SES Imagotag: The Fish Rots from the Head – Part II

SUMMARY OF GOTHAM CITY RESEARCH’S OPINIONS AND SUPPORTING OBSERVATIONS

We find SES IMAGOTAG's executive management and board of directors suspect, as we have identified serious misconduct and conflicts of interest, including:

• The Austrian land registry reveals that members of SESL’s management own the property ( SESL's 2nd largest location) where the SES-imagotag R&D Center operates.

• In other words, SESL is the tenant of the Austrian facility, members of management, the landlord, and all these are significant undisclosed related party transactions.

• 5 Board members described as independent, including 2 out of 3 Audit Committee members, don’t seem independent, as they are massively invested alongside management via SESIM, an illiquid structure that owns SESL shares.

• Even worse, Management’s highly touted November 2022 purchase of shares was actually financed via pledging existing shares (i.e., borrowing) via SESIM.

• We have observed in the past that management and directors engaged in such misconduct are no longer fit to serve in those functions.

We have identified numerous accounting irregularities across its 2022 annual report which seem to contradict SES Imagotag's claim that “Financial statements are not misstated.”

• Trade receivables and other debts and accrual accounts do not match in 2022.

• The 2019 JV transactions as presented by SESL do not match figures from Chinese sources. The implied $10 million irregularity complicates SESL’s 2019 reported cash.

• There are other irregularities regarding SESL’s Asian subsidiaries including: how much does SESL own, how much has SESL invested in, and when were these formed.

• A prior version of SESL's 2022 Annual Report contained R&D-related accounting irregularities. SESL replaced this AR unannounced. The Company should clarify what exactly happened here.

• We believe that SES-Imagotag’s financial reports, including its cash balances, are suspect and/or materially incorrect, and that its recent years’ Annual Reports will require restatement.