Reorganisation Plan Starbreeze AB (publ) Starbreeze Publishing AB Starbreeze Studios AB Starbreeze Production AB This English version of the reorganisation plan is a translation from Swedish. In case of inconsistencies, the Swedish version shall prevail TABLE OF CONTENTS 1 Abbreviations and definitions, etc. ................................................................................................ 8 2 Background ......................................................................................................................................... 9 2.1 Introduction ........................................................................................................................................ 9 2.2 Generally regarding the group structure................................................................................................. 9 2.3 Description of the operation .................................................................................................................. 9 2.3.1 Operational overview .................................................................................................................... 9 2.3.2 Vision and business strategy ......................................................................................................... 10 3 In brief concerning the Reorganisation Companies ................................................................. 12 3.1 Starbreeze AB (publ) .......................................................................................................................... 12 3.1.1 General information .................................................................................................................... 12 3.1.2 Creditors, etc. ............................................................................................................................ 12 3.1.3 Board of directors and senior executives and auditors ......................................................................... 12 3.1.4 Regarding the shares, etc.. ............................................................................................................ 13 3.1.5 Developments ............................................................................................................................ 14 3.1.6 Price trends regarding the stock price ............................................................................................. 15 3.1.7 Equity financing ........................................................................................................................ 17 3.1.8 Major shareholders ..................................................................................................................... 18 3.1.9 Generally regarding the reorganisation investigation ......................................................................... 18 3.1.10 The arrangement and state of the accounting .................................................................................... 19 3.1.10.1 Performance of bookkeeping ............................................................................................. 19 3.1.10.2 Cost centres and projects ................................................................................................... 20 3.1.10.3 Review of general ledger................................................................................................... 21 3.1.10.4 Monthly reconciliation ...................................................................................................... 22 3.1.10.5 Impairment test – short description .................................................................................... 22 3.1.10.6 Internal reporting and board work ..................................................................................... 23 3.1.10.7 2017 annual report and reports per Date of Reorganisation .................................................. 24 3.1.10.8 2018 annual report............................................................................................................ 24 3.1.10.9 Conclusion regarding the accounting system ...................................................................... 24 3.1.11 Overview of assets and shareholders’ equity and liabilities ................................................................... 25 3.1.12 Date of, and reasons for, Starbreeze’s payment difficulties and insolvency .............................................. 27 3.1.12.1 Earnings performance ...................................................................................................... 27 3.1.12.2 Cash liquidity and cash balances ....................................................................................... 28 3.1.12.3 Trade receivables and revenues ......................................................................................... 29 3.1.12.4 Average time to pay vendors ............................................................................................. 29 3.1.12.5 Record of non-payment .................................................................................................... 30 Wesslau Söderqvist Advokatbyrå Kungsgatan 36, Box 7836, SE - 103 98 Stockholm, Sweden, Tel +46(0)8 - 407 88 00. [email protected], www.wsa.se 3.1.12.6 Alternative financing ........................................................................................................ 30 3.1.12.7 Summary analysis of causes of insolvency and the timing of insolvency ................................ 31 3.1.13 Estate inventory ......................................................................................................................... 31 3.1.14 Forecast dividend in the event of bankruptcy .................................................................................... 32 3.1.15 Voidable transactions .................................................................................................................. 35 3.1.16 Other review of payments compatibility with law .............................................................................. 36 3.1.16.1 Suppliers payments to affiliated companies ........................................................................ 40 3.1.16.2 Review of transactions three months prior to the Date of Reorganisation .............................. 41 3.1.17 Suspicions of fraud on the creditors ................................................................................................ 41 3.2 Starbreeze Studios AB ........................................................................................................................ 42 3.2.1 General information .................................................................................................................... 42 3.2.2 Creditors, etc.. ........................................................................................................................... 42 3.2.3 Board of directors and senior executives and auditors ......................................................................... 42 3.2.4 Developments ............................................................................................................................ 43 3.2.5 Generally regarding the reorganisation investigation ......................................................................... 43 3.2.6 Accounting, monthly reconciliation, internal reporting, etc.. ............................................................... 43 3.2.6.1 Annual reports for 2017 and 2018....................................................................................... 43 3.2.7 Overview of assets and shareholder’s equity and liabilities ................................................................... 44 3.2.8 Date of, and reasons for, Studios’ payment difficulties and insolvency ................................................... 46 3.2.8.1 Earnings performance ...................................................................................................... 46 3.2.8.2 Cash liquidity and cash balances ....................................................................................... 47 3.2.8.3 Record of non-payment .................................................................................................... 49 3.2.8.4 Summary analysis of causes of insolvency and the timing of insolvency ................................ 49 3.2.9 Estate inventory ......................................................................................................................... 49 3.2.10 Forecast dividend in the event of bankruptcy .................................................................................... 49 3.2.11 Voidable transactions .................................................................................................................. 49 3.2.12 Other review of payments compatibility with law .............................................................................. 50 3.2.13 Suspicions of fraud on the creditors ........................................................................................... 52 3.3 Starbreeze Publishing AB .................................................................................................................... 52 3.3.1 General information .................................................................................................................... 52 3.3.2 Creditors, etc. ............................................................................................................................ 53 3.3.3 Board of directors and senior