Stillfront Group AB (publ) Company Description December 2015 Important information This company description (the “Company Description”) has been produced by Stillfront Group AB (“Stillfront” or the “Company”) as an information only document for the purpose of providing certain information in conjunction with a listing (the “Listing”) of the Company’s shares on Nasdaq First North. The “Group” refers to Stillfront Group and its subsidiaries. The distribution of this Company Description in certain jurisdictions is restricted by law. No action has been taken by the Company or any other person to permit a public offering in any jurisdiction. Persons into whose possession this Company Description may come are required to inform themselves about and to observe such restrictions. This Company Description may not be used for, or in connection with, any offer to, or solicitation by, anyone in any jurisdiction or under any circumstances in which such offer or solicitation is not authorised or is unlawful. This Company Description does not constitute an offer to sell or a solicitation of an offer to buy any shares in the Company. This document is not a prospectus and it has not been approved or reviewed by any governmental authority or stock exchange in any jurisdiction. The shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or under any of the relevant securities laws of any state or other jurisdiction of the United States of America. The shares may not be offered or sold in the United States, except pursuant to an exemption from the Securities Act or in a transaction not subject to the registration requirements of the Securities Act. In this Company Description, the terms “we”, “our” and “us” all refer to Stillfront Group. No representation or warranty, express or implied, is made by Pareto Securities AB (“Pareto”) as to the accuracy or completeness of any information contained in this Company Description. In making an investment decision, investors must rely on their own assessment of Stillfront. No person is or has been authorised to give any information or make any representation under this Company Description other than those contained in this Company Description and, if given or made, such information or representation must not be relied upon as having been authorised by the Company who does not accept any liability with respect to any such information or representation. Neither the delivery of this Company Description nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date hereof or that the information contained herein is correct as of any time subsequent to its date. It should be noted that certain statements herein which are not historical facts, including, without limitation, those regarding expectations for general economic development and the market situation, expectations for Stillfront’s development and profitability and statements preceded by “expects”, ”estimates”, ”forecasts” or similar expressions, are forward-looking statements. These statements are based on current decisions and plans and currently known factors. They involve risks and uncertainties which may cause the actual results to materially differ from the results currently expected for Stillfront. This Company Description is governed by Swedish law. The courts of Sweden have exclusive jurisdiction to settle any conflict or dispute arising out of or in connection with this Company Description. Investing in the Company involves a high degree of risk. For a discussion of certain of the risk factors that should be considered in connection with an investment in the company, please see the section “Risk Factors”. First North is an alternative marketplace operated by an exchange within the Nasdaq OMX group. Companies on First North are not subject to the same rules as companies on the regulated main market. Instead they are subject to a less extensive set of rules and regulations adjusted to small growth companies. The risk in investing in a company on First North may therefore be higher than investing in a company on the main market. All companies with shares traded on First North have a Certified Adviser who monitors that the rules are followed. The exchange approves the application for admission to trading. 2 Table of Contents Board of directors, management Risk factors 4 and auditors 62 Background and reasons 13 Corporate governance 67 Investment highlights 14 Share capital and ownership structure 69 Market overview 16 Articles of association 73 History 24 Legal considerations and supplementary information 74 Business overview 25 Tax considerations in Sweden 83 Use of proceeds and IPO rationale 49 Documents incorporated by reference 85 Financial overview 50 Definitions 86 Addresses 87 Summary of the listing Total number of shares: ISIN code: 5,006,583 shares SE0007704788 Preliminary first day of trading: Exchange: 8 December 2015 Nasdaq First North Ticker: SF Financial Calendar Annual report 2015: 25 February 2016 Annual General Meeting: 18 May 2016 Interim report January–March 2016: 18 May 2016 Interim report January–June 2016: 26 August 2016 Interim report January–September 2016: 9 November 2016 Annual report 2016: 23 February 2017 3 Risk factors Any offering of securities will only be made by means of this Company Description. Investors should not invest in any securities of the Company except on the basis of information contained in this Company Description. A possible investment in the Company is associated with a number of risks. Investors should carefully analyse the specific risk factors described below as well as all other information in the Company Description prior to deciding whether to make an investment in the Company or not. The Company deems the below described risks as the most significant risks for potential investors. However, the risks are not described in priority or in any other particular order. In the event that any of the following risks materialise, the Group's business, financial condition, and results of operations could be materially adversely affected. In such circumstances, the trading price of the shares could decline and investors could lose part or all of their investment in the shares. In addition, the risks described below are not the only risks to which the Group is subject. Stillfront may be unaware of certain risks or believe certain risks to be immaterial that later prove to be material. There can be no guarantees or assurances that the objectives of the Company can be reached and that an investment in the shares in turn will generate a positive return for the investor. Risks related to the Group and its business Stillfront Group must develop new games and enhance existing games so that the players will continue to play Stillfront Group's games and make purchases of virtual items within the games. Stillfront Group's continued growth will inter alia depend on the ability to regularly develop new games and enhance existing games in ways that improve the gaming experience for both paying and non-paying players while encouraging the purchase of virtual items within games. In the event the current game development model ceases to be effective so that a game IP that is popular with VIPs fails to be successful when adapted for mobile and social platforms, current development costs would increase and operating results would suffer. It is possible that only a small number of games, if any, become successful and generate significant purchases of virtual items. Stillfront Group's ability to successfully develop new games and enhance existing games and their ability to achieve commercial success are subject to a number of challenges, including: the need to continually anticipate and respond to changes in the game industry, particularly in the mobile and social platforms; the ability to compete successfully against a large and growing number of industry participants; the ability to develop and launch new game IP and games on time and on budget; the ability to develop new game formats that drive engagement and monetization; the ability to adapt to changing player preferences; the ability to enhance existing games by adding features and functionality that will encourage continued engagement with the game; the ability to hire and retain skilled personnel as we seek to expand our development capabilities; the ability to achieve a positive return on the advertising investments and continue to experience success with organic viral growth; and the need to minimize and quickly resolve bugs or outages. If Stillfront Group is unable to develop new and enhance existing games that generate meaningful revenue, our business and financial results could be harmed. Stillfront Group has a relatively short history and has as of yet not on a continuous basis made substantial revenues The Group was founded in 2010 through the merger of a number of smaller gaming companies. Currently, Stillfront operates through four near-autonomous subsidiaries: Bytro Labs in Germany, Coldwood Interactive in Sweden, Power Challenge in the UK and Sweden, and DOG Productions Limited in Malta. Although some of the games included in the Group's portfolio have a relatively long history the Group as a whole has a relatively short history. The Group's third party relations with inter alia customers have been established relatively recently which may make it difficult to evaluate these relations and any effects on the Group's future prospects. Although the Group has performed strongly financially in 2015 with organic sales growth and 4 increased EBITDA-margin the Group has as of yet not on a continuous basis been able to show substantial revenues. There is a risk that the Group will not make revenues in the future which could entail a need for further capitalisation and thereto related consequences and risks.