PCF Group S.A.

Earnings Release • Dec 10, 2024

Report Content Decision to reduce the development team dedicated to the production ofProject BifrostWith reference to the current report No. 29/2024dated 10 December 2024 regarding the completion of the strategic optionsreview, the Management Board of PCF Group S.A. with its registeredoffice in Warsaw (the "Company") informs that on 10 December 2024 itdecided to reduce the development team dedicated to the production ofProject Bifrost, developed by the capital group of the Company (the"Group") in a self-publishing model, i.e. by the Group as publisher,with the Group's own funds, in order to adjust its size to the financialcapabilities of the Group.

The reduction of the development team dedicated to the production ofProject Bifrost is a consequence of the Group's failure to secure fundsto cover the expenses associated with the continued production andrelease of Project Bifrost within the assumed budget and production plan.

As a consequence of the aforementioned decision further work on ProjectBifrost will be continued by a reduced development team, and theremaining members of the development team will be subject to either atemporary layoff, which consists in maintaining the employmentrelationship for a period of time specified by the laws of the relevantjurisdictions, after which it is terminated, with no obligations toprovide work and pay remuneration during this period, with thepossibility of reinstatement no later than before the end of this periodor a redundancy.

Moreover, the production and release schedule for Project Bifrost,according to which the Company had planned to release the game under theearly access formula in 2026, is no longer valid.

In addition, steps have been taken to adjust the size of other teamsoperating within the Group, including the publishing team and supportteams, to the revised scale of the Group's operations.

The Company's Management Board also informs that, in its opinion, theoccurrence of this event is an indication to recognize a potentialimpairment of the capitalized expenditures incurred for Project Bifrost,in accordance with International Accounting Standard 36 "Impairment ofAssets". Accordingly, the Company's Management Board has decided tocarry out impairment tests on Project Bifrost, which, in accordance withthe Company's practice, will be performed on the basis of financial dataas of 31 December 2024, as part of the preparation of the standalone andconsolidated financial statements for 2024. The result of these testswill allow the Company to assess whether the capitalized expendituresincurred on Project Bifrost have actually been impaired. The Companywill provide information on the result of these tests to the public inaccordance with applicable laws.

At the same time, the Group is focusing on work on the development ofprojects carried out under the work-for-hire model, including ProjectGemini carried out in cooperation with Square Enix Limited, ProjectMaverick developed for Microsoft Corporation and Project Echo developedfor Krafton Inc. and is working to acquire new projects to be carriedout under the same model.