FINANCIAL RESULTS SECOND QUARTER 2025
FINANCIAL RESULTS JANUARY-JUNE 2025
BUSINESS HIGHLIGHTS DURING THE SECOND QUARTER 2025
BUSINESS HIGHLIGHTS AFTER THE PERIOD
[1] Metals for electrolysis are for certain customers invoiced in a cost-neutral manner not affecting operating profit.[2] Includes the part of the inventory that has been financed by customer pre-payments.[3] Future agreed leasing revenue of SEK 10.6 million over 45 months for a production line leased out by the subsidiary in China is not included in the backlog figures.
CEO’s COMMENTARY
The second quarter was characterized by commercial achievements, but also by continued uncertainty globally and postponed investment decisions by our customers. That the quarter did not contain any system deliveries is disappointing, but in line with an expected challenging market environment – and above all a result of extended decision-making processes rather than a lack of demand. Against this background, we have proactively implemented a savings program. We are simultaneously preparing for increased activity within Coating Services, where customers are moving from sampling to initial production and we continue to work with new and existing customers ahead of substantial investment decisions.
Net sales
Net sales for the second quarter amounted to SEK 6.5 million (31.7). The decrease is mainly explained by the lack of system deliveries in the quarter. Adjusted for this, net sales from other activities were in line with the comparable quarter last year. We are in a clearly cautious market situation, but at the same time we see that interest in our solutions remains, and that several customers are advancing in their evaluations.
Coating Services activity gradually increased during the quarter with more sampling activities within the hydrogen business area and key customers’ start or restart of production. In China, partly due to a doubled volume forecast by FTXT for 2025 confirmed after the period end, we have since July returned to two shifts, which means two 10-hour shifts and four hours for preparations. An upgraded INLINECOATER™ IC2000, together with increased automation and improved quality control, have strengthened our operational efficiency and enabled higher production throughput with existing staffing. This improves our readiness to meet increased volumes.
Net sales for the rolling 12-month period amounted to SEK 90 million, which is a departure from the upward trend we saw in the previous year. The development illustrates how dependence on individual larger orders can create volatility in the growth curve. Our long-term growth ambition remains firm, and we are actively working to broaden the revenue base and increase the stability of the business over time.
Cost-cutting program and measures to increase liquidity implemented
Cash flow from operating activities amounted to SEK -15.9 million (-12.1) during the second quarter. While working capital management actions – including the transition to a generic precious metals inventory – have had a positive effect, a strained liquidity situation remains. The low business activity during the quarter underlines the need for continued financial discipline.
Against this backdrop, we implemented a cost-cutting program during the quarter. A total of ten roles have been affected through a combination of staff reductions, reduced use of consultants, and adjustments in staffing and working hours. In addition, we introduced a temporary freeze on salary adjustments. Overall, the measures are expected to reduce our personnel costs in the parent company (excluding the Chinese operations) by approximately 20 percent. The effect is gradual, with some initiatives having an immediate impact while others gain full effect over time. The program has been implemented while maintaining technical and delivery capacity.
During the quarter, we raised capital through loans of just over SEK 20 million connected to our Chinese operations. The loans have favorable terms and provide financing for the local operations, reducing the need for liquidity from the parent company. Together with other measures, this strengthens our financial flexibility. Increased sales remain the strongest lever for achieving positive cash flow. With several operational and financial initiatives in place, we are well-equipped to meet a challenging market situation and are prepared to act proactively when required.
Continued strong sales pipeline
We continue to see a strong sales pipeline with a wide geographical spread. We added new paying customers during the quarter, and we received several significant sampling orders from customers in Europe and North America. During the second quarter, we received one of our largest sampling orders to date from a leading player in the aerospace industry – a segment where the technical advantages of hydrogen are particularly clear.
These developments reflect how customers are stepwise approaching investment decisions. Sampling orders are often the first step in a longer qualification process, where the technology is verified before a decision on larger volume production. A clear example is the recently signed supply agreement with a European manufacturer of PEM electrolyzers, which was announced on June 24. After a year of recurring sample orders, the agreement marks a shift from the test phase to production preparations, an important milestone that confirms that we are technically relevant when customers industrialize.
While many investment decisions are delayed, we see tangible progress in existing customer relationships. During the quarter, for example, Waveland in China decided to increase the capacity of its leased INLINECOATER™ equipment. The upgrade means an increased contract value of approximately SEK 2.5 million, distributed over the remaining four years of the contract period. The deal generates stable, recurring revenue and has an attractive gross margin, which underlines the profitability of the service business.
Market development
The hydrogen market is developing at different speeds in different parts of the world. Over the past six months, we have seen both uncertainty and progress, depending on the application and on the geographical context. Our global presence allows us to follow developments closely and to act where the opportunities are the most compelling.
In the United States, the investment climate has been characterized by political uncertainty, which has temporarily slowed down decision-making. With the July 4 adoption of new Congressional tax and spending legislation, there are now clear rules of the game for hydrogen, which after the final hearing in the US Senate became better than the industry had feared. Tax reductions for fossil-free hydrogen production and fuel cell investments were consolidated, albeit with new end dates. This gives our customers new time windows to act within and creates a clear driving force to move forward with their plans.
In China, we are seeing a recalibration of the government support systems, from an exclusive focus on fuel cell vehicles to also include production via electrolysis and industrial consumption of green hydrogen. Impact Coatings has grown its business in China in recent years, despite an overall market downturn. This demonstrates the value of our local presence and our ability to meet clear industrial needs.
Korea also continues to be a relevant market. Investments in fuel cells and electrolysis are largely driven by energy supply and industrial needs rather than climate ambitions. We see the market for fuel cells broadening to a wider variety of energy carriers and fuels, such as methanol, ammonia and natural gas. This creates demand for reliable technology in applications where our coatings have strong relevance, regardless of the hydrogen classification. Korea, together with China, the US and Europe, is one of our strategically prioritized markets, where we see many opportunities for long-term business development.
Overall, the commercial basis for hydrogen technologies applied in both green and non-green areas remains strong. We see that customers continue to prepare for future expansion, which is leading to a clear shift in the hydrogen market, from symbolic projects to deals based on industrial needs and verified technology. Investment decisions take longer, but the discussions are more focused and concrete. The demands on technical reliability, business logic and delivery capacity are increasing. This benefits players with a strong offering, industrial presence and technological leadership, and Impact Coatings is well positioned there.
Outlook
During the first half of the year, we have taken measures to reduce costs and increase our financial sustainability. The savings program has been implemented and initiatives to reduce working capital have had an effect. At the same time, we continue to act proactively to adapt to market conditions and secure long-term liquidity.
We also continue to develop technologies that broaden and deepen our relevance in hydrogen-based energy applications. Our coating for iridium oxide has shown strong technical results. It forms the basis for an expanded offering in electrolysis, where we combine internal development with partnerships. We are currently working with several players in the area, who complement each other technically and strategically, and where our coatings play a central role in various types of system solutions.
In parallel, we are driving development in solid oxide applications (SOFC/SOEC), where our coatings have shown good performance in development tests with potential customers. This positions us in a commercially driven growing segment with broad industrial relevance, for example for supplying data centers with energy.
In summary, we are well positioned to meet the next phase of market development. With coating systems in inventory, increased technical relevance and a global infrastructure in place, we are ready to deliver when customers ultimately decide to invest. 2025 is a challenging year, but it is also a year in which the foundation is laid for the next phase of our growth. We are convinced that hard work and customer focus will continue to contribute to long-term relationships and a growing pipeline of new customers, which form the foundation of our path to profitable growth.
Jonas Nilsson, CEO
Presentation
Impact Coatings invites investors, analysts and the media to a presentation of this Interim Report on Friday, August 22 at 10:00 am (CEST). CEO Jonas Nilsson and CFO Lena Åberg will comment on the Interim Report and take questions. The presentation will be held via webcast in English.
Impact Coatings publishes its Interim Report for the second quarter of 2025 on Friday August 22, at 08:00 a.m. (CEST). In reference to this, the company invites investors, analysts and the media to a webcast on the same day at 10:00 a.m. (CEST). Impact Coatings’ CEO Jonas Nilsson together with CFO Lena Åberg will present and comment on the Interim Report, and answer questions. The presentation will be held in English.
What: Presentation of Impact Coatings’ Q2 2025 Interim Report via webcastTime: Friday August 22, at 10:00 a.m. (CEST)Link to webcast: https://www.finwire.tv/webcast/impact-coatings/q2-2025/ The webcast in its entirety will afterwards be available on the company’s website www.impactcoatings.com.
Impact Coatings AB (Linköping, Sweden) and a European supplier of PEM electrolyzers have signed a three-year supply agreement today, under which Impact Coatings will provide coating services for separator plates and porous transport layer (PTL) plates used in PEM electrolyzers. Sampling efforts leading up to the supply agreement started during 2024.
Deliveries under the agreement will begin in summer 2025, initiating an industrial collaboration to support the scale-up of electrolyzer production. Impact Coatings’ Coating Service Center in Linköping will be responsible for the coating production and volumes and revenues are expected to grow over time in line with the customer’s planned manufacturing ramp-up. “There is significant interest from the hydrogen sector globally in Impact Coatings’ solutions for PEM electrolyzers. This supply agreement with a European manufacturer indicates that also the European industry is in transition from sampling to volume production,” said Stefan Dreger, Regional President EMEA, Hydrogen Solutions, at Impact Coatings.
The Annual General Meeting on May 21, 2025 in Impact Coatings AB (publ) (“the Company”) resolved to implement a warrant-based incentive program for key persons (2025/2028:1) at a maximum of 300,000 warrants.
Each warrant entitles the holder to subscribe for one new share in the Company at a subscription price corresponding to 150 per cent of the volume-weighted average price paid for the Company’s share on Nasdaq First North Growth Market during the period from May 22, 2025 up to and including June 5, 2025. The subscription price has thereby been set at SEK 4.77 per share. The warrants may be exercised for subscription of shares during the period from June 15, 2028 up to and including August 31, 2028.
Prior to subscription, the final warrant premium has been determined based on the Black-Scholes warrant valuation model at SEK 0.43 per warrant. The calculation has been carried out by the independent valuation institute People & Corporate Performance AB. A total of 254,000 warrants have been subscribed, meaning that the program has been subscribed to 84.7 percent. The Board’s decision regarding the allocation of warrants was made on June 12.
Terms and conditions for the warrant-based incentive program can be found in the documentation for the Annual General Meeting on the Company’s website, www.impactcoatings.com.
The Annual General Meeting (AGM) of shareholders of Impact Coatings AB (publ), which is listed on Nasdaq First North Growth Market, was held today. At the AGM, 20 shareholders were represented, corresponding to 35.4% of the company’s total voting rights.
The presentation given by CEO Jonas Nilsson at the AGM can be found on the company website www.impactcoatings.com.
Among other items, the AGM decided:
To approve the income statement and balance sheet for 2024, as proposed by the Board of Directors.
To allocate the annual result according to the Board’s proposal.
That the Board of Directors and CEO Jonas Nilsson were granted release from liability.
That the number of Board Members be increased from four (4) to five (5) without Deputy Board Members.
On the re-election of Mark Shay, Christian Sahlén and Sukhwan Yun and the election of Roland Fischer and Johanna Pynnä as members of the Board of Directors, as well as the re-election of Mark Shay as Chairman of the Board.
That remuneration of SEK 200,000 shall be paid to the Board’s ordinary members and remuneration of SEK 300,000 shall be paid to the Chairman of the Board, with no additional remuneration for committee work.
That Öhrlings PricewaterhouseCoopers AB (”PwC”), with lead auditor Johan Palmgren, is elected company auditor.
That the procedure for constituting the next Nomination Committee was approved.
To approve the Board’s proposal on implementation of a warrant-based incentive program for key persons.
That the Board of Directors is granted a mandate to decide on the issuance of shares and/or options and/or convertible securities.
That the Board of Directors is granted a mandate to make minor corrections to decisions taken at the annual general meeting as related to registration with the Swedish Companies Registration Office and Euroclear Sweden AB.
FINANCIAL RESULTS FIRST QUARTER 2025
BUSINESS HIGHLIGHTS DURING THE FIRST QUARTER 2025
[1] Metals for electrolysis are for certain customers invoiced in a cost-neutral manner not affecting operating profit.[2] Includes the part of the inventory that has been financed by customer pre-payments.[3] Future agreed leasing revenue of SEK 9.0 million over 48 months for a production line in Coating Service Center China is not included in the backlog figures.
The first quarter of 2025 was characterized by a continued wait-and-see market situation in the hydrogen sector, with postponed investment decisions. At the same time, our underlying growth continued. Net sales for the rolling 12-month period increased to SEK 115 million in the quarter, which demonstrates continued strength in the business over time. Our strategy remains stable, and we have taken important operational steps to scale the business, strengthen customer relationships and broaden our technical relevance. We are well-positioned as the market turns and see growing demand for solutions that combine technical innovation with industrial scalability. Advancing the business despite subdued invest-ment appetite
As expected, the start of the year saw lower business activity. The quarter was affected, among other things, by seasonal effects such as the Chinese New Year, but also by the cautious investment environment we expected for 2025. We continue to expect that the investment appetite in the hydrogen sector will be characterized by some caution during the year, while our long-term market outlook remains positive.
Net sales for the quarter amounted to SEK 9.5 million (4.0), which represents continued growth compared to the previous year. The fact that no system deliveries were completed during the quarter is disappointing, but similar to the comparable quarter last year. We have systems in stock prepared for customizations and have created the right conditions to meet customer needs for systems with short delivery times once customers finalize purchase decisions.
Coating Services continues to show good development despite lower activity during the beginning of the year. Increased volumes of customer samples indicate that more customers are approaching commercial decisions, confirming that our technical solution is gaining ground.
Steps toward stronger cash flow
As previously communicated, our top priority is increasing sales, which is the key to profitable growth. At the same time, our cash flow has improved significantly compared to the previous quarter, although we are not yet where we want to be. We maintain the tight cost control that was initiated in the second half of 2024 and are focusing on both margin improvements and capital efficiency.
One example is that we will reduce customer-specific inventory of precious metals and gradually move towards customer-independent inventory. This shift has been initiated and shows a temporary positive cash flow effect in the quarter. We expect to see improved operating flexibility and efficiency from the new approach, which will take a few quarters to become fully customer-independent.
Overall, we have measures in place and continue to work actively to improve cash flow, where sales remain the most significant tool. Cash flow from operating activities amounted to SEK -3.2 million (-12.1) for the quarter.
Technical development to expand our market
Impact Coatings has a strong position in coatings for PEM fuel cells and PEM electrolyzers. In particular in fuel cells, we have unique advanced multi-layer coatings that fully exploit the potential of our INLINECOATER™ systems. Our technology has the potential to address more steps in the hydrogen value chain and we have therefore initiated two new technical initiatives that have great strategic importance for our future business and our position as a technology leader.
During the quarter, we have taken important steps towards broadening our offering in electrolysis with a particular focus on iridium oxide, a costly catalytic material that is crucial in PEM electrolyzer systems. Our INLINECOATER™ systems are well-suited to apply iridium oxide with high precision, which minimizes material consumption without compromising performance. By expanding our offering to more performance-critical functions in electrolysis stacks, we broaden our addressable market and create value for both component manufacturers and system integrators, in the form of more comprehensive solutions and reduced system costs.
To accelerate development, after quarter-end we entered into two new partnerships with technology companies: Ionautics and Smoltek Hydrogen. The purpose is to evaluate how their technologies – HiPIMS (high power impulse magnetron sputtering) and carbon nanofibers (CNF), respectively – can be integrated into our systems to enable next-generation high-performance coatings. The collaboration with Ionautics focuses especially on applications with iridium oxide, where HiPIMS technology can create coatings with very high technical performance. By acting as an integration platform for technologies with a high level of innovation, our systems are evolving from conventional coating equipment to enablers of higher performance in customer applications.
Encouraging results in SOFC/SOEC
For some time, we have together with multiple potential customers also evaluated our coating technology for use in solid oxide technologies, both solid oxide fuel cells (SOFC) and solid oxide electrolyzer cells (SOEC). These technologies share many similarities and are driven by the need for high performance in demanding applications, such as stationary power generation plants.
Our technology shows very good results in tests and is designed to be integrated into existing SOFC/SOEC architectures, which enables faster technology adaptation and provides clear commercial value. By also addressing solid oxide technologies, we can expand our reach and strengthen our competitiveness in a segment with high growth potential. Adapting the INLINECOATER™ platform to volume capacity will entail further development efforts, but our ambition is to become a qualified supplier in this area and thereby further broaden our market presence.
After several years of investments in technology, capacity and market presence, we have built a strong platform for continued growth. At the same time, we find ourselves in a market situation where business decisions tend to take longer, and where customers place higher demands on technically verified solutions and clear business value. We see this as a natural part of the maturation process and as an opportunity to further sharpen our offering. In parallel, we continue to have a clear focus on sales and work methodically with cost control and margin improvements.
With global unrest, we feel relatively secure in having built up a robust structure for a long time to meet changes in the global trade landscape. With facilities in Europe and China and preparations for establishment in the USA, we have built a strong global presence. This makes us well-positioned to handle regional regulations, tariffs, trade barriers and other market challenges in an increasingly complex trade landscape. At the same time, we maintain secure delivery capacity to our most important markets.
2025 will be a challenging year. Customer investments are delayed across industries. With a clear strategy, a competitive offering and a committed team, we are adapting and well-prepared to create long-term value for our customers, partners and shareholders.
The full report is attached, and can be retrieved on the company’s website at www.impactcoatings.com/investors/financial-reporting/.
Impact Coatings invites investors, analysts and the media to a presentation of this Interim Report on Tuesday, April 29 at 10:00 am (CEST). CEO Jonas Nilsson and CFO Lena Åberg will comment on the Interim Report and take questions. The presentation will held via webcast in English.
Impact Coatings AB (publ) has received a Letter of Intent, about continued supply of coating services for fuel cell bipolar plates, from FTXT Energy Technology Co., Ltd., a Chinese manufacturer of fuel cell systems and stacks for automotive and other fuel cell applications. Subject to coming purchase orders, Impact Coatings will for the remainder of 2025 provide production capacity from its Coating Service Center in Shanghai, for a volume corresponding to at least CNY 4.5 million in revenue.
Coating service production for FTXT was ramped up at the Coating Service Center in Shanghai during 2024 following an official approval from the customer in April 2024 of Impact Coatings’ Premium FC coating for heavy duty fuel cell applications. The companies in September 2024, by signing a Letter of Intent, also initiated a development collaboration concerning fuel cell coating technology. FTXT Energy Technology Co., Ltd. was established in 2019 by Great Wall Holding Group. Relying on global R&D centers in four countries, the company develops core products such as fuel cell engines and hydrogen storage cylinders. It has set up more than 1,000 demonstration projects to promote the diversified application of hydrogen energy and zero-carbon transformation. This includes hydrogen heavy-duty trucks for the Xiong’an New Area construction project in Hebei Province and hydrogen buses for the Shanghai Lingang District.
Impact Coatings publishes its Interim Report for the first quarter of 2025 on Tuesday April 29, at 08:00 a.m. (CEST). In reference to this, the company invites investors, analysts and the media to a webcast on the same day at 10:00 a.m. (CEST). Impact Coatings’ CEO Jonas Nilsson together with CFO Lena Åberg will present and comment on the Interim Report, and answer questions. The presentation will be held in English.
What: Presentation of Impact Coatings’ Q1 2025 Interim Report via webcastTime: Tuesday April 29, at 10:00 a.m. (CEST)Link to webcast: https://www.finwire.tv/webcast/impact-coatings/q1-2025/ The webcast in its entirety will afterwards be available on the company’s website www.impactcoatings.com.
Impact Coatings’ Annual Report for 2024 (in Swedish) is attached, and is available for download from the company’s website at www.impactcoatings.com/investors/financial-reporting.
The shareholders of Impact Coatings AB (publ), reg. no. 556544-5318 (the ”Company”), are hereby invited to participate in the Annual General Meeting (“AGM”), which will be held on Wednesday, May 21, 2025 at 2:00 p.m. CEST at the Company’s new headquarters, located at Cobolgatan 5 in Linköping.
Shareholders wishing to participate in the AGM must be registered in the register of shareholders maintained by Euroclear Sweden AB as of Tuesday May 13, 2025, and notify attendance to the Company no later than Thursday, May 15, 2025.
The notice of attendance to the AGM shall be sent by email to anmalan@impactcoatings.com or by post to Impact Coatings AB, Cobolgatan 5, SE-583 30 Linköping, Sweden. The notice of attendance shall state name, date of birth or corporate identification number, address, telephone number, when applicable, the number of assistants, and the number of shares held by the shareholder. A form of a power of attorney for shareholders who wish to participate in the AGM through a proxy holder will be available on the Company´s website, www.impactcoatings.com. Shareholders who are represented by a proxy holder may exercise their voting right at the AGM by a proxy holder with a written and dated power of attorney which is signed by the shareholder. If the power of attorney is issued by a legal entity, a copy of the certificate of registration or equivalent for the legal entity shall be attached. The power of attorney and any certificate of registration or equivalent must be sent to the Company to the abovementioned address well in advance before the AGM. The power of attorney cannot be older than one year, unless a longer validity term is specifically stated in the power of attorney, maximum five years.
Shareholders who have had their shares registered in the name of a nominee must have their shares registered in their own name in the register of shareholders maintained by Euroclear Sweden AB in order to be entitled to participate in the AGM. Such registration may be temporary (so-called voting rights registration) and is requested from the trustee in accordance with the trustee’s procedures. Registrations of voting rights made no later than Thursday, May 15, 2025, will be taken into account in the preparation of the share register.
PROPOSED AGENDA
PROPOSED RESOLUTIONS
Election of Chairman of the meeting (item 2)The Nomination Committee proposes that Mark Shay is elected as Chairman of the meeting.
Resolution regarding appropriation of the Company’s profit/loss according to the adopted Balance Sheet (item 9b)The Board of Directors and the CEO proposes that the net profit for the year and retained earnings be appropriated in accordance with the motion in the Annual Report. The proposal entails that no dividend will be paid.
Determination of the number of Board Members and Deputy Board Members (item 10)The Nomination Committee proposes that the number of Board Members be increased from four (4) to five (5) without Deputy Board Members.
Election of Board of Directors (item 11)The Nomination Committee proposes re-election of Mark Shay, Christian Sahlén and Sukhwan Yun, and that Roland Fischer and Johanna Pynnä are elected as new Members of the Board of Directors, for the period until the end of the Annual General Meeting 2026. Per Wassén has informed the Nomination Committee that he is not available for re-election. Mark Shay is proposed to be re-elected as the Chairman of the Board of Directors. The Board Members proposed for re-election are presented in more detail on the Company’s website.
Information about Roland Fischer:
Roland Fischer was born in 1962 and is a German citizen living in Switzerland. He was the CEO of OC Oerlikon Corporation AG (2016-2022), a global technology leader in coating solutions with revenues of approximately EUR 3 billion. Oerlikon is headquartered in Switzerland and listed on the Swiss stock exchange. Dr. Fischer was previously CEO of the Power & Gas division of Siemens AG (2011-2015), providing power generation equipment and power plants, and worked for more than 15 years in various executive roles at MTU Aero Engines (Germany). Dr. Fischer has held numerous board positions in affiliated companies and joint ventures. He holds a PhD in aeronautical engineering from the Technical University of Karlsruhe (Germany) and a Master degree in engineering from the Technical University of Stuttgart (Germany). Dr. Fischer currently has no board or executive management appointments and owns no shares in the Company. He is considered independent of the Company and its executive management, and independent of the Company’s major shareholders.
Information about Johanna Pynnä:
Johanna Pynnä was born in 1985 and is a Finnish citizen. She was the Head of Corporate Strategy for Kemira Oyj (2017-2024), a listed Finnish global chemicals company with revenues of approximately EUR 3 billion. Since 2025, she has been leading business development for Water Solutions, Kemira’s largest business unit. Johanna Pynnä previously held executive roles for VR Group, a passenger traffic, logistics and infrastructure company. Prior to that she was a management consultant for Booz Allen Hamilton. She has altogether 20 years of experience working with company strategies from different perspectives and extensive experience in the APAC region. Johanna Pynnä holds a Masters degree in Industrial Engineering and Management from Helsinki University of Technology in Finland (current name Aalto University). Johanna Pynnä currently has no board or executive management appointments and owns no shares in the Company. She is considered independent of the Company and its executive management, and independent of the Company’s major shareholders.
Election of Auditor (item 12)The Nomination Committee proposes re-election of Öhrlings PricewaterhouseCoopers AB (”PwC”) as Auditor for the period until the end of the annual general meeting 2026. PwC has announced that the authorised public accountant Johan Palmgren will be appointed as auditor-in-charge.
Determination of remuneration to the Board of Directors and Auditors (item 13)The AGM is proposed to approve a fee to the Board of Directors of a total of SEK 1,100,000 to be distributed with SEK 300,000 to the Chairman of the Board and with SEK 200,000 to each of the other Board Members, and that the Auditors’ fee shall be paid on the basis of approved invoices.
Resolution regarding adoption of principles for the appointment of the Nomination Committee (item 14)The Nomination Committee proposes that the following principles for the Nomination Committee are adopted.
The Nomination Committee shall consist of three (3) members, who shall be nominated by the Company’s three largest shareholders. The Chairman of the Board of Directors of the Company shall be a co-opted member of the Nomination Committee.
The assessment of the three largest shareholders by voting power shall be based on the shareholder statistics from Euroclear Sweden AB, as per the last banking day in September, who will be contacted by the Chairman of the Board as soon as possible thereafter.
If any of the three largest shareholders wish not to exercise their right to appoint a member of the Nomination Committee or does not give a reply within one week after the above-mentioned contact, the next shareholder in consecutive order as of the said date shall be entitled to appoint a member of the Nomination Committee. The names of the members of the Nomination Committee and the shareholders who appointed them shall be published as soon as possible, but not later than six months prior to the Annual General Meeting.
The Nomination Committee’s term of office extends until a new Nomination Committee has been appointed. Chairman of the Nomination Committee shall, unless the members of the committee unanimously agree otherwise, be the member that represent the shareholder controlling the largest number of votes.
The Nomination Committee shall remain unchanged unless:
(i) a member wishes to resign early, in which case such a request shall be sent to the Chairman of the Nomination Committee (or if it is the Chairman who wishes to resign, to another member of the Nomination Committee) and the receipt means that the request has been executed,
(ii) a nominating shareholder wishes to replace the member of the Nomination Committee appointed by the shareholder with another person, whereby such request (containing the two relevant names) shall be sent to the Chairman of the Nomination Committee (or in the event that it is the Chairman who is to be replaced, to another member of the Nomination Committee) and the receipt shall mean that the request has been executed,
(iii) a nominating shareholder sells all or part of its shareholding in the Company so that the shareholder is no longer one of the three largest shareholders in terms of voting rights, in which case a new member shall be appointed in accordance with the same principles as above, or
(iv) the Nomination Committee is free to decide to offer unfilled seats on the Nomination Committee to shareholders or persons appointed by shareholders in order for the Nomination Committee thereby to reflect the ownership structure in the Company. If a member leaves the Nomination Committee before its work is completed, the Nomination Committee shall appoint a new member in accordance with the principles above, but on the basis of Euroclear Sweden AB’s printout of the share register as soon as possible after the member has left his or her post. Changes in the composition of the Nomination Committee shall be announced immediately.
No fee shall be payable by the Company to any member of the Nomination Committee. The Company shall bear all reasonable costs associated with the work of the Nomination Committee as well as costs for external consultants and similar which are deemed necessary by the Nomination Committee for it to be able to fulfil its assignment.
The Nomination Committee shall submit proposals on the following issues to the Annual General Meeting:
(i) proposal for the Chairman of the general meeting,
(ii) proposal for Members of the Board of Directors,
(iii) proposal for Chairman of the Board of Directors,
(iv) proposal for fees to the Board of Directors and other remuneration with a division between the Chairman of the Board and other Members and any remuneration for committee work,
(v) proposal for election and remuneration of the Company Auditor, and
(vi) proposal for principles for the Nomination Committee
Board of Director’s proposal for resolution on implementation of a warrant-based incentive program for key persons (item 15)
The board of directors proposes that the meeting resolves to implement a long-term warrant-based incentive program for key persons in the Impact Coatings group (the “Warrant Program 2025/2028:1”) through (A) a resolution to issue warrants of series 2025/2028:1 to the Company and (B) a resolution to approve transfers of warrants of series 2025/2028:1 from the Company to key persons in the group, as set out below.
The Board of Directors’ proposal for resolutions under (A) and (B) below constitutes a combined proposal, which shall be resolved on as one resolution. The Board of Directors considers that the proposed program can have a positive effect on the Company’s development. The main purpose of implementing the program is to align the key persons’ interests with the shareholders’ interests to promote long-term value creation. The program is also expected to facilitate for the Company to recruit and retain key persons. (A) Proposal for resolution to issue warrants of series 2025/2028:1 The Board of Directors proposes that the meeting resolves to issue a maximum of 300,000 warrants of series 2025/2028:1 on the following terms and conditions: 1. With deviation from the shareholders’ preferential rights, the warrants may only be subscribed for by the Company, with the right and obligation for the Company to transfer the warrants to key persons in the group in accordance with what is stated in the proposal under (B) below. The Company shall not be entitled to dispose of the warrants in any other way than what is stated in the proposal under (B) below. 2. The reason for the deviation from the shareholders’ preferential rights is that the warrants shall be used within the framework of Warrant Program 2025/2028:1. 3. The warrants shall be issued free of charge to the Company. 4. Subscription of warrants shall be made on a separate subscription list on June 11, 2025 at the latest. The Board of Directors shall have the right to prolong the subscription period. 5. Each warrant entitles the holder to subscribe for one new share in the Company against cash payment at a subscription price corresponding to 150 percent of the volume-weighted average price paid for the Company’s share on Nasdaq First North Growth Market during ten trading days ending three banking days before the last day for subscription in accordance with point A 4 above. The subscription price shall be rounded off to the nearest even hundredth of a SEK, where SEK 0.005 shall be rounded upwards. However, the subscription price may never be lower than the share’s quotient value. Upon subscription of shares, the part of the subscription price that exceeds the quotient value of the previous shares shall be allocated to the non-restricted share premium fund. 6. The warrants may be exercised for subscription of shares during the period from June 15, 2028 up to and including August 31, 2028. The Board of Directors shall have the right to prolong the subscription period if any warrant holder is prevented from subscribing for shares during that period due to insider or market abuse legislation. 7. Shares issued upon exercise of warrants confer right to dividends for the first time on the next record date for dividends which occurs after subscription is effected. 8. The full terms and conditions for the warrants are set forth in the terms and conditions for warrants of series 2025/2028:1, which will be kept available at the Company and on the Company’s website no later than on May 1, 2025 (the “Terms”). According to the Terms the subscription price and the number of shares which each warrant confers right to subscribe for may be recalculated in the event of a bonus issue, reverse share split or share split, new issue of shares, issue of warrants or convertibles and under some other circumstances. Further, the period for exercise of warrants may be brought forward or be postponed in some cases. 9. If all warrants are subscribed for, all warrants are transferred to key persons in the group in accordance with what is stated in the proposal under (B) below and all warrants are exercised for subscription of shares, the Company’s share capital will increase by SEK 37,500 (with reservation for eventual recalculation according to the Terms). 10. The Board of Directors, or anyone appointed by the Board of Directors, shall be authorized to make such minor formal adjustments in the issue resolution that may be required in connection with registration of the resolution with the Swedish Companies Registration Office or, where applicable, Euroclear Sweden AB. (B) Proposal for resolution on approval of transfer of warrants of series 2025/2028:1 The Board of Directors proposes that the meeting resolves to approve that the Company, within the framework of Warrant Program 2025/2028:1, transfers a maximum of 300,000 warrants of series 2025/2028:1 to key persons in the group on the following terms and conditions: 1. Key persons in the group shall be entitled to acquire warrants from the Company as set out below: (a) the CEO of the Company (one person) shall be offered to acquire a maximum of 75,000 warrants;
(b) the other permanent members of the group management and regional presidents (up to eight persons) shall be offered to acquire a maximum of 37,500 warrants each; and
(c) other key persons in the group (up to sixteen persons), shall be offered to acquire a maximum of 15,000 warrants each. If the number of warrants to which applications refer exceeds the number of warrants available to be distributed, the warrants shall be distributed among the key persons who have applied for acquisition of warrants. The distribution shall be made pro-rata in relation to the number of warrants that each of them has been entitled to apply for acquisition of. 2. The warrants shall be transferred at a price (premium) corresponding to the warrant’s market value at the time of the transfer. Calculation of the warrant’s market value shall be made by People & Corporate Performance AB, as an independent valuation institute, by applying the Black-Scholes valuation model. 3. Application for acquisition of warrants shall be made on a special application form on June 11, 2025 at the latest. The Board of Directors shall have the right to prolong the application period. 4. Payment for warrants acquired shall be made on June 17, 2025 at the latest. The payment shall be made in cash to the bank account designated by the Company. The Board of Directors shall have the right to prolong the payment period. 5. A prerequisite for being entitled to acquire warrants from the Company is (i) that the key person is employed in the group or engaged as a consultant by a company in the group at the time of the acquisition and that the employment or consultancy agreement has not been terminated, (ii) that acquisition of warrants can take place in accordance with applicable laws, and (iii) that the key person at the time of the acquisition has entered into an agreement with the Company, which inter alia contains a pre-emption right for the Company if the key person wishes to transfer or otherwise dispose of his/her warrants and a right for the Company to repurchase the warrants, or some of them, if the key persons employment or consultancy assignment ceases. However, the repurchase right shall not apply when the consultancy assignment ceases if the key person becomes employed in the group at the same time. The Board of Directors shall have the right to make reasonable changes and adjustments in the terms and conditions in the agreement that are deemed suitable or appropriate as a result of local civil law or tax law or administrative conditions. 6. Warrants of series 2025/2028:1 which are not transferred to key persons in the group, as well as warrants of series 2025/2028:1 which, where applicable, are later repurchased, may be canceled.
Dilution Per the day of this Notice there are 87,486,713 shares in the Company. If all warrants that can be issued within the framework of Warrant Program 2025/2028:1 (warrants of series 2025/2028:1) are subscribed for, transferred and exercised for subscription of shares, the number of shares and votes in the Company will increase by 300,000 (with reservation for eventual recalculation according to the Terms), which corresponds to a dilution of approximately 0.34 per cent of the number of shares and votes in the Company. The dilution effects have been calculated as the number of additional shares and votes in relation to the number of existing and additional shares and votes. Preliminary valuation, costs and effects on key figures People & Corporate Performance AB has made a preliminary valuation of the market value of a warrant of series 2025/2028:1, applying the Black-Scholes valuation model. Based on an assumed share price of SEK 3.39 at the time of the issuance of the warrants, an assumed subscription price of SEK 5.09 upon exercise of the warrants, a term of 3.2 years, an assumed volatility of 37.5 per cent, a risk-free interest rate of 1.97 per cent and full compensation through recalculation in the event of payment of any dividends during the term, the market value of a warrant of series 2025/2028:1 has been calculated to SEK 0.516. When transferring the warrants to the key persons, the market value will be determined based on updated assumptions and then known parameters. As the warrants are to be acquired by the key persons at market value, Warrant Program 2025/2028:1 is not expected to cause any costs for the Company with regards to key persons residing in Sweden. With regards to key persons residing in other countries than Sweden (a few persons), the program is expected to cause costs for the Company in the form of social security contributions. The size of the costs for social security contributions depends on how many warrants the key persons residing in other countries than Sweden acquires and exercises for subscription of shares, the market value of the Company’s share at the time of the exercise of the warrants in 2028, and the applicable percentages of social security contributions in the different counties at that time. If all key persons residing in other countries than Sweden acquires the number of warrants corresponding to their maximum allotment and exercises them for subscription of shares, the costs for social security contributions are, at an assumed share price of SEK 8.50 at the time of exercise of the warrants (corresponding to 2.5 times the assumed share price at the time of the issue) and unchanged percentages for social security contributions in the different countries, estimated to amount to approximately SEK 65,000. As the costs that may arise for the Company are estimated to be small, the Board of Directors does not propose that any hedging measures be taken to secure the Company’s exposure to the costs that may arise. Warrant Program 2025/2028:1 will have a marginal effect on the Company’s key figures. Other incentive programs There are two outstanding long-term incentive programs in the Company since earlier – Warrant Program 2024/2027:1 and Warrant Program 2024/2027:2, resolved on at an extraordinary general meeting 2024, directed to key persons and one board member. There are 703,898 outstanding warrants in the programs and each warrant entitles for subscription of one new share in the Company during the period from November 1, 2027 up to and including December 10, 2027 at a subscription price of SEK 6.52.
Preparation of the proposal The proposal for resolution has been prepared by the Board of Directors in consultation with external advisers. Majority requirements For a valid resolution in accordance with the proposal, the resolution must be supported by share-holders with at least nine-tenths of the votes cast as well as the shares represented at the meeting.
Resolution regarding authorization for the Board of Directors to increase the share capital through the issue of new shares, warrants and/or convertibles (item 16)The Board of Directors proposes that the AGM authorizes the Board of Directors to resolve on one or several occasions up until the next annual general meeting, with or without deviation from the shareholders’ preferential rights, increase the share capital through the issue of new shares, warrants and/or convertible.
The total number of newly issued shares and the number of shares that may be added through the exchange of convertibles or subscription of new shares with the support of warrants shall in total amount to no more than ten (10) percent of the total number of outstanding shares in the Company at the time when the Board of Directors first exercises the authorization.
An issue based on the authorization may be carried out as a cash, non-cash or set-off issue and may only be made at market price.
The reason for deviating from the shareholders’ preferential rights is that the Company shall be able to raise capital on favorable terms for the Company and, in the event of acquisition of companies or other property, to be able to pay with the Company’s shares.
The resolution according to this item is only valid if it is supported by shareholders with at least two thirds (2/3) of both the votes cast and the shares represented at the AGM.
Resolution to authorize the Board of Directors to make minor adjustments to the resolutions adopted at the meeting in connection with the registration with the Swedish Companies Registration Office and Euroclear Sweden AB (item 17)The AGM is proposed to authorise the Board of Directors or the person appointed by the Board of Directors to make such minor adjustments and clarifications to the resolutions adopted at the AGM as are necessary for the registration with the Swedish Companies Registration Office or Euroclear Sweden AB.
DOCUMENTS, INFORMATION AND NUMBER OF SHARES AND VOTES
The Board of Directors and the CEO shall, if a shareholder so requests and the Board of Directors believes that it can be done without material harm to the Company, provide information regarding circumstances that may affect the assessment of an item on the agenda, as well as circumstances that may affect the financial situation of the Company or another group company.
The Annual Report and the Audit Report as well as Board of Director’s and Shareholder’s complete proposals for resolutions as describe above will be available at the Company and on the Company’s website, www.impactcoatings.com, no later than Thursday, May 1, 2025. The documents will be sent free of charge to shareholders who request it and who states their address.
The total number of shares and votes in the Company as of the date of this notice is 87,486,713.
PROCESSING OF PERSONAL DATA
For information on how your personal data is processed, please see www.euroclear.com/dam/ESw/Legal/Privacy-notice-bolagsstammor-engelska.pdf.
___________________________Linköping in April 2025Impact Coatings AB (publ)Board of Directors
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