StillfrontGroupAB(publ)

InformationMemorandum

Dated21December2017

ImportantinformationThis informationmemorandum(the“InformationMemorandum”)hasbeenproducedbyStillfrontGroupAB(publ)withregistration number 556721-3078. In this Information Memorandum, “Stillfront”, “Company” or "Group" refers toStillfrontGroupAB(publ),orthegroupinwhichStillfrontistheparent,orasubsidiarywithinthegroup,dependingonthecontext.ThisInformationMemorandumhasbeenproducedasaninformationonlydocumentforthepurposeofprovidingcertain information in conjunction with a proposed acquisition of Altigi GmbH with registration number HRB 132391,Theodorstrs.42-90Hs.9,22761Hamburg,Germany,operatingunderthenameGoodgameStudios(“Altigi”or“GoodgameStudios”andthe“Acquisition”or“Transaction”respectively),andpresentthegroupfollowingapotentialcompletionoftheAcquisition.“Subsidiaries”meansthesubsidiariesofStillfrontasperthedateof this InformationMemorandumand“Subsidiary"referstoanyofthem."NewGroup"referstothegroupinwhichStillfrontistheparentfollowingapotentialcompletionoftheAcquisition.

ThedistributionofthisInformationMemorandumincertainjurisdictionsisrestrictedbylaw.Noactionhasbeentakenbythe Company or any other person to permit a public offering in any jurisdiction. Persons into whose possession thisInformation Memorandum may come are required to inform themselves about and to observe such restrictions. ThisInformationMemorandummay not be used for, or in connection with, any offer to, or solicitation by, anyone in anyjurisdictionorunderanycircumstancesinwhichsuchofferorsolicitationisnotauthorisedorisunlawful.ThisInformationMemorandumdoesnotconstituteanoffertosellorasolicitationofanoffertobuyanysharesintheCompany.

This document is not a prospectus and it has not been approved or reviewed by any governmental authority or stockexchangeinanyjurisdiction.

Theshareshavenotbeenandwillnotbe registeredunder theU.S.SecuritiesActof1933,asamended (the“SecuritiesAct”),orunderanyoftherelevantsecurities lawsofanystateorother jurisdictionoftheUnitedStatesofAmerica.Thesharesmaynotbeofferedorsold intheUnitedStates,exceptpursuanttoanexemptionfromtheSecuritiesActor inatransactionnotsubjecttotheregistrationrequirementsoftheSecuritiesAct.

InthisInformationMemorandum,theterms“we”,“our”and“us”allrefertoStillfront.

No representation or warranty, express or implied, is made by Carnegie Investment Bank AB as to the accuracy orcompletenessofanyinformationcontainedinthisInformationMemorandum.Inmakinganinvestmentdecision,investorsmustrelyontheirownassessmentofStillfront.NopersonisorhasbeenauthorisedtogiveanyinformationormakeanyrepresentationunderthisInformationMemorandumotherthanthosecontainedinthisInformationMemorandumand,ifgivenormade, such informationor representationmustnotbe relieduponashavingbeenauthorisedby theCompanywhodoesnotacceptanyliabilitywithrespecttoanysuchinformationorrepresentation.

Thedeliveryof this InformationMemorandumshallnot,underanycircumstances,createany implication that therehasbeennochangeintheaffairsoftheCompanysincethedatehereoforthattheinformationcontainedhereiniscorrectasofanytimesubsequenttoitsdate.

It should be noted that certain statements herein which are not historical facts, including, without limitation, thoseregarding expectations for general economic development and the market situation, expectations for Stillfront’sdevelopmentandprofitabilityandstatementsprecededby“expects”,“estimates”,“forecasts”orsimilarexpressions,areforward-lookingstatements.Thesestatementsarebasedoncurrentdecisionsandplansandcurrentlyknownfactors.TheyinvolverisksanduncertaintieswhichmaycausetheactualresultstomateriallydifferfromtheresultscurrentlyexpectedforStillfront.

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TableofContents

RISKFACTORS................................................................................................................................................2 BACKGROUNDANDREASONS......................................................................................................................11 MARKETOVERVIEW.....................................................................................................................................13 DESCRIPTIONOFTHESTILLFRONTGROUP....................................................................................................21 DESCRIPTIONOFGOODGAMESTUDIOS........................................................................................................27 DESCRIPTIONOFTHENEWGROUP...............................................................................................................31 PROFORMAFINANCIALINFORMATION.......................................................................................................33 BOARDOFDIRECTORSANDMANAGEMENT.................................................................................................40 CORPORATEGOVERNANCEANDLEGALCONSIDERATIONS...........................................................................48 DEFINITIONS.................................................................................................................................................54 ADDRESSES..................................................................................................................................................56

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RiskFactors

TheholdingoffinancialinstrumentsintheCompanyisassociatedwithanumberofrisks,acircumstancewhichwillnotbeaffectedbytheAcquisitionofGoodgameStudios.TheCompanydeemsthebelowdescribedrisksasthemostsignificantrisksrelatingtotheCompany,takingintoconsiderationtheAcquisition.However,therisksare not described in priority or in any other particular order. The risks describedhereinwould, in Stillfront'sview,beapplicabletotheNewGroupfollowingapotentialcompletionoftheAcquisition.Intheeventthatanyofthefollowingrisksmaterialise,theGroup'sbusiness,financialcondition,andresultsofoperationscouldbematerially adversely affected. In such circumstances, the trading price of the shares could decline and theholders of financial instruments in the Company could lose part or all of their investment in the financialinstruments.Inaddition,therisksdescribedbelowarenottheonlyriskstowhichtheGroupissubject.Stillfrontmaybeunawareofcertainrisksorbelievecertainriskstobeimmaterialthatlaterprovetobematerial.Therecan be no guarantees or assurances that the objectives of the Company can be reached and that financialinstrumentsintheCompanyinturnwillgenerateapositivereturnfortheholderofthefinancialinstruments.

Additional risk factors that are not currently known or not currently considered to be material may alsomateriallyadverselyaffecttheGroup'sbusiness,financialcondition,andresultsofoperations.

RisksrelatedtotheGroupanditsbusiness

ThecontinuedsuccessandgrowthoftheGroup’sbusinessisreliantonitsabilitytocontinuetodevelopnewgamesandenhanceitsexistingrangeofgamesTheGroup'sabilitytoincreaserevenuesandprofitabilityisreliantonitsabilitytoregularlydevelopnewgamesand enhance existing games in ways that improve the gaming experience for both paying and non-payingplayers while encouraging the purchase of virtual items within games. If the Group’s current gamedevelopmentmodelceasestobeeffectiveincreatingoracquiringgamesthatappealtonewaswellasexistingplayers and developing existing games to continue to retain the interest of its existing range of games, itscustomer base will cease to grow at the current rates which are central to the Group’s business model.Furthermore, regular failure to successfully adapt games that are popular with the Group’s most frequentusers tomobile and social platformswill significantly reduce thepotential of existing titles, and inorder toovercome this obstacle within the existing game development model will result in increased currentdevelopmentcostswiththeeffectthatoperatingresultsmaybemateriallyadverselyaffected.TherecanbenoassurancethattheGroupwillcontinuetobeabletoadaptasufficientnumberofgames,ifany,onexistingplatformsortobeplayedonnewmediaplatformssuccessfullytogeneratethesignificantpurchasesofvirtualitemsthattheGroup’scurrentstrategyandfinancialgrowthrelyon.

TheGroup'sabilitytosuccessfullydevelopnewgamesandenhanceexistinggamesandtheirabilitytoachievecommercial success is subject to a number of challenges, including: the need to continually anticipate andrespond to changes in the games industry, particularly in the mobile and social platforms; the ability tocompetesuccessfullyagainsta largeandgrowingnumberof industryparticipants;theabilitytodevelopandlaunchnewgameIPandgamesontimeandonbudget; theability todevelopnewgameformatsthatdriveengagement andmonetization; the ability to adapt to changing player preferences; the ability to enhanceexistinggamesbyaddingfeaturesandfunctionalitythatwillencouragecontinuedengagementwiththegame;theabilitytohireandretainskilledpersonnelastheGroupseekstoexpanditsdevelopmentcapabilities;theability to achieve a positive return on advertising investments and to continue to experience success withorganicviralgrowth;andtheneedtominimiseandquicklyresolvebugsoroutages.

If the Group is unable to develop new and enhance existing games that generatemeaningful revenue, itsfinancialconditionandresultsandaccordinglyitsabilitytoserviceitspaymentobligationscouldbemateriallyadverselyaffected.

The Group has a relatively short history and has as of yet not on a continuous basis made substantialrevenuesTheGroupwasfoundedin2010throughthemergerofanumberofsmallergamingcompanies.Currently,theGroupoperatesthrougheightnear-autonomoussubsidiaries:BytroLabsinGermany,ColdwoodInteractivein

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Sweden,PowerChallengeintheUKandSweden,DOGProductionsLimitedinMalta,BabilGamesinUAEandJordan,Simutronics in theU.S.,eRepublik in IrelandandRomaniaandOFMStudios inGermany.TheGrouptakenasawholehasarelativelyshorthistory.TheGroup'sthirdpartyrelationshipswithcustomershavebeenestablishedrelativelyrecently,makingitdifficulttoevaluatethelongevityandstrengthofthoserelationships,and their potential impact on the Group's future prospects. Although the Group has performed stronglyfinanciallyin2015and2016withorganicsalesgrowthandincreasedEBITDA-margin,theGrouphasnotyetona continuous basis been able to show substantial revenues. There is a risk that the Group’s strategy andbusinessmodelwillnotbesuccessful inachieving theanticipated revenues in future resulting inaneed forfurthercapitalisationandtheretorelatedconsequencesandrisksforthefinancialconditionandresultsoftheGroup.

AlimitednumberofgamescurrentlygenerateamajorityoftheGroup'srevenueTheGrouphasawidearrayofgamesinitsportfolio.However,theGroupreliesonarelativelysmallnumberofgamestogeneratethemajorityoftheGroup'srevenues. IfthegrossbookingsoftheGroup'stopgamesarelowerthananticipatedandtheGroupisunabletobroadenitsportfolioofgamesor increasegrossbookingsfromthosegames,theGroupwillnotbeabletomaintainorgrowitsrevenueanditsfinancialconditionandresultscouldbemateriallyadverselyaffected.

Negativeperceptionsandpublicitysurroundingthegamingindustryandlackoftrustandadoptionofonlinepayment systems and other transactions systems could adversely affect the Group’s business, financialconditionandresultsofoperationsTheonlinegaming industry isexposedtopublicityrelatingtogamingbehaviour,gamingbyminorsandrisksrelatedtoonlinegaming.Adverseornegativeperceptionsandotherconcernsregardingthegamingindustry,even ifnotdirectly connected to theCompany’sorGoodgameStudios'business, couldhaveamaterial andadverseeffectontheGroup.Forexample,ifaperceptiondevelopsthattheonlinegamingmarketisfailingtoaddress public concerns, the resulting political pressure and public sentiment may result in increasedregulation of the online gaming market, and such regulation could have a material adverse effect on theGroup’sbusiness,financialconditionandresultsofoperations.PartoftheGroup'sbusinessreliesonthetrustandadoptionofonlinepaymentandothertransactionsystemsby itscustomers’endusers.Historically,endusershavebeenreluctanttoadoptinternetpaymentmethodsasasecureandtrustedmeansoftransferringfund,andalthoughendusershavebecomemorewillingtomakeonlinepaymentsandothertransfersovertheinternet,publicopinionmayturnagainstsuchsystemsandendusersmayceasetoadoptonlinepaymentsandother transfers as a trusted, reliable and secure type of transaction. To the extent that there is sloweracceptancebypotentialendusers,theGroup’sgrowthstrategyandexpectationscouldbeadverselyimpacted,which could have a material adverse effect on the Group’s business, financial condition and results ofoperations.

IftheGroupfailstoproperlymanagegrowth,itsbusinessmaybeadverselyaffectedTheCompanyhasbeengrowingrapidlywhichincreasesthedemandformanagementandoperationalcontrol,informationandreportingsystemsaswellasfinancialcontrol.ToachievetheCompany’srevenueandgrowthgoals, theCompanymustsuccessfullymanagebusinessopportunities, revenuestreams,productandservicequalityandoperations,andincreasecapacityandinfrastructureasrequiredbycustomerdemandacrossthejurisdictionsinwhichtheCompanyoperates.ThisalsorequiresthattheGroupissuccessfulinfindingqualifiedpersonnel.TheCompanymayexplorenewanddiversified revenuegeneratingstrategies,and the increasingbusiness complexity of operationsmay place additional requirements on the Company’s systems, controls,proceduresandmanagement,whichmaystraintheCompany’sabilitytosuccessfullymanagefuturegrowth.TheCompanymay fail to successfully implement revenueor cost strategies. Theseproblemscould result indelays in fulfillingcustomerdemandsand increasedexpensesfortheCompany.Anysuchdelayor increasedexpenses could have a material adverse effect on the Group’s business, financial condition and results ofoperations. Future growthwill also impose significant added responsibilities onmanagement, including theneed to identify, recruit, train and integrate additional employees. The Company may fail to successfullymanage such developments and growth in the future. If the Company is unable to effectively manage itsgrowth,orisunsuccessfulinadaptingtochangesandincreasedrequirementsresultingfromexpansion,therecouldbeanadverseeffectontheGroup’sgrowth,whichcouldhaveamaterialadverseeffectontheGroup’sbusiness,financialconditionandresultsofoperations.

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TheGroup’sbusinessmaybeadverselyaffectedbycompetitionfromotheronlinegamingdevelopersandconsoledevelopersTheGroupoperatesinahighlycompetitiveindustry.Competitionmayverywellintensifyasnewonlinegamedevelopers, publishers andoperators enter into thebusinessor current competitors expand theirofferings.Online gaming products and services are also sensitive to consumer trends and the improvement andexpansion of product offerings by the Group’s competitors may attract customers away from the Group’sproductsandreducetheGroup’smarketshare.Failuretocompeteeffectivelymayresultinalossofcustomersandaninabilitytoattractnewcustomers.

Increased competition can also lead to lowermargins and pressure from customers in respect of the feeschargedbytheGroup.Inaddition,certaincompetitorsmayofferamoreattractiverangeofonlinegamesorancillaryproductsandservicesthantheGroupdoes,whichcanleadtopressurefromcustomerstodeveloporoffer similarproducts and services, andmay result in the lossof such customersor increaseddevelopmentcostsassociatedwithdevelopingaspecifictypeofproductorservice.Afailuretodealwiththeemergenceofsuch increased competition quickly and effectively could have a material adverse effect on the Group’sbusiness,financialconditionandresultsofoperations.

Increasedmarketing costs couldhaveamaterial adverseeffecton theGroup'sbusiness, financial conditionandresultofoperations.

TheGroupmustbeinnovativeandadapttotechnologicaladvancesandconsumerpreferencesanddemandsTheGroup’s success isdependenton itsability tosuccessfully innovate,developandreleasenewgames. Inaddition, the online gaming industry is driven by the preferences and demands of end users, and gamingdevelopers,publishers andoperatorsmust continuouslyoffernewproducts and services inorder toattractandretainabroadrangeofendusers.Inanindustrycharacterisedbytherapidemergenceanddevelopmentof new products, services, technologies and end user practices, it is imperative that the Group updates itsexistingproducts,servicesandproprietarytechnology.WidespreadadoptionofnewinternettechnologyandhigherstandardscouldrequiretheGrouptocommitsignificantfundingtoreplace,upgrade,modifyoradaptits existing supply, which could negatively impact the Group’s business, financial condition and results ofoperations.

The Group is dependent on certain key individuals and employees and the loss of such persons, ordifficulties in attracting new employees, may negatively impact the Group’s business and ability toimplementcurrentandfuturestrategiesTheGroup’s business is dependent on certain key individuals, senior executives andpersonswith specialistcompetence,someofwhomarethefoundersofGroupcompanies.ThesekeypersonshaveestablishedgoodrelationshipswithmarketparticipantsandhaveagoodunderstandingoftheenvironmentinwhichtheGroupoperates.Accordingly,thesekeypersonsarecentraltothesuccessfuldevelopmentoftheGroup’sbusiness.Ifanyof thesekeypersons terminate their relationshipswith theGroup,ormaterially changeor reduce theirroleswithin theGroup, theGroupmaynotbeable to replace themor their servicesona timelybasiswithotherprofessionalscapableofmakingcomparablecontributionstotheGroup’sbusiness.InordertoretainkeyindividualsandemployeestheGroupmayencounterincreasedcostsforremunerationtotheseindividualsintermsofbonusesandotherincentives.Furthermore,theGroup’sabilitytocompeteeffectivelyinthemarketsinwhichitoperatesdependsuponitsabilitytoretainandmotivateitsexistingworkforce.ThefailurebytheGroup to retainkeypersonnelor toattractnewtalent,ora significant increase in thecostofdoingsomayhaveamaterialadverseeffectontheGroup’sbusiness,financialconditionandresultsofoperations.

The Group hasmade andmaymake acquisitions that prove unsuccessful or strain or divert the Group’sresourcesThe Group has grown bymeans of making acquisitions of small online game developing companies whichentails lingeringrisks intermsof legal,marketingandfinancialrisksassociatedwiththetargetcompaniesaswell as the risk of failing to properly integrate the acquired companies into the Group. Such risks are alsoassociatedwiththecontemplatedAcquisitionofGoodgameStudios,whichisasubstantiallylargertransactionthanpreviousacquisitions. Such transactionsmayalsomake theGroup’shistorical financialdatadifficult tocompare from year to year. Furthermore, these circumstances may also make it difficult to evaluate theGroup’s future prospects and financial results. Historically the Group has issued warrants or contractually

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undertaken to issuewarrants as consideration to the sellersof certainof the companies it has acquiredontermsthattoacertainextentareambiguousastotheconsequencesofthedilutionofexistingshareholdings.Theexerciseofsuchwarrantsmayresultinshareholdersbeingdilutedtoalargerextentthanpredicted.TheCompany'sacquisitionstrategythatinteraliainvolvesacquiringtargetcompaniesanddeferringthepaymentof part of the purchase prices based on future performance of the target companies may result in largerdilutionof theshareholding in theCompanythanpredictedat thetimeof theacquisition.Furthermore, thetrue future value of a target company, including Goodgame Studios,may prove to be difficult to correctlyevaluateat the timeofanacquisition.TheGroup intends to continue togrow itsbusinessby continuing tomake acquisitions to support future growth and profitability. Successful growth through acquisitions isdependentupontheGroup’sabilitytoidentifysuitableacquisitiontargets,conductappropriateduediligence,negotiate transactions on favourable terms, and complete such acquisitions and integrate the targetcompanies or businesses into the Group. In the future, the Group may not be able to generate expectedmargins or cash flows, or realise the anticipated benefits of acquisitions, including growth or expectedsynergies. The Group’s assessment of and assumptions regarding acquisition targets, including thecontemplated Acquisition of Goodgame Studios, may prove to be incorrect, and actual development maydiffer significantly from expectations. TheGroupmay not be able to integrate acquisitions successfully andsuch integration may require more investment than anticipated, and the Group could incur or assumeunknownorunanticipatedliabilitiesorcontingencieswithrespecttocustomers,employeesorotherparties.Theprocessof integratingacquired targetsmayalsobedisruptive to theGroup’soperations,asa resultof,among other things, conflicting interests with minority shareholders of non-wholly owned subsidiaries,unforeseenlegal issues,anddifficulties inrealisingoperatingsynergiesorafailuretomaintainthequalityofservices that have historically been provided thereby affecting its reputation, all of which could cause theGroup’sresultsofoperationstodecline.Furthermore,futureacquisitionsmaydivertmanagement’sattentionfromdaytodaybusinessandmayresultintheincurrenceofadditionaldebt.Shouldanyoftheaboveoccurinconnectionwithanacquisition,includingthecontemplatedAcquisitionofGoodgameStudios,therecouldbeamaterialadverseeffectontheGroup’sbusiness,financialconditionandresultsofoperations.

The Company's contemplated Acquisition of Goodgame Studios is associated with a number of materialrisks.The Company has on 6 December 2017 entered into the Acquisition Agreement. In connection with theAcquisition, the Company has conducted various due diligence investigations in order to identify andinvestigatetherisksthatthebusinessofGoodgameStudiosisexposedto.Thereis,however,ariskthatthesedue diligence investigations have not been sufficient or that there are gaps or deficiencies therein.Consequently,thereisariskthattheassumptionsthattheCompanyhasmaderegardingGoodgameStudiosare inaccurateand, insuchcase, interaliathecalculatedreturnon investmentcouldbeaffectednegatively.Such gaps or deficiencies could also lead to the Company having to make investments in the business ofGoodgame Studios. The Company has in the Acquisition Agreement received certain representations andwarranties regarding Goodgame Studios and its business. This warranty protection is, however, not all-encompassing and risks associated with Goodgame Studios or its business may not be encompassed bywarranties. If such risksmaterialise, the Company would not have a right to claim compensation. Further,certainSellersprovidemorelimitedwarrantiesthanothers,andthewarrantiesarelimitedintime,subjecttocertain amount restrictions and other qualifications. Consequently, there is a risk that the Company is notcompensatedoronlypartlycompensatedforaloss,evenwherethedeficiencythathasresultedinthelossisencompassedby awarranty. If anyof the above risks shouldmaterialise there couldbe amaterial adverseeffectontheGroup'sbusiness,financialconditionandresultsofoperation.

TheGroupmaybeunabletoprotect its intellectualpropertyrightsandcouldbeatriskof infringingthirdpartyintellectualpropertyrightsTheGroup’sabilitytogrowitsbusinesssuccessfullydepends,amongstotherthings,on itsabilitytoprotect,registerandenforceitsintellectualpropertyrights.

In the early stagesof the life cycle of theGroup’s games, theGroupmainly relies on trademarkprotectionthrough trademark registration. With regard to trademark registration, some of the Group’s brands andlogotypesarenotregisteredtrademarksand/orpendingtrademarkregistrationandthereisnoguaranteethatthe Groupwill be able to complete such registrations in respect of such brands and logotypes and/or anyfuturebrandsorlogotypes.

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TheBerneConventionfortheProtectionofLiteraryandArtisticWorks,whichextendscopyrightprotectiontoamajorityoftheCompany'sintellectualproperty,onlyextendsitsprotectiontotheoriginalliteralexpressionof theGroup’s source codeandnot the conceptsor ideas expressedby it. Further, theGroup’s intellectualproperty does not constitute patentable subjectmatter and is, as a result thereof, not patentable. Hence,otherthanprotectionthroughtrademarkregistrationanddomainnameregistration,theGroup’sintellectualpropertyenjoyslimitedintellectualpropertyrightprotection.

The Group also faces the risk that the use and exploitation of its intellectual property rights, including, inparticular,rightsrelatingtoitssoftware,mayinfringetheintellectualpropertyrightsofathirdparty.Thecostsincurredinbringingordefendinganyinfringementactionsmaybesubstantial,regardlessofthemeritsoftheclaim,andanunsuccessfuloutcomefortheGroupmayresultinroyaltiesordamagesbeingpayableand/ortheGroup being required to cease using any infringing intellectual property or embodiments of any suchintellectual property. Should theGroup not be able to effectively protect its intellectual property rights, orshould an infringement claimbe brought against theGroup, it could have amaterial adverse effect on theGroup’sbusiness,financialconditionandresultsofoperations.TheGroupisalsodependentonknow-howandtradesecrets,andtheGroupstrivestoprotectsuch informationby, forexample,maintainingconfidentialityagreementswithemployees,consultantsandpartners.However it isnotpossible toensure totalprotectionagainst unauthorised distribution of information and competitors and others may gain access to suchinformation, which may lead to the value of such information diminishing or competitors gaining anadvantage,whichinturncouldhaveamaterialadverseeffectontheGroup’sbusiness,financialconditionandresultsofoperations.

TheGroupusesopensourcesoftware in itsgamesthatmaysubjecttheGroup'ssoftwarecodetogeneralreleaseorrequiretheGrouptore-engineersuchcode,whichmaycauseharmtothebusiness.TheGroupusesopensourcesoftwareinitsgamedevelopment.Someopensourcesoftwarelicencesrequiredeveloperswhodistributeopensourcesoftwareaspartoftheirsoftwaretopubliclydiscloseallorpartofthesourcecodetosuchsoftwareormakeavailableanyderivativeworksoftheopensourcecodeonunfavourabletermsoratnocost.Thetermsofvariousopensourcelicenceshavenotbeeninterpretedbycourts,andthereis a risk that such licences could be construed in a manner that imposes unanticipated conditions orrestrictions on the Group's ability tomarket the games.While the Groupmonitors its use of open sourcesoftwareandtriestoensurethatnoneisusedinamannerthatwouldrequiretheGrouptodiscloseitssourcecodeor thatwouldotherwisebreach the termsofanopensourceagreement, suchusecould inadvertentlyoccur and the Group may be required to release its proprietary source code, pay damages for breach ofcontract, re-engineer itsgames,discontinuedistribution in theevent reengineeringcannotbeaccomplishedon a timely basis or take other remedial action that may divert resources away from the Group's gamedevelopment efforts, any ofwhich could harm the Group's reputation, result in player losses, increase thecostsorotherwiseadverselyaffectthebusinessandoperatingresults.

TheGroupanditscustomersarevulnerabletohacking,viruses,maliciousactsandothercybercrimeOnlinegamingbusinessissubjecttotheriskofbeingadverselyaffectedbyactivitiessuchassystemintrusions,virusspreadingandotherformsofcybercrime.Suchactivitiescandisruptinternetsites,causesystemfailures,businessdisruptionsandmaydamagethecomputerequipmentoftheGroup,itscustomersorendusers.Theimpactofanysuchactivities,ortheCompany’s inabilitytosuccessfullyprotecttheGroupfromsuchattacks,couldhaveamaterialadverseeffectontheGroup’sbusiness,financialconditionandresultsofoperations.

TheGroupissubjectto lawsandregulations inseveraldifferent jurisdictionsandchangesto,orfailuretocomplywith,applicablelawsandregulationsmaynegativelyaffecttheGroup'sbusinessWhile neither the Group's nor Goodgame Studios' business currently requires any specific licenses andcertifications,other than the trade license in respectof theGroup'sbusinessoperations in theUnitedArabEmirates,gaming lawsareconstantly reviewedandchangedby theregulators in theapplicablecountries. ItcannotberuledoutthattheGrouporGoodgameStudiosmaybecomefurthersubjecttosuchlaws,directlyorindirectly,orthattheGroup'sUAEtradelicenseiswithdrawn,whichcouldhaveamaterialadverseeffectontheGroup’sbusiness,financialconditionandresultsofoperations.

ItcannotberuledoutthatsomeoftheconsumersplayingthegamesofferedbytheGroupareminorswhichentail certain risks, including negative publicity or litigation which could adversely impact the Group’sreputation.

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The Group is inter alia subject to data protection and privacy laws. Compliance with all such laws andregulations is complex and expensive. TheGroup’s non-compliance or deemednon-compliancewith any ofthese other laws and regulatory requirements could result in serious financial and other penalties for theGroup.Any failurebytheGrouptocomplywiththeseother lawsandregulatoryrequirementscouldhaveamaterialadverseeffectontheGroup’sreputation,business,financialconditionandresultsofoperations.

The Group is further subject to requirements of cultural vetting of games which it distributes in certainjurisdictions. TheGroup’s non-compliance or deemed non-compliancewith any of these vetting laws couldhave a material adverse effect on the Group’s reputation, business, financial condition and results ofoperations.

PoliticalandlegalrisksTheGroup currently owns businesses, andmay in future acquire further businesses, in certain jurisdictionswhich may be subject to political and legal risks. Accordingly, the operations and earnings of the Groupthroughout the world may be affected from time to time in varying degree by political and legal factorsincluding:(1)politicalinstabilityorlackofwell-establishedandreliablelegalsystemsinareaswheretheGroupoperates ormay operate in the future; (2) other political developments and laws and regulations, such asunilateralcancellationormodificationofcontractterms,andregulationofcertainmarkets;(3)restrictionsonimports and exports; (4) price controls; (5) tax or royalty increases, including retroactive claims; (6)war orotherinternationalconflicts;and(7)civilunrest.TheGroup'sfailuretomanagetheseriskssuccessfullycouldharmitsinternationaloperations,reduceitssalesand/orincreaseitscosts,andconsequentlyhaveamateriallyadverse effect on the Groups financial condition and results as well as its ability to meet its paymentobligations.

TheGroup’sbusiness isdependentonthesecurity, integrityandoperationalperformanceof thesystems,productsandservicesthatitoffersTheGroup’sabilitytoprovideitssoftwaredependsupontheintegrity,reliabilityandoperationalperformanceof its systems. The functioning of the IT systems within the Group’s businesses, or that of its suppliers,contractors or partners, could be disrupted for reasons beyond its control, including accidental damage,disruptions to the supply of utilities or services, extreme weather events, safety issues, system failures,workforce actionsor environmental contaminations. Furthermore, theremaybe technological challenges inrollingoutnewproductsandservices.AnysuchdisruptionoreventmayleadtocustomerclaimsagainsttheGrouporotherwisenegativelyimpacttheGroup’sabilitytosellproductsandservicestoitscustomers,andasa result could have a material adverse effect on the Group’s business, financial condition and results ofoperations.

TheGroup’sfailuretosuccessfullymaintainandenhanceitsbrandscouldhaveamaterialandadverseeffectontheGroup’sbusiness,financialconditionandresultsofoperationsTheGroup’s success isdependent inparton thestrengthof thebrandsof theproductsoffered.TheGroupbelieves that it iswell on itsway toestablish trustedand recognisedbrandsanda reputation in theonlinegamingmarket, and that theGroup’s brands represent competitive advantages in thedevelopment of newand existing customer relationships. The future success of the Groupwill depend on the Group’s ability tomaintainandenhancethestrengthofthebrands.IftheGroupisunabletomaintainorenhancethestrengthoftheGroup’sbrands,thentheGroup’sabilitytoretainorexpanditscustomerbasemaybeimpaired,anditcouldhaveamaterialadverseeffectontheGroup'sbusiness,financialconditionandresultsofoperations.

DisputesandtheriskoflitigationTheGroupisexposedtotheriskoflitigation,disputesandclaimsresultingfromtheagreementsenteredintoaswellasitsbusinessoperationsingeneral.Exceptassetforthintheseriskfactors,neitherStillfrontnor,toStillfront'sknowledge,GoodgameStudios, iscurrentlyawareofanydisputeswith itscustomers,suppliersoranyotherpartiesthatareactual,pendingorthreatened.Stillfront'sviewisthat ithasfulfilleditsobligationsbuttherecanbenoassurancethatcounterpartiesdonothaveanotherview.TherearecurrentlytwolawsuitsagainstGoodgameStudiosrelatingtoemploymentlawmatters,onebroughtbyaformeremployeeforlossofemployment and the other concerning alleged discrimination brought by a person who has never beenemployed or engaged as a contractor by Goodgame Studios. Neither of these lawsuits is, to Stillfront'sknowledge,consideredbyGoodgameStudiostobeofmaterialimportance.TheGrouphasrecentlyacquired

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businesses,andmayinthefutureacquirefurtherbusinesses,incertainjurisdictionswhichhaveatraditionoflitigiousbehaviour,whichmayincreasetheriskoflitigation,disputesandclaims.Inthefuture,theGroupmaybecome involved in commercialdisputesaswell as legal andarbitrationdisputes,withpublic authoritiesorprivateparties,whichinvolvesubstantialclaimsfordamagesorothersanctions.Suchdisputescouldbetimeconsumingand,intheeventofanegativeoutcomeofanymaterialproceeding,whetherbasedonajudgmentorasettledagreement,theGroupcouldbeobligatedtomakesubstantialpaymentsoracceptothersanctions.Inaddition,thecostsrelatedtolitigationandarbitrationproceedingsmaybesignificant.AnyoftheseeventscouldhaveamaterialadverseeffectontheGroup'sbusiness,financialconditionandresultsofoperations.

Changes to taxation or the interpretation or application of tax laws could have an adverse effect on theGroup’sbusiness,financialconditionandresultsofoperationsTheGroupprimarily operates its business through subsidiaries that are active in the geographicmarkets inwhich it operates andhave customersona global scale. Thebusiness, including intra-group transactions, isconductedinaccordancewiththeGroup’sinterpretationofapplicablelaws,taxtreatiesandotherregulationsconcerning taxes and the practice of tax authorities in the relevant countries. The Company has obtainedadvicefromindependenttaxadvisorstoacertainextentinthisrespect,butthereisariskthattaxauthoritiesin relevant countries may issue decisions that deviate from the Group’s interpretation and advice fromindependent taxadvisors. Inaddition, theGroup’s interpretationofapplicable laws, tax treaties, regulationsand administrative practice may be incorrect and such rules may change, possibly with retroactive effectRegulatoryor legislativechanges,ordecisionsbytaxauthorities,may impair thepresent, futureorprevioustax position of the Group, which could have a material adverse effect on the Group’s business, financialconditionandresultsofoperations.

CurrencyfluctuationrisksCurrencyfluctuationsmayimpacttheGroup’sfinancialperformance.ThecostsoftheGrouparemainlyinSEK,EUR,USD,JODandRON,whilerevenuesfromtheGroup’scustomeragreementsarepartiallyindifferentlocalcurrencies,includingEURandUSD.TheexchangeratesbetweenthelocalcurrenciesandSEKhavefluctuatedsignificantlyandmayinthefuturefluctuatesignificantly.WhileforeignexchangeriskandexposuretocurrencyfluctuationshavenothistoricallyhadamaterialimpactontheGroup’sbusiness,financialconditionorresultsofoperations,theGroupnormallydoesnothedgeitsexposuretocurrencyfluctuations,andasaconsequencefluctuations inexchangeratesandcurrenciescouldhaveasignificanteffectonthecashflowsoftheGroup,which could impact theGroup’s financial results inwaysunrelated to itsoperationsand/orhaveamaterialadverseeffectontheGroup’sbusiness,financialconditionandresultsofoperations.

Anyfinancialobjectivesincludedinthis InformationMemorandummaydiffermateriallyfromtheGroup’sactualresultsandshareholdersshouldnotplaceunduerelianceonthemAny objectives set forth in this InformationMemorandumare theGroup’s expectations for themedium tolong term. Any such objectives included in this Information Memorandum are based upon a number ofassumptions,whichareinherentlysubjecttosignificantbusiness,operational,economicandotherrisks,manyofwhichareoutsideoftheGroup’scontrol.Accordingly,suchassumptionsmaychangeormaynotmaterialiseat all. In addition, unanticipated eventsmay adversely affect the actual results that the Group achieves infutureperiodswhetherornot itsassumptionsotherwiseprovetobecorrect.Asaresult,theGroup’sactualresultsmayvarymateriallyfromtheseobjectivesandshareholdersshouldnotplaceunduerelianceonthem.

Risksrelatedtotheshares

NasdaqFirstNorthisnotaregulatedmarket,maybesubjecttodisruptionsandcarriesahigherdegreeofriskthananinvestmentinacompanylistedonaregulatedmarketTheexistingsharesinStillfrontaretradedon,andtheConsiderationSharesthatmaybeissuedinconnectionwiththeAcquisitionareplannedtobetradedon,NasdaqFirstNorthPremier.NasdaqFirstNorthPremierisanMTFwhichisanalternativemarketplace,operatedbyNasdaqStockholm.CompanieswhosesharesaretradedonNasdaqFirstNorthPremierarecoveredbyalessextensiveregulatoryframeworkthancompaniesthataretradedonmainmarketofNasdaqStockholm.NasdaqFirstNorthPremierisnotaregulatedmarketandisnotobligated to implement rules or procedures that comply with existing EU-directives and requirements,including directives and requirements regarding listings, disclosure and offerings. Shareholders may suffer

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actualorperceivedprejudice to theextent theCompany takesadvantageof the increased flexibility that isallowedthrougha listingonNasdaqFirstNorthPremier. It ispossiblethatthemarket fortheshareswillbesubject todisruptions, andany suchdisruptionmayhaveanegativeeffecton theCompany's shareholders,regardless of the Group’s prospects and financial performance. An investment in the Company’s sharesthereforecarriesahigherdegreeofriskthananinvestmentinacompanylistedonaregulatedmarket,suchasthemainmarket of Nasdaq Stockholm. Although the existing shares are and the Consideration Shares areplannedtobelistedonNasdaqFirstNorthPremier,itispossiblethattheshareswillnotremainlistedorthatfuturesuccessandliquidityinthemarketwillnotbeachieved.AlthoughnoassurancescanbemadeastotheliquidityofthesharesasaresultofadmissiontotradingonNasdaqFirstNorthPremier,delistingofthesharesfromNasdaqFirstNorthPremiermayhaveamaterialeffectonashareholder'sabilitytoreselltheshares inthesecondarymarket.

TheremaynotbeanactiveandliquidmarketforthesharesandthepriceofthesharesmaybevolatileTheCompany'sshareholdersshouldbeawarethataninvestmentintheCompany’ssharesisassociatedwithahighdegreeof risk,andthat thepriceof thesharesmaynotdevelop favourably.Anactiveor liquid tradingmarket in the Company’s shares may not develop or be sustained. If such market fails to develop or besustained,itcouldhaveanegativeimpactontheliquidityandpriceoftheshares,andcouldincreasethepricevolatilityoftheshares.TheCompany'sshareholdersmaynotbeinapositiontoselltheirsharesquicklyoratthemarket price if there is no active trading in the Company’s shares. The share prices of publicly-tradedcompaniescanbehighlyvolatileandthepriceofthesharescanfluctuatesubstantiallyduetovariousfactors,someofwhichcouldbespecifictotheGroupanditsoperations,andsomeofwhichcouldberelatedtotheindustryinwhichtheGroupoperatesorequitymarketsgenerally.Asaresultoftheseandotherfactors,thesharesmaytradeatpricessignificantlybelowthepriceatwhichashareholder intheCompanyacquiredtheshares.Themarketpriceofthesharesmaydecline,andthesharesmaytradeatpricessignificantlybelowthepriceatwhichashareholderintheCompanyacquiredtheshares,regardlessoftheGroup’sactualoperatingperformance,andtherecanbenoassurancesastotheliquidityofanymarketoftheshares,ashareholder'sabilitytoselltheirsharesorthepricesatwhichshareholderswouldbeabletoselltheirshares.

Certain shareholdersmay exercise considerable influence over the Company and its operations, and theinterestsoftheseshareholdersmayconflictwiththoseofothershareholdersUponcompletionof theAcquisitionand thePlacing, the five largest shareholderswill controlmore than30percent of the shares and the votes (approximately 54.33 percent) in the Company. Accordingly, theseshareholderswillgainaconsiderableinterestintheCompanyandwillconsequentlyhavethepowertocontrolthe outcome ofmanymatters to be decided by vote at a shareholders’meeting. Suchmatters include theissuanceof additional sharesor other equity related securities,whichmaydiluteholders of theCompany’sshares,andthepaymentofanyfuturedividends.TheseshareholdersmayalsobeabletoexercisecontrolovertheCompany’sboardofdirectorsthroughtheirrepresentationontheboardofdirectors,thusinfluencingitsdirectionoftheGroup’soperationsandotheraffairs.Furthermore,someoftheindividualswhohold,orwillaftertheAcquisitionofGoodgameStudioshold,managementpositionswithintheGroupareaffiliatedwithorotherwise dependent in relation to these shareholders, who thereby will be able to direct the day to dayoperations and strategy of the Company orGoodgame Studios, as the casemay be. The interests of theseshareholders may differ significantly from or compete with the Company’s interests or those of othershareholdersanditispossiblethattheseshareholdersmayexerciseinfluenceovertheCompanyinamannerthat isnot in thebest interestsofall shareholders.Forexample, therecouldalsobeaconflictbetweentheinterestsoftheseshareholdersontheonehand,andtheinterestsoftheCompanyoritsothershareholdersonthe other hand, with respect to dividend resolution or other fundamental corporate matters. Theconcentrationofshareownershipcoulddelay,postponeorpreventachangeofcontrolintheCompany,andimpactmergers,consolidations,acquisitionsorotherformsofcombinations,aswellasdistributionsofprofit,whichmayormaynotbedesiredbyothershareholdersintheCompany.SuchconflictscouldhaveamaterialadverseeffectontheGroup’sbusiness,financialconditionandresultsofoperations.

FutureofferingsofdebtorequitysecuritiesbytheCompanymayadverselyaffectthemarketpriceofthesharesandleadtosubstantialdilutionofexistingshareholdersInthefuture,theCompanymayseektoraisecapitalthroughofferingsofdebtsecurities(potentiallyincludingconvertible debt securities) or additional equity securities. An issuance of additional equity securities orsecuritieswithrightstoconvertintoequitycouldreducethemarketpriceofthesharesandwoulddilutethe

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economic and voting rights of existing shareholders ifmadewithout granting subscription rights to existingshareholders.Becausethetimingandnatureofany futureofferingwilldependonmarketconditionsat thetimeofsuchanoffering,theCompanycannotpredictorestimatetheamount,timingornatureofanyfutureoffering. Thus, holders of the shares bear the risk of any future offerings reducing themarket price of thesharesand/ordilutingtheirshareholdingsintheCompany.

FuturesalesofsharesaftertheAcquisitionmayaffectthemarketpriceofthesharesInconnectionwiththeAcquisition,certainpotentialshareholdershaveagreedtoalock-uparrangementwithCarnegieandtheCompany.Alockuparrangementisanundertaking,withcertainexceptions,nottosellsharesforacertainperiod.Thelock-upperiodwillbe360daysfollowingsettlementoftheConsiderationShares,withtheexceptionfor4,386,464ConsiderationShares,distributedprorataamongtheSellers,whichwillbesubjectto a 180 day lock-up provision. Although the lock-up arrangements restrict the ability of certain potentialshareholders to sell the shares during a specified time period, subject to certain termination events withrespecttotherestrictions,CarnegieandtheCompanymay,intheirsolediscretionandatanytime,waivetherestrictionsonsalesofthesharesduringthistimeperiod.Whentheselock-uparrangementsexpire,oriftheyare waived or terminated by Carnegie and the Company, the shares that are subject to the lock-uparrangements will be available for sale in the public market or otherwise. Sales of substantial amounts ofsharesfollowingtheAcquisition,regardlessofwhethersuchsalesaredonebythesaleofsharesinthemarketor by way of a subsequent issuance of shares, or the perception that any such sales could occur, couldadverselyaffectthemarketpriceofthesharesandmaymakeitmoredifficultforholderstoselltheirsharesatatimeandpricethattheydeemappropriate.

TheCompany’sabilitytopaydividendsinthefuturemaybeconstrainedanddependsonseveralfactorsIf declared by a shareholders’meeting, holders of shares in the Companywill be entitled to receive futuredividends.Swedish law limits theabilityof theBoardofDirectorsand theCompany toproposeanddeclaredividends to certain funds legally available for that purpose. In addition, the Company’s operations areconducted almost entirely through the Subsidiaries and the Company’s ability to generate cash tomeet itsobligationsortomakefuturedividends, ifany, ishighlydependentontheearningsandthereceiptoffundsfrom Subsidiaries via dividends or intercompany loans. As the amount of future dividend payments theCompanymaymake,ifany,willdependuponfutureearnings,financialcondition,cashflows,workingcapitalrequirements,thereceiptoffundsfromSubsidiariesand,followingapotentialcompletionoftheAcquisition,GoodgameStudios, aswell asother factors, it cannotbepredictedwhether adividendwill beproposedordeclaredinanygivenyear.

Certainnon-SwedishshareholdersmaybeunabletoexercisetheirpreferentialrightsUnderSwedishlaw,holdersofshareswillhavecertainpreferentialrightsinrespectofcertainissuesofshares,unlessthoserightsaredisappliedbyaresolutionoftheshareholdersatageneralmeetingorthesharesareissuedonthebasisofanauthorisationtotheBoardofDirectorsunderwhichitmaydisapplythepreferentialrights. Securities laws of certain jurisdictions may restrict the Company’s ability to allow participation byshareholdersinsuchjurisdictionsinanyfutureissueofthesharescarriedoutonapreferentialbasisinarightsoffer.Shareholders in theUnitedStatesaswellascertainothercountriesmaynotbeable toexercise theirpreferential rights to participate in a rights offer or a buy-back offer, as the case may be, including inconnection with an offering below market value, unless the Company’ decides to comply with localrequirements,andinthecaseoftheUnitedStates,unlessaregistrationstatementundertheSecuritiesActiseffectivewithrespecttosuchrightsoranexemptionfromregistrationrequirementsisavailable.Insuchcases,shareholdersresident insuchnon-Swedish jurisdictionsmayexperienceadilutionoftheirholdingofshares,possiblywithoutsuchdilutionbeingoffsetbyanycompensationreceivedinexchangeforsubscriptionrights.Itisnotpossibletopredictwhetherlocalrequirementswillbecompliedwithorthatanyregistrationstatementwould be filed in the United States so as to enable the exercise of such holders’ preferential rights orparticipationinanyrightsofferorbuy-backoffer.

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BackgroundandReasons

Stillfront is a group of leading creators, publishers and distributors of digital games, aiming to become aleadingindiegamedeveloperandpublisher.Stillfrontisactivewithinthreegamingsegments;thePC/consolesegment, themobile games segment, and the browser games segment,with focus on free to play strategygames on mobile and browser. The Company owns semi-autonomous game studios with global reach onmultiple platforms and with operations in Sweden, Germany, Malta, the U.S., UAE, Jordan and Romania.Stillfrontcurrentlyhas15coregamesinitsportfolio,withlargetitlessuchasCallofWar,Siege:TITANWARSandWorldatWar.Forthefirstninemonthsof2017,StillfrontrecordednetrevenuesofSEK112.7millionandanEBITmarginof17.1percent.

A core element within Stillfront’s business model is to actively identify, evaluate and acquire interestinggaming companies active in themobile and browser strategy genre. The Company has during the last fouryearsevaluatedmorethan1,000targetsandclosedonlyeightacquisitionsthathavefulfilledtheCompany’scriteria.TheacquisitionofeRepublikLabsinJune2017isonerecentadditiontotheStillfrontGroup.

On 6 December 2017, Stillfront signed an agreement with the owners of Goodgame Studios ("AcquisitionAgreement"and"Sellers"respectively)toacquireallofthesharesinAltigiGmbHforatotalconsiderationofEUR 270million on a cash and debt free basis to be paid partly in cash and partly in new issued shares inStillfront(“ConsiderationShares”).TheConsiderationShareswillrepresent72.4percentofthetotalnumberof outstanding shares and votes in Stillfront post-Transaction. As part of the Transaction, 8,360,154 of theConsiderationShareswillbeacquiredbyanumberofinvestorshavingcommittedtoacquiresharesfromtheownersofAltigisubsequentto,andconditionalupon,completionoftheTransaction("Placing").SettlementofthePlacingwilloccuras soonaspossibleafter theextraordinarygeneralmeeting tobeheld inStillfronton9January2018("EGM").

GoodgameStudios isa leadingGermangamedevelopmentcompany,producingstrategygamesbothwithinthe browser games segment and themobile games segment.Goodgame Studios has four products on twomajorgameIPs;GoodgameEmpireandBigFarm,bothavailableonbothbrowserandmobile.Forthefirstninemonthsof2017,GoodgameStudiosrecordednetrevenuesofEUR71.1millionandanEBITmarginof31.4percent.

TofinancethemainpartoftheAcquisition,Stillfront’sboardofdirectorshasresolvedtosummontheEGMtobeheldon9January2018toresolveonanissueof16,868,623ConsiderationShares,andresolvedtoconductatapissueofSEK390millionunderitsoutstandingcorporatebondloan.TheTransactionisconditionalupon,interalia,approvalbytheEGM.

The acquisition of Goodgame Studios will significantly strengthen Stillfront’s market position and gameportfolio.Thetwocompaniesareactivewithinthesamegamegenre,focusingmainlyonfree-to-playstrategygames.ThecombinationofStillfront’sbroadportfoliowithGoodgameStudios’twoblockbusterIPsmakestheportfoliosgreatcomplements.Furthermore,thestrategygenretypicallyseesastickycustomerbaseandlonggame life cycles, enabling steady revenue streams with additional upside from new game launches. Thecombined group will be well-positioned to optimise and further develop its well-diversified portfolio,consisting of the established blockbuster IPs Empire and Big Farm together with Stillfront’s many smaller,highlyprofitableIPs.

Stillfront expects the acquisition of Goodgame Studios to result in a number of potential synergies andincreasedgrowthopportunitiesdirectlyuponcompletionoftheTransaction,whichisexpectedtotakeplacefollowing the EGM. The companies have identified synergies within performance-based marketing,monetisation,shareduseoftechnologyaswellascostreductions.Achievingthesesynergieswillresult inanenhancedprofitabilitywithinthecombinedgroup.NorevenuesynergiesorcostreductionshavebeentakenintoconsiderationintheproformafigurespresentedinthisInformationMemorandum.

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Inother respects, reference ismade to the fullparticularsof the InformationMemorandum,whichhasbeenpreparedbytheboardofdirectorsofStillfrontforinformationpurposesonlyinconnectionwiththeproposedAcquisition.

The Board of Directors of Stillfront has taken all reasonable precautionary measures to ensure that theinformationcontainedinthisInformationMemorandum,asfarastheboardofdirectorsisaware,correspondsto the facts and that nothing has been omitted that would affect its import. However, the informationcontainedhereinistoalargeextentdependentoninformationpertainingtoGoodgameStudiosandtheboardofdirectorsofStillfronthasreliedonsuchinformationbeingtrueandcorrect.

Stockholm,21December2017

StillfrontGroupAB(publ)

BoardofDirectors

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Marketoverview

Theinformationaboutmarketgrowth,trends,size,andStillfront’smarketpositioncomparedtoitscompetitorsas specified in this InformationMemorandum, is Stillfront’s overall assessment based on both internal andexternalsources.ThesourcesonwhichStillfronthasbaseditsassessmentcomprise,amongmanyotherthings,information derived from industry associations such as The Entertainment Software Association (ESA) andindependent research institutes such as Newzoo and Superdata. Readers should note that macroeconomicforecasts and sentiments change. Stillfront has strived to use the latest available information from relevantsources.CertaininformationhasbeenobtainedfromvariousexternalsourcesandsuchinformationhasbeenaccuratelyreproducedinthisInformationMemorandum.AlthoughStillfrontregardsthesesourcesasreliable,no independent verification has been carried out and thus, it cannot be guaranteed that this information isaccurateorcomplete.Certainstatistics inthis InformationMemorandumhavebeencompiledbyStillfront, insomecasesonthebasisofvariousassumptions.Inviewofthis,thereader’sattentionisdrawninparticulartothefactthatmarketstatisticspresentedinthisInformationMemorandumareuncertainandthatnoguaranteecan be given regarding the accuracy of these. However, as far as Stillfront is aware and can confirm bycomparing this with other information published by the third parties fromwhich the information has beenobtained, no material information has been omitted in such a way that would render the reproducedinformationerroneousormisleading.

Overview

Despiteitsrelativelyyoungage,theglobalgamesindustryisoneofthelargestentertainmentindustriestoday.Followingthehighdegreeoftechnologyinherentingames,thereisnoshortageofinnovationintheindustry.Withtherapidintroductionofnewtechnology,allpartsoftheindustryvaluechaindevelopnewwaystomeet,andtoacertainlevelcreate,consumerdemand.

Marketsizeandgrowth

Theglobalgamesmarketislargeandgrowingatarapidpace.NewzooestimatestheglobalgamesmarketatUSD109bnin2017,up7.8percentfromanestimatedUSD101bnin2016.TheAsiaPacific(APAC)regionisthelargest at USD 51.2bn followed by North America, Europe, the Middle East and Africa (EMEA) and LatinAmerica at USD 27bn, USD 26.2bn and USD 4.4bn respectively. In addition, Newzoo estimates the globalgamesmarkettogrowatCAGR6.2percentbetween2016and2020,reachingatotalmarketsizeinexcessofUSD128bnby2020.1

Industrygrowth ismainlydrivenbygrowth inmobilegamesasconsumers increasinglyplaygamesonmoreaccessible devices. Newzoo estimates that mobile games (tablet andmobile) will constitute approximately38%oftotalglobalgamesrevenuein2017.WithaCAGRof14%between2016and2020,totalrevenuefrommobilegameswillreachUSD64bnin2020,constitutinghalfofthemarketaccordingtoNewzoo.2

Revenue from console games are expected to continue to grow – even though sales of traditional physicalvideogamesareslowing–asdigitaldistributionofconsolegamesandsubscriptionservicesareincreasing.3

Marketsegments

Segmentationbyplatform

1NewzooGlobalGamesMarketReport(Q22017)2NewzooGlobalGamesMarketReport(Q22017)3TheESAreport:Essentialfactsaboutthecomputerandvideogameindustry(2017)

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PC/Consolesegment

PC/Console games are traditional video games played either on a computer or a console such as Sony’sPlayStation,Microsoft’sXboxorNintendo’sSwitch.

PC/Console games have traditionally been sold as physical copies through retailers. Recently, however,distributionhasmovedtowardsdigitalizationwhereconsumersdownloadthegamesviaonlinechannelssuchasPlayStationNetwork,XboxLiveMarketplaceandValve’sSteamforPC.Thistrendthusreducesthepowerofthetraditionalretailerstore’sroleinthevaluechainandmakesiteasierforindependentgamedeveloperstocomeclosertothepotentialcustomers.

TheshifttodigitalhasalsointroducedtheconceptofDLC(downloadablecontent)whichallowsconsumerstopurchaseadd-onstothepurchasedgame.Thisallowsthegamedevelopertocontinuallyupdatethecontentofthegameandprovidesanadditionalsourceofrevenuefordevelopersandpublishers(incontrasttotheone-time sale of a video gamewithout subsequent add-on selling). In-gamemonetization in the form of digitalgoodsthatcanbeusedtoenhancethegameeithercosmeticallyorbyalteringgameplay isalsoontherise,bothinPC/Consolegamesthatarefreetoplay,andthosethataresoldataninitialupfrontcost.

PC/Consolegamesareoftenmoreadvancedthanmobileorbrowsergamesintermsofthegamingexperiencetheyprovide.Thisisreflectedinthattheamountofman-hoursandotherinvestmentsrequiredtodevelopaPC/Console game is significantly higher than for other types of games such as mobile or browser games.Consequently,thereisasubstantialfinancialriskinherentindevelopingPC/Consolegames,whichisoftentoohigh formany small and/or non-diversified developers to take on. Thusmany smaller independent studios,such as Stillfront’s Subsidiary Coldwood, have historically collaboratedwith larger publishers such as EA orSonytoshiftawaymostoftheriskandtoreceivehelpinmarketinganddistribution.

Mobilesegment

Mobilegamesaredevelopedforsmartphonesandtablets.

Mobilegamesmaybesocalled“casualgames”withasimplisticgamingcharacter,shortplayingtimesateachplaying occasion and low degree of player involvement. For example, casual games are often playedwhilecommutingorinbetweenmeetings.

Due to thesimplistic characterand lowdegreeofplayer involvement,mobilegames tend tohaveshort lifecycles.This,inturn,requiresdeveloperstomaintainalargeportfolioofgamesandtocontinuallyreleasenewtitlesasturnoverofgamesishigh,withafewnotableexceptionssuchasCandyCrushandAngryBirds,whichhavebeenabletoachieveexceptionalusermetrics.

Typically,mobilegamesarefastandeasytodevelop,requireonlyafewinvestmentsandareeasilydistributede.g.throughApple’sAppStore.Thisimpliesthatbarrierstoentryarelowformobilegameswhichhasallowedfor substantial competition between developers, making it difficult to achieve and maintain attractiveprofitability for the average developer. However, there are some success stories that have been highlyprofitable,suchasSwedishKingandFinnishRovio,whichstartedassmallindependentstudios,publishinganddistributingtheirgamesdirectlythroughe.g.Apple’sAppStore.

Online/Browsergamessegment

Online/Browsergamesaregamesplayeddirectlythroughaninternetbrowser.Thesegamesdonothavetobedownloaded or purchased in physical copies, and can therefore be consumed anywhere with access tointernet.

Historically,browsergameshavebeenofasimplegamingcharactersimilarlytomobilegames.Thissegmentishowevermovingtowardsmoreadvancedgamesasconsumerdemandforhighqualitycontent is increasing,andwithlevelofdepthandqualityofcontentingamesincreasing–soisthegames’lifetime.

Browsergamesareoftensocalled“free-to-play”games,meaningthatnopaymentisrequiredwhenstartingtoplaythegame.However,paymentisoftenrequiredtounlockcertainpartsofthegameortoaddspecificadvantages. In thisway,gameswitha longer lifecyclecanprovide thedeveloperwith longer-termrevenuestreams.

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ModernwebtechnologyanddesignalsoallowsforbrowsergamestoworkbothonPCandthemobileformfactor,givingthissegmentanopportunitytotakeashareof thegrowingmobilesegment,blurringthe linesbetweenthesetwosegments.

RevenuemodelsTherevenuemodelshavedevelopedandnewoneshavebeen introducedduring the lastdecadesasgameshavebecomemoreofadigitalgood thanbefore.The following revenuemodelscanalsobecombinedwitheachother,whichisincreasinglyhappening.

One-offrevenue

Inthissegment,aone-timecostischargedatthetimeofthepurchase.BothconsoleandPCgamesfallunderthiscategory.

Free-to-play

“Free-to-play” means that no payment is required when starting the game. However, payments are oftenrequiredtounlockcertainpartsofthegameortoaddspecificadvantages.

DownloadablecontentDownloadable content is additional content created for an already released video game. Downloadablecontentcanbeaddedbothtogamesthathaveaninitialone-offcostandtogamesthatarefree-to-play.Thisrequires a digital distribution which also makes the content very scalable, as the additional cost besidesdevelopingtheextracontentiseffectivelyzero.

Subscription

Inthissegment,theplayersubscribesforthegameandpaysarecurringfee.

Advertisingrevenue

Thegameprovidercanalsoreceiverevenuefromadvertisersinsteadoffromtheplayers.GamesthatcanbeaccessedthroughsocialmediawebsitessuchasFacebookareoftensponsoredbyadvertisers.

IndustryValuechain

Depending on the type of game being developed, the industry value chain varies in its composition. Forexample,inthemobilegamessegment,asmalldeveloperoftentakesitsgamesdirectlytoApple’sorGoogle’sapp store, surpassing publishers. In the case of PC games and online browser games, a developer can self-publish and distribute their games directly online, without the need of publishers, distributors or platformowners via digital distribution channels such as Steam. Note that the value chains below are based onStillfront’s view of the market and are thus only examples of typical value chains given the respectiveplatforms.Thecompaniesmentionedareexamplesofplayersandareonlyforillustrativepurposes.

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Stillfront’spositionintheindustryvaluechainStillfront’sdifferentSubsidiariesarepartofdifferentindustryvaluechainsastheirgamesdifferincharacter.

Coldwood is currently positioned as a traditional independent game developer,with ideation, creation andgamedevelopmentoncontractfordifferentlargepublishers,currentlyEA.Incontrast,Bytro,StillfrontOnlineGames, Simutronics, Babil, eRepublik, Power Challenge and OFM Studios mainly develop, publish anddistribute their games directly to the end consumer either through a web browser, Steam or Apple’s AppStore/Google Play. In this way, they are usually not dependent on a game publisher or distributor. Someservicescanbeoutsourcedforthebrowsergames,suchasmarketingandadvertising.AcurrentexceptionisSIEGE:TitanWarsbySimutronics,whichisco-publishedwithanexternalpublisher,TiltingPoint.

DevelopersGamedeveloperscreategamecontent,designthegameandwritethesoftwarecodeunderlyingthefinishedgame.

Independent(“indie”)gamedevelopersarefinanciallyandcontractuallyindependent,thusnotownedortiedtoaspecificgamespublisherorplatformowner. Indiegamedeveloperscanbothdevelopgamesfora largegame publisher or self-publish their games.When collaboratingwith a game publisher, the publisher oftenassumes the intellectualproperty to thegamewhilecompensating the independentgamedeveloperwithacontractingfeeduringgamedevelopmentandroyaltiesoneachsoldcopyofthegame.Thus,boththeriskandtheupsidefortheindependentgamedeveloperarereducedbycollaboratingwithapublisher.Thisisoftenasuitablestrategyforsmallerindependentgamedevelopers,specificallyinthePC/Consolemarket.

PublishersAgamepublisherpublishesvideogamesthattheyhaveeitherdevelopedinternallyorhavehaddevelopedbyavideogamedeveloper.

Usuallythepublisherprovidesfinancingforthedevelopmentofthegame,whilealsobeingresponsibleforthemarketresearch,pricingofthegame,andallaspectsofmarketingandadvertising.Inaddition,thepublishersupervisesthedevelopmentprocess,testsandadjuststhegameasitisbeingdevelopedandmanufacturestheproductinthecaseofphysicaldistribution.

Sincethepublisheroftenprovidesthefinancingandthusbearsthefinancialriskoftheproject,italsoretainsasignificantpartoftheIPownershipinthecaseofoutsourceddevelopment.

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DistributorsPhysicaldistributorsareusuallygamevendors,supermarketsandinternetvendors,suchasAmazon.

Distributionviadigitalchannelsisbecomingmorecommonasgamerspreferdigitallydistributedgamesmorethanever.ExamplesofdigitaldistributorsareGoogle,Facebook,AppleandAmazon.IntheU.S.,almostthreequartersofvideogamespendingoccursthroughdigitalchannels.However,eventhoughdigitaldistributionisgrowinginpopularityandphysicalvideogamesalesisdroppingglobally,physicaldistributionstillaccountsforasubstantialportionofthedistributionchannelsforPC/Consolegames.

AbovegraphshowsthetrendindigitalversusphysicaldistributionmodelofgamesfortheU.S.market.Digitalformatsales includesubscriptions,digital fullgames,digitaladd-oncontent,mobileappsandsocialnetworkgaming.4

PlatformownersTheplatformownerisattheendoftheindustryvaluechain,andmanufacturesandownstheultimatemediathat consumers use to consume the games. In the case of console games, there are essentially three largeplatformownersdominatingthemarket:Microsoft’sXbox,Sony’sPlayStation,andNintendo’sSwitch,playersthat also cover the restof the value chain via their own in-house gamedevelopment. For computer gameshowever,theendofthevaluechainisabitdifferent,withdigitaldistributionplatformsthatistheclosestthingtoplatformowners.Valve’sSteamforexample,whichcanalsobeconsideredasmoreofadistributor, isaninternet-baseddigitaldistributionplatformthatprovidesgamesandmultiplayerfunctionalitiesforWindows,Mac,andLinuxbasedcomputers.

Forconsolegames,theplatformownercontrolstheusageoftheplatformandinorderforgamestobeplayedontheplatformactorsinthelowerendofthevaluechainneedanapprovalandalicensetoreleasethegameonagivenplatform.

4 The ESA report: Essential facts about the computer and video game industry (2017); The NPD Group/GamesMarketDynamics:U.S.Digitalformatsalesincludesubscriptions,digitalfullgames,digitaladd-oncontent,mobileappsandsocialnetworkgaming

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Certainmarkettrendsanddynamics

StrongmarketgrowthGlobal gamesmarket is estimated at USD 101bn in 2016, USD 109bn in 2017 and growing to beyondUSD128bnin2020correspondingtoaCAGRof6.2percentfrom2016to2020.Industrygrowthismainlydrivenbygrowthintabletandmobilegamesasconsumersincreasinglyplaygamesonmoreaccessibledevices.5

ContentiskingLow-qualitycasualgamesfacehardercompetitionthanthemid-tohard-coregamessector.Typically,casualgames are fast andeasy to develop, require only a few investments and are easily distributed e.g. throughApple’sAppStore.This impliesthatbarrierstoentryare lowforcasualmobilegameswhichhasallowedforsubstantialcompetitionbetweendevelopers,makingitdifficulttoachieveandmaintainattractiveprofitabilityfor the averagedeveloper.6 The increasing number of games available has thus becomean entry barrier initself,makingithardertostandoutinthecrowdofgames,increasingneedforcontentquality.

MoreadvancedbrowsergamesStillfront’sstrongpositionisenhancedasbrowsergamesevolvetomoreadvancedproductswhichincreasesbarriers to entry. Historically, browser games have been of a simple gaming character similarly to mobilegames.However,thissegmentismovingtowardsmoreadvancedgamesasconsumerdemandforhighqualitycontent is increasing. Greater content quality andmore advanced games provide consumerswith a longergaming experience, leading to longer life-time-value of each user for the game developer. New webtechnologyanddesignalsoallowsgamestotargetbothPCandmobiledevicesatthesametime,broadeningthepotentialconsumerbaseandallowingforincreasedconsumerengagementandspending.

IncreaseddigitaldistributionDigitallydistributedgaming isgrowing, favouringStillfront’sdigitaldistributionmodel.Distributionofgamescanbephysical,butwithincreaseddemandofcompletelydigitalproducts,distributionviadigitalchannelsisnowthedominantwaytodistributegameexperiences.7

Growthinfree-to-playFree-to-play revenue model grows in prevalence and importance. Free-to-play massive multiplayer onlinegames (MMOG) for PC are leading growth for PC games in generalwith aCAGRof 19.4per cent for 2012-2016.8 Free-to-play is also growing on console, and similar monetization techniques as free-to-play gamesutilisesareincreasinglyusedalsowithinpaid-forgamestoextendlongevityandrevenue.

IndustryconsolidationA substantial industry consolidation trend has been visible in recent yearswith high levels ofmergers andacquisition volumes globally.9 One factor possibly fuelling this trend is heightening barriers to entry in themobile andbrowser game space as customer acquisition costs rises and consumerdemand for highqualitycontentincreases.10

5NewzooGlobalGamesMarketReport(Q22017)6VideoGamesIntelligence(VGI),”2014insightinMobileGames”7TheESAreport:Essentialfactsaboutthecomputerandvideogameindustry(2017)8Newzoo“GlobalGamesMarketWebinar(2014)”9http://venturebeat.com/2014/04/02/the-year-of-the-deal-game-industry-already-has-more-than-5b-in-mergers-and-

acquisitions-in-2014/10http://news.investors.com/technology-click/111214-726156-king-glu-lead-mobile-game-industry.htm

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Non-cyclicalmarketThegamingmarketingeneralisrelativelynon-cyclicalastheunderlyingdemandforvideogamesisrelativelyunaffected by the general business cycle. However, different game platforms can be cyclical in terms ofpopularityasgamescanbeverydependentoncurrenttrendsandnewplatformreleases.

MobileandtabletgamesgrowthWithanestimatedCAGRof 14per centbetween2016and2020,mobile and tablet games is the strongestgrowingsector.11This incrediblegrowthhasattracteda lotof interest, resulting inaconstant inflowofnewgamedevelopers andnewgame titles. Themobile and tablet games segment is thus very competitive, andhavingalow-riskdevelopmentstrategyand/orahighlyskilledmarketingteamisincreasinglyimportant.

Industrycompetition

Thecompetitivelandscapediffersforthedifferentgamingproducts,butingeneral,withrecentrapidindustrygrowth, thegamingmarketremainsextremelycompetitive.The industry isgrowingfast,constantlyevolvingandthepotentialforsuccessfornewcomersremainsimmense.Theeffectsofindustrycharacteristicssuchasquicklydevelopingtechnology,intensecompetitionandvolatileconsumerhabitsarethatnocompetitiveedgeislong-termsustainableandthetoppositionisthusalwaysbeingfoughtover.

Game consumers in general are not very brand-focused and do not develop long-term bonds with certaingamingcompaniescomparedtoothermorebrand-focusedindustriessuchasluxurycarorclothingindustries.Gamedevelopershavetobeconstantlycreativeandpriorsuccesseshaverelativelysmalleffectonthefutureofthecompanyastraditionalvideogamerevenuelifetimeisratherfinite.

Thegaming industry is inall regardsglobalandStillfront’sSubsidiaries thus competewithgamedevelopersfromallovertheworld.

Console/PCgamesBefore technology and quality developed to current levels, video game development budgets weresignificantlylower,anditwasviableforgamedeveloperstostartfromscratchanddeveloptheirowngameswithverylittlefunding.Videogamescouldbedevelopedbysmallerteamsandtookafewmonthstoproduce.Inamarketwith littlecompetition,gamesoftenspreadvirallyandmarketingcostswere limited.These twofactorsresultedinlargepossibleprofitmarginsforthegameindustry.

Astheindustryhasgrownrapidlytobecomeoneofthehighestgrossingentertainment industriesofall,thecompetitionandthustheneedanddriveforinnovationanddemandforhigherqualitycontenthaveincreased.Improvements in gaming technology and the increasing demand for higher quality content quickly led to aneed for largerdevelopment teamsand longerdevelopmentcycles.The increasedcompetition then fuelledmarketingandadvertisingcosts,leadingtoescalatingvideogamebudgetsingeneral.Thelargegamebudgets,coupledwithahit-drivenmarket,couldalsobeseenasfactorsthatincreasetheriskforthepartybearingthecostsofdevelopingavideogame.

However,comparedtoothergamingsectorssuchasmobileandtabletgames, thecompetitive landscape isstill somewhatmore restricted. The increase in budgets and higher demand for quality content, aswell asshortergamelifecycles,havebecomebarrierstoentryintheconsoleandPCgamesector,makingitvirtuallyimpossibleforindividualhobbyistsandsmallerteamsdevelopinggamestocompeteeffectivelyinthissector,withmanysmalldevelopersgoingoutofbusinessasaresult.

Key competitors for Coldwood include a wide array of independent high quality studios. In the Nordics,AvalancheStudios,StarbreezeandParadoxInteractivearegoodexamples.Largestudiosbelongingtothelargepublishers,i.e.nonindependent,alsoconstitutesonecategoryofcompetitorsasthey,alongwithColdwood,

11NewzooGlobalGamesMarketReport(Q22017)

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wantacutofthepublishers’budgets.However,thelargepublisherssuchasEA,Sony,andMicrosoftaremoreseenaspotentialpartnersratherthancompetitors.

MobileandtabletgamesThemobilegamemarketisboomingandstilldeveloping,resultinginaconstantsignificantinflowofnewgamedevelopers and new game titles. Thousands of games are submitted eachmonth toApple’s App Store andGooglePlay.Currently,thetotalamountofgameappsinApple’sAppStoreisover790,000.12It isestimatedthat even more game developers will continue to enter the market and a wider range of games will beintroducedastheindustrycontinuestoevolve.

Thebarriers toentry formobilegames in termsofdevelopmentcostsare lowercompared tomidandhighqualityconsoleandPCgames.However,thesignificantchangesinseamlessdistributionmodelsandincreasedcompetition means that tens of thousands of games are fighting for consumer attention, and consumermarketinghasbecomethekeydifferentiationandgreatestcostandbarriertoentry.

Key competitors for Subsidiaries that focus onmobile games, like Simutronics, Babil and eRepublik, is verywideandincludesgamegiantssuchasZynga,EAmobileandActivisionBlizzard(King)andGameloft,butalsomorefocusedmobilegamesdeveloperssuchasGamevil,SupercellandRovio.However,asthedevelopmententry barriers are low, competition can also come from individuals or small networks of people developinggamesforahobby.WithdigitaldistributionplatformssuchasApple’sAppStoreandGooglePlay,thestepforareallysmallfirst-timedevelopertocreateahugehitisnotaslargeasinthePCgamesector.

BrowsergamesAsthebrowsergame industryhasdevelopedandevolvedfrombeingmostlysimplisticcasualgames,a low-barrierindustrysimilartomobilegames,tomovingtowardsmoreadvancedgames,thebarrierstoentryhaveincreasedslightlyandthecompetitivelandscapehasthusbecomenarrower.Therewillofcoursestillbecasualbrowsergameswithlowerbarrierstoentry,butmid-tohard-corebrowsergamesareincreasinginpopularity,changing the competitive landscape in that quality content and high game immersion is becoming moreimportant.

Thisdevelopmentisalsofuelledbytheincreasinguseracquisitioncostinthebrowserspace,andcostpernewaccountishigherthanever.Asitgetsmoreexpensivetobuytrafficandusers,gamesneedtobecomemoreimmersive and have longer game cycles in order for marketing to pay off. Long game cycles and highimmersionwillthusincreasechancestogetpositivereturnonmarketinginvestments.

Stillfront considers all browser games to be competitors in the sense that they all contribute to risingmarketingcosts, leading to risinguseracquisitioncosts forStillfront.Directkeycompetitors forSubsidiariesthathavestrategyBrowsergameslikeBytro,StillfrontOnlineGamesandeRepublikincludecompaniessuchasInnoGames,Wargaming,Plarium,andParadoxInteractive(developsPCgames)astheyalsocreatemultiplayeronline war strategy gameswith similar features. Direct competitors for Power Challenge and OFM Studiosinclude companies such as CAT Games, What If Sports, Northworks, and Sports Interactive (develops PCgames).

12http://www.pocketgamer.biz/metrics/app-store/app-count/,2017-11-30

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DescriptionoftheStillfrontGroup

Business

GeneralThe Group is an independent creator, publisher and distributor of digital games, with a vision to becomeEurope’sleadingindiegamedeveloperandpublisher.

MarketSegmentsTheGroupdividesitsgamesintofourdifferentsegments:the“HealthyLegacy”segment,the“CrossPlatform”segment, the “Mobile Apps” segment and the “Downloadables” segment. During Q3 2017, the “HealthyLegacy”gamessegmentaccountedforapproximately17percentoftheGroup’sbusiness,the“CrossPlatform”segment for approximately 29 per cent of theGroup's business, the “Mobile Apps” segment accounted forapproximately43percentoftheGroup’sbusinessandthe“Downloadables”segmentforapproximately11percentoftheGroup’sbusiness.

• Healthy Legacy games segment. Healthy legacy games are online games with a long history ofgeneratingrevenuewithalong-timeengageduserbase.Thesegamesareoperatedinaveryleanwayfocusedonengagingtheexistinguserbaseandreducingchurn.

• CrossPlatformgamessegment.CrossPlatformgamesareonlinegamesthathavethepotentialtobeplayedonseveralplatforms,i.e.theplayercanstartagameinabrowserandthencontinuethesamegameonSteamoronamobiledeviceorevenaconsole.Historically,browsergamesandmobilegameshavebeenofasimplegamingcharacter,andseparatefromeachother.Thesesegments,however,aremovingtowardsmoreadvancedgamesasconsumerdemandforhighqualitycontentisincreasing,andmodernweb technologyanddesignareenabling truecrossplatformexperiences.Asa result, the lifecycleofgamesanduserengagement is increasing.Crossplatformgamesareoftensocalled“free-to-play”games,meaningthatnopaymentisrequiredwhenstartingtoplaythegame.However,paymentisoftenrequiredtounlockcertainpartsofthegameortogainspecificadvantages.Inthisway,gameswithalongerlifecyclecanprovidethedeveloperwithlonger-termrevenuestreams.

• Downloadables.Downloadable games are traditional video games played either on a computer or aconsole. Traditionally, these types of games have been sold as physical copies through retailers, buttoday the majority of sales and revenue is coming through digital channels. This trend reduces thepower of the traditional retailer store’s role in the value chain andmakes it easier for independentgamedeveloperstocomeclosertothepotentialcustomers.Theshifttodigitalhasalsointroducedtheconcept of DLC (downloadable content) which allows consumers to purchase add-ons to purchasedgames. Monetization strategies similar to “free-to-play” games are also increasingly common withinthese types of games, enabling additional purchases of digital goodswithin the game.Downloadablegamesareoftenmoreadvancedthanmobileorbrowsergamesintermsofthegamingexperiencetheyprovide,whichisreflectedintheamountofman-hoursandotherinvestmentsrequiredtosuchsgamein comparison toMobileAppsorCrossPlatformgames.Consequently, there is a substantial financialrisk inherent indevelopingDownloadablegames,which isoften toohigh formanysmalland/ornon-diversified developers to take on. Thus many smaller independent studios, such as the Company’sSubsidiaryColdwood,havehistorically collaboratedwith largerpublishers suchas EAor Sony to shiftawaymostoftheriskandtoreceivehelpinmarketinganddistribution.

• Mobile Apps.Mobile games are developed for smartphones and tablets.Mobile games have usuallybeen so called "casual games"witha simplistic gaming character, shortplaying timesateachplayingoccasionandlowdegreeofplayerinvolvement.Duetothesimplisticcharacterandlowdegreeofplayerinvolvement,mobilegamestendtohaveshortlifecycles.This,inturn,requiresdeveloperstomaintainalargeportfolioofgamesandtocontinuallyreleasenewtitlesasturnoverofgamesishigh.Thesetypesofmobilegamesarefastandeasytodevelop,requireonlyafewinvestmentsandareeasilydistributed.This implies that barriers to entry are low for mobile games which has allowed for substantialcompetitionbetweendevelopers,makingitdifficulttoachieveandmaintainattractiveprofitability,with

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a small number of notable exceptions. As mobile devices are now more powerful, more advancedgamesaresuitableformobiles,withhighergamerimmersionandlifetime.ThesemoreadvancedgamesaremainlytheonesthattheSubsidiariesarefocusingondeveloping.

BusinessModelTheCompany’scurrentSubsidiariesapplythreedifferentbusinessmodels:

①Proprietarydevelopmentandpublishing(BytroLabs,PowerChallenge,StillfrontOnlineGames,eRepublik,SimutronicsandOFMStudios)

Gamedevelopment is internallyperformedand financed,whichenables retained intellectualproperty (“IP”)ownershipandlargeupsidepotential.Theupfrontinvestmentriskismitigatedwiththeuseofgameengines,asthe investmentpergamebecomessmaller foreverynewgamereleasedonthesamegame.Therevenuemodelisfreetoplaywithmonetisingthroughin-gamepurchases.

②Partnershipdevelopmentandpublishing(ColdwoodInteractive)

Development andpublishing is carriedout in collaborationwith a global publisher suchas Sonyor EA,whoobtainstheIPownershipofthegamebutfinancesthedevelopment,marketinganddistribution.Theabsenceofup-frontinvestmentindevelopment,marketinganddistributionreducestheGroup’sriskwhilethelossofIPownershiplimitstheupside.Therevenuemodeliscontractingfeeswithroyaltyparticipationonsoldcopies.

③Adaptationandpublishing(BabilGames)

Adaptation and publishing does not entail development of games but localised adaptation of games fromexternal developers to meet the requirements of a certain market. The adaptations relate to language,graphics and in some cases also to adding social functions. Revenues are generated through a free-to-playmodelwithingamepurchaseoptions.

StudiosThe Group operates through eight near-autonomous studios: Bytro Labs and OFM Studios in Germany,ColdwoodInteractiveinSweden,PowerChallengeintheUKandSweden,SimutronicsintheU.S.,BabilGamesin the UAE and Jordan, eRepublik in Ireland and Romania and Stillfront Online Games with Dorado OnlineGamesinMalta.TheGroup’sgamesaredistributedglobally,althoughitsmaintargetmarketsincludetheU.S.,UK,Germany,MENAandFrance.

• BabilGamesfocusesonadaptingandpublishingmobilegamesfortheMENAmarket.Itadaptsgamesfrom external – mainly Chinese – developers to the specific requirements of the MENA market,including adapting language, graphics and in some cases adding social functions. Revenues aregeneratedthroughafree-to-playmodelwithingamepurchaseoptions.

• BytroLabsdevelopsandpublishescrossplatformwarstrategygames,earningrevenuethroughafree-to-playmodelwithingamepurchaseoptions.

• ColdwoodInteractive isagamestudiocurrentlydevelopinggamesonacontractualbasisforconsolesand PC and has a long history of console games. Coldwood generally earns revenues by way ofcontractingfeesduringgamedevelopmentandroyaltiesoneachsoldcopyofagame.

• StillfrontOnline Games develops and publishes cross platformwar strategy games, earning revenuethroughafree-to-playmodelwithingamepurchaseoptions.

• eRepublikdevelopsmobileandcrossplatformstrategygames,earningrevenuethroughafree-to-playmodelwithingamepurchaseoptions.

• OFMStudiosdevelopsandpublishesbrowser-basedsportsmanagergames,earningrevenuethroughafree-to-playmodelwithingamepurchaseoptions.

• Power Challenge develops and publishes browser-based sports manager games, earning revenuethroughafree-to-playmodelwithingamepurchaseoptions.

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• Simutronicsdevelops advancedmobile games, earning revenue through a free-to-playmodelwith ingamepurchaseoptions.Theyalsomaintainlegacyonlinegameswithmorethan30yearsofhistory.

GamesportfolioTheGrouphasawell-diversifiedgamesportfolioacrossarangeofgenresandplatforms.KeygametitlesoftheGroupinclude:

HealthyLegacysegment

• Gemstone IV andDragonrealms,browser-based fantasygamesoriginally launched in1987and1996,respectively;

• ManagerZone,browser-basedsportsmanagementgameslaunchedin2001;

• OnlineFussballManager,browser-basedsportsmanagementgameslaunchedin2003;

CrossPlatformsegment

• Supremacy1914,abrowser-basedWorldWarIstrategygamelaunchedin2009;

• CallofWar,acrossplatformWorldWarIIstrategygamelaunchedin2015;

• ConflictofNations:ModernWar,abrowser-basedcontemporarystrategygamelaunchedin2017;

• eRepublik.com,abrowser-basedmassivelymultiplayeronlinegamelaunchedin2007;

Downloadablessegment

• Unravel,apuzzle/strategyplatformgamelaunchedforconsoleandPCin2016;

MobileAppssegment

• TankStorm,amobilewarstrategygamefocusedonMENAregionlaunchedin2015;

• Admiral,amobilewarstrategygamefocusedonMENAregionlaunchedin2016;

• AgeofLords,amobilestrategygamelaunchedin2015.

• WorldatWar,amobilewarstrategygamelaunchedin2016;

• SIEGE:TitanWars,anadvancedmobilereal-timemultiplayergamelaunchedin2017;and

• WarandPeace:CivilWar,amobilewarstrategygamelaunchedin2017.

TheStillfrontGroup

TheStillfrontGroup’sorganisationalset-upisconcentratedintheCompanyitselfprovidingprofessionalgroupmanagementoverthestudioslistedabove.Thismanagementframeworkprovidesaprofessionalstructuretoguidecreativityintheentrepreneurialgame-developingsubsidiariesandtoobtaininter-subsidiarysynergies.

ProfessionalStructureThe Company seeks to professionalise decision making relating to investments and operations in order toimproveresourceallocation.Forexample,therisk-to-rewardprofileofdifferentinvestmentopportunitiesareweighedagainsteachothertoselectthemostbeneficialinvestmentfortheGroupatagivenpointintime.Inaddition,groupmanagementmayalsobeabletoleverageitsindustrynetworksthroughouttheGroup.

GuidedCreativityGroup management applies a professional framework to improve resource allocation and to centraliseadministrative functions across the Group, leaving entrepreneurs and game developers free to originate,conceptualiseanddevelopgames.

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SynergiesThe central management of the Group creates cost synergies through centralised overhead functions andmarketingprocurement.Furthermore,theGroupcanbenefitfromcross-promotionsynergiesbetweengamesandbetweenSubsidiaries,aswellasknowledge-sharingsynergiesbetweenSubsidiaries.

GroupStructure

The below structure chart shows the legal structure of the Group as at the date of this InformationMemorandum.*

TheCompanyistheultimateparentcompanyintheGroupandhasseveraldirectandindirectsubsidiariesindifferent countries. A significant portion of the Group's business is carried out through the Subsidiaries.Consequently,theCompanyisdependentuponitsSubsidiaries.

MidCoandTodaviaarewholly-ownedsubsidiariesoftheCompany.BabilGames,PowerChallenge,BytroLabsand Coldwood Interactive are wholly-owned subsidiaries of MidCo and indirectly wholly-owned by theCompany.StillfrontOnlineGames,SimutronicsandOFMStudiosaremajorityownedbyMidCo.eRepublik isjointly owned by Stillfront and MidCo. Each of the Subsidiaries is dependent on the Company for groupmanagementpurposeasfurtherdescribedundersection"TheStillfrontGroup"above.OnGOLFisadormantcompany wholly-owned by MidCo. Todavia was established in 2017, for the purposes of facilitating thehandlingoftheCompany'sincentiveprogramme.

* AllmembersoftheGrouparedirectlyorindirectlywholly-ownedbytheCompanyunlessotherwiseindicated.** One shareof eRepublik Labs. Limited is ownedby theCompany. The1,999,999,999other sharesof eRepublik Labs.

LimitedareownedbyStillfrontMidcoAB.

ManagerZone(U.S.)

DOGProductionsLtd

(Malta)

OFMStudiosGmbH

(Germany)

TodaviaAB(Sweden)

StillfrontGroupAB(publ)(Sweden)

StillfrontMidcoAB

(Sweden)

PowerChallengeAB(Sweden)

DOGHoldingsLtd

(Malta)

80% 55.06%

51%

PowerChallenge

HoldingsLtd(U.K.)

StillfrontOnlineGamesAB(Sweden)

ColdwoodInteractiveAB(Sweden)

BytroLabsGmbH

(Germany)

onGOLF HongKongLimited

(HK)

eRepublik LabsLimited**(Ireland)

SimutronicsCorp.(U.S.)

ERPK LabsS.R.L.

(Romania)

Babil GamesJordanBranch

(Jordan)

Babil GamesFZLLC

(UAE)

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Strategy

TheGroup’sstrategyfocussesonthefollowing:

• Internaloperationalstrategy:focussingonimprovingandextendingtheGroup’sportfolioofgames,longlife-cyclegames,gameenginesforscalabilityandcross(X)platformdevelopment.

• Growth: the Group intends to increase profitability by capitalising on the internal operational strategythroughbothorganicgrowthandfurtheracquisitions.

• Marketing: the Group’s marketing strategy is based on publishing and brands, aiming to target thepotentialofthirdpartypublishingandincreasingownbrands.

Intellectualproperty

GeneralIntellectual property rights to works produced by the Group's employees are generally transferred via theemployment agreements. Consultants are only occasionally involved in work that results in intellectualproperty rights. The employees are remunerated for the transfer of rights to the employing entity throughtheirsalaries.Generally,noextrapaymentsaremadeasconsiderationforthetransferofrights.

MaterialIntellectualPropertyRightsTheGroup’smaterialintellectualpropertyrightsareasfollows:

Trademarks. Bytro Labs, Simutronics, DOG Holdings Ltd, eRepublik, and ERPK Labs S.R.L have registered anumberof trademarks in relevant classes and territories.No trademarkshavebeen registeredby theotherGroupcompanies.

Domainnames.TheGroupcompaniesholdanumberofdomainnameswhichareusedinandareconsideredrelevantforthebusiness.

DisputesNomaterialdisputesregardingtheGroupcompanies'intellectualpropertyrightsareon-going.

FinancialinformationregardingStillfront

ThefollowingdocumentsareincorporatedintothisInformationMemorandumbyreference:

• theGroup’sannualfinancialstatementsforthefinancialyearended31December2015(the“2015AnnualReport”);

• theGroup’sannualfinancialstatementsforthefinancialyearended31December2016(the“2016AnnualReport”andtogetherwiththe2015AnnualReportthe"AnnualReports");and

• theGroup'sinterimfinancialstatementsfortheperiod1January2017to30September2017(the“2017Q3 Report”). The documents incorporated by reference are to be read as part of this InformationMemorandum. All such reports are available on the Company’s websitehttp://www.stillfront.com/site/investor-relations/financial-reports/ and can also be obtained from theCompanyinhardcopy.

FactorsAffectingComparabilityoftheAnnualHistoricalFinancialInformation

ChangeofAccountingPrinciplesThe 2015 Annual Report was prepared in accordance with GAAP. The Group has since then changed itsaccounting principles to IFRS and the 2016 Annual Report has therefore been prepared in accordancewith

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IFRS.ThetransitionhastakenplaceinaccordancewithIFRS1First-timeAdoptionofIFRS(“IFRS1”).Themainrule in IFRS1requirestheentityapplyall IFRSstandardsretrospectivelywhendeterminingtheopening IFRSbalance sheet and the comparison years have therefore been fully converted to IFRS. However, certainexemptions from the retrospective application are permitted, while some exemptions from retrospectiveapplicationaremandatory.NomandatoryexemptionsappliedtotheGroup.OftheoptionalexemptionstheGroup chose to apply the option not to restate acquisitions of businesses retroactively and to zero thetranslationdifferences.Thismeansthattheacquisitionanalyseswhichweremadeforbusinesscombinationsprior to 1 January 2014 are unchanged compared to how they were reported in the most recent annualreports. Explanations of how the transition from previous GAAP to IFRS has affected the Group’s financialpositionandfinancialresultsareshowninthe2016AnnualReport;forcomparabilitybetweentheCompany'sfinancialperiods,pleasereviewtherelevantfinancialinformationsetoutinthe2016AnnualReportwiththecorrespondingfinancialinformationforthe2015AnnualReport.

Auditing

AuditorsoftheAnnualHistoricalFinancialInformationTheauditingoftheAnnualReportswasconductedinaccordancewithgenerallyacceptedauditingstandardsinSwedenandtheauditreportssubmittedwereunqualifiedwithoutothermodifications.

At the annual general meeting held on 19 May 2017, Mazars SET Revisionsbyrå AB was re-elected as theCompany's auditor andMichael Olssonwas re-appointed as auditor-in-charge to serve until the end of theannual generalmeeting in 2018.MichaelOlsson is an authorisedpublic account andamemberof FAR, theprofessionalbodyfortheaccountancysectorinSweden.TheofficeaddressofMazarsSETRevisionsbyråABisMästerSamuelsgatan56,SE-11183Stockholm,Sweden.

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DescriptionofGoodgameStudios

Business

GeneralGoodgame Studios is an independent developer and publisher of free-to-play games available throughbrowsersandonmobiledeviceswithmorethan340millionregisteredusersworldwide.GoodgameStudiosisa leading German game development company, producing strategy games both within the browser gamessegment and themobile games segment.Goodgame Studios has four hit products on twomajor game IPs;GoodgameEmpireandBigFarm,bothavailableonbothbrowserandmobile.Forthefirstninemonthsof2017,GoodgameStudiosrecordednetrevenuesofEUR71.1millionandanEBITmarginof31.4percent.

MarketSegmentsGoodgameStudiosisactivewithinthemid-core,free-to-playgamesegmentononline/browsermobile.Duringthecalendaryear2016,online/browsergamesaccountedforapproximately60percentofGoodgameStudios’business,andmobilegamesforapproximately40percentofGoodgameStudios’business.

• Online/Browser and Mobile games. Online/Browser games are games played live directly through aninternetbrowser.Thesegamesdonothave tobedownloadedorpurchased inphysical copies,andcanthereforebeconsumedanywherewithaccesstointernet.Mobilegamesaredevelopedforsmartphonesandtablets,usuallydownloadedthroughtheplatformprovider’scatalogue

• Free-to-Play.Infree-to-playgames,playerscangainaccesstoasignificantportionoftheircontentforfreebutcanalsomakepaymentstopurchasein-gamevirtualitemsortoaccessadditionalcontent.Inthisway,gameswithalongerlifecyclecanprovidethedeveloperwithlonger-termrevenuestreams.

• Mid-core games. The casual category is distinguished by its broad appeal: they appeal to people of allages,genderandnationalities.Initiallydrivenbysocialnetworkingservicesonwebbrowser,inparticularFacebook,theproliferationofmobiledevicesdrovethespreadofcasualgamesgenerally,Mid-coregameshowever,arealsopartofthistrendandhaverapidlygainedprominenceamongplayerswithpriorgamingbackground or casual gamers who seek a more immersive experience. Growing player sophistication,combinedwithtechnologyadvancementsinmobiledevices,whichplayersusuallyusefromthecomfortoftheir home or during longer stretches of time spent in transit, has fuelled the rise of mid-core gamesfeaturingmore intricategraphicsandgameplaymechanisms.Deeperengagement inthesegamesoftenresultsinstrongretentionandmonetizationmetricsincomparisontocasualgames.

BusinessModelGoodgameStudioscurrentlyemploysthefollowingbusinessmodel:

Proprietarydevelopmentandpublishingoffreegameswithin-gamepurchases

Game development is internally performed and financed, which enables retained IP ownership and largeupside potential. All games are available for free,while users are encouraged to purchase virtual currency,whichcanbeusedtoacquirein-gamevirtualitemstoenhanceplayers’gamingexperience.ThegamescanbeaccessedonGoodgameStudios’ownwebsitegoodgamestudios.com,aswellasthroughpartnerwebsitesandonmajormobileplatforms.

GamesportfolioGoodgame Studios has a diversified games portfolio across web and mobile platforms. Key game titles ofGoodgameStudiosinclude:

• GoodgameEmpire,abrowser-basedmedievalstrategygamelaunchedin2011

• Empire:FourKingdoms,amobile-basedmedievalstrategygamelaunchedin2013

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• BigFarm,aweb-basedfarmingeconomysimulationgamelaunchedin2012

• BigFarm:MobileHarvest,aweb-basedfarmingeconomysimulationgamelaunchedin2017

CompanyStrategy

Based on extensive knowledge of the free-to-play model and extensive analyses of industry trends andconsumer preferences, Goodgame Studios strives to develop its current portfolio and create new games toproduceattractive long-termeconomicpotential.GoodgameStudiosbelieves that thequalityof thegames,combinedwithperformance-basedmarketingandavastglobaldistributionnetwork,willenableittoachievethis.

StrongPortfolioofMid-coreFree-to-PlayGamesGoodgame Studios constantly endeavours to improve existing games and retain existing users through thecontinued release of new content and features tailored to users’ playing preferences and behaviour. Thecontent and characteristics of new games under development are continuously optimised to reflect playerpreferencesandbehaviour,aswellasgamesofcompetitorswithaviewto launchingnewgameswith long-termeconomicpotential,targetingvariousplayergroups.

InnovationtransferforrepeatedsuccessGoodgameStudioshasafocusontransferringexperiencetonewandexistinggamestoboostthesuccessofthetitles.Forexample, itssuccessfultransitiontomobiledeviceshasdemonstrated itsabilityto leverage itsexperience to quickly adapt to important trends anddifferent platforms.Goodgame Studios' game-to-gameinnovationtransferhasalsoprovensuccessful,asitstransferofexperienceandknowledgeamongexistingandintonewgameshasresultedintherepeatedsuccessofitstitles.Forexample,automated,customisedoffers,whichwereinitiallyintroducedforplayersinGoodgameEmpire,wereswiftlyadoptedinBigFarmandEmpire:FourKingdoms

Strongperformance-basedmarketingleadingtohighreturnoninvestmentAllmarketingactivitiesareperformance-focusedandaimtoattractspecificsegmentsoftheplayeraudiencewithhighmonetizationpotential,withaviewtomaximizingtheROIofGoodgameStudios'marketingactivities.ImproveddataanalyticsandtheemergenceofsophisticatedtargetedadvertisingondigitalplatformsenableGoodgame Studios to adopt a rigorous approach to investing in marketing over the life of a game, whichgreatlydiffersfromthetraditionalmarketingcampaigns

Deepandgrowingfree-to-playknowledgeleadingtostrongmonetizationDeep base of free-to-play knowledge on all aspects of operations, from game design to monetizationmechanics,hasenabledstrongmonetizationoftheuserbase.Thegamesbenefitedfromspill-overeffectsoflearningandgame-independentknow-howwithintheir lifecycles,andGoodgameStudioscontinuestodrivegamedevelopmentprocessbuildingonaccumulatedknowledgeofthefree-to-playmodel.

GlobalwebgamedistributionnetworkIn addition toGoodgame Studios’ ownwebsite, goodgamestudios.com, games are published in cooperationwith third-party platform operators. Goodgame Studios has been steadily expanding and developing a far-reachinganddiversifiedpublishingnetwork for itsgames.Thecurrentnetworkcomprisesmorethan16,000publishing partners that distribute the browser games on worldwide and local bases. This has significantlycontributedtodiversifyingandamplifyingrevenuestreams.

GroupStructure

Thebelowstructurechart shows the legal structureofGoodgameStudiosasat thedateof this InformationMemorandum:

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Intellectualproperty

GeneralIntellectual property rights to works produced by the Group's employees are generally transferred via theemployment agreements. Consultants are only occasionally involved in work that results in intellectualproperty rights. The employees are remunerated for the transfer of rights to the employing entity throughtheirsalaries.Generally,noextrapaymentsaremadeasconsiderationforthetransferofrights.

MaterialIntellectualPropertyRightsGoodgameStudios’materialintellectualpropertyrightsareasfollows:

Trademarks.GoodgameStudioshasregisteredanumberoftrademarksinrelevantclassesandterritories,suchasGGGOODGAMELogo,GoodgameStudios,GoodgameEmpire.Empire:FourKingdoms.

Domainnames.TheGroupcompaniesholdanumberofdomainnameswhichareusedinandareconsideredrelevantforthebusiness.

DisputesNomaterialdisputesregardingGoodgameStudio'sintellectualpropertyrightshavebeenidentified.

Competition

Competition in the browser and mobile gaming industry is intense in most major markets, involving bothbrowser andmobile gaming companies and gameoperators usingothermedia (such as console games).Asmanygamingcompaniesdevelopgamesonsocialnetworksandmobileplatformsandmanynewdevelopersenterthegamingmarketonaregularbasis,browserandmobilegamesarebecomingmorewidelyaccessibleacross platforms and countries. Goodgame Studios, fully armed with high quality games and a scientificapproach to effectively monetise its user base, believes it is well positioned to differentiate itself in thiscompetitiveenvironment.

GoodgameStudios’maincompetitorsinclude:

Globalmobileandbrowsergamedevelopers.Someofthesecompetitors includeKingDigitalEntertainmentPLC;GameloftS.E.;GungHoOnlineEntertainment,Inc.;ZyngaInc.;GluMobile,Inc.;SupercellOy;Kabam,Inc.;RovioEntertainmentLtd.;MachineZone, Inc.;WoogaGmbH;BigpointGmbH; InnogamesGmbH;GameforgeAG;andWargamingPublicCompany,Limited.

OnlinegamedeveloperswithafocusonAsia.Someofthesecompetitors includeTencentHoldingsLimited;DeNACo.,Ltd.;GreeInternational,Inc.;NCSOFTCorporation;NexonCo.Ltd;NetEase,Inc.;Changyou.comLtd.;ShandaGamesLtd.;andIGGInc.

Traditionalgamedevelopers.SomeofthesecompetitorsincludeActivisionBlizzard,Inc.;ElectronicArts,Inc.;UbisoftEntertainmentS.A.;Take-TwoInteractiveSoftware,Inc.;andKonamiDigitalEntertainment,Inc.

Altigi GmbH

Goodgame StudiosJapanK.K.,Tokyo

Goodgame StudiosKoreaLtd,SeoulLiquidated in2017

30

Auditing

TheauditingofGoodgameStudios'annualreportshavebeenconductedinaccordancewithgenerallyacceptedauditingstandardsinGermanyandtheauditreportssubmittedwereunqualifiedwithoutothermodifications.

With the shareholder's resolution of 17 October 2017,Mazars GmbH & Co. KG was elected as GoodgameStudios'auditorwiththeintentiontoappointTobiasZickmannasauditor-in-chargetoauditthefinancialyear2017.TobiasZickmannisaCertifiedpublicaccountantandtaxadvisor.

TheofficeaddressofMazarsGmbH&Co.KGisDomstraße15,20095Hamburg,Germany.

31

DescriptionoftheNewGroup

Transactionlogic

The acquisition of Goodgame Studios will significantly strengthen Stillfront’s market position and gameportfolio.Thetwocompaniesareactivewithinthesamegamegenre,focusingmainlyonfree-to-playstrategygames.ThecombinationofStillfront’sbroadportfoliowithGoodgameStudios’twoblockbusterIPsmakestheportfoliosgreatcomplements.Furthermore,thestrategygenretypicallyseesastickycustomerbaseandlonggame life cycles, enabling steady revenue streams with additional upside from new game launches. Thecombinedgroupwillbewell-positionedtooptimiseandfurtherdevelopitswell-diversifiedportfolio,consistingof the established blockbuster IPs Empire and Big Farm together with Stillfront’s many smaller, highlyprofitableIPs.

Stillfront expects the acquisition of Goodgame Studios to result in a number of potential synergies andincreased growthopportunities directly upon completionof the Transaction. The companies have identifiedsynergies within performance-based marketing, monetisation, shared use of technology as well as costreductions.Achievingthesesynergieswillresultinanenhancedprofitabilitywithinthecombinedgroup.

LegalStructureoftheNewGroup

Assuming that the Acquisition is completed, Goodgame Studios will be transferred to and owned by theCompany'swholly-ownedsubsidiaryStillfrontMidcoAB.Theshares inGoodgameStudioswillbepledgedtoIntertrust SwedenAB in its capacity as agent in relation to theCompany's Bond. Thebelow structure chartshowsthelegalstructureoftheNewGroupfollowingapotentialcompletionoftheAcquisition:*

TheCompanywillbetheultimateparentcompanyintheNewGroupandwillcontinuetohaveseveraldirectandindirectsubsidiariesindifferentcountries.AswasthecasepriortotheAcquisition,asignificantportionofthe NewGroup's businesswill be carried out through the subsidiaries. Goodgame Studioswill, as all otherSubsidiaries, operate on a stand-alone basis also following a potential completion of the Acquisition.Consequently,theCompanyis,andwillcontinuetobe,dependentuponitssubsidiaries.

ManagerZone(U.S.)

DOGProductionsLtd

(Malta)

OFMStudiosGmbH

(Germany)

TodaviaAB(Sweden)

StillfrontGroupAB(publ)(Sweden)

StillfrontMidcoAB

(Sweden)

PowerChallengeAB(Sweden)

DOGHoldingsLtd

(Malta)

80% 55.06%

51%

PowerChallenge

HoldingsLtd(U.K.)

StillfrontOnlineGamesAB(Sweden)

ColdwoodInteractiveAB(Sweden)

BytroLabsGmbH

(Germany)

onGOLF HongKongLimited

(HK)

eRepublik LabsLimited**(Ireland)

SimutronicsCorp.(U.S.)

ERPK LabsS.R.L.

(Romania)

Babil GamesJordanBranch

(Jordan)

Babil GamesFZLLC

(UAE)

GoodgameStudiosJapan

K.K.

GoodgameStudiosKorea

Limited***

AltigiGmbH

32

* Allmembersof thegrouparedirectlyor indirectlywholly-ownedby theCompanyunlessotherwise indicated (in thecaseofAltigianditssubsidiaries,theywillbedirectlyorindirectlywholly-ownedbytheCompanysubjecttocompletionoftheAcquisition).

** One shareof eRepublik Labs. Limited is ownedby theCompany. The1,999,999,999other sharesof eRepublik Labs.LimitedareownedbyStillfrontMidcoAB.

***Liquidatedin2017.

The Board of Directors and Senior Management of Stillfront following theAcquisition

AspartofthetransactionandinorderfortheboardofdirectorsofStillfronttoinabetterwaybecomposedtoreflect the ownership of the Company after the Transaction, Stillfront's nomination committee has, inconsultationwiththeSellers,nominatedoneboardmemberproposedbytheSellerstobeappointedbytheEGMprovidedthattheTransactioncloses.Thenominatedboardmemberispresentedundersection"BoardofDirectorsandManagement".NootherchangestotheboardofdirectorsofStillfrontareenvisagedasaresultoftheAcquisition.Consequently,subjecttoEGMapproval,theboardofdirectorswillfollowingtheAcquisitionbecomprisedofAnnetteBrodinRampe(chairman),AlexanderBricca,MarkMiller,BirgittaHenriksson,UlrikaViklund,StureWikmanandChristianWawrzinek.

NochangesoftheseniormanagementofStillfrontGroupAB(publ)areenvisagedasaresultoftheAcquisition.

NewFinancialTargets

TheboardofdirectorsofStillfronthasadoptednewfinancialtargetswhicharelinkedtotheCompany'srevisedgroupstructurefollowingcompletionoftheTransaction.Thenewfinancialtargetsareasfollows:

• Growth-Stillfront'slong-termrevenuegrowthobjectiveistohaveayearlyorganicgrowthabovemarketgrowth.Inadditiontogrowingorganically,Stillfrontwillcontinuetogrowthroughacquisitions.

• Margin-Stillfront'slong-termprofitabilitygoalistohaveanEBITmargininexcessof30percent

• Dividend-Stillfront'sdividendpolicyistodistributeannualdividendsupto50percentoftheGroup'snetprofit. Dividends may vary from year to year depending on M&A activity and the Group's financialposition.13

• Leverage-Stillfront intendstomaintainaNetDebt/EBITDAratiobelow1.5x.TheGroupmayhowever,undercertaincircumstances,choosetoexceedsuchlevelduringshorttimeperiods.

13 For as long as the Company's current Bond loan remains outstanding, no dividend will be paid due to dividendrestrictionsunderthetermsandconditionsforthebondloan.

33

ProFormaFinancialInformation

BackgroundoftheproformafinancialinformationStillfrontintendstoacquireGoodgameStudioson9January2018.GoodgameStudioswillbeacquiredforthetotal consideration of 270 MEUR, equivalent of 2 681.9 MSEK.14 The consideration consists of 390 MSEK,equivalentof39.3MEUR14financedwithintheexistinglimitofanexistingcorporatebondofStillfront,andtheremaining230.7MEUR,equivalentof2291.9MSEK,14throughapproximately16.9millionnewlyissuedshares.The acquisition is classified as a reverse acquisition in accordance with IFRS 3, mainly on the basis thatGoodgameStudiosoperationallyisthelargercompanyandthatGoodgameStudios’existingshareholderswillcontrola largernumberofsharesandvotes inthenewgroup, thanStillfront’sexistingshareholders.Hence,the pro forma financial information is presented with Goodgame Studios as the accounting acquirer, eventhough Stillfront is the legal acquirer. The new combined groupwill continue under the name of Stillfront,meaning that theuseof “Stillfront” in thispro forma financial informationmeansStillfrontGroupABor thenewgroupthatwillbeformedbytheacquisition.

PurposeoftheproformafinancialinformationThe transaction will have a direct effect on Stillfront’s future earnings, financial position and cash flows.ThereforeStillfronthaspreparedproformafinancialinformationasofandforthenine-monthperiodended30September2017toillustratetheeffectthattheacquisitionmighthavehadonStillfrontiftheacquisitionhadbeen completed on an earlier date. For purposes of the pro forma income statement the acquisition isassumed tohavebeencompletedasof January1,2017and for thepurposeof thepro formastatementoffinancialpositiontheacquisitionisassumedtohavetakenplaceasofSeptember30,2017.

Thepro formafinancial informationdescribesahypotheticalsituationandhasbeenpreparedfor illustrativepurposes only. The pro forma financial information does not include all of the information required forfinancialstatementsunderIFRS.

Moreover, the pro forma financial information may not necessarily reflect Stillfront’s actual results ofoperationsor financialposition if theacquisitionhadactuallybeencompletedonsuchearlierdateandsuchproformafinancial informationshouldnotbeconsideredtobe indicativeofStillfront’sresultsofoperationsfor any future period. Accordingly, potential investors should not pay undue attention to the pro formafinancialinformation.

Basisfortheproformafinancialinformation

Basisforpreparation

The pro forma financial information is prepared based on the principles of the Prospectus Regulation809/2004/EC.

Accountingpolicies

The pro forma financial information has been prepared in accordance with Stillfront’s accounting policiesunder IFRS,asdescribed inStillfront’s2016AnnualReport,whicharetheaccountingpolicies thenewgroupexpectstoapplyinthefuture.Neworamendedaccountingstandardsthatarenotapplicableasof2017havenot been considered in the pro forma financial information. Those standardsmight impact future financialreportsofthenewgroup.

GoodgameStudiospreparesitsexternalfinancialstatementsaccordingtoGermanGAAP.However,GoodgameStudiosalsopreparesfinancialstatements inaccordancewithIFRS.Ananalysisofthedifferences inapplyingIFRSbetweenStillfrontandGoodgameStudioshasbeenperformed.ThedifferenceidentifiedisthatStillfrontandGoodgameStudiosapplydifferentmethodstorecognizerevenueunderIFRS.Forthepurposeofthispro

14FX-rateSEK/EUR9.9329asofDecember6

34

formafinancial informationGoodgameStudioshaspreparedinternalreportsinaccordancewiththerevenuerecognitionmethodusedbyStillfront.

Supportingdocuments

Stillfront-publishedinterimreportasofandforthenine-monthperiodendingSeptember30,2017reviewedbytheCompany’sauditor.ThereporthasbeenpreparedinaccordancewithIAS34.

Goodgame Studios – internal reports as of and for the nine-month period ending September 30, 2017,accordingtoIFRS.

Currency

TheproformafinancialinformationispresentedinSEK,whichisStillfront’spresentationcurrency.Theincomestatement and statement of financial position of Goodgame Studios are presented in EUR and have beenconvertedintoSEK.Forthepurposesoftheproformaincomestatement,theaverageSEK/EURexchangerateduringthenine-monthperiodJanuary1–September30,2017of9.580hasbeenused.Forthepurposesoftheproformastatementoffinancialposition,theexchangerateasofSeptember30,2017ofSEK/EUR9.567hasbeenused.

AllFX-ratesusedareobtainedfromtheSwedishCentralBank.

Synergiesandintegrationcosts

No pro forma adjustments have been made for synergies or integration costs in the pro forma financialinformation.

Assumptionsfortheproformafinancialinformation

PreliminaryPurchasePriceAllocation(PPA)

ThepreliminaryPPAperformedasofDecember4,2017withStillfrontasthetarget isbasedonan implicitlycalculated total consideration transferredof873.0MSEK. In total,218.0MSEKof intangibleassetshasbeenidentifiedandadjusted for,andwillbeamortizedover theeconomic lifeof the respective intangibleassets.ThePPAisasfollows:

PreliminaryPPA MSEK Economiclife

Gametitles 47.0 5-10Developedtechnology 119.4 5Indevelopmenttechnology

12.6 5Customerrelationships 39.0 5Deferredtaxliability -48.0 Totalintangibleassets 170.0 Othernetassets -173.5 Totalnetassets -3.5 Totalconsideration 873.0 Goodwill 876.5

The preliminary PPA is conducted on Stillfront as the target due to the reverse acquisition. An implicitcalculationgivesahypotheticaltotalconsiderationof873.0MSEK.Comparedtototalnetassetsofnegative3.5MSEK,therecognizedgoodwillis876.5MSEK.

35

Financingoftheacquisition

AccordingtotheAcquisitionAgreement,GoodgameStudioswillbeacquiredforthetotalconsiderationof270MEUR(2681.9MSEK15),partlyfinancedbyanewshareissueandpartlybyacashpayment.Inaccordancewiththe Acquisition Agreement the new share issue corresponds to 230.7 MEUR (2 291.9 MSEK15). A volumeweighted average price of Stillfront’s shares onNasdaq First North during the five (5) trading days prior tosigning of the Acquisition Agreement (6 December 2017), the day of signing included, with a discountamountingto5percent,of135.87SEKandaFX-rateof9.3929SEK/EURasof6December2017isused,whichrendersapproximately16.9millionissuedshares.Thecashpaymentof390MSEKwillbefinancedwithintheexistinglimitofanexistingcorporatebondofStillfront,whichisissuedatapremiumof101%ofthenominalamount.Theinterestrateforthebondisvariable(Stibor3M+7.5%)withamaturityofthreeyears.Forthepurposeoftheproforma,Stiborasof6December2017isusedtocalculatetheinterestfortheperiod.

Dividendpayment

In accordancewith the Acquisition Agreement, a dividend payment fromGoodgame Studios to the currentownerswillbeexecutedpriortotheacquisition.GoodgameStudioswillremainsufficientlyfundedtoa levelthat itmay still carryout itsbusinessoperations consistentwithpastpractice.Ananalysisof thedifferencebetweenthenormalworkingcapitalandthecurrentworkingcapitalservesasthebasisfortheamountofthedividendpayment.ThedividendpaymentwillresultinanadjustmentreducingCashandbank.Thereductionof cash generates less interest income. Based on the current interest rate level, the reduction of interestincomeisassessedtobeimmaterialandthereforenoadjustmentwillberecognized.

Tax

TAXeffectshavebeencalculatedforeachoftheadjustmentsthataredeemedtobetax-deductibleexpensesandtaxable income.TheadjustmentsrelatingtoGoodgameStudioshasbeencalculatedusingthecorporatetax rate inGermany (32.25%).Theadjustments relating toStillfronthasbeencalculatedusing thecorporatetaxrate inSweden(22%).Thetaxeffects in thepro formafinancial informationmightdiffer fromactual taxeffectswhen the transaction is executed pending on the current tax in the respective entity aswell as therespectivecountrywhereintangibleassetsarelocated.

ProformaIncomeStatementfortheperiodJanuary1–September30,2017

15FX-rateSEK/EUR9.9329asofDecember6

Million

Altigi,€IFRS

Unaudited

Altigi,SEKIFRS

Unaudited

Stillfront,SEKIFRS

Unaudited

AdjustmentsSEK

UnauditedNotes

Proformaincome

statementSEK

UnauditedNetrevenues 71.1 681.5 112.7 - 794.2Otherrevenues 0.8 7.9 3.5 - 11.4TotalOperatingRevenues 72.0 689.4 116.2 0.0 805.6

Generaloperatingexpenses -43.0 -412.2 -79.2 - A1 -491.4Depreciation,amortizationandwrite-downs -6.6 -63.2 -17.6 -12.9 D2 -93.8AdjustedOperatingresult 22.3 214.0 19.4 -12.9 H 220.5

Transactioncosts - - - -74.1 A2,E1 -74.1Restructuringcosts -4.8 -45.9 - - A2 -45.9Operatingresult 17.5 168.1 19.4 -87.0 100.5

Financialincome 0.0 0.0 0.6 - 0.6Financialexpenses - - -8.6 -23.2 B1,E3 -31.8Totalfinancialitems 0.0 0.0 -8.0 -23.2 -31.2Operatingresultafterfinancialitems 17.6 168.1 11.4 -110.2 69.3

Taxesfortheperiod -5.9 -56.4 -2.6 8.0 F -51.0Netresultfortheperiod 11.7 111.7 8.8 -102.3 18.2

36

ProformastatementoffinancialpositionasofSeptember30,2017

Notestotheproformafinancialinformation

Adjustmentsfordifferencesinpresentationformat

A -Thepro forma financial information ispresented ina condensed formatcompared toStillfront’soriginalpresentationformat.AdjustmentshavebeenmadetoStillfront’spresentationformattobemoretransparentandsuitableforthepurposeoftheproformafinancialinformationforthenewgroup.

A1 - Internally accrued during the year of 23 MSEK, Other operating expenses of 52.3 MSEK, Personnelexpenses of 49.8 MSEK, and Other expenses of 0.1 MSEK in Stillfront’s income statement have beenreclassifiedasGeneraloperatingexpensesintheproformaincomestatement.

A2–TransactioncostsandRestructuringcostsareconsiderednon-recurringandareshownseparatelyinordertopresentarepresentativeproformaAdjustedoperatingresult.

Acquisition-relatedadjustments

BFinancing

B1 - The acquisition is financed partly through a new share issue and partly through cash payment thatStillfrontisfinancingwithintheexistinglimitofanexistingcorporatebondofStillfront.Accordingtothetermsandconditionsforthebond,theinterestrateforthebondisvariable(Stibor3M(-0.61%perDecember6)+7.5%)withmaturityofthreeyears.IfStiborisnegativethebondrunswithinterestratecorrespondingtothemargin (7.5%). An adjustment of negative 21.7MSEK is recognized to account for the additional financingcosts.Theadjustmenthasacontinuingimpact.

B2–Adjustmentof393.9MSEKreferstothecashreceivedthroughthebondissue.Thecashconsiderationof390MSEK is transferred to the former shareholdersofGoodgameStudiosaspartof the total considerationandhasbeeneliminatedaccordinglyinOthershareholder’sequity.

CDividendpayment

InaccordancewiththeAcquisitionAgreement,adividendpaymentof21.7MEUR(equivalentof207.9MSEK)fromGoodgameStudiostothecurrentownersisexecutedpriortotheacquisition.TheadjustmentisreducingCashandbankandOthershareholder’sequity.

Million

Altigi,€IFRS

Unaudited

Altigi,SEKIFRS

Unaudited

StillfrontSEKIFRS

Unaudited

AdjustmentsSEK

Unaudited Notes

ProformaBalanceSheet

UnauditedOtherintangibleassets 15.6 148.8 106.6 111.4 D1 366.8Goodwill - - 252.6 623.9 D1 876.5Intangiblenoncurrentassets 15.6 148.8 359.2 735.3 1243.3

Tangiblenoncurrentassets 1.1 10.6 1.1 - 11.7Deferredtaxassets - - 8.2 - 8.2Noncurrentreceivables - - 4.8 - 4.8

Currentreceivables 6.2 59.6 22.6 - 82.2Cashandbank 25.1 239.8 71.1 -234.0 B2,C,E2 76.9

Totalassets 48.0 458.8 467.0 501.3 1427.1

Shareholders'equitySharecapital 0.1 0.7 4.5 11.1 G1 16.3Othershareholders'equity 30.6 292.9 176.9 7.7 B2,C,D1,E1,E2,G2 477.5TotalShareholder'sequity 30.7 293.6 181.4 18.8 493.8

Non-currentliabilities 2.8 26.7 264.1 408.4 B2,D1,E2 699.3

Currentliabilities 14.5 138.5 21.5 74.0 E1 234.0

TotalLiabilitiesandShareholder'sequity 48.0 458.8 467.0 427.3 1427.1

37

DIntangibleassets

D1 - The following intangible assets were identified in the acquisition analysis; Game titles, Developedtechnology, In development technology, and Customer relationships. The total fair value of the intangiblesamountsto218.0MSEK,whichresultsinadeferredtaxliabilityof48.0MSEK(basedontheSwedishcorporatetaxrateof22%).BasedonthePPA,thegoodwillamountsto876.5MSEK.Theoriginalrecognizedgoodwillof252.6MSEKandintangibleassets(Capitalizeddevelopmentexpensesof68.2MSEK,Gametitlesof38.4MSEKanddeferredtaxliabilityof23.5MSEK)ofStillfrontareeliminatedaccordingly.

D2 -Amortizationof theseassets, save forgoodwillwhich isnotamortized, ismadeona straight-linebasisovertheestimatedeconomiclifeoftheassets.TheestimatedeconomiclifeispresentedinthepreliminaryPPAtableabove.Theamortizations(basedonfairvalue)fromJanuary1toSeptember30,2017amountsto30.5MSEKandhavebeenadjustedintheproformaincomestatement.Theamortizationsandwrite-downsof17.6MSEKfortheintangibleassetsrecognizedbyStillfront(basedonbookvalue)arecorrespondinglyeliminated.The net effect in the pro forma income statement is negative 12.9MSEK. The pro forma adjustment has acontinuingimpact.

ETransactioncosts

Adjustmentsarerecognizedintheproformaincomestatementaswellastheproformastatementoffinancialpositionfortheestimatedtransactioncostsfortheacquisitionandtherelatedbondandshareissues.

E1-Theestimatedcostsfortheacquisitionareadjustedwithanincreaseof74.1MSEKinTransactioncostsinthepro forma incomestatementandwithan increaseof74.0MSEK inCurrent liabilitiesandreductionwith74.0MSEK inOthershareholders’equity intheproformastatementof financialposition.Asthetransactioncostsarenottaxdeductible,notaxeffect isrecognizedfortheadjustment.Theadjustmentdoesnothaveacontinuingimpact.

E2-Theestimatedcostsof30MSEKforthebond(10MSEK)andshareissue(20MSEK)areadjustedforinCashandbankof negative 30MSEK,Other shareholders’ equity of negative 20MSEK andOther interest bearingsecuritiesofnegative10MSEK.Notaxeffectisrecognizedfortheadjustment.Theadjustmentdoesnothaveacontinuingimpact.

E3-Theestimatedcostsof10MSEKforthebondissueaswellasthepremiumof3.9MSEKareamortizedoverthelifeofthebond(threeyears).Fortheninemonthsin2017acostof1.5MSEKisadjustedforinFinancialexpensesintheproformaincomestatement.Theproformaadjustmenthasacontinuingimpact.

FTAXeffects

TAXeffectshavebeencalculatedforeachoftheadjustmentsthataredeemedtobetax-deductibleexpensesandtaxable income.TheadjustmentsrelatingtoGoodgameStudioshasbeencalculatedusingthecorporatetax rate inGermany (32.25%).Theadjustments relating toStillfronthasbeencalculatedusing thecorporatetaxrateinSweden(22%).

GEquity

G1–Adjustmentsof11.1MSEKhasbeenrecognized inSharecapital toreflectthesharecapitalof the legalparent,includingtheequityinterestsissuedbythelegalparenttoeffectthecombination.

G2–Adjustmentsof7.7MSEKhasbeenrecognizedinOthershareholders’equity.TheadjustmentsconsistofaneliminationofStillfront’sothershareholders’equityofpositive178.0MSEK,aneliminationofnegative15.6MSEKwhichreducesOthershareholders’equityandincreasesSharecapitalinaccordancewithG1above,aneliminationofthecashdividendofnegative21.7MEUR(equivalentof207.9MSEK)asdescribedinnoteC,aneliminationofnegative335.7MSEKfortheoriginalrecognizedgoodwill,intangibleassetsandrelateddeferredtaxliabilitiesasdescribedinnoteD1,anincreaseforthetotalconsiderationof873.0MSEK,aneliminationofthe cash consideration of negative 390MSEK as described in note B2, and an elimination of the estimatedtransactioncostsofnegative94.0MSEKasdescribedinnoteE1andE2.

38

HAlternativePerformanceMeasurements

Adjusted Operating result is defined as the reported operating result before Transaction costs andRestructuringcosts.StillfrontbelievesthatAdjustedOperatingresultisausefulmeasureforshowingtheprofitgeneratedbytheoperatingactivitiesexcludingTransactioncostsandRestructuringcosts,assuchcostsarenotconsideredtobeindicativeofthenewgroup’sfutureoperations.

Intra-grouptransactions

There were no transactions between Stillfront and Goodgame Studios during the period and hence noadjustmentisneeded.

39

Theauditor'sreportontheproformafinancialinformation

TotheBoardofDirectorsinStillfrontGroupAB,corporateidentitynumber556721-3078

TheAuditor’sReportonProFormaFinancialInformationWe have audited the pro forma financial information set out on pages 33-38 in Stillfront Groups AB:sinformationmemorandumdated21December2017.

Thepro forma financial informationhasbeenprepared for illustrativepurposesonly toprovide informationabout how the consolidated income statement and statement of financial position of the Stillfront GroupwouldhavebeenaffectediftheacquisitionwouldhavetakenplaceonJan1,2017respectiveSep30,2017.

TheBoardofDirectors’responsibility

It is the Board of Directors’ responsibility to prepare the pro forma financial information based on theprinciplesoftheProspectusRegulation(EC)No809/2004.

Theauditor’sresponsibility

ItisourresponsibilitytoprovideanopinionbasedontheprinciplesinAnnexIIitem7ofProspectusRegulation809/2004/EC.Wearenotresponsibleforexpressinganyotheropinionontheproformafinancialinformationor of any of its constituent elements. In particular, we do not accept any responsibility for any financialinformationusedinthecompilationoftheproformafinancialinformationbeyondthatresponsibilitywehaveforauditor´sreportsregardinghistoricalfinancialinformationissuedinthepast.

Workperformed

We performed our work based on FAR´s Recommendation RevR 5 Examination of Prospectuses. ThisrecommendationrequiresthatwecomplywithFAR´sethicalrequirementsandhaveplannedandperformedtheaudittoobtainreasonableassurancethatthefinancialstatementsarefreefrommaterialmisstatements.ThefirmappliesISQC1(InternationalStandardonQualityControl)andaccordinglymaintainsacomprehensivesystem of quality control including documented policies and procedures regarding compliance with ethicalrequirements,professionalstandardsandapplicablelegalandregulatoryrequirements.

WeareindependentofStillfrontGroupABinaccordancewithprofessionalethicsforaccountants inSwedenandhaveotherwisefulfilledourethicalresponsibilitiesinaccordancewiththeserequirements.

Our work, which involved no independent examination of any of the underlying financial information,consisted primarily of comparing the unadjusted financial information with the historical information,assessing the evidence supporting the pro forma adjustments and discussing the pro forma financialinformationwiththemanagementofthecompany.

We planned and performed our work so as to obtain the information and explanations we considerednecessaryinordertoobtainreasonableassurancethattheproformafinancialinformationhasbeencompiledonthebasisstatedonpages33-38,andinaccordancewiththeaccountingprinciplesappliedbythecompany.

Opinion

Inouropiniontheproformafinancialinformationhasbeenproperlycompiledonthebasisstatedonpages33-38andinaccordancewiththeaccountingprinciplesappliedbythecompany.

Stockholm,December21,2017

MazarsSETRevisionsbyråAB

MichaelOlsson

AuthorisedPublicAccountant

40

BoardofDirectorsandManagement

AbriefintroductiontotheCompany'sboardofdirectors,includingthecandidateproposedforelectionontheextraordinarygeneralmeetingon9January2018,andtheseniormanagementoftheGroupissetforthbelow.MoreinformationabouttheindividualspresentedbelowcanbefoundontheCompany´swebsite.

BoardofDirectors

AnnetteBrodinRampe,ChairoftheBoard

Born1962.Chairsince2017andboardmembersince2016.

Other current positions: Board member ofHerCareSwedenABandFerronordicMachinesAB.BoardmemberandmanagingdirectorofHus1AB,Jobb1ABandSund1AB.DeputyboardmemberofBRNSWK Nordic AB. Partner with BrunswickGroup.

AnnetteBrodinRampehasbeenappointedCEOofInternationellaEngelskaSkolaniSverigeHoldingsIIABasfrom1March2018.

Holdings of financial instruments in Stillfront:9,677shares(heldthroughalegalentity).

Independentinrelationtomajorshareholders:Yes

IndependentinrelationtotheCompanyandmanagement:Yes

AlexanderBricca,BoardMember

Born1976.Boardmembersince2008.

Othercurrentpositions:DeputyboardmemberofColdwoodInteractiveAB.

Alexander Bricca has agreed with ParadoxInteractive AB to assume the position as CFO ofParadox InteractiveAB.Hewill enter thepositionwithin sixmonths.AlexanderBriccahas thereforeannounced that he will leave his boardassignmentsinStillfrontandColdwoodInteractive.TheNominationCommitteetakesnoteofthisinitsnomination work before the Annual GeneralMeetingtobeheldinMay2018.

Holdings of financial instruments in Stillfront:4,194shares.

Independentinrelationtomajorshareholders:Yes

IndependentinrelationtotheCompanyandmanagement:Yes

MarkMiller,BoardMember

Born1973.Boardmembersince2016.

Other current positions: Managing Director ofCatCapGmbH.

HoldingsoffinancialinstrumentsinStillfront:0.

Independentinrelationtomajorshareholders:Yes

IndependentinrelationtotheCompanyandmanagement:No

BirgittaHenriksson,BoardMember

Born1963.Boardmembersince2017.

Other current positions: Partner with BrunswickGroup.

Holdings of financial instruments in Stillfront:2,250shares.

Independentinrelationtomajorshareholders:Yes

Independent in relation to the Company andmanagement:Yes

UlrikaViklund,BoardMember

Born1981.Boardmembersince2017.

Othercurrentpositions:BoardmemberofGodEliSverige AB, Idea2Innovation Sweden AB, AdgieConsultingAB,HouseBeiÅreABandMyAcademySwedenAB.BoardmemberandmanagingdirectorHouseBeHoldingAB.Boardmemberanddeputymanaging director of Magine Media InvestmentsAB,MagineSwedenABandMagineAB.ManagingdirectorofMagineHoldingAB.

HoldingsoffinancialinstrumentsinStillfront:0.

Independentinrelationtomajorshareholders:Yes

Independent in relation to the Company andmanagement:Yes

41

StureWikman,BoardMember

Born1954.Boardmembersince2017.

Other current positions: Chairman andmanagingdirector of Precima Production Aktiebolag. Boardmember and managing director of Naeco AB,NaecoFastighetAB,NaecoStallYAB.

Holdings of financial instruments in Stillfront:43,693shares.

Independentinrelationtomajorshareholders:Yes

Independent in relation to the Company andmanagement:Yes

ChristianWawrzinek (proposed to be elected attheEGM)

Born1980.

Other current positions: Founder, ManagingDirector and Chief Strategy Officer of GoodgameStudios.

Holdings of financial instruments in Stillfront:Noneatpresent.Forholdingsfollowingapotentialcompletion of the Acquisition, please see section"ShareCapitalandOwnershipStructure".

Independentinrelationtomajorshareholders:No16

Independent in relation to the Company andmanagement:No17

16InformationassumescompletionoftheAcquisition.17InformationassumescompletionoftheAcquisition.

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SeniorManagement

JörgenLarsson,CEO

Born1964.CEOinStillfrontsince2015.

Other current positions: Board member andManaging Director of Mind Improvement GroupScandinavia AB. Board member of Idecap AB,Sontagh & Larsson Investment Strategy AB,Coldwood Interactive AB, Stillfront Midco AB,Stillfront Online Games AB and Power ChallengeAB. Deputy board member of 4P BusinessConsultingABandSandhammarenUtvecklingAB.

Holdings of financial instruments in Stillfront:208,106 shares (held through legal entities) and60,000warrants.

StenWranne,CFO

Born 1961. CFO in Stillfront since 2010, full timesince2015.

Other currentpositions:Boardmemberof PowerChallenge Holding Ltd, Black Ocean DevelopmentAktiebolag, Deseven International Aktiebolag,PamplemousseHoldingAB,F2NSHoldingAB,D702Invest AB and Black Ocean Invest AB. Deputyboardmember of Influence AB, Power ChallengeAB, Stillfront Online Games AB, and StillfrontMidco AB. Deputy board member and managingdirectorofDesevenCapitalAktiebolag.

Holdings of financial instruments in Stillfront:87,243 shares (held through legal entities) and40,000warrants.

MohammadJFahmi

Born1985.CEOandfounderofBabilGamesLLC.

Othercurrentpositions:-

Holdings of financial instruments in Stillfront:109,196shares.

AJFahmi

Born1981.COOandfounderofBabilGamesLLC.

Othercurrentpositions:-

Holdings of financial instruments in Stillfront:58,797shares.

HubertusThonhauser

Born1968.FounderofBabilGamesLLC.

Other current positions:Memberof theboardofdirectorsofStadtcasinoBadenAG(Switzerland).

Holdings of financial instruments in Stillfront:177,302shares.

TobiasKringe

Born1980.ManagingDirectorofBytroLabsGmbHsince2009.

Othercurrentpositions:ManagingDirectorofFKLHoldingGmbH.

Holdings of financial instruments in Stillfront:310,086shares(heldthroughalegalentity).

FelixFaber

Born 1980. Managing Director (Operations) ofBytroLabsGmbHsince2009.

Other current positions: Managing Director(Operations)ofFKLHoldingGmbH.

Holdings of financial instruments in Stillfront:310,086shares(heldthroughalegalentity).

ChristopherLörken

Born 1980. Managing Director (Technology) ofBytroLabsGmbHsince2009.

Other current positions: Managing Director(Technology)ofFKLHoldingGmbH.

Holdings of financial instruments in Stillfront:310,086shares(heldthroughalegalentity).

ChristopherHolmberg

Born 1977. Studio Manager of ColdwoodInteractiveABsince2003.

Other current positions: Board member ofAktiebolagetNorraTeknikinvest.

Holdings of financial instruments in Stillfront:20,000shares.

JakobMarklund

Born 1973. Technical Director of ColdwoodInteractiveABsince2003.

Othercurrentpositions:-

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Holdings of financial instruments in Stillfront:21,812shares.

DavidWhatley

Born1966.FounderandCEOofSimutronicssince1987.

Othercurrentpositions:PresidentCriticalThoughtGames,LLC.

Holdings of financial instruments in Stillfront:18,851 shares (held through a legal entity) and10,000incentivestockoptions.

AlexisBonte

Born 1976. Founder and CEO of eRepublik since2007.

Other current positions: Executive in Residence(XiR)atAtomico.Non-executiveboardmember inseveral companies (internet, healthcare and realestate). Non-executive chairman ofwww.trilulilu.roandZonga.fm.

Holdings of financial instruments in Stillfront:76,054shares.

ChangesofSeniorManagementfollowingtheAcquisition

No changes of the senior management of Stillfront Group AB (publ) are envisaged as a result of theAcquisition.

NochangesoftheseniormanagementofGoodgameStudiosareenvisagedasaresultoftheAcquisition.ThemanagementofGoodgameStudiosispresentedbelow.

KaiWawrzinek

Born1976.Founder,managingdirectorandChiefExecutiveOfficerofGoodgameStudiossince2009

Othercurrentpositions:-

HoldingsoffinancialinstrumentsinStillfront:Noneatpresent.ForholdingsfollowingapotentialcompletionoftheAcquisition,pleaseseesection"ShareCapitalandOwnershipStructure".

ChristianWawrzinek

Born1980.Founder,managingdirectorandChiefStrategyOfficerofGoodgameStudiossince2009

Othercurrentpositions:-

HoldingsoffinancialinstrumentsinStillfront:Noneatpresent.ForholdingsfollowingapotentialcompletionoftheAcquisition,pleaseseesection"ShareCapitalandOwnershipStructure".

ConflictsofInterestwithinAdministrative,ManagementandControlBodies

Otherthanassetoutbelow,therearenoconflictsof interestbetweenthedutiesoftheboardmembersormembersofseniormanagement inrespectoftheCompanyortheSubsidiariesandtheirprivate interestsorothercommitments.

Severalmembersof theBoardofDirectorsof theCompanyandmembersof theseniormanagementof theNew Group have or will, following the Acquisition have, certain financial interests in the Company as aconsequenceoftheholdings,directorindirect,ofsharesintheCompany.WhiletheCompanyrecognisesthepotential conflicts, the Company does not believe that such appointments constitute an actual conflict ofinterestbetweensuchpersons'dutiestotheCompany.

MohammadJFahmiandAJFahmiarebrothers.KaiWawrzinekandChristianWawrzinekarebrothers.Otherthanthat,therearenofamilytiesbetweenanyoftheboardmembersormembersoftheseniormanagementoftheNewGroup.

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ShareCapitalandOwnershipStructure

SharecapitaloftheCompanyAsat21December2017,theCompany'ssharecapitalamountedtoSEK4,497,505.60dividedamong6,425,008shares. The shares are denominated in SEK. Since 8 December 2015, the Company's shares are traded onNasdaqFirstNorth,withtradingsymbolSFandISIN:5E0007704788.Since29June2017,theCompany'ssharesare traded on Nasdaq First North Premier. As at 30 September 2017, there were approximately 1,500shareholdersintheCompany.

ThefollowingtableshowstheprincipalshareholdersofsharesintheCompanyasat30September2017:

Shareholder NumberofShares

ProportionofShareCapital

ProportionofVotingCapital

FKLHoldingGmbH* 930,257 14.48% 14.48%

SwedbankRoburFonder 493,102 7.67% 7.67%

PrioritetFinans 253,272 3.94% 3.94%

IdinvestPartners 230,681 3.59% 3.59%

AvanzaPension 215,385 3.35% 3.35%

IdecapAB 204,836 3.19% 3.19%

HubertusThonhauser 177,302 2.96% 2.96%

IQCapital** 175,174 2.73% 2.73%

NordnetPensionsförsäkring 172,889 2.69% 2.69%

NiclasEriksson 135,889 2.27% 2.27%

OtherShareholders 3,436,221 53.48% 53.48%

Total: 6,425,008 100.00% 100.00%* Ownedby33.33%eachbyFelixFaber,ChristopherLörkenandTobiasKringe.

** Accordingtopressrelease10October2017,IQCapitalhasdivestedallsharesintheCompany.

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TheboardofdirectorsofStillfronthasproposedthattheEGMresolvestoissue16,868,623newConsiderationShares to the Sellers as partial consideration for shares in Goodgame Studios. As part of the Transaction,8,360,154oftheConsiderationShareswillbeacquiredbyanumberofinvestorshavingcommittedtoacquireshares from the owners of Altigi subsequent to, and conditional upon, completion of the Transaction. ThePlacing ismade at a price per share equal to the price per share in the issue of the Consideration Shares.SettlementofthePlacingwilloccurassoonaspossibleaftertheEGMtobeheldon9January2018.

ThefollowingtableshowstheownershipstructurefollowingapotentialcompletionoftheAcquisitionandthePlacing:

Shareholder NumberofShares

ProportionofShareCapital

ProportionofVotingCapital

LaureusCapital* 6,283,475 26.98% 26.98%

SwedbankRoburFonder 2,185,896 9.38% 9.38%

FörstaAP-fonden 1,839,994 7.90% 7.90%

GlobalFoundersCapital 1,276,246 5.48% 5.48%

HandelsbankenFonder 1,068,521 4.59% 4.59%

FKLHoldingGmbH** 930,257 3.99% 3.99%

CarnegieFonder 919,997 3.95% 3.95%

PrioritetFinans 474,071 2.04% 2.04%

NiclasEriksson/Vasastaden 467,087 2.01% 2.01%

Novobis 374,399 1.61% 1.61%

OtherShareholders 7,473,688 32.08% 32.08%

Total: 23,293,631 100.00% 100.00%

* Ownedby50%eachbyKaiWawrzinekandChristianWawrzinek.** Ownedby33.33%eachbyFelixFaber,ChristopherLörkenandTobiasKringe.

Exemptionfrommandatorybidobligation

LaureusCapitalGmbHcurrentlydoesnotownany shares inStillfront.When theConsiderationShareshavebeenissuedtoLaureusCapitalGmbH,andpriortothePlacing,LaureusCapitalGmbHwillhold53.5percentofthe shares and votes in Stillfront. Subsequent to the closing of the Placing, Laureus CapitalGmbHwill holdapproximately27.0percentofthesharesandvotesofStillfront.TheacquisitionofthesharesinStillfrontwillthereforetriggeramandatorybidobligationforLaureusCapitalGmbHundertheTakeoverRulesforCertainTrading Platforms adopted by the Swedish Corporate Governance Board (Sw. Kollegiet för svenskbolagsstyrning). The Swedish Securities Council (Sw.Aktiemarknadsnämnden) has in its statement 2017:39resolvedtoexemptLaureusCapitalGmbHfromsuchmandatorybidobligationsubjecttothattheresolutiontoissuetheConsiderationSharesissupportedbyshareholdersrepresentingnotlessthantwo-thirdsofboththevotescastandofthesharesrepresentedattheEGMandthatanysharesheldbyLaureusCapitalGmbHshallbedisregardedatthecountingofvotes,andthattheshareholdersbeforetheEGMareinformedofthehighestpercentageofthesharesandvotesthatLaureusCapitalGmbHcanreachbysubscribingtotherelevantshares.

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The following table shows shares in the Company owned directly or indirectly bymanagement and/or theBoardofDirectorsasat30September2017:

Shareholder NumberofShares

ProportionofShareCapital

ProportionofVotingCapital

TobiasKringe* 310,085.67 4.83% 4.83%

FelixFaber* 310,085.67 4.83% 4.83%

ChristopherLörken* 310,085.67 4.83% 4.83%

JörgenLarsson** 208,106 3.24% 3.24%

HubertusThonhauser 177,302 2.76% 2.76%

MJFahmi 109,196 1.70% 1.70%

StenWranne*** 87,243 1.36% 1.36%

AlexisBonte 76,054 1.18% 1.18%

AJFahmi 58,797 0.92% 0.92%

StureWikman 43,693 0.68% 0.68%

JakobMarklund 21,812 0.34% 0.34%

ChristopherHolmberg 20,000 0.31% 0.31%

DavidWhatley 18,851 0.29% 0.29%

AnnetteBrodinRampe**** 9,677 0.15% 0.15%

AlexanderBricca 4,194 0.07% 0.07%

BirgittaHenriksson 2,250 0.04% 0.04%

Total: 1,767,432 27.51% 27.51%

* EachofTobiasKringe,FelixFaberandChristopherLörkenowns33.33%ofFKLHoldingGmbH,whichowns930,257sharesintheCompany.

** JörgenLarssonowns100%ofIdeCapAB,whichholds204,836sharesintheCompany.Further,JörgenLarssonowns50%ofSonthag&LarssonInvestmentStrategyAB,whichholds6,540sharesintheCompany.

***6,540sharesheldthroughanendowmentinsurance,80,703sharesheldbyLacebarkConsultantsLtd,100%ownedbyStenWranne.

****HeldthroughSund1AB,whereAnnetteBrodinRampeisthesoleshareholder.

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ThefollowingtableshowsthesharesintheCompanyowneddirectlyorindirectlybymanagementand/ortheBoardofDirectorsfollowingapotentialcompletionoftheAcquisitionandthePlacing:

Shareholder NumberofShares

ProportionofShareCapital

ProportionofVotingCapital

KaiWawrzinek* 3,141,737.5 13.49% 13.49%

ChristianWawrzinek* 3,141,737.5 13.49% 13.49%

TobiasKringe** 310,085.67 1.33% 1.33%

FelixFaber** 310,085.67 1.33% 1.33%

ChristopherLörken** 310,085.67 1.33% 1.33%

JörgenLarsson*** 208,106 0.89% 0.89%

HubertusThonhauser 177,302 0.76% 0.76%

MJFahmi 109,196 0.47% 0.47%

StenWranne**** 87,243 0.37% 0.37%

AlexisBonte 76,054 0.33% 0.33%

AJFahmi 58,797 0.25% 0.25%

StureWikman 43,693 0.19% 0.19%

JakobMarklund 21,812 0.09% 0.09%

ChristopherHolmberg 20,000 0.09% 0.09%

DavidWhatley 18,851 0.08% 0.08%

AnnetteBrodinRampe***** 9,677 0.04% 0.04%

AlexanderBricca 4,194 0.02% 0.02%

BirgittaHenriksson 2,250 0.01% 0.01%

Total:

8,050,907

34.56%

34.56%

* Each of Kai Wawrzinek and Christian Wawrzinek owns 50% of Laureus Capital GmbH, which will followingcompletionoftheAcquisitionandthePlacinghold6,283,475sharesintheCompany.

** EachofTobiasKringe,FelixFaberandChristopherLörkenowns33.33%ofFKLHoldingGmbH,whichowns930,257sharesintheCompany.

*** JörgenLarssonowns100%ofIdeCapAB,whichholds204,836sharesintheCompany.Further,JörgenLarssonowns50%ofSonthag&LarssonInvestmentStrategyAB,whichholds6,540sharesintheCompany.

****6,540sharesheldthroughanendowmentinsurance,80,703sharesheldbyLacebarkConsultantsLtd,100%ownedbyStenWranne.

*****HeldthroughSund1AB,whereAnnetteBrodinRampeisthesoleshareholder.

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CorporateGovernanceandLegalConsiderations

CorporateGovernance

TheCompany'scorporategovernanceisgovernedbySwedishlegislationandregulationssuchastheSwedishCompanies Act (Sw. aktiebolagslagen (2005:551)), the Swedish Accounting Act (Sw. bokföringslagen(1999:1078)) and the Swedish Annual Reports Act (Sw. årsredovisningslagen (1995:1554)). The Companyapplies theFirstNorthRulebook.TheCompany furtheradheres to theSwedishCorporateGovernanceCode(the "Code"). The corporate governance is exercised, inter alia, through the generalmeeting, the Board ofDirectorsandtheManagingDirector.TheCompany'sauditor,whoisappointedbytheannualgeneralmeeting,supervises the Company and the Group's accounts and themanagement of the Company by the Board ofDirectorsandtheManagingDirector.The foreignsubsidiariesof theCompanyandGoodgameStudiosapplythelawsandordinancesinforceinthecountryinquestion.

GeneralMeetingsandNominationCommitteeInformationaboutpreviousgeneralmeetingsandthenominationcommitteeoftheCompanycanbefoundontheCompany´swebsite.Noticehasbeenissuedtotheupcomingextraordinarygeneralmeetingon9January2018.ThenoticeisavailableattheCompany'swebsiteandfurtherinformationissetoutfurtherbelowinthissection.

BoardofDirectors

Theboardofdirectors’primaryresponsibility istosafeguardtheCompany’sandtheshareholders’ interests.The board of directors is responsible to ensure that the Company complies with applicable laws andregulations,thearticlesofassociationandtheCode.Informationaboutthemembersoftheboardofdirectorsissetoutinsection"BoardofDirectorsandManagement"aboveandontheCompany’swebsite.

ManagingDirectorandExecutiveManagement

Themanagingdirector isappointedbytheboardofdirectorsandshallabidebythe instructionsadoptedbythe board of directors. The managing director is responsible for the Company’s day-to-day management,which includesmanagingalloperationalaspectsof theCompany’sbusiness inaccordancewith thebusinessplan, principles and instructions adopted by the board of directors. The managing director is furthermoreresponsibleforthepreparationandpresentationofmatterstobeaddressedbytheboardofdirectors,aswellas for the execution of decisions made by the board of directors. Information about the members of theexecutivemanagement isset insection"BoardofDirectorsandManagement"aboveandontheCompany’swebsite.

IncentivePrograms

Anincentiveprogramforthemanagementwasdecideduponontheextraordinarygeneralmeetingon18April2017. The generalmeeting resolved on a directed issue of notmore than 299,189warrants. Eachwarrantentitles to subscriptionofoneshare in theCompany,entailingan increaseof the sharecapitalofnotmorethanSEK209,432.30ifallwarrantsareexercised.Thepurposeofthedirectedissueofwarrantsistoconstituteanincentiveforthegroup'scurrentandfuturekeyemployees.

EachwarrantentitlestothesubscriptionofoneshareintheCompanyatasubscriptionpricecorrespondingto200per centof thevolumeweightedaveragepriceof the share fromand including3April 2017up toandincluding18April2017.ThesubscriptionpricemaynotbelowerthananamountcorrespondingtothequotavalueofthesharesintheCompany.Subscriptionofsharesinaccordancewiththetermsandconditionsofthewarrantsmaytakeplacefromandincluding15May2020uptoandincluding1June2020.TheincreaseofthesharecapitalmayatfullexerciseofthewarrantsamounttoamaximumofSEK209,432.30distributedamong299,189shares,correspondingtoapre-Transactiondilutionofapproximately4.5percent.

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Committees

TheboardofdirectorsoftheCompanyhasestablishedaremunerationcommitteeconsistingofthechairmanAnnette Brodin Rampe and board members Alexander Bricca and Sture Wikman. The main tasks of theremuneration committee are to prepare the board’s decisions on issues concerning principles forremuneration for the executive management and to monitor and evaluate programmes for variableremunerationaswellasthecurrentremunerationstructuresandlevelsintheCompany.

Theannualgeneralmeetingheldon19May2017adoptedprinciplesfortheappointmentofthenominationcommittee.Thenominationcommitteeshallbecomposedofthreemembers,whoareappointedbyeachofthe three largest shareholders in Stillfront as of the last banking day in Septemberwhowish to appoint arepresentative in thenomination committee. Thenomination committeehas resolved that the chairmanofStillfront's board of directors shall also be a member of the nomination committee. The nominationcommittee's tasksaretoprepareandpresentproposals for interalia theelectionof theboardmembersanauditor as well as their remuneration. If a shareholder, who is represented in the nomination committee,during the term of the nomination committee ceases to be one of the three largest shareholders, arepresentativeappointedbythatshareholdershalloffertovacatehisorherofficeandtheshareholderwhohasbecomeoneofthethreelargestshareholdersshallbeofferedtheopportunitytoappointamemberofthenominationcommittee.Minorchangesdonothavetobeconsidered.

Auditors

ForinformationabouttheCompany’sauditorsandtheauditingofthehistoricalfinancialinformation,pleaseseesection"DescriptionoftheStillfrontGroup–Auditing"above.

LegalConsiderations

MaterialAgreements

AcquisitionAgreements

BytroLabs

On 9 May 2016 Stillfront completed the acquisition of the remaining 49 per cent of the shares in Bytro.Stillfrontenteredintothesharepurchaseagreementandacquired51percentofthesharesinBytroin2013.Thepurchaseprice,basedonBytro'ssalesandearningsin2015,consistedofacombinationofacashpaymentand560,724newlyissuedsharesintheStillfront.

Simutronics

On27June2016,Stillfrontacquired52.65percentofthesharesinSimutronics.ThepurchasepriceamountedtointotalUSD937,661,ofwhichUSD787,635waspaidincashandtheremainingpartintheformof18851newissuedsharesinStillfront.Furthermore,anearn-outconsiderationconsistingpartlyofcashandpartlyofequitywillbepaidbasedonthefinancialperformanceofSimutronicsduring2017.Theearn-outconsiderationshallnotexceedUSD1,805,400.InFebruary2017,theCompanyincreaseditsownershipinSimutronicsCorp.by2.41percent,whereaftertheGroupowned55.06percentofthesharesinSimutronics.

BabilGames

On13March2017,StillfrontcompletedtheacquisitionofalloutstandingsharesinBabilGames.ThepurchasepriceamountedtoUSD4,500,000,ofwhichUSD2,100,000waspaidincashandtheremainingpartintheformof355,848newlyissuedsharesintheCompany.Further,USD300,000ispayablebyStillfrontifandwhentheaccumulatedgross revenues receivedbyBabilGames for the saleof certain licensedgames reacha certainportionofforecastedaccumulatedgrossrevenues.Furthermore,Stillfrontwillpayanearn-outconsideration,subjecttocertainEBIT-targetsbeingmet,intheaggregatemaximumtotalamountofUSD12,500,000payable50 per cent in cash and 50 per cent in newly issued shares in Stillfront, following the establishment of theauditedannualaccountsforthefiscalyears2017,2018and2019.Thesubscriptionpriceforsuchnewlyissuedsharesshallcorrespondto theaveragepricepershare inStillfrontatNasdaqFirstNorthduring the30days

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precedingtheendoftherelevantfiscalyear.Theearn-outconsiderationpayableforeachoftheyears2017and 2018 is capped at USD 1,700,000, however, excess amounts accumulates for subsequent years. ThepurchasepriceforthesharesinBabilpayabletothefoundersthusamountstoamaximumaggregatetotalofUSD17,000,000payable50percentincashand50percentinnewlyissuedsharesinStillfront.The355,848newly issued shares in Stillfront that are issued to the founders upon completion are subject to customarylock-uprestrictionsduringaperiodoftwelvemonthsfromreceiptthereof. Thecashportionofthepurchasepriceisfinancedthroughinternallygeneratedfunds.

Todavia

InMarch2017,Stillfrontacquiredanoff the shelf company,TodaviaAB, for thepurposesof facilitating thehandlingoftheCompany'sincentiveprogramme.

MidCo

InMay2017,Stillfrontacquiredanofftheshelfcompany,StillfrontMidcoAB,inconnectionwiththeissueandlistingoftheBondsforthesolepurposeofprovidingasinglepointofenforcementinrespectofamajorityoftheGroup.

eRepublik

On 27 June 2017, Stillfront acquired all of the shares in eRepublik Labs. Limited with its wholly-ownedsubsidiaryERPKLABSS.R.L,adeveloperofonlinemultiplayerstrategygamesincorporatedandheadquarteredin Ireland but with its main operations in Bucharest, Romania. eRepublik currently has a portfolio of fourgamesand intends to releasea further twogames in thenext12months.Thepurchaseprice thatStillfrontpaid to the sellers of eRepublik in connection with the closing amounted to EUR 7,500,000, of which EUR4,050,000waspaid incashand the remainingEUR3,450,000 in the formof441,233newly issuedshares inStillfront.Further,anearn-outconsiderationispayablebyStillfront,providedthatcertaintargetsaremet,inanaggregatemaximumtotalamountofEUR13,000,000outofwhich50percentshallbepaidincashand50percentinnewlyissuedsharesinStillfront,followingtheapprovalofauditedannualreportsforthefinancialyears 2017, 2018 and 2019. The subscription price for such newly issued shares shall correspond to theaveragepricepershareinStillfrontatNasdaqFirstNorthduringthe30daysprecedingtheendoftherelevantfiscalyear.Theearn-outconsiderationshallnotexceedEUR4,333,333forfiscalyear2017orEUR8,666,666for fiscal years 2017 and 2018 together. The purchase price payable by Stillfront for eRepublik shall inaggregatenotexceedEUR20,500,000.

OFMStudios

On18July2017,Stillfrontacquired51percentofOnlineFussballManager.dethroughanassetpurchase.ThebusinessisconductedinthenewlyformedlegalentityOFMStudiosGmbH,whichisownedto51percentbyStillfrontthroughMidCo,andisoperatedfromCologne,Germany.ThepurchasepricepaidbyOFMStudiosforassets related to OFM is EUR 639,000. Stillfront issued a loan to OFM Studios for the financing of theacquisition.

The acquisition agreements described above contain customary representations and warranties by therespective sellers of each of the acquired companies. As at the date of this InformationMemorandum, noclaimsforbreachesofwarrantiesorotherprovisionsundertheacquisitionagreementshavebeenmade.

TheAcquisition

The Company has on 6 December 2017 entered into the Acquisition Agreement with the shareholders ofGoodgameStudios,beingLaureusCapitalGmbH,GlobalFoundersCapitalGmbH&Co.BeteiligungsKGNr.1,Mr. DominikWillers,Mr. Stefan Klemm,Mr. Fabian Ritter andMr. Nikolai Lücht for the acquisition by theCompanyofalloutstandingsharesinGoodgameStudios.

Thetotalconsiderationfor100percentofthesharesinAltigiisEUR270milliononacashanddebtfreebasis,excludingadividendinAltigiofapprox.EUR21.7millionwhichwillbedistributedtoitsshareholderspriortocompletion of the Transaction. SEK 390 million will be paid in cash and financed through a tap issue ofStillfront’soutstandingcorporatebondloan.ThecashamountwillbepaidinEURbasedonanexchangerateagreedbetweenthepartiesinconnectionwiththesigningoftheAcquisitionAgreement.Stillfronthashedged

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the risk for currently fluctuations during the period from the signing sate until the completion of theAcquisition.TheremainingpartoftheconsiderationwillbepaidinnewlyissuedStillfrontshares.ThevalueoftheConsiderationShareswillbeEUR231millionandthepricepershareisbasedonninetyfive(95)percentof volumeweighted average price per share in Stillfront onNasdaq First North Premier during the five (5)tradingdaysuptoandincluding6December2017,i.e.SEK135.87.Thus,theissueofnewshareswillcompriseof16,868,623shares.TheConsiderationShareswillrepresent72.4percentofthetotalnumberofoutstandingshares and votes in Stillfront post-Transaction. Through the issue of the Consideration Shares and thesubsequent closing of the Placing, Laureus Capital GmbH will hold approximately 27.0 per cent of theoutstandingsharesandvotes inStillfrontandGlobalFoundersCapitalGmbHwillholdapproximately5.5percentoftheoutstandingsharesandvotesinStillfront.

AspartoftheTransaction,apartoftheConsiderationShareswillbeacquiredbyanumberofinvestorshavingcommittedtoacquiresharesfromtheownersofAltigisubsequentto,andconditionalupon,completionoftheTransaction.ThePlacingamountsto8,360,154shares.ThePlacing ismadeatapricepershareequaltothepricepershareintheissueoftheConsiderationShares.Theinstitutionalinvestorswhichhavecommittedtoacquire shares in the Placing include Första AP-fonden (for SEK 250million), Swedbank Robur (for SEK 230million), Handelsbanken Fonder (for SEK 145 million) and Carnegie Fonder (for SEK 125 million). Thesecommitmentsarenotsecuredbyabankguarantee,pledge,depositorsimilararrangement.

Through the issue of the Consideration Shares and the subsequent closing of the Placing, Laureus CapitalGmbH will hold approximately 27.0 per cent of the outstanding shares and votes in Stillfront and GlobalFoundersCapitalGmbHwillholdapproximately5.5percentoftheoutstandingsharesandvotesinStillfront.

The Consideration Shares not placed with investors in the Placing will be subject to customary lock-upprovisions. The lock-up periodwill be 360 days following settlement of the Consideration Shares, with theexemptionfor4,386,464shares,distributedproratabetweentheSellers,whichwillbesubjecttoa180dayslock-upprovision.

TheAcquisitionisconditionalupon(i)theEGMhavingadoptedresolutionstoapprovetheAcquisition,changethe articles of association of Stillfront and issue the Consideration Shares, as well as to appoint ChristianWawrzinek as member of Stillfront's board of directors subject to completion of the Acquisition, (ii) thatStillfronthasreceivedSEK390millionfromthetapissueunderthecorporatebondloan,(iii)LaureusCapitalGmbHhaving receivedanexemption fromthemandatorybidobligationpursuant to theTakeoverRules forCertain Trading Platforms issued by the Swedish Corporate Governance Board (Sw. Kollegiet för SvenskBolagsstyrning) from theSwedishSecuritiesCouncil (Sw.Aktiemarknadsnämnden), (iv) that theSellershaveobtained comfort on receiving a certain amount of cash proceeds from the Placing, (v) that there has notoccurredanymaterialadversechangeduringtheperiodbetweenthesigningdateandupuntilandincludingthecompletionoftheTransactionwithrespecttoAltigiorStillfrontand(vi)thateachoftheSellershasopenedadepositaccountwithCarnegieInvestmentBankABandnotterminatedsuchaccounts.

IftheconditionsprecedentarenotfulfilledwithinaspecifiedtimeperiodfromthesigningoftheAcquisitionAgreement,bothStillfrontandtheSellershavetherighttoterminatetheAcquisitionAgreement.

TheSwedishSecuritiesCouncil(Sw.Aktiemarknadsnämnden)hasinitsstatement2017:39resolvedtoexemptLaureus Capital GmbH from the mandatory bid obligation which arises from Laureus Capital GmbH'sacquisition of shares in Stillfront, subject inter alia to that the resolution to approve the issue of theConsiderationSharesissupportedbyshareholdersrepresentingnotlessthantwo-thirdsofboththevotescastand of the shares represented at the EGM in Stillfront (see further section " Share Capital and OwnershipStructure–Exemptionfrommandatorybidobligation"above).SincealltheresolutionstobeadoptedbytheEGMareproposedtobeconditionaluponeachother,theboardofdirectorshasproposedthatthemajorityrequirementprescribedbytheSwedishSecuritiesCouncilshallbeappliedinrelationtoallresolutionsrelatedtotheAcquisitionproposedattheEGM.

TheAcquisitionAgreementcontainscustomaryrepresentationsandwarrantiesbytheSellersrelatingtointeraliathefinancialpositionofGoodgameStudios,intellectualproperty,taxposition,employeesandlitigation.

TheclosingoftheAcquisitionandsettlementofthePlacingwilloccurassoonaspossibleaftertheEGMtobeheldon9January2018.

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GuaranteeAgreementsThe Company's obligations under the Bonds are guaranteed by certain guarantors pursuant to guaranteeagreements(eacha"GuaranteeAgreement").Subjecttocertaingraceperiods,theguarantorsmustrepresentover80percentoftheEBITDAoftheGroup(excludingSimutronics)andanymaterialgroupcompany(otherthantheCompany)whichiswholly-ownedbytheCompanymustissueaguaranteeoraccedetoaGuaranteeAgreement.Asatthedateofthis InformationMemorandum,BabilGames,BytroLabs,ColdwoodInteractiveandMidCo are guarantors. Pursuant to the Terms and Conditions of the Bond, a guarantormay resign asguarantor if itno longerconstitutesamaterialgroupcompany,subjecttocompliancewiththeprovisionsoftheTermsandConditions.

Each guarantor shall unconditionally and irrevocably guarantee (Sw. proprieborgen) to the Agent and eachbondholder(asrepresentedbytheAgent)asforitsowndebts(Sw.såsomföregenskuld)thefullandpunctualpayment by the Company under the Bonds. The obligations and liabilities of the guarantors under theGuaranteeAgreementshallbelimitedifrequired(butonlyifandtotheextentrequired)underthelawsofthejurisdictioninwhichtherelevantguarantorisincorporated.

DevelopmentandPublishingAgreementsColdwoodInteractivehason31January2015enteredintoadevelopmentandpublishingagreementwithEAregarding Coldwood Interactive's development of the game "Unravel" for EA. Through the agreement,ColdwoodInteractiveassignsallintellectualpropertyrightstothegametoEA.

Simutronicshason1April2016enteredintoaconsultingagreementwithMammothEntertainmentregradingconsultingservicesinrelationtofindingapublishingpartner(s)and/ordigitallicensor(s)forSimutronics'game"Siege".

OtherMaterialAgreementsNeithertheGroupnor, insofarasStillfront isaware,GoodgameStudios,hasenteredintoanyothermaterialagreementsnotintheordinarycourseofitsbusinessandwhichmayaffecttheCompany.

RelatedPartyTransactionsTransactions which have taken place between related parties during the period covered by the section"Description of the Stillfront Group - Financial information regarding Stillfront" are, as regards Stillfront,describedinthe2015AnnualReport,the2016AnnualReportandthe2017Q3Report.GoodgameStudioshasnot,insofarasStillfrontisaware,undertakenanytransactionswithrelatedpartiesduringthatperiod.

Bond

On17May,2017theCompanyissuedBondsintheamountofSEK110withafinalmaturityinMay2020withinatotalframeworkamountofMSEK500.TheBonds,whicharelistedonthecorporatebondmarketofNasdaqStockholm,bearafloatingratecouponofStibor3m+7.50percent.

SecurityundertheBondThe shares inMidCo, Bytro Labs, StillfrontOnlineGames, Simutronics, eRepublik and Coldwood Interactivehave been pledged as security for the Company's obligations under the Bonds. The Company's obligationsundertheBondsare furtherguaranteedbycertainguarantorspursuant toguaranteeagreements.Asat thedateof this InformationMemorandum,BabilGames,Bytro Labs,Coldwood Interactive andMidCoare suchguarantors.PursuanttothetermsoftheBond,newmaterialgroupcompaniesmustbeownedbyMidCoandthesharesshallbepledgedandaguaranteemustbeissuedoraguaranteeagreementshallbeaccededtobysuch newmaterial group company. The Company has furthermore pledged its present and futurematerialintra-grouploansadvancedtoamemberoftheGroupwhichwhenaggregatedwithall loansgrantedbytheCompanytothesamememberoftheGroupisequaltoorexceedSEK10,000,000andhasatenorofnotlessthan1year.

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TapIssueStillfront has secured unconditional subscription commitments for a tap issue of SEK 390 million on itsoutstandingcorporatebondloan(ISIN:SE0009973050)andtheproceedswillbeusedaspartfinancingoftheacquisitionofAltigi.

Theunconditional subscriptioncommitmentshavebeen retainedatapremiumtonominalamountand thebondswillbeissuedatapriceof101percentofthenominalamount.ThenewlyissuedbondswillbesubjecttothesametermsasforotherbondsissuedunderStillfront’soutstandingbondloan.Afterthetapissue,thetotaloutstandingamountofthecompany’sbondloanwillamounttoSEK500million,whichequalsthetotalframeworkamountofthebondloan.ThebondislistedonNasdaqStockholmandthecompanywillapplyforlisting of the new bonds onNasdaq Stockholm. The expected settlement date of the tap issue is set to 12January2018.

PermitsandLicenses

TheGroup'sbusinesscurrentlydoesnotrequireanyspecific licensesandcertifications,otherthanthetradelicenseinrespectofitsbusinessoperationsintheUnitedArabEmirateswhichBabilGamesholds.ThebusinessofGoodgameStudioscurrentlydoesnotrequireanyspecificlicensesandcertifications.

LegalProceedingsandArbitrationProceedings

The Company is not, nor has it over the past twelve months been, a party to any legal proceedings orarbitration proceedings that have had orwould have amaterial effect on the Group's financial position orprofitability, nor has the Company been informed of any claims that could lead to the Company or anymember of the Group becoming a party to such proceedings. There are currently two lawsuits againstGoodgame Studios relating to employment law matters, one brought by a former employee for loss ofemployment and the other concerning alleged discrimination brought by a person who has never beenemployedorengagedasacontractorbyGoodgameStudios.Neitheroftheselawsuitsare,insofarasStillfrontisaware,consideredbyGoodgameStudiostobeofmaterialimportance.

CertifiedAdviser

AvanzaBankisStillfront’sCertifiedAdviser,andcanbereachedat+46-8-40942120.

Definitions

2015AnnualReport means the Group’s annual financial statements for the financialyearended31December2015.

2016AnnualReport means the Group’s annual financial statements for the financialyearended31December2016.

2017Q3Report means the Group's interim financial statements for the period1January2017to30September2017.

AcquisitionorTransaction means the contemplated acquisition of Goodgame Studios andthereto related transactions described in this InformationMemorandum.

AcquisitionAgreement meanstheagreemententeredintoon6December2017betweenStillfrontandtheSellersregardingtheAcquisition.

AnnualReports meansthe2015AnnualReportandthe2016AnnualReport.

BabilGames meansBabilGamesFZLLC,withtradelicenseno.2987/2012FCZ,and registered address P.O. Box 4422 Fujairah, United ArabEmiratesandBabilGames,JordanBranch(Jordanreg.no.2740).

Bond means debt instruments (Sw. skuldförbindelser), each for theNominalAmountandofthetypesetforthinChapter1Section3of the Swedish Central Securities Depositories and FinancialInstruments (Accounts) Act (Sw. lag (1998:1479) omvärdepapperscentralerochkontoföringav finansiella instrument),issuedbyStillfront(ISIN:SE0009973050).

BytroLabs means Bytro Labs GmbH, with registration number HRB118884andregisteredaddressZirkusweg2,20359Hamburg,Germany.

Code meanstheSwedishCorporateGovernanceCode.

ColdwoodInteractive means Coldwood Interactive AB, with registration number556641-6532andregisteredaddressStorgatan43,90326Umeå,Sweden.

CompanyorStillfrontorGroup means Stillfront Group AB (publ), with registration number556721-3078andregisteredaddressGamlaTanneforsvägen17C,58254 Linköping, Sweden,or thegroup inwhichStillfront is theparent, or a subsidiary within the group, depending on thecontext.

ConsiderationShares means the shares to be issued to the Sellers as partialconsideration for shares in Goodgame Studios pursuant to theAcquisitionAgreement.

EGM means the extraordinary generalmeeting of the shareholders ofStillfronttobeheldon9January2018.

eRepublik meanseRepublik Labs. Limited,with registrationnumber462101and registeredaddressUnit4BlockA,BroomfieldBusinessPark,TheHill,Malahide,Co.Dublin,Ireland,oritssubsidiaryERPKLabsS.R.L,withregistrationnumberJ40/6415/2009,sole identificationcode (CUI) 25622297, and registered address 39 - 41 NicolaeFilipescu Street, 6th floor, 2nd District 020961, Bucharest,

Romania,asapplicable.

GoodgameStudios means Altigi GmbH, with registration number HRB 132391, andregistered address Theodorstrs. 42-90 Hs. 9, 22761 Hamburg,Germany,operatingunderthenameGoodgameStudios.

GuaranteeAgreement means an agreement bywhich the Company's obligations undertheBondsareguaranteedbycertainguarantors.

InformationMemorandum meansthisinformationmemorandum.

IP meansintellectualproperty.

MidCo meansStillfrontMidcoAB,withregistrationnumber559110-4053and registered address Gamla Tanneforsvägen 17 C, 582 54Linköping,Sweden.

NewGroup means the group in which Stillfront is the parent following apotentialcompletionoftheAcquisition.

OFMStudios meansOFMStudiosGmbH,withregistrationnumberHRB145244and registered address Eupener Straße 60, 50933, Cologne,Germany.

Placing meansthetransferof8,360,154ConsiderationSharestoanumberofinvestorswhichtheSellerswillundertakeimmediatelyaftertheEGM.

PowerChallenge meansPowerChallengeHoldingLimited,withregistrationnumber07099333 and registered address Shakespeare House, 42Newmarket Road, Cambridge, Cambridgeshire, CB5 8EP, UK, orPower Challenge AB with registration number 556719-9871 andregisteredaddressGamlaTanneforsvägen17C,58254Linköping,Sweden,orManagerZoneInc.,withregistrationnumber(CompanyNo.)07099333 and registered address 1200 Broom Street,Wilmington,NewCastleCounty,Delaware,US,asapplicable

Sellers meansthesellersofthesharesinGoodgameStudios.

Simutronics means Simutronics Corp., with Virginia registration number0311296 and registered address 218-C Millwell Dr., MarylandHeights,MO63043,Virginia,US.

StillfrontOnlineGames means Stillfront Online Games AB, with registration number556721-9430andregisteredaddressGamlaTanneforsvägen17C,58254Linköping,Sweden,orDOGHoldingsLtd,withregistrationnumber C 64760 and registered address 60/2 Melita Street,VallettaVLT1122,MaltaorDOGProductionsLtd,withregistrationnumber C 55850 and registered address 60/2 Melita Street,VallettaVLT1122,Malta,asapplicable.

Subsidiary meansasubsidiaryofStillfrontasperthedateofthisInformationMemorandum.

Todavia means Todavia AB, with registration number 559100-2893,registeredaddressVästraTrädgårdsgatan15,11153Stockholm.

Addresses

COMPANY

StillfrontGroupAB(publ)GamlaTanneforsvägen17C

SE-58254LinköpingSweden

FINANCIALADVISER

CarnegieInvestmentBankAB(publ)Regeringsgatan56

SE-10338StockholmSweden

LEGALCOUNSEL

(totheCompany)AdvokatfirmaDLAPiperSwedenKB

Kungsgatan9P.O.Box7315

SE-10390StockholmSweden

CERTIFIEDADVISER

AvanzaBankABRegeringsgatan103

P.O.Box1399SE-11193Stockholm

Sweden

CENTRALSECURITIESDEPOSITORY

EuroclearSwedenABP.O.Box191

SE-10123StockholmSweden