Flat Capital

Financial position

• Net asset value amounted to 370 267 KSEK, corresponding to 7.55 SEK per share, a decrease of -7.9% per share for the quarter and mainly consists of the write-down in Getir.
• Net cash amounted to 125 557 KSEK, corresponding to 34% of net asset value as of June 30, 2024.

The period April-June 2024

• During the quarter, the holding in Getir was written down to 1 SEK. The writedown of 32 559 KSEK is due to the severe financial challenges facing the company, which have been communicated in a press release dated June 20, 2024. See also other significant events during the quarter below.
• Excluding the write-down of the holding in Getir, the change in value amounted to +327 KSEK, including FX effect of approximately -1 120 KSEK. We are however getting positive signals from several of our recent AI-related portfolio holdings, where interest is high with indications of upcoming capital rounds at notable higher valuations, which we expect to know more about in the second half of 2024.
• Investments amounted to 17 192 KSEK (52 731).  See "Investments and divestments during the quarter".
• Operating expenses for the period amounted to 1 679 KSEK (3 219) corresponding to 1.74% (3.84%) of average NAV during the period, on an annual basis.
• Operating profit amounted to -33 911 KSEK (-3 452). The operating profit includes unrealized changes in value of -32 232 KSEK (-233). 
• Profit after tax amounted to -31 907 KSEK (-2 993).
• Profit per share amounted to -0.65 SEK (-0.09).

The period January-June 2024

• Change in value of financial assets amounted to -42 674 KSEK (-25 299) and consists mainly of changes in value in three major holdings; OpenAI +41 145 KSEK, Getir -61 338 KSEK and Instabee -18 067 KSEK. 
• Investments amounted to 37 784 KSEK (58 210).
• Operating expenses amounted to 2 894 KSEK (4 842), corresponding to 1.48% (3.00%) of average NAV on an annual basis.
• Operating profit amounted to -45 568 KSEK (-30,141). Operating profit includes unrealized changes in value of -42 674 KSEK (-18 072) and realized changes of 0 KSEK (-7 227).
• Profit after tax amounted to -42 491 KSEK (-28 778).
• Earnings per share amounted to -0.87 SEK (-0.90).

Significant investments and divestments during the quarter

• During the quarter, two investments were made for a total value of the equivalent of 17 192 KSEK:
  • In May, an investment of approx. 11 MSEK was made in Elon Musk's AI company xAI, which was founded in 2023. The company raised approx. 6 billion dollars in connection with the investment with the intention of supporting and driving AI development. Other investors include Sequoia Capital, Andreessen Horowitz and Valor Equity Partners, among others.
  • In June, an investment in the AI and robotics company Physical Intelligence was announced for a total of approximately 11 MSEK, split into two sub-investments, the first of which of approximately 6.3 MSEK has been completed. The newly launched company has brought together some of the world's most prominent AI & robotics profiles with the ambition to integrate AI into the physical world. Other investors include OpenAI Startup Fund, Sequoia Capital, Khosla Ventures and Thrive Capital, among others.

Significant events during the quarter

• On May 6, 2024, the Annual General Meeting of Flat Capital was held. At the meeting, the current board was re-elected. BDO Mälardalen AB was elected as new auditor.
• The write-down in Getir is a result of their substantial challenges to achieve profitability in most of their markets and their subsequent restructuring. Flat made its first investment in Getir of approx. 19 MSEK in April 2022. In May 2023, Flat made an additional investment of approx. 21 MSEK. The carrying value at the end of the first quarter amounted to approx. 32.6 MSEK. That value is now adjusted downwards to 1 SEK as of June 30, 2024.

Significant events after the end of the quarter

• No significant events have occurred after the end of the quarter.

This text has been translated using DeepL.

Link to the report on the website:
https://www.flatcapital.com/en/investor-relations/

For further information, please contact:
Hanna Andreen (former Wachtmeister), CEO, hw@flatcapital.com, +46 (0) 73 353 44 66 
Antonio Melani, CFO, am@flatcapital.com,+46 (0) 72 221 81 32

Certified Adviser:
Flat Capital's Certified Adviser is Augment Partners AB, info@augment.se, +46 (0) 8 604 22 55

About Flat Capital:
Flat Capital is an investment company that focuses on growth stage companies with prominent entrepreneurs in leading positions and primarily makes investments through its network of world-class investors and entrepreneurs. The company was founded in 2013 by entrepreneurs Nina and Sebastian Siemiatkowski (founders and CEOs of Milkywire and Klarna, respectively) and is led by CEO Hanna Andreen (former Wachtmeister) together with an experienced board of directors. Examples of portfolio companies include Klarna, OpenAI, Instabee, Figma and DeepL. The company aims to provide long-term capital and is essentially a passive minority shareholder, while Flat Capital's experience and network are available to the extent the entrepreneur wishes. The aim is to facilitate successful company building and enable exposure to otherwise hard-to-reach and promising companies.
More information is available at www.flatcapital.com

Note: This is a non-official translation of the Swedish original text. In case of any discrepancies between the Swedish text and the English translation, the Swedish text shall prevail.