Huddly AS – New business plan, Q3 2024 results, contemplated equity raise and update on strategic review

05 Dec 2024 19:20 CET

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JAPAN, AUSTRALIA OR THE UNITED STATES, OR ANY OTHER JURISDICTION IN WHICH SUCH
RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES
NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.

Oslo, 5 December 2024: Huddly AS (“Huddly” or the “Company”) announces (i) a new
business plan and outlook, (ii) an updated investor presentation, (iii)
financial results for Q3 2024 and preliminary trading update for Q4 2024, (iv) a
contemplated equity raise, (v) a resolution by the Company's board of directors
(the ”Board”) to call for an extraordinary general meeting to be held on 19
December 2024 (the “EGM”), and (vi) an update on its ongoing strategic review.

New business plan and outlook

The Company operates in a strong market driven by the growing demand for hybrid
collaboration, with significant untapped potential as only 10-15% of the 100
million meeting rooms globally are equipped with video conferencing systems.

Huddly is well-positioned to seize these opportunities with its compelling
product portfolio, powered by AI technology that delivers engaging and inclusive
video meeting experiences. Under a newly developed business plan, the Company
aims to achieve cash flow positive towards end of 2025, sustain it throughout
2026, and generate strong cash flow starting in 2027.

The strategic focus driving the path to profitability can be summarized as
follows:

• Growing revenue from Strategic partners and Channel: The business plan targets
revenue growth, with ambition of NOK 270–320 million in 2025, NOK 550–600
million in 2026, and NOK 650–700 million in 2027. A new strategic partner,
signed in Q4 2024, will drive sales in 2025. The Company is also pursuing
several additional partnership opportunities. Channel remains a key element of
Huddly’s go-to-market strategy, providing important diversification and
supporting its financial ambitions.
• Leading with AI-enabled product innovation: In February 2025, Huddly will
introduce the Huddly Crew+ Videobar, offering a complete video and audio
solution, with sales beginning in the second half of the year. A modular
satellite device, planned for 2026–2027, will enable Crew+ to support meeting
rooms of all sizes and scenarios. The addition of audio to Huddly’s portfolio is
a significant milestone that will bolster the Company’s growth strategy and
solidify its market leadership.
• Disciplined investments and cost control: The Company plans cost measures to
reduce annualized total cost by approximately NOK 12 million from 2025. With
strict cost management and enhanced efficiency, a relatively fixed cost base
will provide strong operational leverage, creating a solid foundation for
profitable and scalable growth

The Company already sees promising signs of the new business plan:

• Significant acceleration in adoption of Huddly Crew where the Company
forecasts sales in Q4 2024 of 650 kits worth approximately NOK 30-40 million, a
fourfold increase in comparison to the previous quarter.
• Microsoft has embraced Huddly’s AI-driven multi-camera technology to redefine
collaboration in its large meeting spaces at the Redmond headquarters. By
selecting Huddly Crew, Microsoft demonstrates confidence in the Company’s
innovative approach to enhance hybrid work experiences. As a leader and
trendsetter in the video conferencing industry, Microsoft’s adoption of Huddly
Crew is expected to drive increased demand for the Company’s products among
enterprises that have chosen Teams as their collaboration platform
• A global agreement with a new strategic partner was signed in Q4 2024. The
revenue impact is accelerated to Q4 2024, instead of Q1 2025 as first
communicated

An updated investor presentation, which inter alia outlines the new business
plan, is attached hereto.

Financial results for Q3 2024:

• The Company reports revenues of NOK 25.8 million in Q3 2024, a decrease of 34%
compared to Q2 2024 and a decrease of 56% compared to NOK 58.1 million in Q3
2023.
• Gross margin decreased to 40% compared to 48% Q3 2023. However, underlying
gross margin in Q3 2024 was 52 % excluding accrual for one-off scrapping of
components
• The ending cash balance per 30 September 2024, was 48.8 million, a reduction
from NOK 164.2 million on 31 December 2023

Preliminary trading update for Q4 2024:

• The Company forecasts revenue in the range of NOK 50-60 million, representing
a 100-130% QoQ growth and 15-35% YoY growth. Gross margin in the range of 50-55%

• Revenue growth and strong gross margins driven by a solid acceleration in
sales of Huddly Crew, forecasting a total volume of 650 kits sold in the
quarter, compared to 150 kits in Q3 2024. Proof of market adoption with
increasing order size from customers, including a purchase order of 276 kits
from a large Canadian customer and an order of 90 kits from a large US customer.

Near-term capital need and contemplated equity issue

The combination of the Q3 2024 results where the Company and investors will need
to show patience with respect to positive results of the new business plan, the
ongoing strategic review process, coupled with forecasted increased working
capital requirements, has put the Company in need of additional equity to
support the new strategy.

Against this background, the Board has engaged Pareto Securities AS to initiate
a process to raise new equity of NOK 130 million (the “Equity Raise”). The size
of the Equity Raise is based on the Board's best understanding of the financial
development and liquidity projections going forward and is deemed sufficient for
the Company to succeed with its new strategy to secure a positive cash flow from
the end of 2025. Of the total NOK 130 million, approximately NOK 100 million
will be channelled to R&D including the development of Huddly Crew+ and
go-to-market and sales efforts, while the remaining approximately NOK 30 million
is for working capital requirements and general corporate purposes. A potential
launch of the Equity Raise is expected as soon as a sufficient commitment to
support the Equity Raise has been identified, but no later than 18 December 2024
(1 day ahead of the upcoming EGM).

The following primary insiders and other members of the management of the
Company have pre-committed to subscribe for, and will be allocated, a total of
approx. NOK 42 million in the contemplated Equity Raise (approx. 33% of the
potential transaction):

• Jostein Devold, chair in the Company, has pre-committed to subscribe for new
shares for the amount of NOK 0.25 million.
• Mertoun Capital AS, owned by Leif Hubert and represented on the board by the
chair, holding 7.06% of the outstanding shares in the Company, has pre-committed
to subscribe for new shares for the amount of NOK 10 million.
• Sonstad AS, a close associate of board member Jon Øyvind Eriksen, holding
7.33% of the outstanding shares in the Company, has pre-committed to subscribe
for new shares for the amount of NOK 15 million.
• Kolberg Motors AS, a close associate of board member Kristian Kolberg, holding
3.85% of the outstanding shares in the Company, has pre-committed to subscribe
for new shares for the amount of NOK 11 million.
• Abhijit Saha Banik, CFO in the Company, holding 0.01% of the outstanding
shares in the Company, has pre-committed to subscribe for new shares for the
amount of NOK 0.5 million.
• SOM Holding AS, a close associate of Co-founder & CPO Stein Ove Eriksen,
holding 4.47% of the outstanding shares in the Company, has pre-committed to
subscribe for new shares for the amount of NOK 2 million.
• Knut Teppan Design AS, a close associate of CDO Knut Helge Teppan, holding
0.45% of the outstanding shares in the Company, has pre-committed to subscribe
for new shares for the amount of NOK 0.05 million.
• Vegard Hammer, CTO in the Company, has pre-committed to subscribe for new
shares for the amount of NOK 0.05 million.
• HPA Holding AS, a close associate of VP Engineering Håvard Alstad, holding
1.38% of the outstanding shares in the Company, has pre-committed to subscribe
for new shares for the amount of NOK 2 million.
• Korinvest AS, a close associate of Technical product manager Jan Tore
Korneliussen, holding 1.53% of the outstanding shares in the Company, has
pre-committed to subscribe for new shares for the amount of NOK 1.2 million.
• Kvamstad Solutions AS, a close associate of Technical product manager Bendik
Kvamstad, holding 0.15% of the outstanding shares in the Company, has
pre-committed to subscribe for new shares for the amount of NOK 0.2150 million.

In addition, other large shareholders of the Company and a small number of
selected investors have indicated (subject to certain conditions) that they will
subscribe for a total of approx. NOK 63 million in the Equity Raise (approx. 49%
of the potential transaction).

In summary, the Company has received pre-commitments and indications (subject to
certain conditions) amounting to NOK 105 million in total, equal to approx. 81%
of the potential transaction, signalling strong support for the Company’s new
strategy and future growth plans.

The Board will consider to propose for the EGM a subsequent repair offering (the
“Subsequent Offering”) towards existing shareholders in the Company who (i) do
not have a pro-rata share of the Equity Raise which is equal to or higher than
the minimum order and allocation in the Equity Raise (approx. 0.8% of the shares
outstanding in the Company), (ii) were not allocated offer shares in the Equity
Raise, and (iii) are not resident in a jurisdiction where such offering would be
unlawful or would (other than Norway) require any prospectus, filing,
registration or similar action.

Call for an extraordinary general meeting
The Board calls for an extraordinary general meeting to be held on 19 December
2024 at 10:00 CET to resolve on (i) a share capital increase in connection with
the contemplated Equity Raise and (ii) an authorization to the board of
directors to increase the share capital in connection with a potential
Subsequent Offering. A detailed description of both (i) and (ii), as well as
further information regarding the EGM, is included in the notice to the EGM,
made available at the Company's website: www.huddly.com and attached hereto.

Strategic review
As announced in the stock exchange announcement published by the Company on 9
November 2023, the Company has been conducting a strategic review during 2024.
The process was launched following interest from a global industrial player in
Q4 2023 and is aimed at evaluating the Company’s long-term direction and
partnerships. The Company is assisted by Sansa Advisors. The strategic review is
expected to conclude in Q1 2025.

The strategic review process is still ongoing, and the Company has recently
received an indicative offer to acquire 100% of Huddly’s shares from a new
foreign industrial player. The offer is subject to several conditions such as
due diligence and external financing and does not include a specific price per
share but indicates that it will be at the prevailing market price. The parties
have furthermore not entered into negotiations about the terms of a potential
transaction. The Company is also in contact with other potential bidders, among
them certain global industrial players. There is, thus, no certainty with
respect to the outcome of the indicative offer or the contact with the said
other potential bidders.

Virtual group presentation with management
In connection with the contemplated Equity Raise, a virtual group presentation
will be held on Tuesday 10th December at 15:00 CET with CEO Rósa Stensen, CFO
Abhijit Banik and co-founder and CPO Stein Ove Eriksen. The focus will be on (i)
the new business plan and future outlook, (ii) financial results for Q3 2024 and
preliminary trading update for Q4 2024, as well as (iii) the contemplated Equity
Raise. You may register by contacting Pareto Securities on +47 22 87 87 50.

Disclosure
This information is considered to be inside information pursuant to the EU
Market Abuse Regulation (“MAR”) and is subject to the disclosure requirements
pursuant to MAR article 17, Euronext Growth Oslo Rule Book – Part II, section
3.9.1 and section 5-12 of the Norwegian Securities Trading Act. This stock
exchange announcement was published by Abhijit Saha Banik, CFO of the Company on
5 December 2024, at 19.20 CET.

Contacts
For more information, please contact:
Jostein Devold, chair of the Board, +47 90 88 00 49, jd@mertoun.no
Abhijit Saha Banik, CFO, +47 40 83 09 64, abi.banik@huddly.com

About Huddly AS
Disruptive innovation is our heartbeat at Huddly. We're committed to pushing
technology and challenging the status quo in order to empower human
collaboration. Combining our industry-leading expertise in artificial
intelligence, software, hardware, and UX, we craft intelligent camera systems
that enable inclusive and productive teamwork. Huddly cameras are designed to
provide high-quality, AI-powered video meetings on major platforms, including
Microsoft Teams, Zoom, and Google Meet. With upgradable software, durable
hardware, and engaging user experiences, they are the ideal choice for
organizations seeking a future-proof, scalable, and sustainable solution.
Founded in 2013, Huddly is headquartered in Oslo, Norway, with presence in the
US and EMEA and distribution globally.

Important notice
This announcement is not, and does not form a part of, any offer to sell, or a
solicitation of an offer to purchase, any securities of the Company. The
distribution of this announcement and other information may be restricted by law
in certain jurisdictions. Copies of this announcement are not being made and may
not be distributed or sent into any jurisdiction in which such distribution
would be unlawful or would require registration or other measures. Persons into
whose possession this announcement or such other information should come are
required to inform themselves about and to observe any such restrictions.

The securities referred to in this announcement have not been and will not be
registered under the Securities Act, and accordingly may not be offered or sold
in the United States absent registration or an applicable exemption from the
registration requirements of the Securities Act and in accordance with
applicable U.S. state securities laws. The Company does not intend to register
any part of the potential equity raise or their securities in the United States
or to conduct a public offering of securities in the United States. Any sale in
the United States of the securities mentioned in this announcement will be made
solely to "qualified institutional buyers" as defined in Rule 144A under the
Securities Act.
In any EEA Member State, this communication is only addressed to and is only
directed at qualified investors in that EEA Member State within the meaning of
the Prospectus Regulation, i.e., only to investors who can receive a on offer to
participate in a potential equity raise without an approved prospectus in such
EEA Member State. The expression "Prospectus Regulation" means Regulation
2017/1129 as amended together with any applicable implementing measures in any
EEA Member State. This communication is only being distributed to and is only
directed at persons in the United Kingdom that are (i) investment professionals
falling within Article 19 (5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005, as amended (the "Order") or (ii) high net
worth entities, and other persons to whom this announcement may lawfully be
communicated, falling within Article 49 (2) (a) to (d) of the Order (all such
persons together being referred to as "relevant persons"). This communication
must not be acted on or relied on by persons who are not relevant persons. Any
investment or investment activity to which this communication relates is
available only for relevant persons and will be engaged in only with relevant
persons. Persons distributing this communication must satisfy themselves that it
is lawful to do so.

Matters discussed in this announcement may constitute forward-looking
statements. Forward-looking statements are statements that are not historical
facts and may be identified by words such as "believe", "expect", "anticipate",
"strategy", "intends", "estimate", "will", "may", "continue", "should" and
similar expressions. The forward-looking statements in this release are based
upon various assumptions, many of which are based, in turn, upon further
assumptions. Although the Company believes that these assumptions were
reasonable when made, the assumptions are inherently subject to significant
known and unknown risks, uncertainties, contingencies and other important
factors which are difficult or impossible to predict and are beyond the
Company's control.

Actual events may differ significantly from any anticipated development due to a
number of factors, including without limitation, changes in investment levels
and need for the Company's services, changes in the general economic, political
and market conditions in the markets in which the Company operates, the
Company's ability to attract, retain and motivate qualified personnel, changes
in the Company's ability to engage in commercially acceptable acquisitions and
strategic investments, and changes in laws and regulation and the potential
impact of legal proceedings and actions. Such risks, uncertainties,
contingencies and other important factors could cause actual events to differ
materially from the expectations expressed or implied in this release by
forward-looking statements. The Company does not provide any guarantees that the
assumptions underlying the forward-looking statements in this announcement are
free from errors nor does it accept any responsibility for the future accuracy
of the opinions expressed in this announcement or any obligation to update or
revise the statements in this announcement to reflect subsequent events. You
should not place undue reliance on any forward-looking statements in this
announcement.

The information, opinions and forward-looking statements contained in this
announcement speak only as at its date and are subject to change without notice.
The Company does not undertake any obligation to review, update, confirm, or to
release publicly any revisions to any forward-looking statements to reflect
events that occur or circumstances that arise in relation to the content of this
announcement.
This announcement is for information purposes only and is not to be relied upon
in substitution for the exercise of independent judgment. It is not intended as
investment advice and under no circumstances is it to be used or considered as
an offer to sell, or a solicitation of an offer to buy any securities or a
recommendation to buy or sell any securities in the Company. This announcement
is an advertisement and is not a prospectus for the purposes of Regulation (EU)
2017/1129 of the European Parliament and of the Council of 14 June 2017 on
prospectuses to be published when securities are offered to the public or
admitted to trading on a regulated market, and repealing Directive 2003/71/EC
(as amended) as implemented in any Member State.

More information:
Access the news on Oslo Bors NewsWeb site

633995_Huddly AS - Investor Presentation - Dec 2024.pdf
633995_Huddly AS - Notice of EGM.pdf
633995_Huddly AS - Q3 2024 - Report.pdf
633995_Huddly AS - Q3 2024 - Presentation.pdf