Investor Relations Frequently Asked Questions
Index
Corporate Information
Where Can I find more information about the company?
You can find more information about the company on our website, and in our investor presentations.
Financial Information
Who are the auditors of Starbreeze?
The auditors for Starbreeze are PWC.
Where can I find the latest Annual Report?
Latest financial reports can be found here: https://www.starbreeze.com/investor-relations/financial-reports/
What’s Starbreeze financial year?
Starbreeze financial year runs from January to December.
Does Starbreeze release quarterly reports?
Yes, you can find the latest quarterly reports here: https://www.starbreeze.com/investor-relations/financial-reports/
The Starbreeze Share
Where are Starbreeze shares listed?
Starbreeze shares are listed on Nasdaq Stockholm Main Market.
Starbreeze changed lists from Nasdaq Stockholm First North Premiere to the Main Market on October 2nd, 2017. More information here: https://www.starbreeze.com/2017/09/starbreeze-approved-for-listing-on-nasdaq-stockholm/
What is the Starbreeze ticker and ISIN code?
Starbreeze is traded on Nasdaq Stockholm Main Market, under the tickers STAR A and STAR B with the ISIN codes SE0007158928 (A share) and SE0005992831 (B share)
Where can I follow the Starbreeze share?
- The B-share can be followed here: http://www.nasdaqomxnordic.com/aktier/microsite?Instrument=SSE5285&name=Starbreeze%20B
- The A-share can be followed here: http://www.nasdaqomxnordic.com/aktier/microsite?Instrument=SSE110197&name=Starbreeze%20A
What is the difference between the A and B share?
The A-share carries ten (10) votes, and the B-share one (1). Otherwise, Class A shares and Class B shares carry equal rights to a share in the Starbreeze assets and profits.
When was Starbreeze first listed on Nasdaq First North?
Starbreeze was first listed on Nasdaq First North May 28th, 2014.
Recontruction
Why did you apply for reconstruction?
The decision is based on shortfall of cash and is deemed necessary to give the Company the time needed to negotiate for a long-term financial solution and implement operational and organizational changes.
Why did Starbreeze end up in reconstruction?
As we announced on November 23, lower sales revenue for OTWD has led the board to initiate a cost-cutting program. On November 29, we lowered the price of OTWD, which we expected would have an impact on sales primarily in the US / Europe. In the short term, the expected effect was less than projected. This means that short-term cash flow is adversely affected for the company. Despite initiated cost savings, we are unable to fully counteract the loss of revenue.
In the past 2 years, Starbreeze has been in an investment phase and thus dependent on ongoing funding. When the company was listed on Nasdaq Stockholm, in October 2017, we communicated financial targets, which included the company being profitable at EBITDA level from Q4 2018 when OTWD was to be launched. These financial targets are now removed.
You have submitted your application to the District Court, what happens next?
The district court’s approval of the reconstruction was given in December 2018, and that they appointed our recommended Administrator Lars Söderqvist from WSA Law Firm.
The reconstruction work has been ongoing since December 3rd under the direction of the administrator. The company’s board and management have unchanged responsibility for the company and its operations. Starbreeze is currently in its second extension of the reconstruction, up til September 3rd 2019 and can further request extension up until December 3, 2019.
What happens to the listing of the share?
The stock continues to be traded as usual but under the observation listing.
How likely is reconstruction to be successful?
We believe that the reconstruction has good prospects for success, otherwise the application would not have been submitted.
How long can you be under reconstruction?
We do this in order to conduct negotiations on a long-term financial solution and implement operational and organizational changes. Reconstruction is granted for three months at a time with a maxumum period of 12 months.
What if it does not succeed?
We have initiated this process and have good faith in reaching a long-term financial solution while also conducting operational and organizational changes.
Why will you succeed in reconstruction?
We apply for reconstruction due to shortfall of cash. There are significant values in the company. We believe that the reconstruction has good prospects for success, otherwise the application would not have been submitted.
Who are your creditors?
The largest creditors are currently Nordea and Smilegate.
How big are your debts?
The long-term debt per 2018-09-30 amounted to 512 MSEK and short-term debt amounted to 97 MSEK. The debt has been reduced in the reconstruction period due to Acer’s conversion of their convertible bond.
Who are you negotiating with?
Negotiations are being held with all major lenders, ie Nordea and Smilegate, in order to find a long-term financial solution for the company.
How long do you expect the negotiations to take?
We expect to be able to conduct the negotiations during the reconstruction period. Reconstruction is granted for three months at a time with a maximum period of 12 months total.
What does operational and organizational change mean?
We have already said that we are working to reduce our costs and focus on core business. This means that we will take action that reduces our costs, especially in areas that are not part of our core business. We carry out the reconstruction with the Administrator and the process will indicate what actions will be taken.
Continued business
What happens to PAYDAY / OTWD / Crossfire, etc?
The purpose of the reconstruction is to create conditions for taking the company further. The company needs to strengthen its financial position and take operational and organisational changes to focus on core business and has initiated several parallel processes to do so. We will communicate on this further as decisions are made. The company’s board and management have unchanged responsibility for the company and its operations.
Financing
Will suppliers be paid for outstanding claims?
Suppliers are not paid for work and materials for the period until the application is submitted. On the other hand, suppliers will be paid for work done during the reconstruction period.
Is the objective of positive EBITDA for Q4 missing and the target of reaching 2 billion in revenue in 2020?
Previously communicated financial targets no longer applies.
Are you considering opportunities to strengthen funding with for example new issues?
It is one of several things we evaluate as possibilities for long term financing, but any decisions will be pending the process now initiated.
The cost reduction program
How far have you arrived with the program?
We have identified several possible ways of lowering costs and also initiating multiple processes.
How much should the costs be reduced?
We expect significant cost savings. Starbreeze will focus on its core business, which means that we primarily look beyond what is not considered core business.
What is core business?
Game development is of course central to us where we have internal development and games developed by our external studios.
Is VR core business?
VR is defined as non-core.
Is there more than VR that is not a core business?
Documentation regarding the reconstruction process can be found here: https://www.starbreeze.com/investor-relations/reconstruction/
