, current interchange rates, current scheme fee schedules and current competitor pricing before making a decision.

The model deliberately reports uncomfortable outcomes where the arithmetic produces them. Take rate dilution, sub-threshold acquisition economics in the trade segment, and the sensitivity of terminal-year profitability to card price compression are stated in the executive summary rather than confined to an appendix. Readers should treat these as the central features of the investment case, not as caveats to it.

Published benchmarks. South Africa’s real-time low-value credit-push rail processed 60 million transactions worth R62 billion in December 2025 alone, against cumulative totals of 461 million transactions and R403 billion through that month and more than 900 million transactions by mid-2026. Monthly volume accelerated from roughly 14 million in the first thirty-three months of operation to about 89 million in the five months to May 2026, at an average transaction size of approximately R874 across six million registered users. The per-transaction limit was raised from R3 000 to R50 000 in August 2024, and a request-to-pay capability enabling person-to-merchant payments was introduced in December 2024. The South African Reserve Bank acquired a 50 per cent stake in the operating entity in October 2025. The South African real-time payments market is valued at US$0.57 billion in 2025 and forecast to reach US$2.75 billion by 2030, a compound annual growth rate of 34.21 per cent, with person-to-person flows holding 68 per cent of 2024 volume and person-to-business flows growing faster at 35.1 per cent. These are cited where used.

Taxation. South African corporate income tax is applied at 27 per cent, with assessed losses carried forward subject to the section 20 limitation capping the set-off at the higher of R1 million or 80 per cent of taxable income.

Confidentiality. This document is delivered in confidence to the named recipient. It may not be reproduced or circulated in whole or in part without prior written consent.