Transition : Inside Information / Operations of the issuer (acquisitions, sales...)

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Transition and Arverne Group sign combination agreement to publicly list on Euronext Paris' professional segment the future French leader in geothermal and low-carbon lithium to drive the energy transition

• Arverne Group is an industrial group with a wide array of expertise in the energy transition, specializing in harnessing subsurface resources, with a focus on geothermal energy via its subsidiary 2gré and lithium extraction via its subsidiary Lithium de France.
• Although the demand for key resources to decarbonize the economy is exponential, Arverne Group has the unique know-how to become the French champion in geothermal production and low-carbon lithium extraction.
• Geothermal energy combines the benefits of decarbonisation, price stability and energy sovereignty. These issues have become a priority for European countries and are especially important in France, reflecting the absolutely critical and strategic nature of 2gré projects. Geothermal energy is a local energy source par excellence, and will go a long way to helping France and Europe meet their decarbonisation targets for industry and buildings.
• Thanks to the integration of innovative extraction technologies, Lithium de France aims to make France a global champion in low-carbon lithium sourced from the country's geothermal waters, which are essential to the development of low-carbon mobility, in particular by enabling the European automotive industry to benefit from a local supply of this strategic metal with a very low carbon footprint.
• The combined expertise and resources of Arverne Group and Transition will accelerate growth in harnessing subsurface resources to support the energy transition, with an initial goal of achieving revenues of between €200 million and €350 million by 2027, and between €800 million and €1.15 trillion by 2030.
• To meet this target, the combined entity plans to operate geothermal heat production facilities able to generate 4.8 TWh per year by 2030 (with initial production starting in 2025), along with an annual 30 kt of low-carbon lithium extraction and refining (with production due to begin in 2027). The group has already secured or filed applications for relevant permits, and draws on a combination of exploration and drilling expertise unparalleled in France.

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• Arverne Group has experienced rapid growth and currently has five onshore drilling rigs (able to reach a depth of 5,000 m) and six exclusive research permits and five exclusive research permits under instruction. The group draws on the support of world-renowned players with whom it has set up industrial partnerships. Its assets have enabled it to generate total revenues of around €10 million in 2022 through its drilling business.
• The Initial Business Combination will be based on a fully diluted pre-money valuation of Arverne Group shares of €166 million and a value of Transition shares (issued or to be issued) of around €148 million1, corresponding to a pro forma enterprise value of around €257 million.2
• The Board of Directors of Transition received a fairness opinion from Joh. Berenberg, Gossler & Co. KG ("Berenberg"), which determined that the consideration offered to Arverne Group shareholders in the form of Transition shares as part of the merger is fair from a financial standpoint to the existing Transition shareholders.
• On the date of the merger, the combined entity will have development capital comprising (i) the funds raised by Transition via its initial public offering less any amounts resulting from redemption requests made by holders of Class B3 preference shares issued during the initial public offering and (ii) additional funds raised from institutional investors via a Private Investment in Public Equity ("PIPE"), net of listing costs and other operating expenses since Transition's listing.
• The total amount of funding secured to date stands at €130 million, enabling the company to pursue its growth strategy through 2025, regardless of the final level of redemption of Transition's Class B preference shares and costs related to the combination and Transition IPO. This amount corresponds to the PIPE commitments and non-redemption undertakings received from investors (for €63 million and €52 million respectively) including ADEME Investissement, Sycomore AM and Crédit Mutuel Equity, as well as to the conversion into capital under the same conditions of the €15 million "bridge loan" made available to Arverne Group by the Transition Sponsors in the form of convertible bonds (the "Convertible Bonds"). Transition sponsors support the operation with €30 million4.

1. Amount corresponding to commitments to subscribe to the PIPE and not to request redemption, to the Convertible Bonds and to the conversion of Class A1 preference shares into ordinary shares.
2. Based on an estimated proforma debt position of €27 million, a cash position at Lithium de France of €44 million, a cash position at Arverne Group of €95 million (including transaction proceeds net of transaction costs) and a value of Lithium de France minority interests of €55 million.
3. As indicated in the Transition prospectus approved by the French financial markets authority (Autorité des Marchés Financiers) on June 16, 2021, Mr. Xavier Caïtucoli and Eiffel Essentiel SLP have irrevocably undertaken not to request the redemption of their Class B preference shares.
4. Of which €15 million already committed through Convertible Bonds issued by Arverne Group that will be converted in ordinary shares in the transaction (see further below).

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• Transition and Arverne Group have also received indications of interest from strategic European investors, with whom they continue to hold active discussions. These additional investments could bring the total amount of financing up to €200 million.
• The planned transaction will give Arverne Group the financial resources needed to effectively pursue its portfolio of projects and develop the technology most suited to extracting and processing lithium. Combined with the capital raised by Lithium de France through its most recent (Series B) round funding of €44 million5, of which the first tranche of €24 million has been released, in March 2023, the funds provided by Transition will allow the Group to meet its equity investment needs until 2025.
• Transition will change its name to "Arverne Group" on completion of the merger.

"With this transaction, Arverne is taking a decisive step towards becoming the French champion of geothermal and low-carbon lithium production at a time when demand for key resources to decarbonize our economy is exponential. It's a natural alliance between highly complementary entrepreneurs in the energy transition who share a common ambition, vision and values. We are grateful of the trust placed in us by renowned investors, whom I would like to thank for supporting our sustainable growth strategy. Being publicly listed will enable us to capitalize on our unique expertise and strategic positioning across the entire subsurface value chain in order to accelerate our growth in France and Europe while supporting the energy transition and regional prosperity," commented Pierre Brossollet, Chairman and CEO of Arverne Group.

"We are extremely proud to enable the Arverne Group, an outstanding entrepreneurial success story, to go public. Arverne will now have the capital it needs for its rapid and ambitious expansion and will gain visibility by being listed on Euronext Paris. This operation is a tremendous boost for Arverne's teams, who are committed to the energy transition by developing underground resources. By producing green heat and extracting decarbonated lithium, Arverne will contribute not only to the ecological transition, but also to French and European industrial sovereignty," added Xavier Caïtucoli, Erik Maris and Fabrice Dumonteil, Chairman of Eiffel Investment Group, the management company of the Eiffel Essentiel SLP fund, the founders of Transition.

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5 It being specified that part of the funds raised in the transaction will be used to release the second tranche of Lithium de France's Series B.

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Paris, June 15, 2023 - Transition (Euronext Paris: TRAN) and Arverne Group ("Arverne"), a company specialised in harnessing the potential of subsurface resources,

with a focus on geothermal production and lithium extraction, today announced that they have entered into business combination agreement (business combination or "Initial Business Combination", as defined in the Transition prospectus approved by the French financial markets authority (Autorité des Marchés Financiers - "AMF") on June 16, 2021 (the "IPO Prospectus")).

The Initial Business Combination will involve the merger and absorption of Arverne Group, a French simplified joint stock company (SAS) with registered office at 2 Avenue du Président Pierre Angot, 64000, Pau, France, listed in the trade and companies register under 850 295 957 Pau ("Arverne" and its subsidiaries, collectively referred to as the "Group") by Transition6, the acquiring entity in the merger (the "Merger"). Transition will change its name to "Arverne Group" on completion of the Merger.

The common shares issued by Transition as part of the Merger in consideration of Arverne shares will be listed for trading in the Professional Segment (Compartiment Professionnel) of the Euronext Paris regulated market on the date of the Merger. Transition will prepare and submit a prospectus to the AMF for approval (the "Merger Prospectus").

Concurrently with the Merger and as part of the PIPE, Transition will issue new common shares at a subscription price of €10.00 per share, which will also be admitted to trading in the Professional Segment (Compartiment Professionnel) of the regulated market of Euronext Paris, on the date of, and a reasonable time prior to, the completion of the Merger. As such, Transition will prepare and submit to the AMF a second prospectus for its approval (the "Admission Prospectus").

1) About the Group

The Group is an industry player with a wide array of expertise in the energy transition. It couples that expertise with solid business ethics to help local authorities unleash the potential of subsurface resources in an environmentally responsible manner, to create an innovative energy mix in tune with the needs of future generations.

Established in March 2018, the Group was founded by seasoned experts who specialise in harnessing the potential of subsurface resources, and draw on knowledge gained

6 Transition's main shareholders holding more than 5% of the share capital and/or voting rights at December 31, 2022 were: Xavier Caïtucoli (10.15% of share capital and 4.94% of voting rights through Crescendix (or any entity controlled by Crescendix)), Erik Maris (8.33% of share capital and 2.72% of voting rights through Schuman Invest), Eiffel Essentiel SLP (11.97% of capital and 7.17% of voting rights), Sycomore Asset Management (11.99% of capital and 14.68% of voting rights), La Financière de l'Echiquier (4.54% of capital and 5.56% of voting rights) and JP Morgan Securities Plc. (10.97% of capital and 13.43% of voting rights).

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