Strax

• The Group’s sales for the period January 1 – March 31, 2024, amounted to MEUR 4.5 (9.1)
  with a gross margin of -14.3 (36.8) percent.
  
• The Group’s result for the period January 1 – March 31, 2024, amounted to MEUR -7.3 (-3.1) corresponding to EUR -0.06 (-0.03) per share.
  
• EBITDA from remaining operations for the period January 1 – March 31, 2024, amounted to
  MEUR -7.1 (-2.2).

• Equity as of March 31, 2024, amounted to MEUR -62.1 (-9.5) corresponding to EUR -0.52 (-0.08)
  per share.

• As of March 31, 2024, STRAX is not fulfilling the special conditions in the loan agreement with PCP due to the development of profitability and financial position in the Group. STRAX board and management is working closely with PCP on a plan to return to compliance of the agreement.
  

Significant events after the end of the period

• STRAX entered into an Assets Purchase Agreement with Matter Brands, LLC, formerly Alara Inc, to divest the brands Clckr, Jewel and Fundamental as well as key customer contracts and the majority of the US organization. Matter Brands, LLC, has a strong portfolio of brands including Gadget Guard as a category leader in screen protection, Atom Studios as a category leader in design and sustainability, as well as Alara Technologies, an industry leader holding several global patents in the field of EMF protection.
  Matter Brands, LLC, is paying for the assets by issuing new shares corresponding to a total of 40 percent of outstanding shares in Matter Brands, LLC.
  
• STRAX AB, through its subsidiary STRAX Holding GmbH divested its 40 percent ownership of Matter Brands LLC for at total consideration of the equivalent of approximately MEUR 11 to P Capital Partners AB (“PCP”) with a potential future upside for the Group. The consideration of approximately MEUR 11 will be fully assigned towards the outstanding loans under the facility agreement with PCP. The sale will also lead to a capital gain of approximately MEUR 5.
  
• STRAX associated company STRAX GmbH filed for insolvency in May 2024.
  
• Following events this week including the filing of insolvency of the associated company STRAX GmbH on May 28, 2024, the Board have decided to write down shares in subsidiaries in the parent company’s financial statements to zero with effect as of December 31, 2023, as well as write off the value of goodwill in the Group. This change is reflected in the Q1 2024 report as the full year 2023 numbers have been changed compared to what was previously reported in the year-end report for 2023.
  
  Consequently, the Board has further decided to initiate the process of a control balance sheet dated May 31, 2024. The control balance sheet will be audited by the auditors and will be presented at an EGM, according to the process for control balance sheet.
  
• In connection with the insolvency filing of the associated company Strax GmbH that entity has raised claims regarding payment of outstanding receivables towards Strax Holding GmbH. There have previously been agreements how these outstanding amounts would be handled both short and long term, but under the current preliminary insolvency of Strax GmbH it is not clear how this will affect Strax Holding GmbH and thereby the Strax AB Group.
  

“This year we have continued following the path of reducing our interest-bearing debt through asset sales. It´s certainly been a rough couple of years for us and our short-term objective remains to salvage the company through divestment of further assets and closing businesses via insolvency procedures. We are not out of the woods just yet but do have a restructuring plan in place enabling a future for the company.”

Gudmundur Palmason, CEO