Convening of an Extraordinary General Meeting on 27 September 2019 to vote on capital measures

Munich, August 16, 2019: The company SE ("" or the "Company" and together with its subsidiaries the "Group") announces that the Management Board and Supervisory Board have decided to convene an Extraordinary General Meeting for September 27, 2019 in order to resolve on an ordinary capital reduction by merging shares at a ratio of 2 : 1 and thus enable the Group to: carry out a capital increase. In addition, the management bodies will propose to resolve on an ordinary capital increase of the share capital with subscription rights as well as a new authorized capital. The aim of these measures is to finance the growth strategy in China, to create strategic flexibility for capital-backed corporate cooperation with Chinese companies and to strengthen liquidity.

Growth strategy in China, increasing flexibility and strengthening liquidity position is pursuing a consistent growth strategy in China with the support of the two major Asian investors who have been involved in since the capital increase in March 2019. The Chinese market offers significant growth potential, which the Group intends to consistently exploit through targeted growth measures. The planned growth measures include (i) the already planned opening of a second bonded warehouse, (ii) the development of additional online sales channels, (iii) the continuous expansion of the product range, (iv) possible cooperations with local Chinese companies and (v) the potential expansion of the business model into a hybrid (also stationary) sales model. Above all, the hybrid sales model is of strategic importance for in order to reach a broad target group in China (especially in Tier 2 and Tier 3 cities) at attractive offline customer acquisition costs. Such an expansion of the business model is based on the Group's good supplier relationships in Europe and the high level of awareness of in China.
In addition, in China sees the opportunity to enter into cooperations with Chinese companies in the areas of online marketing, access to distribution channels and the expansion of the product range and, if necessary, to participate in them on the capital side. Among other things, the creation of a new Authorized Capital is planned for this purpose. has made significant progress in reducing cash outflow over the past 18 months. The operating cash outflow amounted to EUR 8.6 million in the first half of 2019 compared to EUR 13.8 million in the previous year. The Group's available liquidity amounted to EUR 12.1 million as of June 30, 2019 and EUR 9.1 million as of August 14, 2019 due to the build-up of inventories in the run-up to the second half of the year, which is usually stronger in terms of sales and earnings. In order to strengthen the Group's liquidity position, it is planned in this context to increase's share capital by means of a capital increase against cash contribution with the granting of subscription rights to shareholders, to be resolved at the Extraordinary General Meeting.

Planned capital measures to achieve the above-mentioned objectives

In order to achieve the aforementioned goals, the Executive Board and Supervisory Board propose to the Annual General Meeting that a capital reduction of a ratio of 2: 1 be resolved in accordance with Section 222 et seq. of the German Stock Corporation Act (AktG). This measure is intended to reduce the Company's share capital from EUR 9,963,670.00, divided into 9,963,670 no-par value bearer shares, by EUR 4,981,835.00 to EUR 4,981,835.00, divided into 4,981,835 no-par value bearer shares. In accordance with the provisions on ordinary capital reduction (§§ 222 et seq. of the German Stock Corporation Act ( AktG), the reduction is to be made at a ratio of 2 : 1 in order to cover losses. The issued 9,963,670 shares of the company are to be combined at a ratio of 2: 1 (reverse share split). As a result, two existing shares would be combined into one new share and the share price would thus (as things stand at present) be mathematically above the statutory minimum issue price for capital increases under the German Stock Corporation Act (AktG) of EUR 1.00. The capital reduction has no influence on the valuation of the company. The value and relative share of the individual shareholder in the company is also not affected.
In addition, the Executive Board and Supervisory Board will propose to the Annual General Meeting that a capital increase of the existing share capital against cash contribution be carried out by up to EUR 10,000,000.00 by granting shareholders subscription rights. The subscription period is to begin shortly after the proposed capital reduction has been entered in the commercial register. Details of the specific target volume of the cash capital increase and the subscription ratio will also be communicated at the beginning of the subscription period.
The existing authorization of the Executive Board to increase the share capital by issuing new shares in accordance with § 4 (2) of the Articles of Association (Authorized Capital 2018) is to be revoked upon the effective date of a new authorization. The proposed authorization stipulates that, with the consent of the Supervisory Board, the share capital may be increased by up to EUR 6,000,000.00 by issuing new no-par value bearer shares against cash and/or non-cash contributions once or several times until September 26, 2024 (Authorized Capital 2019).
The full invitation to the Extraordinary General Meeting of including the agenda, is expected to be published on August 21, 2019 in the Federal Gazette and on the Group's website (