GOTHAM CITY RESEARCH LLC www.gothamcityresearch.com info@gothamcityresearch.

com

GOTHAM CITY RESEARCH LLC

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

Should SES Imagotag be judged by the company it keeps?

Disclaimer:

This report (the “Report”) has been produced by GOTHAM CITY RESEARCH LLC (“GCR”), an affiliate of General Industrial Partners LLP (“GIP”). GIP
is authorised and regulated by the Financial Conduct Authority in the United Kingdom (FRN 705149) and is a Registered Investment Advisor with
the U.S. Securities and Exchange Commission (CIK 0001719883). GCR is not registered as an investment advisor in any jurisdiction.

Any information presented which could be construed as investment research has not been prepared in accordance with legal requirements
designed to promote the independence of investment research, and it is not subject to any prohibition on dealing ahead of the dissemination of
investment research. Nevertheless, GOTHAM CITY RESEARCH LLC and GIP have made and will continue to make their best efforts to follow the
investment recommendation regimes as set out by the UK Market Abuse Regulation as adopted, the Market Abuse Regulation (EU) No 596/2014
and Delegated Regulation 2016/958 of 9 March 2016, in the Report and in all communications surrounding it, and more generally to uphold the
highest standards of market integrity and transparency of the information provided.

In no event will you hold GOTHAM CITY RESEARCH LLC or any affiliated and related parties liable for any direct or indirect trading losses caused
by any information in this Report. Affiliated and related parties include, but are not limited to partners, principals, officers, directors, employees,
members, clients, investors, advisors, consultants and agents. In no event shall GOTHAM CITY RESEARCH LLC or their affiliates and their related
persons be liable for any claims, losses, costs or damages of any kind, including direct, indirect, punitive, exemplary, incidental, special or,
consequential damages, arising out of or in any way connected with any content of this Report.

This Report is for informational purposes only and is not an offer or solicitation to buy or sell any investment product. You agree to do your own
research and due diligence before making any investment decision with respect to securities covered herein. You represent to GCR that you have
sufficient investment sophistication to critically assess the information, analysis, and opinions in this Report. You further agree that you will not
communicate the contents of this Report to any other person unless that person has agreed to be bound by these same terms.

At the time of publication of this Report, GOTHAM CITY RESEARCH LLC, its affiliates, or related persons (possibly along with or through its
members, partners, affiliates, employees, and/or consultants), hold short positions in the issuer mentioned in this Report and stand to profit in
the event the issuer’s stock declines. Thus, while GOTHAM CITY RESEARCH LLC has made every effort to present the information contained in the
Report in an objective manner, the reader of the Report must bear in mind that GOTHAM CITY RESEARCH LLC’s interest and that of its affiliates
is to see the price of the issuer’s stock decline.

GOTHAM CITY RESEARCH LLC and its affiliates may take additional positions in the issuer (both long and short) at a future date, and disclaim any
obligation to notify the market of any such changes.

Our research and Report include forward-looking statements, estimates, projections, and opinions prepared with respect to, among other things,
certain accounting, legal, and regulatory issues the issuer faces and the potential impact of those issues on its future business, financial condition
and results of operations, as well as more generally, the issuer’s anticipated operating performance, access to capital markets, market conditions,
assets and liabilities. Such statements, estimates, projections and opinions may prove to be substantially inaccurate and are inherently subject
to significant risks and uncertainties beyond GOTHAM CITY RESEARCH LLC’s and its affiliates’ control. No representation is made or warranty
given as to the accuracy, completeness, achievability or reasonableness of such statements of opinion.

Our research and Report expresses our opinions, which we have based upon generally available information, field research, inferences and
deductions through our due diligence and analytical process. GOTHAM CITY RESEARCH LLC believes all information contained herein is
accurate and reliable, and has been obtained from public sources it believes to be accurate and reliable.

However, such information is presented “as is,” without warranty of any kind, whether express or implied. GOTHAM CITY RESEARCH LLC and its
affiliates make no representation, express or implied, as to the accuracy, timeliness, or completeness of any such information or with regard to
the results to be obtained from its use. All expressions of opinion are subject to change without notice, and GOTHAM CITY RESEARCH LLC is not
obligated to update or supplement any Reports or any of the information, analysis and opinion contained in them.

For UK recipients: This Report is only intended for investors who qualify as FCA defined Professional Clients (the “Recipient(s)”), and who are
expected to make their own judgment as to any reliance that they place on the research Report). This document is not suitable for, nor intended
for any persons deemed to be a “Retail Client” under the FCA Rules.

For US recipients: This Report is being distributed in the US in compliance with the Investment Advisors Act 1940. The information contained in
this Report is intended solely for institutional investors only and may not be used or relied upon by any other person for any purpose. Such
information is provided for informational purposes only and does not constitute a solicitation to buy or an offer to sell any securities under any
U.S. federal or state securities laws, rules or regulations.

Page 2 of 54
Table of Contents

I. Disclaimer
II. Introduction
III. Corporate governance and undisclosed related party issues
IV. The JV: accounting irregularities since inception
V. Problems with the JV’s deconsolidation and divestiture
VI. Japan and BOE Chongqing: dubious transactions
VII. Other accounting irregularities and unexplained red flags
VIII. SES Imagotag’s Partnership with Wirecard
IX. End Notes

Page 3 of 54
Introduction
In SES imagotag’s Response to the Gotham City Report issued on June 26, 2023, SESL claims: “Financial
statements are not misstated.”1 We believe this claim is false. In this report we focus on observations,
including accounting irregularities, that demonstrate our belief 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. For example:

 Trade receivables and other debts and accrual accounts do not match within the 2022 AR.
 There are conflicting claims regarding SESL’s Asian subsidiaries including: how much does SESL
own of these entities, how much has SESL invested in them, and when were they formed.
 The amount of cash used to incorporate and sustain some of these subsidiaries is larger than
would be expected and leads us to question the economic rationale for these transactions.

Before we cover the accounting irregularities in depth, we begin by examining the leadership – including
management and the Board – behind SES Imagotag. A closer examination reveals misconduct and conflicts
of interest that appear to be as serious, if not more so, than the accounting irregularities we’ve identified.

For example, we discovered that members of SESL’s executive management secretly own the property in
Austria, where the SES-imagotag R&D Center is based 2:

This is the Company’s second largest location, housing ~20% of its employees. SESL is the tenant, and
members of management are the landlord. And all these are undisclosed related party transactions.

The problematic leadership is not limited to these executives: The so-called “independent” board
members – including 2 out of 3 members of the audit committee – do not seem independent, as they own
very large stakes in SESL shares via an illiquid, pooled vehicle called SESIM. Though SESL’s promoters tout
SESIM’s November 17, 2022 purchase as a positive sign, in fact those shares were acquired via borrowed
money (pledging of existing shares). Thus, these “independent” board members’ financial well-being is
highly levered to the value of SESL shares, comprising their independence and judgment, in our opinion.

When we began our investigation into SESL early this year, we saw that SESL had a partnership with
Wirecard, from 2018 until 2020 (just months before WDI collapse). Wirecard is a company we know
intimately well. Wirecard was mostly a fake business, and the small part that was real, was badly executed,
unprofitable, and technologically weak.3 SESL is not Wirecard, but we see growing similarities: we see
problems tied to SESL’s Asian subsidiaries, its Austrian operations, and recent legal threats against us. The
only other two companies that have legally threatened us as SES Imagotag has are Quindell plc and
Wirecard. Both companies attacked critics like us precisely because they had something to hide and
wanted to intimidate whistleblowers from revealing the truth. Over time, their threats didn’t matter: the
truth prevailed. We suspect the same will apply here.

Page 4 of 54
Corporate governance and undisclosed related party issues
The fish rots from the head

On June 22, Gotham City Research issued Part I of our report. SESL issued a press release later that day 1:

The SES Imagotag press release made several claims, including2:

 “SES-imagotag’s Board of directors considers unanimously that The Gotham City Research report
includes several gross inaccuracies and/or misunderstandings.”
 “SES-imagotag follows strict procedures aimed at preventing conflicts of interest.”

We find the fact that the board – unanimously – backed management just hours after Part I was published
highly suspect, especially given that we stated very clearly that there was a Part II to our report coming.
A closer examination of SES Imagotag’s management and board leads us to believe that they are at best,
compromised, and at worst, have something to hide, and are distrustful for the following reasons:

 The Austrian land registry reveals that members of SESL’s management own the property where
the SES-imagotag R&D Center is based. In other words, SESL is the tenant, members of
management, the landlord, and all these are undisclosed related party transactions.
 The audit committee chair, Hélène Ploix, though an accomplished entrepreneur, has no apparent
background or skill in audit, accounting, or financial reporting.
 Even if Ploix had the relevant experience, we don’t believe she could possibly have conducted an
internal investigation herself so quickly, especially since Part II of our report was not yet released.
 Ms. Cenhui He is a non-independent member of the Audit Committee. She is based in China and
works for BOE.
 Several Board members described as independent, including 2 out of 3 Audit Committee
members, don’t seem independent, as they are invested alongside management via SESIM. SESIM
is an illiquid structure whereby Management and Board members – own SESL shares.
 Management’s highly touted November 17th, 2022, purchase of SESL shares was executed via
SESIM, and financed via pledging existing shares (i.e., via borrowing).
 Are these “independent” directors’ stake in SESIM appropriate given the current suspicion of
fraud?

We have observed in the past that management and directors engaged in such undisclosed related party
transactions are no longer fit to serve in those functions. We begin by examining the undisclosed related
party transactions between the company and entities owned by Andreas Rößl and Michael Moosburger,
through their undisclosed ownership of the Fernitz facility in Austria.

Page 5 of 54
The undisclosed related party rental arrangement with the SES-imagotag R&D Center in Austria

In its recent years’ annual reports, SES Imagotag states: “In 2019 the R&D center and head office in Austria
was moved to a brand-new building in Fernitz (south of Graz) providing space, catering, a training room
for sports, a climbing wall and recreational areas.”3

Austrian filings reveal that Andreas Rößl, Michael Moosburger, and Eduard Wünscher own this property.
Rößl and Moosburger are current members of SES’ executive board, as well as SES Imagotag’s CTO and
SEVP International, respectively.

Yet we have not observed SES Imagotag disclose these transactions. We believe ownership of the Fernitz
building represents a conflict of interest for the directors involved and should have been disclosed to
SESL’s investors in their 2019, 2020, 2021, and 2022 Annual Reports, for the following reasons:

 Since 2019, SES-imagotag R&D Center has been based out of Kalsdorfer Strasse 12, 8072 Fernitz-
Mellach Austria (near Graz, Austria). This property is also referred to as “Smart Office Fernitz”.
 The Austrian R&D Center is SESL’ second largest location behind Paris, with 105 out of its 552
employees based out of there, according to LinkedIn.
 Austrian land registry filings show that Andreas Rößl, Michael Moosburger and Eduard Wünscher
own Smart Office Fernitz through several entities.
 Andreas Rößl and Michael Moosburger are current members of SES’ executive board (CTO and
SEVP International respectively).
 Rößl, Moosburger and Wünscher all own SESL shares via the SESIM management vehicle.

The SES-imagotag R&D Center is located at Kalsdorfer Strasse 12, 8072 Fernitz-Mellach, Austria 4:

The SES Imagotag R&D Center has occupied Kalsdorfer Strasse 12 since 2019 5:

Page 6 of 54
SESL management secretly owns the Kalsdorfer Strasse 12 property through two entities

Austrian Land Registry documents reveal that Smart Office Fernitz GmbH and Logistic Networking &
Consulting GmbH (known as LNConsult) own Kalsdorfer Strasser 12 6:

Andreas Rößl, Michael Moosburger and Eduard Wünscher (via W-Asset GmbH) own Smart Office Fernitz 7:

Michael Moosburger owns Logistic Networking & Consulting GmbH (aka LN Consult) 8:

Page 7 of 54
All the Kalsdorfer Strasse 12 property owners have strong ties with SES Imagotag

Andreas Rößl is SES Imagotag’s current Chief Technology Officer (“CTO”). Rößl also previously used to
work as a “consultant” at LN Consult9:

Michael Moosburger is SES Imagotag’s current SEVP international and CEO of PDi Digital. PDi Digital is a
joint venture 70% owned and fully consolidated by SESL. In the below image sourced from PDi Digital’s
website, SES Imagotag, PDi Digital, and Moosburger’s LNCONSULT, are all shown located together 10:

PDi Digital occupied Kalsdorfer Strasse 12 through at least 15th August 2022 according to a Wayback
Machine review of PDi Digital’s website, and other sources confirm as well 11:

Page 8 of 54
Eduard Wünscher (along with Rößl and Moosburger) were all owners of Imagotag GmbH, from whom
Store Electronic Systems purchased the business in 2014, to form SES Imagotag 12:

Specifically, Wünscher owned Imagotag via his business WEGIP GmbH 13:

Andreas Rößl, Michael Moosburger and Eduard Wünscher are all invested in SESIM

All 3 owners of the Kalsdorfer Strasse 12 property are also current investors in SES Imagotag shares
through the SESIM vehicle (which we discuss more in coming pages) 14:

Page 9 of 54
Austrian press reports confirm Rößl, Moosburger and Wünscher’s ties to Kalsdorfer Strasse 12 property

In an Austrian article dated May 2, 2018, Andreas Rößl, Michael Moosburger and Eduard Wünscher are
revealed as the investor trio behind the Smart Office Fernitz project15:

Prospective tenants were encouraged to contact Michael Moosburger via his SES Imagotag email
address16:

SES Imagotag and LNConsult’s logos even appeared on the sign at the time of the building’s opening, as
well as on the welcome sign in the entrance to the Smart Office (which confirms Smart Office Fernitz =
Kalsdorfer Strasse 12)17:

Page 10 of 54
SESL’s disclosure problem: SESL should fully disclose rental payments to the R&D facility in Austria

The SES-imagotag R&D Center in Austria is SESL’s second largest location behind Paris, As measured by
the total number of employees located there18:

According to LinkedIn, approximately 20% of its 552 LinkedIn-based staff work at this location 19:

Consequently, we believe the SESL's rental expense should be significant. And these rental payments
directly benefit Rößl, Moosburger and Wünscher – related parties. Since two of these owners of the
Fernitz office property are members of the SES-Imagotag board (thus, key management personnel), and
all 3 own SESL shares via the SESIM management vehicle, we believe that:

 SESL should disclose these rental payments as related party transactions.

 SESL should detail where these expenses have been reflected in its 2019-2022 financial
statements. For example, were these payments part of the R&D expenditures? Capitalized or?
 SESL 2019-2022 annual reports should be restated to reflect these disclosures.

Even if SESL were to reflect all the above changes, these rentals payments seem to represent an inherent
conflict of interest for the directors involved. Should Rößl, Moosburger and Wünscher seek to maximize
rental payments (and thus, receive cash directly in this way) or should they seek to maximize SESL’s profits
by charging rental payments as low as possible?

Page 11 of 54
Concerns with the SESL’s audit committee: the chairwoman’s independence seems compromised

SES Imagotag’s audit committee is chaired by “Independent Director” Helene Ploix. While having an
impressive entrepreneurial track record, as well as presence on many other company’s Boards, Ploix
appears to have limited experience in audit or financial reporting20:

Even if she were well versed in these areas, we found her recent conduct very concerning:

 Ploix, like SESL’s other members of the Board of directors, publicly backed SES Imagotag on June
22, the same day Gotham City Research released the Part I report. 21
 Ploix also purchased 5,000 SESL shares on June 27, 2023. 22

Some people seem to believe that Ploix’s immediate written support and share purchase were a good
idea. After all, in situations when the share price is weak, Company management may purchase shares as
a credible vote of confidence (when you look at comments found in public forums, where retail investors
leave comments, Ploix is perceived as a manager and not as an independent board member).

We see it differently: we believe these actions were very irresponsible on her part. We spent 6 months
investigating SES Imagotag. Ploix cannot possibly have conducted an internal investigation herself within
less than a full day.

Even worse, Ploix and the other board members all backed the Company the day Part I was released, fully
aware that Part II was yet to be disseminated. Without knowing the contents of Part II, how could Ploix or
the other Directors act in such a manner? It seems, at best, irresponsible to us. Sadly, the tale of woe does
not end there:

 The disclosure above claims Ploix’s “Share ownership: 0”.23 We find that highly misleading given
that she owns shares via an unusual structure called SESIM (which we discuss further below).
 Ms. Ploix is listed as an “Independent” Director,24 but her stake in SESL shares, via the SESIM
vehicle, seems to ensure that she will be conflicted, especially if SESL were to face an accounting
investigation.

Page 12 of 54
The other audit committee member, Ms. Cenhui HE, belongs to BOE25:

Ms. HE may not be fluent in French and/or IFRS reporting standards. Worse, this BOE-linked member’s
judgment and/or interests may conflict with SESL’s interests, given BOE’s multifaceted role as SESL
shareholder/supplier/customer/creditor/etc.

The remaining member of the audit committee is Mr. Franck MOISON. He is supposedly “independent”
as SESL claims that its 3-member audit committee has a 66% independence rate 26:

We see Mr. Franck MOISON facing a similar problem as the audit committee chair, Ploix: he owns SESL
shares via the SESIM structure, compromising his independence, in our view.

The Curious Case of SESIM

SESL management and board members – including Andreas Rößl, Michael Moosburger, Eduard Wünscher,
and Helene Ploix – hold their SESL shares through a structure called SESIM. In our experience as investors,
we have never seen management and board members collectively hold their shares in their public
company via a pooled, illiquid private vehicle. Usually, management or board members own shares and/or
transact directly in their publicly listed shares27:

Page 13 of 54
SESIM was originally created to align SES management with BOE, in that they both invested in the same
vehicle BOE had created to hold shares in SESL. At the time SESIM was created, SES was a comparably
small company, making the large investment management made into SESIM surprising, compared to
management’s disclosed compensation.

This leads us to want to know more about transactions and relationships between management and BOE.
We note SESL’s technology partner at the time, Wirecard, also featured a management team that spent
beyond its means of their disclosed compensation and also bought copious amounts of shares.

SESIM borrowed to buy SESL shares on November 17, 2022

Some of SESL’s supporters tout management’s 2022 share purchases as a positive sign. Based on our
review, it seems they are referring to SESIM’s apparent purchase of 240,000 shares on November 17 th,
2022. However, based on our analysis of the disclosures, there is more to the story:

 SESIM purchased 240,000 shares by pledging existing shares (i.e., borrowing to buy shares).
 These 240,000 shares were purchased from BOE, as part of BOE’s simultaneous share sale.

SESIM purchased 240,000 shares by pledging existing shares 28:

Page 14 of 54
Independent Board members with SESIM stakes face a conflict of interest

We see a governance problem involving SESIM and its so-called “independent” directors. We highlight
below evidence of the so-called “independent” board members with stakes in SESIM (note The Glasshouse
SA is Mr. Brabeck-Letmathe’s family office)29:

SESIM is a private, illiquid, company that invests in SESL shares on behalf of SESL management.
Management and Board are separate functions. An effective board should be able to question
management, and indeed act contrary to management. In the event of a review of accounting
irregularities the board may have a duty to take actions that may negatively impact the share price to
rectify past management misdeeds. With key independent board members highly invested in SESIM,
which itself has pledged shares (for debt), independent board members of SESL that are invested in SESIM
are unlikely able to make tough decisions in the interest of the common shareholder. Indeed, the litany
of errors in the SESL financial statements show they are at the very least incapable of effective oversight.
Perhaps the board members invested in SESIM should recuse themselves.

Page 15 of 54
The JV: accounting irregularities since inception
The source of JV’s 2020-2022 revenue remains unaccounted for

BOE Digital Technology’s (the JV) revenue grew ~6x from 2019 to 2022, significantly boosting SESL’s overall
results, often at convenient moments (corresponding, for example, to BOE’s share sales) 1:

YE December (EUR '000) 2019 2020 2021 2022

SESL reported consolidated revenue 247,585 290,264 422,868 620,860
BOE Digital Technology Co. Ltd revenue 4,245 20,085 29,597 25,333
BOE Digital Techology as % of Total Revenue 1.7% 6.9% 7.0% 4.1%

In Part I we stated that ESL revenue doesn’t seem to account for the JV’s 2019-2022 revenue, and SESL
doesn’t clarify what did. The Company doesn’t provide clarifying details in its response either 2:

What percentage of the JV’s sales, by each year, originated from digital signage sales? Or ESL sales? The
Company doesn’t say. Instead, the above statement uses many words to say exactly nothing.

SESL could have explicitly rejected the following possibilities we raised in Part I, but did not:

1. The JV’s 2019-2022 ESL sales are indeed immaterial. Instead, the JV’s revenue comes from
unexplained, possibly suspect sources, akin to round-trip revenue between it and BOE. This
makes the qualification of the JV’s revenue as “rest of the world” revenue even more suspicious.
2. BOE Digital Technology’s 2019-2022 financial figures, including revenue, are incorrect.

Upon closer examination, we have identified accounting irregularities that increase our suspicion that
explanation #2 might be, in part, correct. Additionally, these observations lead us to believe that SESL’s
2019-2022 financial statements, including reported cash, might also be incorrect. In this section, we
examine peculiarities tied to the JV from its inception to before its divestiture last year.

Page 16 of 54
There’s a $10 million discrepancy between SESL and Chinese sources account of the 2019 JV investment

How much did SESL contribute to the JV in China, and when? It depends on where you look. According to
the Statutory Auditors’ Report on Related Party Agreements found within the SESL’s 2019 AR, SESL’s
investment in the JV, for a 51% stake, amounted to USD 15.3 million3:

The notes to the ‘Long term investment and loans’ of SESL’s parent company financial statements within
SESL’s 2019 annual report confirms this USD 15.3 million figure (EUR 13.867 million adjusted for
currency)4:

The 2019 transactions as presented by SESL do not match figures from Chinese sources

SESL filings indicate that SESL invested USD 15.3 million into the JV in 2019, but Chinese sources indicate
SESL invested USD 5.1 million, which works out to a USD 10.2 million accounting irregularity 5:

Page 17 of 54
This USD 10.2 million irregularity complicates SESL’s 2019 reported cash figures

The parent company’s EUR 13.867 million cash contribution6 into the JV reduces the parent company’s
cash position in an equal amount as it increases the JV’s cash position. Because the JV is fully consolidated,
there is no net change in the 2019 consolidated cash. Instead, there is a change in where the cash resides.

The 2019 consolidated cash position of EUR 73.1 million and 2019 parent company cash position of EUR
54.6 million seem to reconcile almost perfectly, after we account for this cash that was injected into the
JV, as well as the cash injected into the JV by the other JV partners, JD Digits (“JDD”) and BOE 7:

Figures in EUR '000

SESL FY19 reported Consolidated Cash 73,108
SESL FY19 reported Corporate Cash 54,586
Cash Difference 18,522
SESL investment in JV 13,867
JDD and BOE investment in JV 4,458
Cash Difference - Sum of investments in JV by SESL, JDD & BOE 197

If SESL contributed only $5.1 million into the JV as Chinese sources reveal, and not the $15.3 million as
SESL filings indicate, then we see a $10.2 million problem with SESL’s 2019 cash balance.

EUR 13.867 million is a suspiciously large use of cash for SESL in 2019

SESL began the year 2019 with EUR 29.578 million in cash and burned nearly EUR 15 million in cash by
year end (cash from operating activities less cash flow from investing activities). This means that 94% of
the remaining cash was invested in the JV, before accounting for the issuance of equity and debt 8:

Components of SESL's 2019 CF statement

Figures in EUR '000
Net Cash Flow generated from Operations 23,260
Net Cash Flow from Investing Activities -38,016
Net Cash Flow from Financing Activities 58,305
Opening Cash Position 29,578
Closing Cash Position 73,108

Page 18 of 54
The implied Cash balance levels of the JV seem high relative to other financial metrics

We have examined the JV’s financial statements as provided by SESL and compared them against financial
figures from Chinese sources. The following table summarizes the figures we have gathered 9:

YE December (EUR '000) 2019 2020 2021 2022

Revenue 4,245 20,085 29,597 25,333
Profit/(loss) -3,921 -1,366 -1,942 N/A
Total Assets N/A 22,642 34,904 N/A
Total Liabilities N/A 10,751 14,764 N/A
Total Owner's Equity N/A 11,891 20,140 N/A
Share Capital 9,081 17,050 28,034 N/A
Reserves and retained earnings 38 -3,810 -5,876 N/A
Cumulative Capital Invested by Owners 18,325 22,315 26,641 N/A
Estimated Cash 14,404 17,028 19,412 N/A

The JV’s financials look very strange to us. The following particularly stick out to us:

 Cash seems unusually high as a % of total assets – for 2020 and 2021 (the only year we were
able to obtain total asset figures), cash seems way too high for a company that is supposedly
growing revenue.
 Cash seems unusually high relative to revenue – by way of comparison, SESL’s revenue is a large
multiple (at least 3x) of cash whereas the JV’s is 1x-1.5x cash.
 JV 2019 loss seems odd – The JV was in operation for less than one half of the full year, yet its
reported loss nearly equaled revenue in 2019. Also, the 2019 reported loss exceeds 2020 and
2021 losses, combined. How were resources spent, and why was there such a failure to convert
spending to ESL sales?

Page 19 of 54
Problems with the JV’s deconsolidation and divestiture
The 2022 JV divestiture makes no sense: why dispose of a growing business for a low price?

If the JV had been growing steadily since inception (growing revenue ~6x), and succeeded in selling ESLs
in China, why would SESL then sell the JV in 2022 for a low price? In its response to our Part I report, the
company claims, “the COVID pandemic made it more difficult to operate the subsidiary. The investment
required to reach a critical scale led to the conclusion that SES-imagotag had better capital allocation
priorities.”1 This explanation makes no sense to us, given that China was set to relax its zero covid policies,
and China offered valuable diversification to its revenue base.

Also, it’s one thing if SESL received a handsome offer for its 51% stake, which it did not. Or if there was a
clearly stated strategic rationale for the JV sale, which there was not. Instead, SESL divested its 51%
interest in the JV for EUR 13.867 million, the same price it originally purchased the JV 2:

Accounting irregularities at inception, and at the point of the JV sale/deconsolidation

The circumstances surrounding the JV’s divestiture and deconsolidation from SESL’s consolidated financial
statements are just as suspect as they were at the JV’s inception. We’ve identified accounting irregularities
at the point of divestiture/deconsolidation that increase our belief that SESL and JV’s financial statements
are materially incorrect. We first discuss relevant observations relating to the JV’s deconsolidation.

We are unable to reconcile the JV’s available cash as presented by SESL in its 2022 AR

SESL claims that the full effect of the JV deconsolidation on cash flows amounts to EUR 18.6 million 3:

Page 20 of 54
And of the EUR 18.6 million, SESL claims EUR 13.8 million is cash available and EUR 4.8 million relates to
changes in working capital4:

The JV's EUR 13.8 million cash balance appears to be reflected in the statement of cash flows, as ‘Impact
of changes in scope’5:

We find these numbers suspect for the following reasons:

1. The numbers are too coincidental:

 EUR 18.6 million is, coincidentally, the same amount that SESL paid for ~9% of a BOE group entity,
BOE YiYun, after selling its JV stake to this same entity (see our developments below).
 EUR 13.8 million is nearly the same amount SESL originally paid for (as well as divested) the JV.

2. SESL claims the JV had EUR 13.8 million in available cash at deconsolidation, however:

 EUR 13.8 million in cash not credible – We estimate JV cash was EUR 19.4 million as of 2021 year-
end.6 For the JV to have EUR 13.8 million cash at the point of deconsolidation, it would imply that
the JV burned EUR 7 million since then. We find this hard to believe given that EUR 7 million in
losses for 9 months of 2022 would exceed the JV’s losses for all prior full years, combined.
 In 2022, the JV’s “revenue and profits have steadily increased” – according to a WeChat post
dated March 15th, 2023, from the JV’s WeChat page, the JV’s revenue and profits steadily
increased in 2022. If the JV’s profits steadily increased in 2022, we don’t see how the JV’s cash
would decline from EUR 19.4 million to EUR 13.8 million within 9 months of 2022.

Page 21 of 54
“revenue and profits have steadily increased” – WeChat original post, and translated version 7:

 SESL claims that of the EUR 18.6 million total deconsolidation effect on cash flow, EUR 4.8 million
is due to changes in working capital. However, about EUR 1.0 million remains a mystery (which
might be “other variations”, but we don’t see an explanation for what that means) 8:

SESL recognizes a EUR 6.7 million gain from the sale of the JV, which does not make sense to us

Within SESL’s Management report on financial results for 2022, the Company claims to have generated a
capital gain of EUR 6.7 million from its sale of the JV9:

Page 22 of 54
We are unable to reconcile how the Group generated a capital gain in the consolidated financial
statements of EUR 6.7 million:

 SESL acquired its JV stake for EUR 13.867 million in 2019 10 and disposed of its JV stake for EUR
13.867 million.11 It’s unclear what the capital gain here is.
 If by ‘capital gain’ SESL is referring to the difference in the price it disposed of its JV stake for (EUR
13.867 million)12 and the price it acquired its stake in BOE YiYun for (EUR 18.669 million) 13, that
difference is EUR 4.8 million, not EUR 6.7 million.

51% of the JV for 9% of BOE YiYun: a suspect deal rife with conflicting information and inconsistencies

Not only did SESL divest and deconsolidate the JV, but it was also then unceremoniously folded into a BOE
owned company called BOE YiYun. We have never seen a promising and growing company like the JV
quietly folded into another. However, we have seen many dying or dubious businesses folded in this
manner.

Boe YiYun appears to be in the business of selling digital signage, and not in the business of selling ESLs. 14
If the JV’s business (a) reported financial results (including revenue) were materially incorrect, and (b) sold
digital signage, but failed to sell ESLs, then this combination would make a lot more sense.

What does not make any sense to us are the basic attributes of this JV for BOE YiYun transaction:

 How much does SESL own of BOE YiYun? Depends on who you ask, and where you look.
 At what valuation was BOE YiYun assessed at? Again, depends on where you look.
 Was this a sale or an exchange? How much did SESL pay? Depends on where you look.

How much of BOE YiYun does SESL own: 9.5% or 8.9%?

In SES Imagotag’s 2022 Annual Report, there are two different claims as to how much SESL owns of BOE
YiYun, depending on where you look. According to the following portions of the 2022 AR, they own 8.9% 15:

Page 23 of 54
SESL owns 8.9% of BOE YiYun here as well16:

Yet within the same annual report, they own 9.5% of BOE YiYun according to these sections 17:

SESL owns 9.5% of BOE YiYun here as well18:

Here they own 9.5% too19:

Page 24 of 54
At what valuation was BOE YiYun assessed at? Again, depends on where you look.

According to SESL, the JV had EUR 13.8 million in cash, and disposed of the JV to BOE YiYun for EUR 13.867
million. That means SESL disposed of the JV for 1x cash, or for free, net of cash.

BOE YiYun’s financial records confirm that it owns 51% of the JV, valued at EUR 13.8 million (originally in
RMB) as this corresponds to registration/ownership change dated September 8 th, 2022.20

As SESL owned 51% of the JV, theoretically it had a claim to 51% of the EUR 13.8 million in cash. But SESL
did not receive any cash for its JV stake. Instead, SESL received shares of BOE YiYun (unclear how many
shares, exactly, as discussed) in exchange. Yet it’s unclear what valuation BOE YiYun was assessed at, as
we see different figures, depending on the source:

 BOE YiYun is implied to be worth EUR 209 million according to SESL – According to SESL AR
2022, it acquired an 8.9% stake in BOE YiYun for EUR 18.6 million. 21 This implies BOE YiYun was
assessed to be worth EUR 209 million upon SESL’s purchase.
 BOE YiYun is implied to be worth EUR 75 million as of 2022 according to Chinese records –
According to Chinese reports, SESL owns 8.93% and its capital contribution was RMB 51.8
million (EUR 6.7 million).22 This implies that BOE YiYun was appraised at RMB 580 million (EUR
75 million) at the point of transaction, which is dated December 12, 2022.
 BOE YiYun was implied to be worth EUR 65 million in 2020 – On December 29th 2020, BOE
Technology disclosed in its 2020 AR that its stake in BOE YiYun was fairly valued at RMB 253.63
million, or EUR 32 million using the RMBEUR rate on that date. This implies that YiYun in its
entirety was valued at EUR 65 million in 2020 (BOE owned 48.99% of YiYun at YE 2020). 23

The BOE YiYun valuation implied by the Chinese records makes more sense to us than the valuation
implied by SESL’s records, given the market context: China equities, particularly Chinese technology
stocks, declined dramatically from the end of 2020 to the end of 2022. For example, Alibaba 24 and
Tencent25 shares fell more than -50% during that time (smaller companies’ share prices fared worse).

We are unable to reconcile the following deal-related figures:

 The difference between the amount SESL acquired YiYun for, EUR 18.669 million, and disposed
of its JV stake for, EUR 13.867 million, is EUR 4.802 million. It’s not clear what this difference
represents.
 The amount SESL contributed for its stake in BOE YiYun = RMB 51.8 million = EUR 6.74 million.
This figure comes from Chinese sources. We are unable to identify it in SESL’s records.

Page 25 of 54
Japan and BOE Chongqing: dubious transactions
Accounting irregularities or not, very suspicious transactions

In the prior two sections we identified accounting irregularities involving the JV that we believe will require
further explanation and/or restatement. In this section, we discuss transactions that may or may not be
strictly accounting irregularities, but appear to be dubious transactions to us, coinciding with the life cycle
of the JV. We particularly focus on three transactions:

1. EUR 3.9 million of payments SESL made to the JV, from 2019-2022
2. EUR 14.7 million Exclusive manufacturing agreement with Chongqing BOE Smart Electronics
System
3. A EUR 18.6 million transaction described as “equity securities of SES-imagotag Japan K.K.”

EUR 3.9 million in payments from SESL to JV: are these round-trip revenue?

According to SESL’s Annual Reports, SESL entered into various related party agreements with its JV. The
following table summarizes payments from these agreements. Of these, SESL paid the JV 3.9 million 1:

SESL agreements with BOE Digital Technology Co. Ltd

YE December (EUR '000) 2019 2020 2021 2022
Technology Licensing agreement None None 4 None
Support Service agreement None None None None
Supply Services agreement for electronic labels (sales generated by SESL) 43 102 70 30
Supply Services agreement for electronic labels (purchases by SESL) None 694 None None
Framework delivery and Quality assurance Agreement (purchases by SESL) None None 287 2,910
Cross License agreement None

Among these agreements, the most material one, by far, is this Framework delivery and Quality Assurance
Agreement” a.k.a. Electronic label and component supply agreement 2:

Page 26 of 54
We question the sincerity of this agreement, and these payments, as Chongqing BOE Smart Electronics
System, the BOE entity that serves as SESL’s largest supplier, already fulfills this function. We wonder: are
these payments round-trip transactions? Or are they paper maneuvers to help correct previous
accounting irregularities in SESL financial statements?

The Chongqing-related EUR 14.7 million Lease/Exclusivity Agreement looks suspect

SESL entered a strange transaction with BOE’s Chongqing factory around the same time that SESL
purchased its JV stake in 2019: SESL signed a EUR 14.7 million Exclusive manufacturing agreement with
Chongqing BOE Smart Electronics System Co., Ltd (The same BOE entity that we believe SESL engaged in
round-trip sales with in 2021 and 2022, as we covered in Part I of the report) 3:

Here are the qualities of this exclusivity agreement/lease we find suspect, and increase our suspicion that
SESL has been engaging in dubious transactions that may indicate its financial statements are incorrect:

 The 4.5-year exclusivity agreement seems redundant, unclear why it was necessary.
 This commitment was made in 2019, a time when SESL was already cash constrained, and could
not afford to make such large payments with existing resources.
 SESL paid the full EUR 14.7 million amount in 2020, a year the company struggled with cash,
despite having years to pay off the balance.

Page 27 of 54
Unclear why this “exclusivity agreement” is necessary

Prior to this 2019 agreement, SESL was already ramping up its dependence on BOE as its supplier 4:

YE December (%) 2018 2019 2020 2021 2022

BOE total ownership as % of SESL shares outstanding 74.4% 68.5% 68.5% 60.2% 32.4%
BOE purchases as % of Total Company COGS 5.4% 47.3% 66.5% 70.1% 67.0%

And beginning to reap the benefits of this relationship5:

YE December 2017 2018 2019 2020 2021 2022

COGS ("Purchases consumed") (EUR '000) -103,697 -133,955 -189,372 -217,776 -319,101 -479,586
Stated # of Labels installed 160,000,000 170,000,000 200,000,000 230,000,000 300,000,000 350,000,000
Implied estimate of Labels sold 10,000,000 10,000,000 30,000,000 30,000,000 70,000,000 50,000,000
Avg COGS / Avg Labels sold (EUR per unit) * EUR 9.10 EUR 11.88 EUR 8.08 EUR 6.79 EUR 5.37 EUR 6.66
*- We take the 2-yr average of both COGS and Estimated labels sold; with the "2-yr average" being the analysis year and the year prior.

Given this context, this 4.5-year exclusivity agreement, whereby SESL owes BOE EUR 14.7 million seems
redundant and unnecessary because the status quo was working fine for both parties:

 SESL was already increasing purchases from BOE, which means BOE’s revenues were benefiting.
 Concurrently, as SESL increased its reliance on BOE as a supplier, SESL per unit costs declined.
Thus, SESL had an incentive to increase its dependence on BOE, so long as this remained true.
 SESL’s improving unit economics would eventually benefit SESL’s share price, which would benefit
BOE more than anyone, as BOE is SESL’s largest shareholder.
 SESL had concurrently entered a contract with a second supplier in 2018. 6 If BOE feared
competition, why not require SESL to direct more business to BOE?

EUR 14.7 million commitment appears financially aggressive given how SESL struggled with cash in 2019

Not only do we believe that this exclusivity agreement was unnecessary, but it appears to have been
financially risky given how SESL was severely cash-strapped and could not afford to pay without incurring
debt. SESL began 2019 with EUR 29.578 million in cash and burned nearly EUR 15 million in cash by year
end (cash from operating activities less cash flow from investing activities).7 If SESL then paid just over
EUR 14 million for its China stake, it means that SESL had only EUR 1 million remaining at the end of 2019
to fund this lease commitment (whereby payments were due in 2020 and 2021).

Page 28 of 54
Without raising additional equity or debt capital, SESL could not fund this exclusivity agreement. And raise
debt is exactly what SESL did, as 'Recurring and non-recurring leasing related debt' increased by EUR
17.244 million8:

Note that this exclusivity agreement was entered into in 2019, the same year whereby Chinese records of
the SESL’s cash injection into the JV does not match SESL’s records, which implies that there is a EUR 10.2
million unexplained difference in cash.

One-time payment makes no sense

Given how precarious SESL’s financial situation was, we would expect that the company would seek to
stretch out the lease payments over as long as possible. Like with many other SESL disclosures, there are
inconsistent disclosures regarding when SESL owed payments:

In one section of the 2019 annual report, it will be paid in several instalments over 4.5 years 9:

In another section of the 2019 annual report, the lease is to be paid not in several, but specifically 2
instalments in 2020 and 202110:

Page 29 of 54
Rather than paying the lease over two years or several years, SESL states that the full amount for the 4.5-
year agreement was paid in 2020, which makes no sense to us 11:

This is very unusual – the entire series of behaviors makes so little sense that we wonder if this is evidence
of clever ways for BOE to extract cash out of SESL and/or evidence that the financial statements are
incorrect, and these odd transactions were utilized to help alleviate historical accounting irregularities.

SES-imagotag Japan K.K. and the unexplained EUR 18 million transaction

SES-imagotag Japan K.K., SESL’s Japan subsidiary, is a little-mentioned – and to our knowledge – small
operation. And yet, SESL 2022 AR indicates that SES Imagotag Japan is tied to one of SESL’s largest implied
uses of cash (accounting for more than 50% of 2022 cash) in 2022. Before we delve into that, we would
like to point out that SESL provides inconsistent claims on when SES-imagotag Japan was incorporated.

In the 2021 AR, SES-imagotag Japan K.K. was created in “early January 2022” 12:

But the 2021 Annual Report also claims it was created in “end of December 2021”13:

Page 30 of 54
We see the same problem in SESL’s 2022 AR. The Japan subsidiary was created in 2022 14:

Actually, the Japan subsidiary was created in 202115:

Something looks very off with the 2022 AR’s financial assets account. Note 3 shows an increase in the
amount of EUR 18.668 million – which is a large transaction and implied use of cash16:

 The only explanation SESL provides for this EUR 18.668 million increase in non-consolidated
investments is that these are “equity securities of the subsidiary created in Japan”.
 We were unable to identify any further explanation for this EUR 18.668 million transaction.
 We find this omission of disclosure concerning.

We thought that perhaps this EUR 18.668 million just might be the BOE YiYun stake, as the figures are
similar but not identical (YiYun is said to be acquired for EUR 18.669 million 17, not 18.668 million).

But aside from the minor difference in figures, we find this explanation problematic because:

 If the Japanese subsidiary were to hold SESL’s stake in BOE YiYun, we would expect SESL to
disclose them as such. And SESL provides no further explanation in Note 3.
 In the SES Imagotag parent company financial statements, the BOE YiYun stake is accounted for
as an asset on the SES Imagotag parent company balance sheet.18
 “Note 3 – Financial assets” to the consolidated financial statements clearly indicates that the
equity securities belong to its Japan subsidiary.19 Both cannot be true at the same time.
 We have never seen American or European companies structure ownership of Chinese
corporates via Japan.

Page 31 of 54
Other accounting irregularities and unexplained red flags
Seemingly small accounting irregularities can be symptomatic of much larger problems

In our experience, companies with material accounting irregularities have also exhibited inconsistencies
in small (or seemingly small) areas as well. We have identified additional accounting irregularities in the
following areas:

1. Deferred revenue and accounts receivable

2. Value-added services
3. 2021 Goods vs services revenue disclosure inconsistency: the 2021 AR vs the 2022 AR
4. Employee count
5. 2022 EBITDA
6. Inconsistent Markethub ownership stake history
7. Historical annual reports not available on website
8. R&D irregularities suggest an undisclosed AR 2022 restatement
9. EUR vs USD accounting irregularities

Trade Receivables: accounting misstatements in its 2022 filing (English Version)

We have identified accounting irregularities in SESL’s 2022 trade receivables. SESL’s 2022 Trade
Receivables found within the consolidated balance sheet does not match with the 2022 Trade Receivables
found within Note 5 – Trade receivables (in the notes to the consolidated financial statements):

In the English AR22, the Trade Receivables on the 2022 Consolidated balance sheet is EUR 109,247 1:

But in the corresponding Note 5, 2022 Trade receivables is EUR 114,997 – these numbers don’t reconcile 2:

Page 32 of 54
Irregularities found in the ‘Deferred revenue’ and ‘Other debts and accrual accounts’

In the French Annual Report 2022, ‘Deferred revenue’ amounts to EUR 10,249 and ‘Other debts and
accrual accounts’ amounts to EUR 91,2753:

In the English version, ‘Deferred revenue’ and ‘Other debts and accrual accounts’ are both totally different
numbers to the French version. ‘Deferred revenue’ is EUR 15,998 (not EUR 10,249) and ‘Other debts and
accrual accounts’ is EUR 97,024 (not EUR 91,275)4:

In addition to the differences between the French and the English, the ‘Other debts and accrual accounts’
of EUR 97,024 according to Note 14 in the English AR 2022, also differs with the total ‘Other debts and
accrual accounts’ of EUR 91,175 found in the consolidated Balance Sheet from the English AR 2022 5:

Page 33 of 54
Inconsistency in “Value-added services”

“VAS (software, services and non-ESL solutions) sales” is EUR 93 million according to the Analysis of 2022
results section in the 2022 AR. In Note 15 to consolidated financial statements, the reported “Software,
services and non-electronic label solutions” sales total in the table is EUR 108.7mln.

On page 177, VAS 2022 sales is EUR 93mln6:

Yet on page 203, VAS 2022 sales is EUR 108.7mln7:

Page 34 of 54
Inconsistencies in 2022 EBITDA

In the 2022 Annual Report, this table from 5.1.3 Cash Flows shows 2022 EBITDA of EUR 56.2 million 8:

But in the next section, 5.1.4 Main performance indicators, the 2022 EBITDA is EUR 58.6 million 9:

Material inconsistency in 2021 sales of “goods” vs “services” from the 2022 AR vs 2021 AR

In the 2022 AR, the company claims EUR 333.8 million of sales from electronic labels (or “goods” as used
interchangeably) in 202110:

Page 35 of 54
However according to the 2021 AR, goods revenue was EUR 387.7 million in 2021, not EUR 333.8
million, more than a EUR 50 million unexplained difference11:

MarketHub irregularities

MarketHub’s CEO has history with Imagotag. Ryan Horgan, CEO and Founder of MarketHub, seems to be
a long-term business partner with SES-imagotag from a prior role as founder of Solarprint. Solarprint went
into voluntary liquidation in 201312:

CORK-BASED RETAIL startup Market Hub has had a long history with its new parent, digital price tag
giant SES-Imagotag.

The €400 million French colossus – which provides electronic shelf labeling systems to 10,000 stores
worldwide – recently bought a majority stake in the Irish firm.

But it has been working with Market Hub’s CEO, Roy Horgan, for many years now.

Before Imagotag merged with SES, it was a customer of Horgan’s previous startup Solarprint, a
company that made solar-powered panels that could be used to power digital price displays in
supermarkets.

Horgan bowed out of Solarprint in 2013 – shortly before the firm went into voluntary liquidation – to
focus on Market Hub, an analytics startup that gives real-time information to supermarkets on how
their products are selling and when they should be discounting.

“When we pitched the idea of Market Hub to Imagotag, they loved it,” Horgan tells Fora. ”They
invested alongside myself and some private investors who seeded the company.”

SESL’s original stated stake in MarketHub was 27.95% in 2016 13:

Page 36 of 54
In the following 3 years, SESL has provided inconsistent representations about how much of MarketHub
it owns and/or controls. The following table summarizes the inconsistencies 14:

MarketHub Technologies: Ownership inconsistencies across the same Annual Report

2017 2018 2019
Text in the Annual Report 60% owned 60% owned 60% owned
Table: Summary of Subsidiaries and Holdings 52.08% shares held 60% shares held 100% shares held
Table: Subsidiaries and equity interests 60% capital held 60% capital held 60% capital held
Table: Consolidation Scope 60% control & held 100% control & held 60% control

Employee figures from the SES Imagotag website and Annual Report 2022 differ

SESL’s website indicated 750 employees when we visited on the 3 rd May 202315:

Page 37 of 54
The 2022 Annual report shows total employees for the year to be 608 16:

We understand that it is theoretically possible that the company’s employee count has grown
considerably within the last 4 months of the year. The issue we find with this explanation is that all the
other metrics – sales, stores, customers, offices, total electronic shelf labels, cloud interactions/year –
match up to the figures in the annual report as of December 31, 2022.

Presentation of their audited income statement: is this meant to obfuscate?

Compare SESL’s presentation of its income statement with Pricer’s: why is it that Pricer and SESL, who are
in the exact same business, present so differently? Pricer provides a clean and commercially standard
revenue less cost of goods sold17:

Page 38 of 54
SESL does not provide a clean breakdown of COGS18:

SESL provides almost no annual reports prior to 2018 19: what are they hiding?

Page 39 of 54
The 2019 Statement of Cash Flows: misstatements in the English version

The English version of the 2019 Annual Report’s consolidated statement of cash flows is clearly misstated.
For example, opening cash position for 2019 and 2018 are only -18 and -53, respectively 20:

Yes, it’s possible that the above errors are printing errors. But given our concerns regarding the cash
figures, our concern here is meritorious, further increasing our belief that the financial statements are
materially incorrect.

Page 40 of 54
R&D accounting irregularity reveals an undisclosed restatement to 2022 Annual Report

In the Universal Registration Document 2022 that we downloaded on May 11, 2023, we identified a few
accounting irregularities in SESL’s R&D reporting. On Page 119: “2022 R&D spend is €36m”, but on page
178: “R&D expenses represented €42 million”.

Page 119: “2022 R&D spend €36m”21:

Page 178: “R&D expenses represented €42 million (€14 million in 2021)” 22:

Within the text in the image immediately above, there are two occasions whereby the breakdown of the
calculations do not add up23:

 SESL states that “within the €44.2 million of R&D and IT capital expenditure in 2022 (€21.2 million
in 2021), €8 million was for IT expenditure (€7 million in 2021), R&D expenses represented €42
million (€14 million in 2021).”
 €8mln + €42mln is actually equal to €50mln (not €44.2mln as stated by SESL)
 SESL claims €42 million R&D expenses for 2022 of which €22 million was spent on new Digital
Shelf System and €14 million mainly related to new VAS expenses.
 However, €22mln + €14mln is actually equal to €36mln, not €42mln.

SESL seems to have corrected the above irregularities, at least in the version of the Universal Registration
Document 2022 currently available on the website. The Company should clarify what exactly happened,
as the Annual Report we downloaded does not match the latest version.

Page 41 of 54
In the 2022 and 2021 AR, we believe there is an error. We see “Overdue < 60 days” repeated twice. This
makes no sense, and the last one should read Overdue > 60 days” 24:

The basis for our belief: based on our historical review of financial statements, as well as that’s how the
company reported in 202025:

Page 42 of 54
EURO vs USD irregularities

SESL has frequently used EUR and USD interchangeably to refer to the same transactions. This has
occurred enough times whereby we feel it is worth flagging, as we believe it is consistent and symptomatic
of much bigger problems with the company’s reported financial statements:

 Sales with BOE in 2022: Is it USD 53.1mln or EUR 53.1mln?

 Framework delivery & quality assurance agreement for 2022: Is it USD 3,209K or EUR 3,209K?
 Framework delivery & quality assurance agreement for 2021: Is it USD 338K or EUR 338K?
 Supply Services agreement for electronic labels for 2022: Is it USD 33K or EUR 33K?
 Supply Services agreement for electronic labels for 2021: Is it USD 83K or EUR 83K?

Sales with BOE in 2022: Is it USD 53.1mln or EUR 53.1mln?

Mentioned a few times in the 2022 Annual Report as USD 53.1mln. Example being Note 29 below 26:

In SESL’s response to us dated June 28, 2023, the company then stated EUR 53.1mln 27:

Framework delivery & quality assurance agreement for 2022: Is it USD 3,209K or EUR 3,209K?

Page 88 of the 2022 Annual Report28:

Page 266 of the 2022 Annual Report29:

Page 43 of 54
Framework delivery & quality assurance agreement for 2021: Is it USD 338K or EUR 338K?

Page 81 of the 2021 Annual Report30:

Page 297 of the 2021 Annual Report31:

Supply Services agreement for electronic labels for 2022: Is it USD 33K or EUR 33K?

Page 88 of the 2022 Annual Report32:

Page 44 of 54
Page 265 of the 2022 Annual Report33:

Supply Services agreement for electronic labels for 2021: Is it USD 83K or EUR 83K?

Page 80 of the 2021 Annual Report34:

Page 297 of the 2021 Annual Report35:

Page 45 of 54
SES Imagotag’s Partnership with Wirecard
The Special SESL-Wirecard relationship

A special relationship between SES Imagotag and Wirecard existed, with aggressive cross promotion until
the very end. On SESL’s side, Thierry Gadou first announced SESL’s partnership with Wirecard in 2018.
Wirecard issued a promotional press release around the same time 1:

Page 46 of 54
SES Imagotag is mentioned in an April 2019 Wirecard white paper: “Digitalization at the POS: How
Electronic Shelf Labels Are Going to Revolutionize the Shopping Experience” 2:

Page 47 of 54
Wirecard and SES Imagotag continuing cross promoting in October 2019 3:

Meanwhile, SES Imagotag Thierry Gadou was a guest speaker at Wirecard’s 2019 Investor Day 4:

SESL cross promoted with Wirecard within months of the Wirecard fraud’s collapse in 2020 5:

Page 48 of 54
End Notes
Introduction

1. SESL response document to Gotham titled ‘SES-imagotag: Response to the Gotham City Report’
on June 26th 2023
2. https://www.ses-imagotag.com/contact-us/
3. ‘Money Men: A Hot Startup, A Billion Dollar Fraud, A Fight for the Truth’, by Dan McCrum

Corporate governance and undisclosed related party issues

1. Left-hand side image taken from Gotham City Research’s Twitter profile. Right-hand side image
is a screenshot of SESL’s press release to the Gotham report dated June 22nd 2023
2. SESL press release to Gotham titled ‘SES-imagotag: Press Release further to the release of the
Gotham City Research Report’ on June 22nd 2023
3. 2021 Annual Report
4. https://www.ses-imagotag.com/contact-us/
5. https://www.ses-imagotag.com/our-esg-goals-and-priorities/be-a-good-place-to-work/
6. Austrian Land Registry document
7. Austrian Registry document
8. Austrian Registry document
9. Left-hand side image taken from: https://www.ses-imagotag.com/investors/governance/. Right-
hand side image taken from: https://www.linkedin.com/in/andreas-r%C3%B6%C3%9Fl-
0b8a86a3/?originalSubdomain=at
10. Left-hand side image taken from: https://www.ses-imagotag.com/investors/governance/. Right-
hand side image taken from: https://www.pdi-digital.com/iiot-company/
11. Left-hand side image taken from the Wayback Machine:
https://web.archive.org/web/20220815044200/https://www.pdi-digital.com/contact/. Middle
image taken from: https://www.silicon-alps.at/company/pdi-digital-gmbh/. Right-hand side
image taken from: https://firmen.wko.at/pdi-digital-gmbh/steiermark/?firmaid=3b1b132b-
62b3-43c9-b6c1-41adb976ec83
12. https://www.actusnews.com/documents/ACTUS-0-5399-Imagotag-Traite-d_apport.pdf
13. https://www.actusnews.com/documents/ACTUS-0-5399-Imagotag-Traite-d_apport.pdf
14. SESIM 2021 Accounts
15. https://www.meinbezirk.at/graz-umgebung/c-wirtschaft/smart-office-fernitz-bringt-200-
arbeitsplaetze_a2551712
16. https://www.meinbezirk.at/graz-umgebung/c-wirtschaft/smart-office-fernitz-bringt-200-
arbeitsplaetze_a2551712#gallery=null
17. Left-hand side image taken from: https://www.meinbezirk.at/graz-umgebung/c-
wirtschaft/smart-office-fernitz-bringt-200-
arbeitsplaetze_a2551712#gallery=default&pid=12453498. Right-hand side image taken from:

Page 49 of 54
 https://www.google.com/maps/place/PDi+Digital+Gmbh+%E2%80%93+The+IIoT+Technology+E
xperts/@46.9718759,15.4948814,3a,75y,90t/data=!3m8!1e2!3m6!1sAF1QipOGPSJO9bT_3URIB
SaBPVIHjpdeEo8ES71TP2iU!2e10!3e12!6shttps:%2F%2Flh5.googleusercontent.com%2Fp%2FAF
1QipOGPSJO9bT_3URIBSaBPVIHjpdeEo8ES71TP2iU%3Dw447-h298-k-
no!7i1920!8i1280!4m18!1m8!3m7!1s0x476fb5b95132bbfd:0x6bbf598957aa1821!2sSmart+Offi
ce+-+Berger-
Logisik!8m2!3d46.9722616!4d15.4945143!10e5!16s%2Fg%2F11j250l_15!3m8!1s0x476fb473c04
477e3:0x3aa2ace86a1d1e2d!8m2!3d46.9718759!4d15.4948814!10e5!14m1!1BCgIgARICEAE!16
s%2Fg%2F11kmc821sl?entry=ttu
18. SESL 2022 Annual Report
19. https://www.linkedin.com/company/ses-imagotag/people/
20. SESL 2022 Annual Report
21. SESL press release to Gotham titled ‘SES-imagotag: Press Release further to the release of the
Gotham City Research Report’ on June 22nd 2023
22. https://bdif.amf-france.org/fr/details/2023DD917142
23. SESL 2022 Annual Report
24. SESL 2022 Annual Report
25. SESL 2022 Annual Report
26. SESL 2022 Annual Report
27. SESL 2022 Annual Report
28. SESL 2022 Annual Report
29. Infogreffe

The JV: accounting irregularities since inception

1. SESL 2019 – 2022 Annual Reports. 2021 Annual Report, as originally reported
- 2022 JV Revenue figure: SESL disclosed that the JV’s contribution to their sales was EUR
19mln. This was until it was deconsolidated in Q322. In order to make an appropriate YoY
comparison, we include a full-year assumption for the JV’s sales. We use SESL’s EUR 19mln
as the basis of our estimation by assuming that Q4’s contribution is the same pro-rated
figure as the prior quarters (i.e., ~EUR 6.3mln)
2. SESL response document to Gotham titled ‘SES-imagotag: Response to the Gotham City Report’
on June 26th 2023
3. SESL 2019 Annual Report
4. SESL 2019 Annual Report
5. Chinese investigative filings
6. SESL 2019 Annual Report
7. SESL 2019 Annual Report
8. SESL 2019 Annual Report
9. The Revenue, Profit/(loss), Share Capital, & Reserves and retained earnings rows are from SESL's
2019 – 2021 Annual Reports.

Page 50 of 54
 - 2022 JV Revenue figure: SESL disclosed that the JV’s contribution to their sales was EUR
19mln. This was until it was deconsolidated in Q322. In order to make an appropriate YoY
comparison, we include a full-year assumption for the JV’s sales. We use SESL’s EUR 19mln
as the basis of our estimation by assuming that Q4’s contribution is the same pro-rated
figure as the prior quarters (i.e., ~EUR 6.3mln)

The Cumulative Capital Invested by Owners row is also calculated from information obtained
from SESL's 2019 – 2021 Annual Reports.

The Total Assets, Total Liabilities, & Total Owner's Equity rows are from Chinese investigative
filings. These were originally reported in CNY (' 000). We convert them to EUR (' 000) as follows:

- 2020 Total Assets of CNY 181,180. Using the CNYEUR rate of 0.12497 (as at 31/12/2020),
the resultant Euro amount is EUR 22,642.
- 2020 Total Liabilities of CNY 86,030. Using the CNYEUR rate of 0.12497 (as at
31/12/2020), the resultant Euro amount is EUR 10,751.
- 2020 Total Owner's Equity of CNY 95,150. Using the CNYEUR rate of 0.12497 (as at
31/12/2020). the resultant Euro amount is EUR 11,891.
- 2021 Total Assets of CNY 252,070. Using the CNYEUR rate of 0.13847 (as at 31/12/2021),
the resultant Euro amount is EUR 34,904.
- 2021 Total Liabilities of CNY 106,620. Using the CNYEUR rate of 0.13847 (as at
31/12/2021), the resultant Euro amount is EUR 14,764.
- 2021 Total Owner's Equity of CNY 145,450. Using the CNYEUR rate of 0.13847 (as at
31/12/2021), the resultant Euro amount is EUR 20,140.

The Estimated Cash row is calculated as follows:

- 2019 Estimated Cash = 2019 Cumulative Capital Invested by Owners + 2019 Profit/(loss).
- 2020 Estimated Cash = 2019 Estimated Cash + 2020 Profit/(loss) + (2020 Cumulative
Capital Invested by Owners - 2019 Cumulative Capital Invested by Owners).
- 2021 Estimated Cash = 2020 Estimated Cash + 2021 Profit/(loss) + (2021 Cumulative
Capital Invested by Owners - 2020 Cumulative Capital Invested by Owners).

Problems with the JV’s deconsolidation and divestiture

1. SESL response document to Gotham titled ‘SES-imagotag: Response to the Gotham City Report’
on June 26th 2023
2. Left-hand side image taken from SESL’s 2022 Annual Report. Right-hand side image taken from
SESL’s 2019 Annual Report.
3. SESL 2022 Annual Report
4. SESL 2022 Annual Report
5. SESL 2022 Annual Report
6. Derived from our ‘Estimated cash’ row in the table titled “BOE Digital Technology Co. Ltd (China
JV): Financial metrics” in the prior section (i.e., The JV: accounting irregularities since inception)

Page 51 of 54
 7. Left-hand side image is the original post taken from the JV’s WeChat page. Right-hand side
image is the JV’s WeChat page translated into English
8. SESL 2022 Annual Report
9. SESL 2022 Annual Report
10. SESL 2019 Annual Report
11. SESL 2022 Annual Report
12. SESL 2022 Annual Report
13. SESL 2022 Annual Report
14. https://www.boeyiyun.com/
15. SESL 2022 Annual Report
16. SESL 2022 Annual Report
17. SESL 2022 Annual Report
18. SESL 2022 Annual Report
19. SESL 2022 Annual Report
20. Chinese investigative filings
21. SESL 2022 Annual Report
22. Chinese investigative filings
23. BOE Technology 2020 Annual Report
24. https://www.google.com/finance/quote/9988:HKG?window=5Y
25. https://www.google.com/finance/quote/0700:HKG?window=5Y

Japan and BOE Chongqing: dubious transactions

1. EUR 3.9mln is the 2019 to 2022 sum of these two rows: ‘Supply Services agreement for
electronic labels (purchases by SESL)’ and ‘Framework delivery and Quality assurance
Agreement (purchases by SESL)’. Notes on each row:

Technology Licensing agreement: SESL also refers to this as the 'Intellectual property license
agreement' in their 2021 and 2022 Annual Reports.

Support Service agreement: SESL also refers to this as the 'Management fees agreement’ in their 2020
and 2022 Annual Reports.

Supply Services agreement for electronic labels (sales generated by SESL): SESL also refers to this as
the 'Electronic label supply agreement' in all four years. In 2021 and 2022, SESL quoted the same
amount in two different currencies. The 2021 and 2022 figures in the table above are their stated USD
amounts converted into EUR.

Supply Services agreement for electronic labels (purchases by SESL): SESL also refers to this as the
'Electronic label supply agreement' in 2020. The 2020 figure in the table above is the stated USD
amount converted into EUR.

Framework delivery and Quality assurance agreement (purchases by SESL): SESL also refers to this as
the 'Electronic label and component supply agreement' in their 2021 and 2022 Annual Reports. This

Page 52 of 54
 agreement was signed in December 2021 and is a subcontracting agreement for electronic label and
component supplies. In 2021 and 2022, SESL quoted the same amount in two different currencies. The
2021 and 2022 figures in the table above are the stated USD amounts converted into EUR.

2. SESL 2022 Annual Report

3. SESL 2019 Annual Report
4. SESL 2018 – 2022 Annual Reports. 2021 Annual Report, as originally reported
5. SESL 2017 – 2022 Annual Reports. 2021 Annual Report, as originally reported
6. SESL 2018 Annual Report
7. SESL 2019 Annual Report
8. SESL 2019 Annual Report
9. SESL 2019 Annual Report
10. SESL 2019 Annual Report
11. SESL 2020 Annual Report
12. SESL 2021 Annual Report
13. SESL 2021 Annual Report
14. SESL 2022 Annual Report
15. SESL 2022 Annual Report
16. SESL 2022 Annual Report
17. SESL 2022 Annual Report
18. SESL 2022 Annual Report
19. SESL 2022 Annual Report

Other accounting irregularities and unexplained red flags

1. SESL 2022 Annual Report (English)

2. SESL 2022 Annual Report (English)
3. SESL 2022 Annual Report (French)
4. SESL 2022 Annual Report (English)
5. SESL 2022 Annual Report (English)
6. SESL 2022 Annual Report
7. SESL 2022 Annual Report
8. SESL 2022 Annual Report
9. SESL 2022 Annual Report
10. SESL 2022 Annual Report
11. SESL 2021 Annual Report
12. https://fora.ie/market-hub-ses-imagotag-3407518-May2017/
13. SESL 2016 Annual Report
14. SESL 2017 – 2019 Annual Reports
15. Wayback Machine: https://web.archive.org/web/20230503111035/https://www.ses-
imagotag.com/about-us/

Page 53 of 54
 16. SESL 2022 Annual Report
17. Pricer 2022 Annual Report
18. SESL 2022 Annual Report
19. https://www.ses-imagotag.com/investors/press-releases-documents/
20. SESL 2019 Annual Report (English)
21. SESL 2022 Annual Report downloaded on May 11 th 2023
22. SESL 2022 Annual Report downloaded on May 11 th 2023
23. SESL 2022 Annual Report downloaded on May 11 th 2023
24. SESL 2022 and 2021 Annual Reports respectively
25. SESL 2020 Annual Report
26. SESL 2022 Annual Report
27. SESL response to Gotham document titled: ‘SES-imagotag: Actions taken following the Gotham
City Report – H1 2023 performance’ on June 28 th 2023
28. SESL 2022 Annual Report
29. SESL 2022 Annual Report
30. SESL 2021 Annual Report
31. SESL 2021 Annual Report
32. SESL 2022 Annual Report
33. SESL 2022 Annual Report
34. SESL 2021 Annual Report
35. SESL 2021 Annual Report

SES Imagotag’s Partnership with Wirecard

1. Left-hand side image is a retweet from Thierry Gadou’s Twitter profile (which he recently
deleted on June 29th 2023). Right-hand side image is a Wirecard press release dated October 9 th
2018
2. https://www.wirecard.com/uploads/knowledge-hub/white-paper/pos-whitepaper.pdf
3. https://www.finextra.com/pressarticle/80159/wirecard-partners-ses-imagotag-on-in-store-
mobile-payments#
4. Wirecard 2019 Investor Day
5. https://twitter.com/wirecard/status/1229387283868069888

Page 54 of 54