FINANCIAL RESULTS FOURTH QUARTER 2024
FINANCIAL RESULTS FULL YEAR 2024
BUSINESS HIGHLIGHTS DURING THE FOURTH QUARTER 2024
BUSINESS HIGHLIGHTS AFTER THE PERIOD
[1] Metals for electrolysis are for certain customers invoiced in a cost-neutral manner not affecting operating profit.[2] Comparative number includes a one-time gain of SEK 4.0 million.[3] Includes the part of the inventory that has been financed by customer pre-payments.[4] Future agreed leasing revenue of SEK 10.4 million over 51 months for a production line in Coating Service Center China is not included in the backlog figures.[5] Comparative number includes severance pay for the former CEO of SEK 3.0 million.
CEO’s COMMENTARY
The fourth quarter marked a successful end to 2024, a year that clearly showed that our strategic priorities are starting to yield results. Our continued growth and reported net sales of over SEK 100 million for the full year underline our ability to deliver according to plan. At the same time, we recognize that we have a lot of work ahead of us and are closely following market developments to adapt our activities to the changing needs of our customers. The year’s successes, together with a continued focus on standardization, efficiency and increased cost control, have prepared us well for 2025.
Stability and progress in the fourth quarterNet sales during the fourth quarter amounted to SEK 42.4 million (38.4) and showed progress in several key areas. In particular, the development in China has been strong, where our operations within Coating Services continue to grow. Another delivery of an INLINECOATER™ IC2000 during the period further strengthens our presence in this strategically important market and demonstrates stable growth and continuity in system sales over the year.
A major focus has been on increasing revenue and maintaining good cost control. Operating income for the quarter amounted to SEK -3.8 million (0.6), where the comparable figure for 2023 includes a one-time gain of SEK 4.0 million. To increase profitability, we have increased cost control further during the fourth quarter and the beginning of 2025. As part of this work, several targeted measures have been implemented to optimize our organization, including a reduction in personnel. The changes aim to create operational efficiency while allowing the business to grow with the right key competencies.
Cash flow from operating activities amounted to SEK -33.5 million (-7.7) for the quarter and SEK -72.9 million (-42.1) for the full year. An investment in working capital is largely linked to a deliberate inventory build-up in connection with the transition to standardized system production against forecast, which strengthens our delivery capacity and shortens lead times for customers. With year-end inventory levels, we are well-prepared to meet demand without further inventory investments in the short term. The move to new facilities during the period resulted in one-time costs, including relocation expenses and temporary double leasing costs.
We closed the year with a significant accounts receivable balance, from which we expect to collect cash gradually during the year, which is expected to strengthen liquidity. We expect significantly improved cash flow in the first quarter of 2025 compared to the preceding quarter.
Focus on sales and customer relationshipsOur push-pull strategy – where we work to build relationships with strategic players across several stages of the value chain – remains successful in sales development. During the year, we welcomed a total of 29 new customers in our entry-stage business Coating Services, of which eight in the fourth quarter. The customers are distributed across North America, Europe and Asia, with the strongest development in China. Several of these customers have been recurring and have continuously increased their test volumes, which shows an active commitment and trust in our solutions. The test phases are not only an important gateway to larger deals, but also give us the opportunity to be active in the customers’ development stage where we can fine-tune our offering and ensure that we meet the market’s needs.
In the beginning of 2025 we announced a cooperation with Feintool and SITEC, manufacturers of high-precision components for fuel cells and electrolyzers, where Impact Coatings was named preferred supplier of coating solutions. This type of agreements mark important developments in our work to strengthen our presence in the hydrogen industry and open the possibility of further joint opportunities in the future.
Market overviewIn 2024, the global hydrogen market was characterized by challenges, with several major players facing setbacks. Despite this, we have seen strong growth in China, which is now our most dynamic market. Our presence there, with several systems in commercial operation and a local Coating Service Center, has been crucial in meeting demand and consolidating our position in the region.
In North America, the market showed signs of recovery during late 2024 despite a challenging year overall. We see an increase in new relationships and recurring business, indicating that our offering is relevant and continues to generate interest. Europe has remained stable during the year, with ongoing activities in hydrogen and metallization, but also in other coating applications.
Through our global presence and strategic establishment in key geographic markets such as Europe, the US and China, we can quickly identify and act on growth opportunities in regions where the market is developing the fastest. Our locations place us close to our customers and potential partners, which helps us adapt our offering effectively and create long-term relationships. This approach ensures that we remain relevant on a global level and strengthen our competitiveness and deepen our presence in regional markets.
During the year, our strategic focus has been on ensuring that supplied coating systems are fully utilized in customers’ production. This has meant working closely with our customers to optimize the systems under real-world conditions, resulting in valuable feedback and technical improvements. This process strengthens our technical capabilities and makes us well-prepared to meet accelerating demand as the market grows.
OutlookWe enter 2025 with strong momentum and continue on our chosen path. By further standardizing our production and shortening lead times, we are creating a more efficient business. Improved efficiency is enhanced by increased cost control, as we continue to optimize resource utilization and streamline operations to reach profitable growth.
We also continue to intensify our commercial efforts, with the goal of reaching new customers and deepening relationships with existing customers and partners. Among other things, we are working to strengthen our offering within electrolysis and fuel cells by expanding it to include a wider variety of coating technologies that are compatible with our existing systems.
The move of the head office and Coating Service Center to new premises in Linköping is now complete, marking a significant step forward for our business. Our new, modern facilities strengthen our operational platform and improve our conditions for continued growth and development.
I would like to extend a warm welcome to Lena Åberg, who joined us as permanent CFO during the quarter, and offer my thanks to our outgoing CFO Bengt Vernerson. Lena’s experience and leadership will be an important asset in our continued development. I would also like say thank you to our employees, customers and shareholders for your contributions and trust during the past year. Together, we will continue to build on Impact Coatings’ strengths and opportunities. I look forward to sharing a successful and dynamic 2025 with you.
Jonas Nilsson, CEO
The full report is attached, and can be retrieved on the company’s website at www.impactcoatings.com/finansiella-rapporter-arkiv/.
Presentation
Impact Coatings invites investors, analysts and the media to a presentation of this Year-End Report on Friday, February 14 at 10:00 am (CET). CEO Jonas Nilsson and CFO Lena Åberg will comment on the Year-End Report and take questions. The presentation will held via webcast in English.
Impact Coatings publishes its Year-end Report 2024 on Friday February 14, at 08:00 a.m. (CET). In reference to this, the company invites investors, analysts and the media to a webcast on the same day at 10:00 a.m. (CET). Impact Coatings’ CEO Jonas Nilsson together with CFO Lena Åberg will present and comment on the Year-End Report, and answer questions. The presentation will be held in English.
What: Presentation of Impact Coatings’ Year-End Report 2024Time: Friday February 14, 2025, at 10:00 a.m. (CET)Link to webcast: https://www.finwire.tv/webcast/impact-coatings/year-end-report-2024/ The webcast in its entirety will afterwards be available on the company’s website www.impactcoatings.com.
Impact Coatings AB, a global leader in physical vapor deposition (PVD) coating technology, has been selected as preferred supplier by Feintool and SITEC, two of the foremost manufacturers of high-precision components for fuel cells and electrolyzers. The cooperation between the well-established Feintool + SITEC production partnership and Impact Coatings will allow the offering of ready-to-install PVD coated bipolar plates and interconnects to hydrogen industry customers. The collaboration with Impact Coatings is presented in a press release from Feintool + SITEC.
“The Feintool + SITEC partnership will leverage on Impact Coatings’ innovative and environmentally friendly PVD solutions to enhance the production of metallic bipolar plates and other stack components. These critical components are essential to the efficiency and cost of fuel cells and electrolyzers,” said Dr. Ing. Hans-Jörg Domian, Head of Business Development at Feintool. “We are honored to be chosen as preferred supplier by Feintool and SITEC,” said Jonas Nilsson, CEO of Impact Coatings. “Our collaboration strengthens the production chain for these critical parts, enabling advanced solutions that support the growing demand for a sustainable hydrogen energy system. We look forward to contributing to their vision of delivering high-quality, ready-to-install components to customers worldwide.” For the press release from Feintool + SITEC on the collaboration with Impact Coatings and for more information about the companies and the role of metallic bipolar plates in the hydrogen energy transition, visit www.feintool.com, www.sitec-technology.de, and www.bipolarplates.com.
Impact Coatings AB (publ) has received an order for an INLINECOATER™ IC2000 from Feintool Precision System Parts (Taicang), a fully-owned subsidiary of Feintool Group (Switzerland). Feintool Group is a global leader in precision sheet metal technologies of fineblanking, forming, and electro-lamination stamping, as well as high performance fuel cell bipolar plate fineforming. The IC2000 system will be used by the Chinese subsidiary in the manufacturing of fuel cell bipolar plates. The system delivery will take place as soon as practically possible based on IC2000 systems being available with short delivery times. The order value is in the EUR 2-2.5 million range.
“The Chinese fuel cell industry continues to be a growth engine for us. This new order marks the third Chinese fuel cell plate manufacturer to order an IC2000 system during 2024, whereof two have been repeat system orders,” said Jonas Nilsson, CEO at Impact Coatings. “In addition, Impact Coatings has delivered and commissioned an IC2000 system at our Coating Service Center China during the year to support growing demand also from fuel cell customers that prefer to purchase coating services.” Impact Coatings has substantially reduced delivery times for PVD systems based on the company’s strategy of manufacturing systems to forecast. The strategy enables Impact Coatings to deliver IC2000 systems for fuel cell and electrolyzer applications quickly, thereby contributing to production scale-up in the hydrogen sector in all geographic markets.
The Extraordinary General Meeting on October 18, 2024 in Impact Coatings AB (publ) (“the Company”) resolved to implement two warrant-based incentive programs, one for key persons (2024/2027:1) and one for a board member (2024/2027:2), in total a maximum of 750,000 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 October 21, 2024 up to and including November 1, 2024. The subscription price has thereby been set at SEK 6.52 per share. The warrants may be exercised for subscription of shares during the period from November 1, 2027 up to and including December 10, 2027.
Prior to subscription, the final warrant premium has been determined based on the Black-Scholes warrant valuation model at SEK 0.63 per warrant for both programs. The calculation has been carried out by the independent valuation institute People & Corporate Performance AB. In total, 703,898 warrants have been subscribed in the two programs, meaning that the programs have been subscribed to 93.9 percent.
Terms and conditions for the warrant-based incentive programs can be found in the documentation for the Extraordinary General Meeting on the Company’s website, www.impactcoatings.com.
As resolved by the AGM, the nomination committee of Impact Coatings shall comprise three members representing the company’s largest shareholders in terms of votes, together with the Chairman of the Board as an adjunct member. If any of the three largest shareholders decides not to exercise the right to appoint a representative on the nomination committee, the right is passed on to the next largest shareholder.
The nomination committee for the AGM 2025 in Impact Coatings consists of: Kai Tavakka, Chairman, appointed by Accendo Capital SICAV RAIF Joseph Boadi-Darkwah, appointed by Hyundai Motor Company Hans Österberg, private investor Mark Shay, Chairman of the Board, adjunct member
The AGM will be held in Linköping on May 21, 2025. The proposals of the nominating committee will be published in the invitation to the AGM and will be made available on the company website, www.impactcoatings.com.
Shareholders who wish to submit proposals to the nomination committee may do so via e-mail to investors@impactcoatings.com no later than February 1, 2025.
An Extraordinary General Meeting (EGM) of shareholders of Impact Coatings AB (publ), which is listed on Nasdaq First North Growth Market, was held today. 30,256,770 shares, corresponding to 34.58% of the total outstanding votes, participated at the EGM.
The EGM decided:
To approve the Board’s proposal on implementation of a warrant-based incentive program for key persons.
To approve a Shareholder’s proposal on implementation of a warrant-based incentive program for a board member.
That the Board of Directors is granted a mandate to make minor corrections to decisions taken at the EGM as related to registration with the Swedish Companies Registration Office and Euroclear Sweden AB.
FINANCIAL RESULTS THIRD QUARTER 2024
FINANCIAL RESULTS JANUARY-SEPTEMBER 2024
BUSINESS HIGHLIGHTS DURING THE THIRD QUARTER 2024
[1] Metals for electrolysis are invoiced in a cost-neutral manner and do not affect operating profit.[2] Includes severance pay for the former CEO of SEK 3.0 million.[3] Future agreed leasing revenue of SEK 10.7 million over 54 months for a production line in Coating Service Center China is not included in the backlog figures.
During the third quarter, Impact Coatings continued to show growth across the business, primarily driven by consistency in system sales. Our efforts to improve production efficiency and refine our delivery strategy have contributed to shorter lead times and increased volumes, particularly to China. With continued strong demand and positive momentum in both system sales and Coating Services, we look forward to building on this success in the coming quarters. Growth across business areasNet sales for the third quarter amounted to SEK 31.7 million (14.8). No metals for electrolysis were invoiced separately during the quarter. Net sales on a rolling twelve-month basis reached SEK 100 million for the first time, indicating the endurance of our focused sales efforts and continuity in system sales.
The quarter’s growth is attributed to the successful delivery of another INLINECOATER™ IC2000 to Boyuan in September. This system delivery significantly contributed to system sales, which amounted to SEK 21.5 million (0) during the quarter.
Coating Services continued its positive trend over the year, although revenues remain at lower levels compared to 12 months ago due to delayed orders in electrolysis, as previously communicated. Net sales from Coating Services amounted to SEK 6.6 million (8.4) for the quarter, excluding metals for electrolysis, primarily driven by Coating Service Center China, which remains in full operation.
Aftermarket sales were higher than in the corresponding period last year.
Successful delivery strategyDuring the third quarter, we again demonstrated the results of our new delivery strategy with the successful delivery of another IC2000 system within the same quarter as the order was received. The delivery to Boyuan in China confirms that our focus on standardization and forecast-based system production increases efficiency.
The IC2000 has quickly become a flagship in our product line and is, due to its capacity, particularly attractive to customers with large-scale production needs. Repeat orders from customers show that the IC2000 not only meets today’s demands but also delivers long-term value through its reliability in rapidly growing markets.
Moving forward, we will work on refining software, coating processes, and other system functionalities. The modular design of the IC2000 allows us to update existing systems with new software and technical upgrades to certain hardware components. The combination of quick adaptability and a more streamlined production process gives our customers and us a strong position in the market. We are confident that faster deliveries will enhance our competitiveness and drive long-term sales growth.
Increased capacity at Coating Service Center ChinaOur Coating Service Center China has been operating at full production capacity in two-shifts since the second quarter 2024. With machine setup time and preparations for the next shift, this in practice means round-the-clock production at the factory. The planned IC2000 system for the Shanghai plant, which was communicated in the Q2 2024 report, has shipped during October. The addition of another system will more than double the facility’s capacity, giving us a strong position to meet the high demand for fuel cell coatings in the Chinese market.
During my visit to China in early September, it became clear that the market is moving. Players in the fuel cell segment are gearing up for increasing demand. Our position as a strategic partner, to grow alongside them, is crucial to our establishment in this emerging landscape. It is still a market in development, but we see significant opportunities and look forward to being part of this growth.
Strengthened collaborationIn September, we signed a Letter of Intent with FTXT in China, a subsidiary of Great Wall Motors and a leading player in fuel cell technology. The intention is to collaborate regarding coating development and allow them to test our coatings in their development cycle, opening up future growth opportunities and technological innovation in fuel cell applications for vehicles.
The Letter of Intent is a direct result of a collaboration described in a press release on April 18, 2024, when we received official approval as a volume supplier of our Premium FC coatings. At that time, initial orders to us from the plate supplier of FTXT were estimated at a value of SEK 13 million.
Relocation of our headquartersDuring the quarter we began the relocation of our Linköping headquarters including R&D, system manufacturing, and our European Coating Service Center to our new premises in the area called Mjärdevi. Mjärdevi is the home of Linköping Science Park, offering us a dynamic and innovative environment. With the new facility we get access to modern and larger production facilities, including a clean room that is particularly important for our coating processes within hydrogen applications. The new facility will allow us to scale production capacity, further streamline production, and continue ensuring our high-quality standards. The move is being carried out in stages, and we expect to be fully settled in the headquarters by the end of the year.
Towards profitability and continued growthNet income has improved thanks in part to sales of IC2000 systems during the last few quarters – a trend we aim to continue and improve upon. With a strong sales pipeline, proven delivery capacity, and increased production capacity in our new premises, we see a path to reach profitability. We are focusing on optimizing our processes and strengthening our production capacity in order to increase volumes in our existing segments. We are also exploring new partnerships, development collaborations, and potential acquisitions that can complement our business.
We will continue to work closely with our customers to ensure that our solutions evolve in line with market needs and that we keep pace with the rapid developments in hydrogen applications such as fuel cells and electrolysis.
A sincere “Thank You” to our employees, customers, suppliers, partners, and shareholders for your continued trust and commitment.
Impact Coatings invites investors, analysts and the media to a presentation of this Interim Report on Friday, October 18 at 10:00 am (CEST). CEO Jonas Nilsson and CFO Bengt Vernerson will comment on the Interim Report and take questions. The presentation will held via webcast in English.
Impact Coatings publishes its Interim Report för the third quarter of 2024 on October 18, 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 Bengt Vernerson will present and comment on the Interim Report, and answer questions. The presentation will be held in English.
What: Presentation of Impact Coatings’ Q3 2024 Interim Report via webcastTime: Friday October 18, at 10:00 a.m. (CEST)Link to webcast: https://www.finwire.tv/webcast/impact-coatings/q3-2024/ The webcast in its entirety will afterwards be available on the company’s website www.impactcoatings.com.
The shareholders of Impact Coatings AB (publ), reg. no. 556544-5318 (the ”Company”), are hereby invited to participate in the Extraordinary General Meeting (“EGM”), which will be held on Friday, October 18, 2024 at 2:30 p.m. (CEST) at KANTER law firm on Engelbrektsgatan 3 in Stockholm.
Shareholders wishing to participate in the EGM must be registered in the register of shareholders maintained by Euroclear Sweden AB on Thursday, October 10, 2024, and notify attendance to the Company no later than on Friday, October 11, 2024.
The notice of attendance to the EGM shall be sent by email to anmalan@impactcoatings.com or by post to Impact Coatings AB, Westmansgatan 29G, SE-582 16 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 EGM 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 EGM 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 authorization document for the legal entity shall be attached. The power of attorney and any certificate of registration or equivalent authorization document must be sent to the Company to the abovementioned address well in advance before the EGM. 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 EGM. Such registration may be temporary (so-called voting rights registration) and is requested from the trustee in accordance with the trustee’s procedures. Registration of voting rights made no later than on Monday, October 14, 2024, will be taken into account in the preparation of the share register.
PROPOSED AGENDA
PROPOSED RESOLUTIONS
Board of Directors’ proposal for resolution on implementation of an updated warrant-based incentive program for key persons (item 7) At the Impact Coatings Annual General Meeting held on May 22, 2024, shareholders approved the Board of Directors’ proposed resolution to implement a warrant-based incentive program for key persons (item 15 on the AGM agenda). The AGM-approved warrant-based incentive program has, due to administrative reasons, not been implemented as of the date of this EGM. Therefore, the Board of Directors proposes to the EGM that shareholders vote to nullify the previous program and replace it with a new long-term warrant-based incentive program for key persons in the Impact Coatings group (the “Warrant Program 2024/2027:1”) through (A) a resolution to issue warrants of series 2024/2027:1 to the Company and (B) a resolution to approve transfer of warrants of series 2024/2027:1 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 2024/2027:1 The Board of Directors proposes that the meeting resolves to issue a maximum of 650,000 warrants of series 2024/2027:1 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 2024/2027:1. 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 November 7, 2024 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 per cent of the volume-weighted average price paid for the Company’s share on Nasdaq First North Growth Market during the period from October 21, 2024 up to and including November 1, 2024. The Board of Directors reserves the right to change the time period for calculation of the subscription price. 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 November 1, 2027 up to and including December 10, 2027. 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 2024/2027:1, which will be kept available at the Company and on the Company’s website no later than on September 27, 2024 (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 81,250 (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 2024/2027:1 The Board of Directors proposes that the meeting resolves to approve that the Company, within the framework of Warrant Program 2024/2027:1, transfers a maximum of 650,000 warrants of series 2024/2027:1 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 100,000 warrants;
(b) the other permanent members of the group management and regional presidents (seven persons) shall be offered to acquire a maximum of 50,000 warrants each; and
(c) the other key persons in the group (ten persons), shall be offered to acquire a maximum 20,000 warrants each.
A key person who applies for acquisition of warrants within the limits stated above and fulfills the prerequisites for acquisition stated in item 5 below, is guaranteed to acquire the number of warrants that he/she wishes to acquire (“guaranteed allotment“).
A key person is entitled to apply for acquisition of more warrants than he/she is guaranteed allotment of, but no more than the number corresponding to 50 per cent of his/her guaranteed allotment. If the number of warrants to which such applications refer exceeds the number of warrants that remain to be distributed after guaranteed allotment, the remaining warrants shall be distributed among the key persons who have applied for acquisition of additional warrants. The distribution shall be made pro-rata in relation to the number of additional 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 November 7, 2024 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 November 12, 2024 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 2024/2027:1 which are not transferred to key persons in the group, as well as warrants of series 2024/2027:1 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 2024/2027:1 (warrants of series 2024/2027:1) are subscribed for, transferred and exercised for subscription of shares, the number of shares and votes in the Company will increase by 650,000 (with reservation for eventual recalculation according to the Terms), which corresponds to a dilution of approximately 0.74 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 2024/2027:1, applying the Black-Scholes valuation model. Based on an assumed share price of SEK 5.90 at the time of the issuance of the warrants, an assumed subscription price of SEK 8.85 upon exercise of the warrants, a term of 3.1 years, an assumed volatility of 37.5 per cent, a risk-free interest rate of 1.67 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 2024/2027:1 has been calculated to SEK 0.85. 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 2024/2027:1 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 2027, 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 guaranteed allotment and exercises them for subscription of shares, the costs for social security contributions are, at an assumed share price of SEK 14.75 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 100,000. 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 2024/2027:1 will have a marginal effect on the Company’s key figures. Other incentive programs There are no other outstanding incentive programs besides the programs adopted at the 2024 AGM that are proposed to be nullified. 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. Shareholder’s proposal for resolution on implementation of an updated warrant-based incentive program for a board member (item 8) At the Impact Coatings Annual General Meeting held on May 22, 2024, shareholders approved the shareholder Accendo Capital SICAV RAIF’s (“Accendo”) proposed resolution to implement a warrant-based incentive program for board member Per Wassén (item 16 on the AGM agenda). The AGM-approved warrant-based incentive program has, due to administrative reasons, not been implemented as of the date of this EGM. Therefore, Accendo, representing approximately 34 per cent of the shares and votes in the Company, proposes to the EGM that shareholders vote to nullify the previous program and replace it with a new long-term warrant-based incentive program for board member Per Wassén (the “Warrant Program 2024/2027:2”) through (A) a resolution to issue warrants of series 2024/2027:2 to the Company and (B) a resolution to approve transfer of warrants of series 2024/2027:2 from the Company to Per Wassén, as set out below. Accendo’s proposal for resolutions under (A) and (B) below constitutes a combined proposal, which shall be resolved on as one resolution. Accendo 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 Per Wassén’s interests with the shareholders’ interests to promote long-term value creation. (A) Proposal for resolution to issue warrants of series 2024/2027:2 Accendo proposes that the meeting resolves to issue a maximum of 100,000 warrants of series 2024/2027:2 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 Per Wassén 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 reasons for the deviation from the shareholders’ preferential rights is that the warrants shall be used within the framework of Warrant Program 2024/2027:2. 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 November 7, 2024 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 per cent of the volume-weighted average price paid for the Company’s share on Nasdaq First North Growth Market during the period from October 21, 2024 up to and including November 1, 2024. The Board of Directors reserves the right to change the time period for calculation of the subscription price. The subscription price shall be rounded off to the nearest even hundredth of a SEK, where SEK 0.005 shall be rounded upwards. The subscription price may however 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 November 1, 2027 up to and including December 10, 2027. The Board of Directors shall have the right to prolong the subscription period if the 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 2024/2027:2, which will be kept available at the Company and at the Company’s website no later than September 27, 2024 (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 Per Wassén 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 12,500 (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 2024/2027:2 Accendo proposes that the meeting resolves to approve that the Company, within the framework of Warrant Program 2024/2027:2, transfers a maximum of 100,000 warrants of series 2024/2027:2 on the following terms and conditions: 1. Per Wassén shall be entitled to acquire warrants from the Company. He shall be offered to acquire a maximum 100,000 warrants. 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 November 7, 2024 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 November 12, 2024 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 Per Wassén is a board member of the Company at the time of the acquisition, (ii) that acquisition of warrants can take place in accordance with applicable laws, and (iii) that Per Wassén 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 Per Wassén wishes to transfer or otherwise dispose of his warrants and a right for the Company to repurchase the warrants, or some of them, if Per Wassén’s appointment as a board member of the Company ceases. 6. Warrants of series 2024/2027:2 which are not transferred to Per Wassén, as well as warrants of series 2024/2027:2 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 2024/2027:2 (warrants of series 2024/2027:2) are subscribed for, transferred and exercised for subscription of shares, the number of shares and votes in the Company will increase by 100,000 (with reservation for eventual recalculation according to the Terms), which corresponds to a dilution of approximately 0.11 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 2024/2027:2, applying the Black-Scholes valuation model. Based on an assumed share price of SEK 5.90 at the time of the issuance of the warrants, an assumed subscription price of SEK 8.85 upon exercise of the warrants, a term of 3.1 years, an assumed volatility of 37.5 per cent, a risk-free interest rate of 1.67 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 2024/2027:2 has been calculated to SEK 0.85. 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 Per Wassén at market value, Warrant Program 2024/2027:2 is not expected to cause any costs for the Company. Warrant Program 2024/2027:2 will have a marginal effect on the Company’s key figures. Other incentive programs There are no other outstanding incentive programs besides the programs adopted at the 2024 AGM that are proposed to be nullified. Preparation of the proposal The proposal for resolution has been prepared by Accendo in consultation with external advisers. Majority requirements For a valid resolution in accordance with the proposal, the resolution must be supported by shareholders with at least nine-tenths of the votes cast as well as the shares represented at the meeting.
Resolution to authorize the Board of Directors to make minor adjustments to the resolutions adopted at the EGM in connection with the registration with the Swedish Companies Registration Office (item 9)
The EGM 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 EGM as are necessary for the registration with the Swedish Companies Registration Office.
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, at the EGM provide information regarding circumstances that may affect the assessment of an item on the agenda.
All documents in accordance with the Swedish Companies Act will be available at the Company and on the Company’s website, www.impactcoatings.com, no later than on September 27, 2024. The documents will be sent free of charge to shareholders who request it and who state their address.
The total number of shares and votes in the Company as of the date of this notice is 87,486,713. The Company holds no own shares.
PROCESSING OF PERSONAL DATA
For information on how your personal data is processed in connection with the EGM, please see the privacy notice on Euroclear Sweden AB’s website, www.euroclear.com/dam/ESw/Legal/Privacy-notice-bolagsstammor-engelska.pdf.
___________________________Linköping in September 2024Impact Coatings AB (publ)Board of Directors
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