CM Bridge Holdings GmbH

Hamburg

Konzernabschluss zum Geschäftsjahr vom 01.01.2023 bis zum 31.12.2023

Consolidated statement of profit or loss

	NOTE	1 Jan -31 Dec 2023 EUR	1 Jan -31 Dec 2022 EUR
Revenues	5.1	27.264.834	26.822.167
Cost of sales		-10.639.431	-9.118.946
Gross profit		16.625.403	17.703.222
Other operating income	5.1	300.609	477.573
Research and development costs	5.2	-4.121.831	-2.926.859
Sales & Marketing	5.3	-7.718.114	-6.662.525
Administrative expenses	5.4	-10.284.961	-8.466.332
Finance income		1.806	41
Finance costs	5.7	-1.665.553	-1.368.289
Loss before tax		-6.862.641	-1.243.169
Income taxes	5.8	-60.985	-20.198
Other taxes	5.8	-5.207	-6.096
Deferred taxes	5.8	1.962.309	201.781
Loss for the year		-4.966.524	-1.067.682
Thereof attributable to:
Loss attributable to owners of the parent company		-4.966.524	-1.067.682
Loss attributable to non-controlling interests		0	0

Consolidated statement of other comprehensive income

	1 Jan -31 Dec 2023 EUR	1 Jan -31 Dec 2022 EUR
Loss for the year	-4.966.524	-1.067.682
Items that may be reclassified subsequently to profit or loss:
Currency translation differences	-26.569	26.086
Other comprehensive income for the year, net of income tax	-26.569	26.086
Total comprehensive loss for the year	-4.993.093	-1.041.595
Thereof attributable to:
Owners of the Group	-4.993.093	-1.041.595

Consolidated statement of financial position

ASSETS	NOTE	31. Dez 23 EUR	31. Dez 22 EUR
Non-current assets
Goodwill	6.1	33.358.777	29.742.072
Intangible assets	6.1	11.999.807	10.910.765
Property, plant and equipment	6.2	653.001	377.773
Right-of-use assets	6.3	1.400.937	1.459.608
Non-current financial assets	6.10	174.007	150.784
Costs to obtain a contract	5.1	701.646	763.039
Deferred tax assets	6.17	517.484	24.426
Total non-current assets		48.805.661	43.470.436
Current assets
Trade and other receivables	6.4	2.188.127	1.561.947
Current contract assets	5.1	1.674.033	2.763.402
Tax receivables	6.5	1.388	2.469
Other current assets	6.6	863.721	723.035
Cash and cash equivalents	6.7	3.644.944	4.318.367
Total current assets		8.372.212	9.369.220
Total assets		57.177.873	52.839.656

EQUITY AND LIABILITIES	NOTE	31. Dez 23 EUR	31. Dez 22 EUR
Equity
Share capital	6.8	26.000	26.000
Capital reserves		17.367.385	7.807.385
Cumulative OCI		59.393	85.962
Retained earnings		-9.109.452	-8.041.770
Profit or loss		-4.966.524	-1.067.682
Total equity		3.376.802	-1.190.105
Liabilities
Non-current liabilities
Non-current loans and borrowings	6.13	38.458.956	38.527.279
Non-current lease liabilities	6.3	1.006.163	1.167.956
Deferred tax liabilities	6.17	1.586.794	3.205.607
Total non-current liabilities		41.051.913	42.900.843
Current liabilities
Current portion of loans and borrowings	6.13	1.728.833	1.086.146
Current lease liabilities	6.3	474.992	377.283
Trade and other payables	6.14	1.306.368	743.255
Current provisions	6.11	673.113	532.942
Current contract liabilities	5.1	6.354.318	5.569.049
Tax liabilities	6.15	433.552	308.764
Other current liabilities	6.16	1.777.983	2.511.480
Total current liabilities		12.749.158	11.128.918
Total equity and liabilities		57.177.873	52.839.656

Consolidated statement of cash flows

	NOTE	1 Jan -31 Dec 2023 EUR	1 Jan -31 Dec 2022 EUR
Loss for the year		-4.966.524	-1.067.682
Adjustments for:
(+) Depreciation, amortization and impairment losses		5.247.895	4.725.502
(+) / (-) Increase/decrease in provisions		-201.681	301.433
(+) / (-) Other non-cash expenses/income		0	-12.478
(+) / (-) Losses/Gains on disposal of assets		-7.008	-64.412
(+) / (-) Decrease/(increase) in trade receivables and other assets		-1.741.145	-3.214.128
(+) / (-) Decrease/(increase) in contract assets		1.087.776	-1.029.269
(+) / (-) Increase/(decrease) in trade and other payables		-761.111	1.657.813
(+) / (-) Increase/(decrease) in contract liabilities		651.922	1.665.581
(+) Income tax expenses		22.799	20.198
(-) Income taxes paid		-22.799	-20.198
Cash flow from operating activities		-689.877	2.962.360
Payments for investments in intangible assets		-97.774	-79.548
Payments for investments in property, plant and equipment		9.072	85.831
Proceeds from disposal of property, plant and equipment		-296.721	-315.522
Proceeds from disposal of right-of-use assets		0	-784
Repayments of loans by related parties		0	1
Payments for acquisition of subsidiaries, net of cash and cash equivalents acquired		-7.680.972	0
Cash flow from investing activities		-8.066.393	-310.023
Proceeds from issues of shares and other equity securities		9.560.000	0
Proceeds from borrowings	7	1.000.000	0
Repayment of borrowings	7	-906.250	-362.500
Principal element of lease payments	7	-409.898	-515.334
Interests paid	7	-1.125.146	-415.073
Cash flow from financing activities		8.118.707	-1.292.906
Net increase (+) / decrease (-) in cash and cash equivalents		-637.564	1.359.432
Cash and cash equivalents at the beginning of the financial year		4.318.367	2.911.407
Effects of exchange rate changes		-35.859	47.529
Cash and cash equivalents at the end of the financial year		3.644.944	4.318.367

Consolidated statement of changes in equity

	Share capital EUR	Capital reserves EUR	Cumulative OCI EUR	Retained earnings incl. profit/loss EUR	Non-controlling interests EUR	Total equity EUR
Balance at Jan 1, 2023	26.000	7.807.385	85.962	-9.109.452	0	-1.190.105
Net loss for the period	0	0	0	-4.966.524	0	-4.966.524
Items of other comprehensive income, net of income tax	0	0	-26.569	0	0	-26.569
Total comprehensive income for the period	0	0	-26.569	-4.966.524	0	-4.993.093
Issue of share capital	0	0	0	0	0	0
Equity contribution	0	9.560.000	0	0	0	9.560.000
Balance at December 31, 2023	26.000	17.367.385	59.393	-14.075.976	0	3.376.802
Balance at Jan 1, 2022	26.000	7.807.385	59.876	-8.041.770	0	-148.510
Net loss for the period	0	0	0	-1.067.682	0	-1.067.682
Items of other comprehensive income, net of income tax	0	0	26.086	0	0	26.086
Total comprehensive income for the period	0	0	26.086	-1.067.682	0	-1.041.596
Issue of share capital	0	0	0	0	0	0
Equity contribution	0	0	0	0	0	0
Balance at December 31, 2022	26.000	7.807.385	85.962	-9.109.452	0	-1.190.105

Notes to the consolidated financial statements for the period from January 1, 2023 to December 31, 2023

CM Bridge Holdings GmbH (hereafter referred to as "CM Bridge Holdings" or "the Company") is a limited liability company (Gesellschaft mit beschränkter Haftung, GmbH), founded and domiciled in Germany. The Company's business is registered in 20459 Hamburg, Rödingsmarkt 9, Germany.

The entire group (hereafter referred to as "CoreMedia" or "the Group") comprises CM Bridge Holdings GmbH as the parent company and its subsidiaries: CoreMedia GmbH in Germany, CoreMedia UK Ltd. in the United Kingdom, CoreMedia Corporation in the USA, ByLabs Unipessoal Lda. in Portugal, BySide - Lead Activation S.A. in Portugal and BySide Brasil LTDA in Brazil. As of July 31, 2023 CoreMedia GmbH has acquired 100% of the shares of ByLabs Unipessoal Lda. which in turn is the parent-company of BySide - Lead Activation S.A. and BySide Brasil LTDA. Since then CoreMedia GmbH has gained control over the three companies and thus the companies are part of CoreMedia. As a result, the comparability of the financial performance as well as assets and liabilities and equity is limited between the two financial periods presented.

CoreMedia is a leading global provider of Digital Experience Platform (DXP) solutions. We specialize in licensing usage rights to our solutions, developed by our expert team. Our solutions enable companies to manage, deliver, and optimize digital experiences across various channels, such as websites, mobile apps, social media, and more. We offer a range of capabilities, including content management, digital marketing, e-commerce integration, personalization, analytics, cloud contact center and integration with other systems, with the goal to provide a unified and seamless experience for users while enabling organizations to engage with their audience effectively and drive business results. By leveraging CoreMedia, businesses can enhance their operational value and achieve sustainable growth.

Note 1: Basis of preparation

The accompanying consolidated financial statements present the operations of CM Bridge Holdings and its subsidiaries (collectively, "CoreMedia" or "the Group"). The notes hereafter reflect the reporting period from January 1 until December 31, 2023.

1.1 Information on the consolidated financial statements

The consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board (IASB) and as adopted by the EU. The consolidated financial statements were authorized for issue by the Managing Board of CM Bridge Holdings on April 26, 2024.

The financial statements have been prepared on a historical cost basis. Assets and liabilities acquired during an acquisition according to IFRS 3 are initially recognized at fair value and subsequently accounted for at cost.

The consolidated financial statements have been prepared and published in EUR (€). Due to rounding, numbers presented may not add up precisely to totals provided.

The expenses in the statement of profit or loss are classified based on their function within the entity.

1.2 New standards and interpretations

New Standards to be adopted for the first time for the annual reporting period commencing 1 January 2023.

Standard	Title of standard	Effective date
Endorsed
Introduction of IFRS 17	Insurance Contracts	1 January 2023
	(Including Amendments to the Standard)
Amendments to IFRS 17	Insurance Contracts	1 January 2023
	(Initial Application of IFRS 17 and IFRS 9 - Comparative
	Information)
Amendments to IAS 1 and	Presentation of Financial Statements and Making	1 January 2023
IFRS Practice	Materiality Judgements
Statement 2	(Disclosure of Key Accounting Policies)
Standard	Title of standard	Effective date
Amendments to IAS 8	Accounting Policies, Changes in Accounting Estimates	1 January 2023
	and Errors
	(Definition of Changes in Accounting Policies and
	Accounting Estimates)
Amendments to IAS 12	Income Taxes	1 January 2023
	(Deferred Tax Related to Assets and Liabilities Arising
	from a Single Transaction)
Amendments to IAS 12	Income Taxes	1 January 2023
	(International Tax Reform - Guidelines on Global
	Minimum Taxation (Pillar Two Model Rules))
Amendments to IAS 37	Onerous Contracts - Cost of Fulfilling a Contract	1 January 2023

First time adoption of applicable new standards and amendments have no material impact on CoreMedia's consolidated financial statements.

The IASB has issued standards, amendments to standards and interpretations that are to be adopted to financial years beginning on or after January 1, 2024. Adoption of the following regulations is not yet mandatory and CoreMedia has not adopted these.

Standard	Title of standard	Effective date
Endorsed
Amendments to IFRS 16	Leases (Accounting of a Lease Liability in a Sale and	1 January 2024
	Leaseback)
Amendments to IAS 1	Presentation of financial statements on classification of	1 January 2024
	liabilities, Disclosure of Accounting policies
Standard	Title of standard	Effective date
Not yet endorsed
Amendments to IAS 7 and	Statement of Cash Flows / Financial Instruments:	1 January 2024
IFRS 7	Disclosures
	(Disclosure requirements in connection with supplier
	finance arrangements)
Amendments to IAS 21	The Effects of Changes in Foreign Exchange Rates	1 January 2024
	(Determination of Exchange Rates in the Event of Lack of
	Exchangeability)

All new or amended standards and interpretations not yet effective are expected to have no material impact on CoreMedia's consolidated financial statements.

Note 2: Significant accounting policies

The accounting policies that were applied in the preparation of the consolidated financial statements are set out below.

2.1 Basis of consolidation

Subsidiaries are all entities (including structured entities) over which CoreMedia has control. CoreMedia controls an entity where the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to CoreMedia. They are deconsolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by CoreMedia. Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by CoreMedia. Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss, consolidated statement of other comprehensive income, consolidated statement of changes in equity and consolidated statement of financial position respectively (if applicable).

2.2 Business combinations

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:

• fair values of the assets transferred

• liabilities incurred to the former owners of the acquired business

• equity interests issued by the Group

• fair value of any asset or liability resulting from a contingent consideration arrangement, and

• fair value of any pre-existing equity interest in the subsidiary.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. CoreMedia recognizes any non-controlling interest (if applicable) in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest's proportionate share of the acquired entity's net identifiable assets. Acquisition-related costs are expensed as incurred. The excess of the:

• consideration transferred,

• amount of any non-controlling interest in the acquired entity (if applicable), and

• acquisition-date fair value of any previous equity interest in the acquired entity (if applicable)

over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognized directly in profit or loss as a bargain purchase. Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value, with changes in fair value recognized in profit or loss.

2.3 Foreign currency translation

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in EUR (€), which is CM Bridge Holdings' functional and presentation currency.

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates, are generally recognized in profit or loss. They are deferred in equity if they relate to qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation (if applicable).

Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss, within finance costs. All other foreign exchange gains and losses are presented in the statement of profit or loss on a net basis within other gains/(losses). Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss are recognized in profit or loss as part of the fair value gain or loss, and translation differences on non-monetary assets such as equities classified as at fair value through other comprehensive income are recognized in other comprehensive income.

The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet,

• income and expenses for each statement of profit or loss and statement of comprehensive income

are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and

• all resulting exchange differences are recognized in other comprehensive income.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognized in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

The main exchange rates used to prepare the consolidated financial statements 2023 are the US Dollar (USD), the Great Britain Pound (GBP) and the Brazilian Real (BRL):

FX rates	31. Dez 23 1 EUR =	Average (Jan-Dec 2023) 1 EUR =	31. Dez 22 1 EUR =	Average (Jan-Dec 2022) 1 EUR =
USD	1,10500	1,08140	1,06660	1,05161
GBP	0,86905	0,86979	0,88693	0,85236
BRL	5,36180	5,39907	n/a	n/a

2.4 Revenue recognition

Revenue is measured based on the consideration to be received specified in a contract with a customer and excludes amounts collected on behalf of third parties. No element of financing is deemed present as the sales are made with a payment term that is consistent with market practice. For details on the payment terms, see each revenue stream below.

CoreMedia recognizes revenue when it transfers control over a product or service to a customer. Control is either transferred at a point in time or over a period of time.

The following is the description of the four revenue streams from which CoreMedia generates its revenue presented.

a. Perpetual license and subscription & support (S&S)

The three separate performance obligations in this revenue stream are:

• The sale of the software (perpetual license)

• Subscription services incl. maintenance and minor and major releases (updates, upgrades and bug fixes) and

• Support services (hotline support).

The sale of the software is recognized at a point in time when the customer obtains control of the software but not earlier than the signing of the contract. The client thus obtains the right to use CoreMedia's intellectual property as it exists at the point in time at which the license is granted. The price of the software sale is determined based on the scope of the soft- and corresponding hardware (number of servers and number of concurrent users).

Generally, subscription and support make up for a portion of the price accumulating to 18-26%. Subscription services comprise updates, upgrades as well as bug fixes. Support entails hotline service. Extended support is optional and entails the support of outdated software. Support is paid in regular intervals and usually acquired for three years. The sum of support payments is recognized over the support period.

b. CoreMedia Content Cloud Self-Managed (Term-based license and subscription & support)

The three separate performance obligations in this revenue stream are:

• The provision of the software (TBL),

• Subscription services incl. maintenance and minor and major releases (updates, upgrades and bug fixes) and

• Support services (hotline support).

The revenue for licensing out the software is recognized at a point in time when the customer obtains control of the software but not earlier than the signing of the contract. Per definition in IFRS 15.B56(b), the client thus obtains the right to use CoreMedia's intellectual property as it exists at the point in time at which the license is granted. For the remaining performance obligations (subscription and support services), revenue is recognized on a straight-line basis over the license period.

The total invoiced amount is split into the consideration for the provision of the software license (realized at a point in time) and the consideration for the subscription & support (realized over time) based on relative standalone selling prices.

A contract asset is recognized for the outstanding consideration related to the software provision since the revenue portion for the software license is recognized in full in the beginning when the customer obtains control of the software. The contract asset is subsequently assessed for impairment in accordance with IFRS 9.

CoreMedia determines the stand-alone selling price of each distinct performance obligation at contract inception to allocate the transaction price to each performance obligation, whereby the revenue proportion for the subscription & support does not need to be split further since both performance obligations are performed over the same period of time. As a result, the total transaction price is allocated to the provision of the software and to the subscription and support.

The best evidence of the stand-alone selling prices of the individual performance obligations of the TBL revenue stream are the prices that CoreMedia charges for those goods or services in the revenue stream "Perpetual license and subscription & support (S&S)".

c. CoreMedia Content Cloud Service (Cloud service, server hosting and support subscription)

The two separate performance obligations in this revenue stream are:

• The cloud service, that is, a right to access software functionality in a cloud-based infrastructure, including updates and server hosting

• Support and maintenance services

Server hosting and cloud service are not distinct services as neither of these can be utilized by a customer without the other. The client thus obtains the right to access CoreMedia's intellectual property as it exists throughout the service period.

The revenue of both performance obligations is recognized over the contractual service period. Server hosting entails only an obligation to provide capacities, not the provision of a specific server.

CoreMedia Cloud Service is a Software-as-a-Service (SaaS) solution which is offered as a subscription model. Remuneration of the service is based on the number of concurrent users, sites, optional components and delivery units as well as storage space, traffic and number of operational environments.

The price and the corresponding service can be adjusted in 6-months intervals over the contract period if requirements of the client change. This would be considered a contract modification. For both commercial and technical support, CoreMedia provides two single points of contact (SPOCs). Subscription fees are due every 6 months and paid in advance. Availability of service is guaranteed at 99.5%/month. Should CoreMedia not comply with this requirement, the client is entitled to a partial refund. However, based on past experience, no such penalties have ever occurred, so that these do not need to be considered as variable consideration.

Professional support is provided for employees explicitly named as users by the client. Maintenance, minor and major releases are made available for download upon development. The responsibility to install releases lies with the client.

d. Expert consulting, professional services and training

CoreMedia offers consulting services to clients. They include:

• guidance and advice for the technical lead,

• guidance and advice for the project manager,

• system architecture and solution design,

• developer coaching in the form of best practices and tutorials,

• feature development,

• system installation and deployment, and

• guidance and assistance for content editors.

Typically, revenues for consulting services are recognized over time as the collaboration progresses.

Depending on whether the client requires a senior technical consultant or a technical consultant, the hourly rates are adjusted. Travel expenses of consultants are covered by the client. Monthly invoices list expenses and are to be paid within 14 days.

e. CoreMedia Engagement Cloud Service

The two separate performance obligations in this revenue stream are:

• The cloud service, that is, a right to access software functionality in a cloud-based infrastructure, including updates and server hosting

• Support and maintenance services

Server hosting and cloud service are not distinct services as neither of these can be utilized by a customer without the other. The client thus obtains the right to access CoreMedia's intellectual property as it exists throughout the service period.

CoreMedia Engagement Cloud Service is a Software-as-a-Service (SaaS) solution. Customers usually subscribe for one year but have a monthly termination right for convenience. Remuneration of the service is based on consumption of the services used. Subscription fees are due every month and are paid after the services have been provided. The revenue of both performance obligations is recognized over the contractual service period which is considered to be one month due to the right to cancel for convenience. Server hosting entails only an obligation to provide capacities, not the provision of a specific server.

Professional support is provided upon request. Maintenance, minor and major releases are made available for download upon development. The responsibility to install releases lies with the client.

Contract modifications

The extension of support services as well as the offered adjustments of cloud services in regular intervals is considered a contract modification under IFRS 15.18 as the scope and price of the contract change.

Determining whether a contract modification has occurred is based on the following criteria:

• The modification adds distinct goods and services.

• The distinct goods and services are priced at their standalone selling prices (SSP).

• The terms and conditions of the new contract were negotiated separately from the original contract.

• The additional goods or services were subject to a competitive bid process.

• Any discount to the standalone selling price of the additional goods or services is attributable to the original contract.

Three options are be considered when recognizing a contract modification:

• as a separate contract

A modification is accounted for as a separate contract if the additional goods or services are distinct and the contract price increases by an amount that reflects the standalone selling price (SSP) of the additional goods or services.

• as part of the existing contract (prospectively)

The modification is accounted for as if it were a termination of the original contract and the creation of a new contract if the additional goods or services are distinct, but the price of the added goods or services does not reflect standalone selling price. Any unrecognized revenue from the original contract and the additional consideration from the modification is combined and allocated to all of the remaining performance obligations under the original contract and modification.

• as part of the existing contract (through a cumulative catch-up adjustment)

If the added goods or services are not distinct and are part of a single performance obligation that is only partially satisfied when the contract is modified, the modification is accounted for through a cumulative catch-up adjustment.

Depending on the SSP of the modification, CoreMedia recognizes migrations from one business model/revenue stream to another as a separate contract or as part of an existing contract, which is adjusted prospectively as the additional services added to the contract are distinct.

For TBL contracts, most contract modifications represent subscriptions of additional support service modules like "Extended Enterprise Support" or the licensing of additional software products (e.g. offering additional features - so-called "upsell"). The contract term of the upsell always ends with the base contract. Additional software features and support services generally represent distinct software goods and services as the customer can benefit from the aforementioned together with the CoreMedia software.

Where the additional software goods and services are priced according to their stand-alone selling prices, revenue is recognized in the amount of the additional goods and services' relative stand-alone selling price when CoreMedia fulfills the respective performance obligations (account for modification as a separate contract). Hence, the relative stand-alone selling price of the additional software product / support services with regard to the upsell is recognized at contract inception / over time.

Contract renewals

Numerous customer contracts contain "automatic renewal" clauses or explicit options for the customers to renew the contracts. The accounting treatment for both alternatives is the same. Customer options that provide a material right to the customer (such as a free or discounted good or service) give rise to a separate performance obligation.

Renewal options are assessed to determine if they provide a material right. The amount of the transaction price for the original contract that is allocated to the material right associated with a contract renewal is initially deferred. When the customer renews the contract, the deferred amount, as well as the additional transaction price resulting from the renewal, are allocated to the goods or services transferred during the renewal period.

The additional consideration that would result from a customer exercising an option in the future is not included in the transaction price for the current contract. This is the case even if it is probable, or even virtually certain, that the customer will purchase additional goods or services.

Costs to obtain a contract

CoreMedia has incremental costs to obtain a contract in the form of provisions for partners who recruit new clients and sales provisions for CoreMedia sales personnel (e.g. key account managers). These costs are recognized as an asset if the entity expects to recover those costs. CoreMedia uses the practical expedient provided in IFRS 15.94 and recognizes incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that CoreMedia otherwise would have recognized is one year or less.

The costs to obtain a contract are amortized in accordance with the pattern of transfer of goods and services to which the assets relate.

2.5 Property, plant and equipment

Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains or losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to CoreMedia and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. Depreciation is calculated using the straight-line method to allocate the cost or revalued amounts of the assets, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term as follows:

Furniture and office equipment: 3-13 years

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss.

2.6 Intangible assets

Patents, trademarks and licenses

Patents, trademarks and licenses are recognized at cost less any accumulated amortization and any accumulated impairment losses.

Goodwill

Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortized but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity (if any) include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. As of December 31, 2023 the group consists of one segment and two CGUs i.e. there are no operating segments below the Group as a whole.

Customer relationships and platform technology acquired

Customer relationships and platform technology acquired in a business combination are recognized at fair value at the acquisition date. They have a finite useful life and are subsequently carried at cost less accumulated amortization and impairment losses.

Software development costs

Costs associated with maintaining software programs are recognized as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by CoreMedia are recognized as intangible assets where the following criteria are met:

• it is technically feasible to complete the software so that it will be available for use,

• management intends to complete the software and use or sell it,

• there is an ability to use or sell the software,

• it can be demonstrated how the software will generate probable future economic benefits,

• adequate technical, financial and other resources to complete the development and to use or sell,

• the software is available, and

• the expenditure attributable to the software during its development can be reliably measured.

Directly attributable costs that are capitalized as part of the software include employee costs and an appropriate portion of relevant overheads. Capitalized development costs are recorded as intangible assets with limited useful lives and amortized from the point at which the asset is ready for use.

Research and development

Research expenditure and development expenditure that do not meet the criteria above are recognized as an expense as incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period.

Amortization methods and periods

CoreMedia amortizes intangible assets with a limited useful life, using the straight-line method over the following periods:

• Patents, trademarks and licenses	3-5 years
• Customer relationships (acquired)	7 years
• Platform technology (acquired)	5 years
• Software development costs	5-8.5 years

Besides Goodwill, CoreMedia has not recognized any intangible assets with indefinite useful life.

2.7 Contract assets

Under IFRS 15, claims against customers that are not recognized as receivables are reported as contract assets. Receivables are recognized insofar as the right to payment is merely dependent on the passage of time. CoreMedia mainly recognizes contract assets for fixed-price projects in which revenue is recognized based on the progress made. Payments from customers (or due payments) are deducted when determining the amount of contract assets. If these payments from customers exceed the underlying claim, they will be recognized as a contract liability.

The contract assets also include all finished time & material services that have not yet been invoiced to the customer as of the balance sheet date. In addition to prepayments for fixed-price projects, contract liabilities also include payments that will lead to revenue from maintenance or hosting only in subsequent periods.

Contract assets are monetary items since they are usually ultimately settled in cash. Therefore, they are translated into the reporting currency using the closing rate (if necessary), whereby the closing rate is the spot exchange rate at the balance sheet date. Exchange differences arising on the settlement of contract assets, or on translating them at rates different from those at which they were translated on initial recognition during the period or in previous financial statements, are recognized in profit or loss in the period in which they arise.

2.8 Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the consolidated statement of financial position.

2.9 Trade and other receivables

Trade receivables are recognized initially at the amount of consideration that is unconditional, unless they contain significant financing components when they are recognized at fair value. They are subsequently measured at amortized cost using the effective interest method, less loss allowance. See Note 6.4 for further information about CoreMedia's accounting for trade receivables and Note 2.16 for a description of CoreMedia's impairment policies.

2.10 Income taxes

The income tax expense or credit for the period is the tax payable on the current period's taxable income, based on the applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company and its subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions, where appropriate, on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided for in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized, or the deferred income tax liability is settled.

Deferred tax assets are recognized only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.

Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.

2.11 Leases - Group as a lessee

Contracts may contain both lease and non-lease components. CoreMedia allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. However, for leases of real estate for which CoreMedia is a lessee, it has elected not to separate lease and non-lease components and instead accounts for these as a single lease component.

Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. Leased assets may not be used as security for borrowing purposes.

Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group.

Lease liabilities

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

• fixed payments (including in-substance fixed payments), less any lease incentives receivable,

• variable lease payments that are based on an index or a rate, initially measured using the index or rate as of the commencement date amounts expected to be payable by CoreMedia under residual value guarantees,

• the exercise price of a purchase option if CoreMedia is reasonably certain to exercise that option, and

• payments of penalties for terminating the lease, if the lease term reflects CoreMedia exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets

Right-of-use assets are measured at cost comprising the following:

the amount of the initial measurement of lease liability

• less any lease payments made at or before the commencement date less any lease incentives received,

• less any initial direct costs, and

• including restoration costs.

Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If CoreMedia is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset's useful life.

CoreMedia accounts for short-term leases and leases of low-value assets by applying the practical expedient according to IFRS 16.6. Therefore, payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets primarily comprise IT and office equipment.

Variable lease payments

The Group may be exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset. The Group is not exposed to any variable lease payments linked to generated sales.

Extension and termination options

Extension and termination options are included in a number of property and equipment leases across the Group. These are used to maximize operational flexibility in terms of managing the assets used in the Group's operations. To determine the applicable lease term CoreMedia estimates if it is highly probably to exercise an extension or termination option.

The Group is not acting as a lessor.

For deferred tax assets and liabilities associated with the lease accounting please see Note 6.17.

2.12 Trade and other payables

These amounts represent liabilities for goods and services provided to CoreMedia prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method.

2.13 Loans and borrowings

Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a prepayment for liquidity services and amortized over the period of the facility to which it relates.

Borrowings are classified as current liabilities unless CoreMedia has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

2.14 Provisions

Provisions for legal claims, service warranties and make good obligations are recognized when CoreMedia has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are not recognized for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expense.

2.15 Contract liabilities

A contract liability is the obligation to transfer goods or services to a customer for which CoreMedia has already received consideration from the customer (or an amount of the consideration is due). A contract liability is recognized when a customer pays the consideration before CoreMedia fulfils its performance obligation by transferring goods or services to the customer. Contract liabilities are recognized as revenue when the performance is rendered under the contract. This especially applies to services invoiced in advance, maintenance agreements, warranty extensions and expansions and down payments received from third parties.

Contract liabilities represent non-monetary items as they are usually ultimately settled by delivering goods or services to the customer. Since contract liabilities are recognized at historical cost, they are translated using the exchange rate at the date of the transaction. They are recorded at historical cost at initial recognition and no re-translation is required at subsequent balance sheet dates.

2.16 Impairment of assets

Goodwill and intangible assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

2.17 Financial instruments

a. Financial assets

Classification

In accordance with IFRS 9, CoreMedia classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through OCI or through profit or loss), and

• those to be measured at amortized cost.

The classification depends on the entity's business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value (if applicable), gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether CoreMedia has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI).

CoreMedia reclassifies debt investments when and only when its business model for managing those assets changes.

Recognition and derecognition

Regular way purchases and sales of financial assets are recognized on trade date, being the date on which CoreMedia commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and CoreMedia has transferred substantially all the risks and rewards of ownership.

Measurement

At initial recognition, CoreMedia measures a financial asset at its fair value in accordance with IFRS 13 including, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

CoreMedia measures trade receivables at their transaction price (as defined in IFRS 15) if the trade receivables do not contain a significant financing component in accordance with IFRS 15.

Fair value is the price that would be paid in an orderly transaction between market participants to purchase an asset or transfer a liability. Depending on the availability of the input factors used, fair value is assigned to one of the three levels of the fair value hierarchy:

- Level 1 fair values are based on market prices that can be observed in active markets for identical instruments. Markets are active when quoted prices are readily and regularly available and represent recent arm's length transactions. These prices can be adopted without further adjustment.

- Level 2 fair values are determined using market prices of comparable financial instruments or financial mathematical valuation techniques based on observable parameters. These parameters include in particular yield curves and exchange rates.

- Level 3: If no observable market prices are available, valuation methods are used which are based to a large extent on non-observable parameters.

Debt instruments

Subsequent measurement of debt instruments depends on CoreMedia's business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Group classifies its debt instruments:

• Amortized cost: Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate (EIR) method. Any gain or loss arising on derecognition is recognized directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the statement of profit or loss.

• FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets' cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses, which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses), and impairment expenses are presented as separate line item in the statement of profit or loss.

• FVPL: Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVPL. Additionally, assets that meet the criteria for measurement at amortized cost or FVOCI but where the option to measure these assets at fair value has been exercised are measured at FVPL. This option may be exercised in order to reduce or eliminate an accounting mismatch. A gain or loss on a debt investment that is subsequently measured at FVPL is recognized in profit or loss and presented net within other gains/(losses) in the period in which it arises.

CoreMedia's financial assets include trade and other receivables, cash and cash equivalents.

Equity instruments

CoreMedia subsequently measures all investments in equity instruments at fair value. Where management has irrevocably elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognized in profit or loss as other income when CoreMedia's right to receive payments is established.

Changes in the fair value of financial assets at FVPL are recognized in other gains/(losses) in the statement of profit or loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.

There are no investments in equity instruments outstanding at CoreMedia.

Impairment

CoreMedia assesses the expected credit losses associated with its debt instruments carried at amortized cost and FVOCI on a forward-looking basis. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables, CoreMedia applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognized from initial recognition of the receivables, see Note 6.10 Financial instruments and financial risk management for further details.

CoreMedia recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that CoreMedia expects to receive, discounted at an approximation of the original effective interest rate. Because expected credit losses consider the amount and timing of payments, a credit loss arises even if the entity expects to be paid in full but later than when contractually due.

ECLs are recognized in three stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). For credit exposures for which there has been a significant increase in credit risk to the point where it is considered credit-impaired, i.e. where objective evidence of impairment such as insolvency exists, interest revenue is calculated based on the loan's amortized cost (that is, the gross carrying amount less the loss allowance). Lifetime ECLs are recognized, as in Stage 2.

For trade receivables, CoreMedia applies a simplified approach in calculating ECLs. Therefore, CoreMedia does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date.

CoreMedia monitors a financial asset for default when contractual payments are 30 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. Generally, trade receivables are written-off if past due for more than one year and are not subject to enforcement activity.

b. Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, financial liabilities measured at amortized cost, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. As of December 31, 2023, CoreMedia's financial liabilities are classified at amortized cost, for further details see Note 6.10.

All financial liabilities are recognized initially at their fair value in accordance with IFRS 13 and, in the case of loans and borrowings and payables net of directly attributable transaction costs. CoreMedia's financial liabilities include trade and other payables, loans and borrowings.

When CoreMedia becomes party to the contractual provisions of a financial liability, the financial liability is assessed whether they contain embedded derivatives. In case of any embedded derivative that has to be bifurcated, the initial carrying amount is adjusted to reflect the separate recognition of a derivative financial asset or liability.

Financial liabilities at amortized cost (loans and borrowings)

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the effective interest rate (EIR) method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit or loss. This category generally applies to interest-bearing loans and borrowings. For more information, refer to Note 6.13.

Derecognition of financial liabilities

CoreMedia derecognizes a financial liability when the corresponding obligation is settled, cancelled or expires. The difference between the carrying amount of the derecognized financial liability and the consideration received or receivable is recognized in the consolidated statement of profit or loss.

2.18 Share-based payments

Share-based compensation benefits are provided via a long-term incentive bonus plan for certain senior managers of CoreMedia ("LTI Agreement"). Information relating to this agreement is set out in Note 6.12.

The LTI Agreement is a cash-settled share-based payment arrangement with linear vesting in the scope of IFRS 2. Cash-settled share-based payment transactions are transactions in which a reporting entity receives goods or services by incurring a liability to transfer cash or other assets in an amount that is based on the price (or value) of equity instruments of the entity or another group entity.

Under IFRS 2, the fair value of the amount payable that is settled in cash is recognised as an expense with a corresponding increase in liabilities over the period during which the employee(s) become unconditionally entitled to payment. The liability is remeasured at each reporting date and at settlement date based on the fair value of the awards. Any changes in the liability are recognised in profit or loss.

2.19 Accounting estimates and judgements

In certain cases, accounting estimates and judgements are necessary. These involve complex and subjective assessments and the use of assumptions, some of which may be for matters that are inherently uncertain and susceptible to change. Accounting estimates and judgements could change from period to period and have a material impact on the results of operations as well as on the assets and financial positions of CoreMedia. In addition, CoreMedia could reasonably have made estimates differently in the current accounting period. CoreMedia cautions that future events often vary from forecasts and that estimates routinely require adjustments. Estimates and assumptions are reviewed on an ongoing basis, and changes in estimates and assumptions are recognized in the period in which the changes occur and in future periods impacted by the changes.

Use of estimates and judgment applies to the following issues in particular:

Goodwill impairment test

Besides the military conflict between Russia and the Ukraine a conflict in Israel came up in 2023. The effects of the conflict in Israel spilled over to the whole region. These conflicts lead to increasing energy and commodity prices and uncertainty in the global economy. The consequences for the Group could be, above all, restrained demand and delayed payment of invoices by customers. The overall effect of the conflict on the CoreMedia financials cannot be quantified. So far, there have been no significant effects on the asset, financial or earnings position. However, an ongoing deterioration of the overall economic situation, as a result of the mentioned conflicts, could impair the recoverability of goodwill. There are no identifiable risks to the Group's ability to continue as a going concern.

Management's judgement is required when calculating the recoverable amount in the annual goodwill impairment test. All estimated input figures such as future sales growth, customer retention rates, expected fix and variable costs as well as the resulting profit margins per revenue stream are calculated in accordance with the annual budget process that is being reviewed and signed-off by the managing directors.

For further details see Note 4.2.

Long-term incentive bonus plan

Management's judgement and estimates that are necessary to calculate the expected fair value of the awards are made in accordance with the annual budget process and with all other parameters used in the annual goodwill impairment test.

For further details see Note 6.12.

Business combinations

In a business combination, all identifiable assets and liabilities acquired are recorded at the date of acquisition at their respective fair value. One of the most significant estimates and judgments relates to the determination of the fair value of these assets and liabilities as well as the determination of the point in time of first consolidation. In connection with management judgment about purchase price allocations, CoreMedia uses appropriate valuation techniques, and determines the fair value of acquired assets and liabilities. These evaluations are linked closely to assumptions and judgments made by management regarding the future performance of the assets concerned and any changes in the discount rates applied.

The determination of the expected useful lives of long-lived assets acquired, their amortization pattern and profit margins for the fair value computation of deferred income is based on judgment and estimates especially regarding the period for which they will generate cash flows.

Income taxes

Deferred tax assets are recognized if sufficient future taxable profit is available, including income from forecasted operating earnings and the reversal of existing taxable temporary differences. At each periodend, management evaluates the recoverability of deferred tax assets. As future developments are uncertain and partly beyond management's control, assumptions are necessary to estimate future taxable profits as well as the period in which deferred tax assets will recover. Estimates are revised in the period in which there is sufficient evidence to revise assumptions.

Provisions

There is uncertainty regarding future increases, the amount, date and the probability of provisions as of the date of recognition and measurement. It is possible, on the basis of existing knowledge, that outcomes within the next financial year that are different from the assumptions could require a material adjustment to the total carrying amount of provisions, which is presented in the consolidated statement of financial position.

Leases

For lease accounting, certain management assumptions and estimates were used, especially in regard of the determination of discount rate to estimate the present value of the lease liabilities and the assessment of the exercise of prolongation and termination options. Extension and termination options are included in several leases across the Group. These terms are used to maximize operational flexibility in terms of managing contracts. Most extension and termination options held are exercisable only by CoreMedia and not by the respective lessor. In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). If any leasehold improvements are expected to have a significant remaining value, CoreMedia is typically reasonably certain to extend (or not terminate).

CoreMedia GmbH has leased a new office space for its headquarter space in Hamburg since September 2022. The enforceable period ends as of September 2027. The Lessee is granted the right to extend the Fixed Lease Term once by five years by means of a unilateral declaration. The lease agreement contains bilateral termination options with a twelve-month notice period and is tacitly extended for further twelve months upon non-cancellation. Judgment is used by management at every reporting date in order to determine the IFRS 16 compliant term of the agreement. The lease is accounted for under IFRS 16 with a remaining lease term of 44 months ending as of September 2027. Further, BySide - Lead Activation S.A. has leased an office in Porto. The enforceable period ends as of October 1, 2025. After this period the lease term ends. Judgment is used by management at every reporting date in order to determine the IFRS 16 compliant term of the agreement. As of July 31, 2023 the lease was accounted for under IFRS 16 with the remaining lease term of 26 months. As of December 31, 2023 it is accounted for under IFRS 16 with a remaining lease term of 21 months ending as of October 1, 2025.

3.1 Information about the subsidiaries

The consolidated financial statements of the Group include the following entities as of December 31, 2023:

Company Name	Place of Business	Country	Group's interest
CoreMedia GmbH	Hamburg	Germany	100%
CoreMedia Corporation	Arlington	USA	100%
CoreMedia UK Ltd	London	United Kingdom	100%
ByLabs Unipessoal Lda.	Porto	Portugal	100%
BySide - Lead Activation S.A.	Porto	Portugal	100%
BySide Brasil LTDA	Sao Paolo	Brazil	100%

The entire group comprises CM Bridge Holdings GmbH as the parent company and its subsidiaries: CoreMedia GmbH in Germany, CoreMedia UK Ltd. in the United Kingdom, CoreMedia Corporation in the USA, ByLabs Unipessoal Lda. in Portugal, BySide - Lead Activation S.A. in Portugal and BySide Brasil LTDA in Brazil. As of July 31, 2023 CoreMedia GmbH has acquired 100% of the shares of ByLabs Unipessoal Lda. which in turn is the parent-company of BySide - Lead Activation S.A. and BySide Brasil LTDA. Since then, CoreMedia GmbH has gained control over the three companies and thus the companies are part of CoreMedia.

3.2 Information about the ultimate parent

On December 31, 2023, the Company was owned by Bridge Intermediate Holdings S.à r.l., Luxemburg (100% of the shares). The ultimate parent entities are private equity funds advised by OpenGate Capital Management, LLC, United States of America (OGC).

Parent entities			31. Dez 23	31. Dez 22
Name	Type	Place of incorporation	Ownership interest
OpenGate Capital Partners II-A, LP	Fund	Cayman Islands	61,40%	61,40%
Bridge Ultimate Holdings S.à r.l.	Ultimate parent	Luxembourg	98,14%	78,20%
Bridge Intermediate Holdings S.à r.l.	Immediate parent	Luxembourg	100,00%	100,00%

Note 4: Business combinations and goodwill

4.1 Acquisition of ByLabs Unipessoal Lda.

The Group carried out one significant business combination in accordance with IFRS 3 in the financial year from 01 January to 31 December 2023. On 31 July 2023, the Group acquired 100% of the shares of ByLabs Unipessoal Lda., a global provider of digital experience solutions in the fields of content management and eCommerce based in Porto, Portugal, for an amount of EUR 6,079,769 after post-closing Balance Sheet adjustments. All shares in ByLabs Unipessoal Lda. were acquired for a final cash consideration.

Post-closing Balance Sheet adjustments were recognized as a receivable at year end in the amount of EUR 171,998. The acquisition was financed through an equity injection by the shareholder.

The revenue and the net loss for the combined entity for the current reporting period as though the acquisition date for the business combination that occurred on July 31, 2023 had been on January 1, 2023 would be at EUR 29,079k and -5,409k. The revenue and the net loss of the BySide group from August 1, 2023 until December 31, 2023 included in the consolidated statement of comprehensive income amount to EUR 2,050k and EUR -573k.

The following table shows the fair values of assets acquired and liabilities assumed in EUR at the date of acquisition:

Fair values of assets and liabilities recognized as of 31 July 2023:	EUR
Intangible assets	3.032.184
Property, plant and equipment	222.545
Right-of-use assets	117.000
Non-current financial assets	31.222
Deferred tax assets	301.029
Non-current assets	3.703.980
Trade and other receivables	1.206.193
Other current assets	633.429
Cash and cash equivalents	373.868
Current assets	2.213.489
Total assets	5.917.469
Non-current financial liabilities	94.250
Deferred tax liabilities	155.250
Non-current liabilities	249.500
Current financial liabilities	126.492
Trade and other payables	2.487.938
Current provisions	345.388
Current contract liabilities	176.925
Other current liabilities	2.686
Tax liabilities	78.126
Current liabilities	3.217.556
Total liabilities	3.467.056
Net identified assets acquired	2.450.414
Purchase consideration	6.079.769
Goodwill	3.629.355

The resulting goodwill is mainly attributable to the assembled workforce.

4.2 Goodwill

The Group has one operating segment according to IFRS 8.5, being the Group as a whole. The goodwill is allocated further down to two CGUs below this operating segment in accordance with IAS 36.80 namely the CoreMedia and the BySide Group. They both represent the lowest level within the entity at which goodwill is monitored for internal management purposes.

The table below presents the development of the Group's goodwill balance during the reporting period:

Goodwill roll forward	EUR
As of January 1, 2023	29.742.072
Addition through business combination	3.629.355
Currency translation differences	-12.650
As of December 31, 2023	33.358.777
As of January 1, 2022	29.727.954
Currency translation differences	14.118
As of December 31, 2022	29.742.072

The goodwill derived from the following two transactions: 1) On July 31, 2023, CoreMedia GmbH acquired 100% of the shares in ByLabs Unipessoal Lda. The goodwill arose in the course of the initial consolidation and the related purchase price allocation. 2) On October 31, 2019, CM Bridge Holdings GmbH acquired 100% of the shares in CoreMedia GmbH. The goodwill arose in the course of the initial consolidation and the related purchase price allocation.

Goodwill allocated to the CGU CoreMedia EUR 29,729k

For the purpose of the goodwill impairment test as of December 31, 2023, the recoverable amount was based on the fair value less costs of disposal (FVLCOD). The valuation is considered to be level 3 in the fair value hierarchy due to unobservable inputs used in the valuation.

Goodwill impairment test disclosure	31. Dez 23
Unobservable inputs
Detail planning period	6 years
Average revenue growth rate (%)	6,9
Long-term discount rate (WACC) (%)	11,4
Long-term growth rate (%)	1,0

The costs of disposal are estimated based on industry benchmarks as a percentage of the entity value on December 31, 2023. The underlying detail planning period represents the internal planning period applied by management. To consider the future growth of the business in accordance with the internal management planning model, the detailed planning period is six years. Average annual revenue growth rate and profit margins over the detailed forecast period are based on past performance as well as management's expectations of market development. Discount rates and growth rates used reflect specific risks relating to CoreMedia's business and the countries in which CoreMedia operates.

The recoverable amount of the single CGU to which Goodwill is assigned exceeds its carrying amount by EUR 6,990k. Therefore, goodwill is fully recoverable as of December 31, 2023.

The recoverable amount would still exceed the carrying amount if either:

• the discount rate (WACC) would increase from 11.36% to 12.36%, or

• the long-term growth rate would be reduced from 1.0% to 0.5 %, or

• the long-term EBITDA-margin would be reduced from 19.05% to 18.05%.

Goodwill allocated to the CGU BySide EUR 3,629k

Goodwill which has been determined as of July 31, 2023 has not changed since then as no material changes to the business including products and services or any other impairment triggers have occurred. The goodwill has been calculated by a independent third party provider.

Note 5: Notes to the consolidated statement of profit or loss

5.1 Revenues and other operating income

The Group generates revenue from the following revenue streams (product types).

Revenues	2023 EUR	2022 EUR
Recurring revenues
CoreMedia Content Cloud Self-Managed	6.165.904	9.813.049
CoreMedia Content Cloud Service	7.863.409	5.425.021
Support & Subscription	7.428.065	7.450.632
Subtotal	21.457.379	22.688.702
Re - ocurring revenues	2.028.264	0
Subtotal	2.028.264	0
Non-recurring revenues
Perpetual license sale	100.000	163.422
Customer Success	3.431.874	3.427.884
Trainingcenter	70.277	343.142
Partner Subscriptions	105.200	131.802
Other	71.839	67.216
Subtotal	3.779.191	4.133.465
Timing of revenue recognition
Revenue recognized at a point in time	5.459.992	5.300.724
Revenue recognized over time	21.804.841	21.521.444
Total	27.264.834	26.822.167

In the following table, revenue is disaggregated by primary geographical markets.

Revenues	2023 EUR	2022 EUR
United States of America	4.234.712	4.004.064
thereof revenues in United States of America	4.234.712	4.004.064
Rest of the world	23.030.121	22.818.104
thereof revenues in Germany	11.713.195	13.489.260
thereof revenues in other EU countries	7.765.849	5.911.310
thereof revenues in other countries	3.551.077	3.417.534
Total	27.264.834	26.822.167

The following table provides information about trade receivables, contract assets and contract liabilities from contracts with customers.

Contract balances	2023 EUR	2022 EUR
Trade receivables	1.903.729	1.502.229
Contract assets	1.674.033	2.763.402
Costs to obtain a contract	701.646	763.039
Contract liabilities	6.354.318	5.569.049

Due to immateriality, there is no expected credit loss recognized for contract assets and trade receivables. For further details regarding the trade receivables please see Note 6.4.

The costs to obtain a contract comprise incremental costs in the form of provisions for partners who recruit new clients and sales provisions for CoreMedia's sales personnel. Costs to obtain a contract are calculated for each individual contract using internal product codes. The depreciation is in line with the expected contract term. The depreciation of costs to obtain a contract in 2023 amounts to EUR 510,995 (2022: EUR 400,517).

The following table shows unsatisfied performance obligations as of the reporting date resulting from long-term software subscription, software cloud, support and maintenance contracts:

Unsatisfied performance obligations	2023 EUR	2022 EUR
Aggregate amount of the transaction price allocated to software subscription, software cloud, support and maintenance contracts that are partially or fully unsatisfied	28.458.803	32.611.635

It is expected that EUR 20,296,657, EUR 6,049,829, EUR 2,014,601 and EUR 97,716 of the transaction price allocated to unsatisfied performance obligations as of December 31, 2023 will be recognized as revenue in financial years 2024, 2025, 2026 and 2027 respectively. The amount disclosed above does not include variable consideration.

The other income includes income from the reversal of other current liabilities of EUR 125,848 (2022: EUR 117,857). Income from exchange rate differences included in other operating income in 2023 amounts to EUR 78,090 (2022: EUR 20,266).

Losses from exchange rate differences included within the expenses described below in 2023 amount in total to EUR 65,073 (2022: EUR 113,961).

5.2 Research and development costs

Research and development costs only include the portion of costs that is not capitalized as internally generated intangible assets and are primarily composed of salaries.

Research and development	2023 EUR	2022 EUR
Product center	-3.235.451	-2.173.462
Product management	-886.380	-753.397
Total	-4.121.831	-2.926.859

5.3 Sales, Partnermanagement, Customer Success & Marketing

Sales, Partnermanagement, Customer Success and Marketing include the salaries for the sales, partnermanagement, customer success and marketing personnel, other personnel costs, attributable depreciation and amortization as well as advertising costs.

Sales & Marketing	2023 EUR	2022 EUR
Sales	-4.884.758	-3.998.104
Marketing	-1.662.510	-1.859.593
Partnermanagement	-501.610	-468.933
Customer Success	-669.237	-335.895
Total	-7.718.114	-6.662.525

5.4 Administrative expenses

Administration expenses	2023 EUR	2022 EUR
Internal Services	-8.814.122	-7.091.140
IT	-709.381	-692.124
Labour	-761.458	-683.068
Total	-10.284.961	-8.466.332

5.5 Personnel expenses

On average, 194 full-time employees were employed during the reporting period (December 31, 2022: 156). The increase is mainly due to the BySide acquisition as of July 31, 2023. The BySide acquisition leads to an average increase of 35 employees. Trainees (3 on average) were not included in the personnel headcount (December 31, 2022: 3).

Personnel expenses	2023 EUR	2022 EUR
Wages and salaries	15.424.007	14.839.500
Social security contribution	2.810.647	2.267.104
Total	18.234.654	17.106.604

5.6 Amortization and depreciation

Amortization and depreciation	2023 EUR	2022 EUR
Amortization	4.814.261	4.469.898
Depreciation	210.334	277.023
Total	5.024.596	4.746.921

5.7 Finance costs

Finance costs	2023 EUR	2022 EUR
Interest expenses on shareholder loan	-653.140	-637.274
Interest expenses on term loan	-959.704	-664.065
Credit commission, contributions to administrative costs	-11.856	-52.823
Interest expenses on current liabilities and similar charges	-57	-334
Interest expenses on leasing	-39.764	-13.647
Interest expenses on tax	0	-110
Interest expenses on current liabilities	-1.033	-35
Total	-1.665.553	-1.368.289

5.8 Taxes

Income taxes comprise deferred taxes and current income taxes paid or payable in the respective countries. They comprise corporate income tax, trade tax, solidarity surcharge and equivalent tax charges in the respective countries. For further information on deferred taxes and tax losses see Note 6.17.

Tax rates
Company	Country	31.12.2023	31.12.2022
CM Bridge Holdings GmbH	Germany	32,275%	32,275%
CoreMedia GmbH	Germany	32,275%	32,275%
COREMEDIA CORPORATION	United States	28,000%	28,000%
COREMEDIA UK LIMITED	United Kingdom	19,000%	19,000%
ByLabs LDA	Portugal	22,500%	22,500%
BySide - Lead Activation S.A.	Portugal	22,500%	22,500%
BySide Brasil LTPA	Brazil	34,000%	34,000%

Taxes	2023 EUR	2022 EUR
Withholding tax expense	-7.128	-6.415
Corporation tax expense (United Kingdom)	-15.671	-13.790
Income tax expense (Singapore)	0	7
Income tax expense (Portugal)	-2.856	0
Income tax expense (USA)	-4.678	0
Income tax expense (Brazil)	-30.651	0
Deferred tax income	-346.418	-479.076
Deferred tax expense	2.308.728	680.857
Recognized net tax income	1.901.325	181.583

Tax rate reconciliation	2023 EUR	2022 EUR
Loss before income taxes	-6.862.641	-1.243.168
Expected income tax income (32.275%)	2.214.917	401.233
Tax increases due to non-tax-deductible expenses	-355.471	0
Trade tax additions / deductions	-57.958	-55.058
Impact of differences in national tax rates	-97.923	3.902
Non-capitalized losses carried forward & non-capitalized temporary differences	106.234	-86.403
Other effects	21.199	-14.193
Taxes for previous years	70.326	-67.898
Subtotal reconciliation effects	-313.592	-219.650
Recognized net tax income	1.901.325	181.583
Effective tax rate	27,71%	14,61%

Note 6: Notes to the consolidated statement of financial position

6.1 Goodwill and intangible assets

Goodwill & Intangible assets	Goodwill EUR	Platform EUR	Customer relationships EUR	Software, patents and licenses EUR	Total EUR
Cost as of 1 January 2023	29.742.072	15.713.005	4.644.165	151.539	50.250.781
Acquired through business combination	3.629.355	3.317.909	0	0	6.947.264
Additions	0	1.988.348	0	95.199	2.086.122
Reclassifications	-605	-2.575	0	2.575	-3.180
Currency effects	-12.045	0	0	0	-12.045
Cost as of 31 December 2023	33.358.778	21.016.687	4.644.165	249.313	59.268.942
Accumulated amortization and impairment as of 1 January 2023	0	-7.430.120	-2.100.931	-66.892	-9.597.943
Amortization	0	-3.322.620	-663.452	-40.616	-4.026.688
Acquired through business combination	0	-285.725	0	0	-285.725
Accumulated amortization and impairment as of 31 December 2023	0	-11.038.465	-2.764.383	-107.508	-13.910.356
Net carrying amount as of 31 December 2023	33.358.778	9.978.222	1.879.782	141.805	45.358.586

Goodwill & Intangible assets	Goodwill EUR	Platform EUR	Customer relationships EUR	Software, patents and licenses EUR	Total EUR
Cost as of 1 January 2022	29.727.954	13.571.687	4.644.165	71.991	48.015.797
Additions	0	2.141.318	0	79.548	2.220.866
Currency effects	14.118	0	0	0	14.118
Cost as of 31 December 2022	29.742.072	15.713.005	4.644.165	151.539	50.250.781
Accumulated amortization and impairment as of 1 January 2022	0	-4.566.094	-1.437.479	-43.151	-6.046.724
Amortization	0	-2.864.026	-663.452	-36.668	-3.564.146
Disposals	0	0	0	12.927	12.927
Accumulated amortization and impairment as of 31 December 2022	0	-7.430.120	-2.100.931	-66.892	-9.597.943
Net carrying amount as of 31 December 2022	29.742.072	8.282.885	2.543.234	84.647	40.652.837

Amortization expenses of platform (including recognized development costs) and customer relationships are included in the cost of sales of goods.

Based on the impairment trigger analysis for intangible assets performed for the financial year 2023 no need for impairment has been identified.

Platform consists of capitalized development costs being an internally generated intangible asset.

6.2 Property, plant and equipment

Property, plant and equipment
Cost as of 1 January 2023	1.251.041
Acquired through business combination	249.875
Additions	296.721
Currency effects	-4.126
Disposals	-76.773
Reclassifications	44.543
Cost as of 31 December 2023	1.761.280
Accumulated depreciation and impairment as of 1 January 2023	-873.270
Depreciation	-210.334
Currency effects	2.653
Addition to consolidation area	-27.330
Accumulated depreciation and impairment as of 31 December 2023	-1.108.281
Net carrying amount as of 31 December 2023	652.999

Property, plant and equipment
Cost as of 1 January 2022	974.325
Additions	273.554
Currency effects	3.162
Cost as of 31 December 2022	1.251.041
Accumulated depreciation and impairment as of 1 January 2022	-594.367
Depreciation	-277.023
Currency effects	-1.879
Accumulated depreciation and impairment as of 31 December 2022	-873.270
Net carrying amount as of 31 December 2022	377.773

6.3 Leases

This note provides information about leases where CoreMedia is a lessee. CoreMedia is not acting as a lessor as defined under IFRS 16.

CoreMedia's lease activities include movable assets (e.g. company cars, IT-hardware) and immovable property (e.g. office space). The fixed base term of the contract is usually three years for company cars and three to five years for IT-hardware. The most relevant leased immovable properties are the headquarter office in Hamburg, Germany and the office building in Porto, Portugal, which was acquired through the business combination in July 2023. As of December 31, 2023 the remaining lease term for this office is 21 months.

Most lease contracts also include termination, extensions or purchase options to ensure maximum flexibility in the use of the underlying assets. CoreMedia assesses at its own discretion whether the exercise of an option is probable by considering all relevant factors that provide an economic incentive to exercise an option. CoreMedia has not entered into any lease contracts with variable lease payments or residual value guarantees.

The balance sheet shows the following amounts relating to leases.

Lease disclosures	31. Dez 23 EUR	31. Dez 22 EUR
Right-of-use assets
Right-of-use immovables	1.119.420	1.301.303
Right-of-use movables	95.798	3.615
Right-of-use IT-hardware	185.720	154.691
Total right-of-use assets	1.400.937	1.459.608
Lease liabilities
Lease liability Immovables - non-current	852.903	1.114.215
Lease liability Movables - non-current	68.895	0
Lease liability IT Hardware - non-current	84.365	53.742
Non-current lease liabilities	1.006.163	1.167.956
Lease liability Immovables - current	355.814	280.114
Lease liability Movables - current	26.902	3.615
Lease liability IT Hardware - current	92.276	93.554
Current lease liabilities	474.992	377.283
Total lease liabilities	1.481.155	1.545.239
Amortization charge of right-of-use assets
Amortization of Right-of-use immovables	298.883	398.538
Amortization of Right-of-use movables	19.436	8.275
Amortization of Right-of-use IT-hardware	106.849	111.349
Total amortization charge	425.168	518.163
Expense relating to short-term leases	7.196	2.546
Expense relating to leases of low-value assets	14.733	10.716
Cash outflow for lease repayments	409.898	515.334

Right-of-use assets	2023 EUR	2022 EUR
Cost as of 1 Jan 2023	3.106.622	1.678.413
(2022)
Additions	249.497	1.428.209
Acquired through business combination	117.000	0
Cost as of 31 December 2023	3.473.119	3.106.622
(2022)
Accumulated amortization and impairmentas of 1 Jan 2023	-1.647.014	-1.128.852
(2022)
Amortization	-425.168	-518.163
Accumulated amortization and impairmentas of 31 December 2023	-2.072.182	-1.647.014
(2022)
Net carrying amountas of 31 December 2023	1.400.937	1.459.607

6.4 Trade and other receivables

Trade and other receivables	31. Dez 23 EUR	31. Dez 22 EUR
Trade receivables	1.903.729	1.502.229
Other receivables	284.398	59.719
Total trade and other receivables	2.188.127	1.561.947

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are generally due for settlement within 14 to 60 days and are therefore all classified as current.

Due to the short-term maturity of trade receivables, the carrying amount approximates the fair value. In 2023, no receivables were sold or transferred (previous year: none). Please refer to Note 6.10 for further information regarding the impairment of trade receivables.

6.5 Tax receivables

As of December 31, 2022, CoreMedia's tax receivables amount to EUR 1,388 (December 31, 2022: EUR 2,469). The total amount is current and primarily relates to value-added tax receivables.

6.6 Other current assets

Other current assets	31. Dez 23 EUR	31. Dez 22 EUR
Prepaid expenses	684.144	472.885
Other current assets	179.577	250.150
Total	863.721	723.035

6.7 Cash and cash equivalents

Cash and cash equivalents	31. Dez 23 EUR	31. Dez 22 EUR
Cash on hand and checks	1.650	0
Bank deposits	3.643.294	4.318.367
Total	3.644.944	4.318.367

Due to the short-term maturity of cash and cash equivalents, the carrying amount approximates the fair value.

6.8 Share capital and capital reserve

The share capital ("Stammkapital") of CM Bridge Holdings GmbH amounts to EUR 26,000 (December 31, 2022: EUR 26,000) and is divided into 26,000 shares with a nominal value of EUR 1.00 each.

The capital reserve as of December 31, 2023 amounts to EUR 17,367,385 (December 2022: EUR 7,807,385) and was initially recognized via issuance of share capital and equity contribution in 2019 and 2023. The increase in the capital reserve is due to a capital contribution by the shareholder of the CM Bridge Holdings GmbH of EUR 9,560,000 in the reporting period 2023.

6.9 Capital management

CoreMedia manages its capital with the objective of maintaining a solid capital base to ensure the sustainable development of the Group. CoreMedia's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for the shareholders and benefits for other stakeholders, and to maintain an optimally leveraged capital structure in order to reduce the cost of capital.

6.10 Financial instruments and financial risk management

Financial instruments	Classification	31. Dez 23 Carrying amount EUR	31. Dez 22 Carrying amount EUR
Non-current financial assets
Non-current financial assets	Financial assets measured at amortized cost	174.007	150.784
Current financial assets
Trade and other receivables	Financial assets measured at amortized cost	2.188.127	1.561.947
Cash and cash equivalents	Financial assets measured at amortized cost	3.644.944	4.318.367
Total financial assets		6.007.078	6.031.099
Non-current financial liabilities
Financial liabilities due to shareholder:
Shareholder loan	Financial liabilities measured at amortized cost	26.778.723	26.125.584
Long-term borrowings, non-current portion:
Term loan	Financial liabilities measured at amortized cost	11.680.232	12.401.695
Non-current lease liabilities	IFRS 16	1.006.163	1.167.956
Current financial liabilities
Trade and other payables	Financial liabilities measured at amortized cost	1.306.368	743.255
Long-term borrowings, current portion:
Current portion of loans and borrowings	Financial liabilities measured at amortized cost	1.728.833	1.086.146
Current lease liabilities	IFRS 16	474.992	377.283
Total financial liabilities		42.975.313	41.901.919

The carrying amount of the financial instruments is considered to be the same as their fair value.

Financial risk management

Foreign exchange risk

Exposure to foreign exchange risk generally arises from transactions denominated in a currency other than the functional currency of a subsidiary. Foreign exchange risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. CoreMedia's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's operating activities.

A portion of CoreMedia's business is conducted in USD, GBP and BRL. Therefore, the periodic fluctuations of the USD, GBP and BRL have an impact on revenues and operating results. The appreciation of the EUR in relation to the USD, GBP and BRL generally has a negative effect, while a depreciation of the EUR has a positive effect.

CoreMedia monitors potential exchange rate risks on the basis of balance sheet items and expected cash flows continuously. Regarding USD, there is a natural hedge of cash flows due to the subsidiary in the United States. In case of a significant increase in sales invoiced in foreign currencies, exchange rate hedging transactions are planned if necessary.

CoreMedia is exposed to a foreign exchange risk arising from trade receivables and payables at reporting date of USD 474,039 (December 31, 2022: USD 451,140).

Based on the financial instruments held at 31 December 2023, if exchange rates were to weaken/strengthen against the Euro by 10% with all other variables held constant, the transaction exposure within profit after tax would be:

Foreign exchange risk
	+10%		-10%
	2023	2022	2023	2022
USD	-38.999	-36.211	47.666	44.258

Further, CoreMedia is exposed to a foreign exchange risk arising from trade receivables and payables at reporting date of BRL 1,731,911.

Based on the financial instruments held at 31 December 2023, if exchange rates were to weaken/strengthen against the Euro by 10% with all other variables held constant, the transaction exposure within profit after tax would be:

Foreign exchange risk
	+10%		-10%
	2023	2022	2023	2022
BRL	-29.364		35.890

The exposure of CoreMedia to foreign exchange risks in terms of GBP is not material.

Interest rate risk

CoreMedia's main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow rate risk. CoreMedia's exposure to the risk of changes in market interest rates relate primarily to CoreMedia's long-term debt obligations with floating interest rates.

The financial instruments exposed to interest rate risk at reporting date include only interest-bearing loans and borrowings amounting to EUR 39,240,685 (December 31, 2022: EUR 39,226,735) as of 31 December 2023.

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, CoreMedia's profit after tax is affected through the impact on floating rate borrowings, as follows:

Interest rate risk
	+10 basis points		-10 basis points
	2023	2022	2023	2022
USD	40.188	39.227	-40.188	-39.227

Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. CoreMedia is exposed to credit risk on its financial assets, which comprise cash and cash equivalents, trade and other receivables. The exposure to credit risks arises from the potential failure of counterparties to meet their obligations. The maximum exposure to credit risk at the reporting date is the carrying amount of the financial instruments. CoreMedia evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several industries and operate in largely independent markets.

CoreMedia trades only with recognized, creditworthy third parties. Customers are subject to credit verification procedures including an assessment of their independent credit rating, financial position, past experience and industry reputation. Due trade receivables are under ongoing assessment on a regular basis with regard to their due date. An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. In 2023, the identified impairment on trade receivables was not material (EUR -11,935).

Since CoreMedia only cooperates with well-known credit-worthy banks, expected credit losses were not recorded due to immateriality. The development in the financial markets has not endangered the liquid funds of CoreMedia Group at any time.

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. CoreMedia's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its obligations when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

For example, a weekly review of net liquidity including forecasts is carried out to manage liquidity. An extensive reporting system ensures that status reports are prepared on an accrual basis and made available to the responsible persons in order to obtain the best possible overview of the Group's financial position and to exercise controls. In addition, an active receivables management system is in place.

The table below shows the undiscounted future cash flows of interest and repayment of CoreMedia's financial liabilities based on contractual terms:

Liquidity risk
	2023
	Shareholder Loan		Term Loan Facility A		Trade and other payables	Lease liabilities
	cash flow	interest	cash flow	interest	cashflow	cash flow
Less than 1 year	0	671.301	1.370.495	697.987	1.192.124	474.992
Between 1 and 5 years	0	2.851.686	12.237.745	498.228	0	1.006.163
Over 5 years	30.932.605	630.939	0	0	0	0
Total of undiscounted cash flows	35.086.532		13.633.799		1.192.124	1.481.155
Carrying amount	26.123.795		12.424.126		1.192.124	1.481.155

Liquidity risk
	2022
	Shareholder Loan		Term Loan Facility A		Trade and other payables	Lease liabilities
	cash flow	interest	cash flow	interest	cashflow	cash flow
Less than 1 year	0	654.884	1.764.964	741.131	712.251	377.283
Between 1 and 5 years		2.781.947	13.047.354	587.181	0	1.167.956
Over 5 years	30.932.579	1.371.979	0	0	0	0
Total of undiscounted cash flows	35.741.389		16.140.630		712.251	1.545.239
Carrying amount	26.123.795		13.485.840		712.251	1.545.239

6.11 Provisions

The split and the movements (incl. additions and usage in the respective reporting period) of the current provisions are displayed in the following table:

Provisions	Current provisions EUR
1 Jan 2023	532.942
Acquired through business combination	345.388
Additional provisions recognized during the year	834.084
Amounts used during the year	-1.035.766
Currency effects	-3.536
31 December 2023	673.113
1 Jan 2022	225.829
Acquired through business combination	0
Additional provisions recognized during the year	821.361
Amounts used during the year	-519.859
Currency effects	5.611
31 December 2022	532.942

As of December 31, 2023, provisions are mainly related to employee provisions. Thereof, the provisions include EUR 501,928 for accrued vacations (December 31, EUR 2022: 192,333). The increase is mainly due to the acquisition of the BySide Group.

6.12 Share-based payments

Long-term incentive bonus plan

Following the acquisition of CoreMedia GmbH in 2019, an Agreement on Management Long-Term Incentive Bonus Plan (the "LTI Agreement") was set up in 2020. This LTI Agreement includes a long-term incentive bonus plan for certain senior managers of CoreMedia, pursuant to which the participants shall be entitled to certain bonus awards ("LTI"). Participants of the LTI are entitled to a variable bonus payment in cash by CoreMedia upon the occurrence of a future exit event, i.e. if more than 50% of the equity securities (in one or more transactions) relating to the shares in CoreMedia are sold to a third-party purchaser.

In case of an exit against payment in kind (for all or part of the sold shares or assets), the participants shall be entitled to a Bonus under the Agreement upon realization of cash proceeds out of the received assets (e.g. shares) but based on the same valuation as if the Exit had occurred in a cash transaction.

The vesting period under the LTI starts on the signing date of the participants' individual agreement. Awards under the LTI Agreement shall be fully vested on the 5th anniversary of the entry into the LTI Agreement or upon Exit, whatever is earlier provided that the relevant participant does not qualify as a bad leaver prior to the exit event. Except in case of a prior exit, 20% of the awards shall be vested on each of (i) the 1st anniversary, (ii) the 2nd anniversary, (iii) the 3rd anniversary, (iv) the 4th anniversary, and (v) the 5th anniversary provided that the relevant participant does not qualify as a bad leaver.

Fair value of awards

The fair value at year-end is determined using a binominal model that considers CoreMedia's valuation and planning assumptions. As the assessed fair value of awards granted was insignificant as of 31 December 2023, no expenses arising from the long-term incentive bonus plan were recognized in the financial year.

The model inputs for options granted during the year ended 31 December 2023 included:

• For internal planning procedures and forecast of cash flows: the discount rate (WACC), EBITDA margin and revenue growth rate.

6.13 Loans and borrowings

Financial liabilities due to shareholder

On October 30, 2019, the Company entered into a shareholder loan agreement with its shareholder Bridge Intermediate Holdings S.à r.l. Under the agreement, Bridge Intermediate Holdings S.à.r.l made available to the Company a loan in an amount of EUR 25,265k accruing interest at a rate of 2.5% per annum, provided that the interest rate is to be amended by mutual written agreement between Bridge Intermediate Holdings S.à.r.l and the Company to such arm`s length interest rate as determined upon completion of a transfer pricing analysis conducted by an independent third party expert service provider.

As at November 1, 2019, the first amendment to the shareholder loan agreement was made by Bridge Intermediate Holdings S.à.r.l and the Company. The shareholder Bridge Intermediate Holdings S.à.r.l overfunded the original loan to the Company in the amount of EUR 888k. The shareholder Bridge Intermediate Holdings S.à.r.l and the Company agreed that with effect as of contribution of the overpayment amount the outstanding principal under the original loan of EUR 25,265k is reduced by the overpayment amount to EUR 24,377k.

As per the terms of the agreement, the accrued interest is repayable each 12-month anniversary of the initial payment date, December 30, 2019. The maturity date of the loan is October 31, 2029 and the shareholder loan is to be prepaid, in whole or in part, at any time prior to the maturity date, without penalty or premium, but only together with interest accrued on the principal amount of the loan being prepaid, upon three business days post written notice to the shareholder or such prior notice as agreed to by the shareholder in writing.

Loan facilities

On September 27, 2019 the Company entered into a facilities agreement (the "Facilities Agreement") with Silicon Valley Bank Germany Branch. In 2023, this loan was transferred to the HSBC Innovation Bank Ltd after the collapse of the SVB. In March 2024 the term loan facility was extended. The loan initially expired on October 31, 2024 and was extended until September 27, 2025. The revolving credit facility was extended from EUR 3,000k to up to EUR 5,000k. The company has entered the following commitments:

• A term loan facility (the "Facility A") in the amount of EUR 14,500k due on September 27, 2025. On the last business day of each calendar quarter, the Company shall repay the aggregate outstanding Facility A Commitments of the principal amount;

• a revolving credit facility (the "Revolver") of up to EUR 5,000k due on September 27, 2025. In case the Company draws down this loan, the Company shall repay the loan on the last day of its interest period.

• Both facilities bear an interest rate equal to the applicable margin of currently 4.00% plus applicable EURIBOR, with a EURIBOR floor of 0.00%.

The revolving credit facility has been drawn down by EUR 1,000k on December 19, 2023 and has been repaid on February 14, 2024.

The loan agreement foresees that Recurring Revenues (since Q4 2022 this changed to ARR) and Total Liquidity measured as Cash, drawn and undrawn loan facilities shall not fall under relevant thresholds which is reviewed on a quarterly basis. The group has complied with these covenants throughout the reporting period.

The following tables present the development of non-current and current loans and borrowings during the financial year 2023:

Non-current loans and borrowings	Term loan EUR	Shareholder loan EUR	Total EUR
1 January 2023	12.401.695	26.125.583	38.527.279
Redemptions	-1.009.992	0	-1.009.992
Interest expense	3.537	653.140	656.677
Reclassifications (to short term)	181.250	0	181.250
Acquired through business combination	103.742	0	103.742
31 December 2023	11.680.232	26.778.723	38.458.955
1 January 2022	13.068.973	25.488.310	38.557.284
Redemptions	-362.500	0	-362.500
Interest expense	57.722	637.274	694.996
Reclassifications (to short term)	-362.500	0	-362.500
31 December 2022	12.401.695	26.125.583	38.527.279

The loans acquired through business combination have been redeemed right after the acquisition.

Current loans and borrowings	Term loan EUR	Shareholder loan EUR	Total EUR
1 January 2023	1.082.312	0	1.082.312
Borrowings	1.000.000	0	1.000.000
Interest expense	-176.062	0	-176.062
Reclassifications (from long term)	-181.250	0	-181.250
31 December 2023	1.725.000	0	1.725.000
1 January 2022	543.750	0	543.750
Interest expense	176.062	0	176.062
Reclassifications (from long term)	362.500	0	362.500
31 December 2022	1.082.312	0	1.082.312

CoreMedia GmbH and CoreMedia Corporation have to provide certain securities referring to the term loan facility. According to the facility agreement, for CoreMedia GmbH there is a pledge over all issued stock of CoreMedia Corporation, a pledge over bank accounts and intellectual property rights as well as a security assignment of receivables. For CoreMedia Corporation, there is a pledge and security agreement over all assets. The carrying amount of the following assets are:

Pledges and securities	31. Dez 23 EUR	31. Dez 22 EUR
Intellectual property	9.118.789	10.910.765
Issued stock of CoreMedia Corporation	3.032.000	3.032.000
Trade and other receivables	847.666	3.388.998
Bank accounts	1.382.173	3.029.413
CoreMedia Corporation
All assets	2.244.144	2.524.316
Total	16.624.771	21.436.891

CoreMedia has committed to its subsidiary CoreMedia UK Ltd. to provide them with sufficient liquidity for a period up to April 2025. A claim is not expected due to a stable asset, financial and earnings position of the subsidiary.

6.14 Trade and other payables

Trade and other payables	31. Dez 23 EUR	31. Dez 22 EUR
Trade payables	1.192.124	712.251
Other payables	114.244	31.004
Total trade and other payables	1.306.368	743.255

Trade payables are unsecured and are usually paid within 30 days of recognition. Due to the short-term maturity of trade payables, the carrying amount approximates fair value.

6.15 Tax liabilities

As of December 31, 2023, CoreMedia's tax liabilities amount to EUR 433,551 (December 31, 2022: EUR 308,764). The total amount is current and primarily relates to payroll tax.

6.16 Other current liabilities

Other current liabilities amount to EUR 1,777,983 (December 31, 2022: EUR 2,511,480) as of December 31, 2023 and comprise personnel-related liabilities EUR 773,784 (December 31, 2022: EUR 1,478,227), accrued expenses EUR 904,527 (December 31, 2022: EUR 883,569) and liabilities for financial statements preparation and audit EUR 98,500 (December 31, 2022: EUR 113,048).

6.17 Deferred tax

Deferred tax assets and liabilities recognized as of December 31, 2023 break down as follows:

Deferred tax balances	31. Dez 23
	EUR	EUR
	Deferred Tax Assets	Deferred Tax Liabilities
Intangible assets	3.557	-3.048.519
Right-of-use-assets	0	-442.915
Other assets	288.583	-737.445
Financial liabilities	0	-32.603
Contract liabilities	0	-610.072
Lease liabilities	447.383	0
Losses available for offsetting against future taxable income	3.062.721	0
Total	3.802.244	-4.871.554
Netting	-3.284.760	3.284.760
Carrying amount	517.484	-1.586.794

Unused tax losses for which no deferred tax assets have been recognized amount to EUR 8,614,142 (December 31, 2022: EUR 8,507,996) as of the reporting date. The breakdown is displayed in the table below.

Unused tax losses	31. Dez 23 EUR	31. Dez 22 EUR
CoreMedia GmbH
Corporate income tax(including solidarity surcharge)	3.478.758	3.478.758
Trade tax	3.694.380	3.694.380
CoreMedia Corporation
Federal net operating loss	1.205.560	1.334.858
ByLabs Lda.	235.444	n/a
Total	8.614.142	8.507.996

Temporary differences relating to investments in subsidiaries, for which deferred tax liabilities have not been recognized, amount to EUR 29,449 as of December 31, 2023 (December 31, 2022: EUR 24,421).

Note 7: Notes to the consolidated cash flow statement

Non-cash investing and financing activities disclosed in other notes are:

• Acquisition of right-of-use assets ( Note 6.3).

Liabilities from financing activities	Loans and Borrowings	Leases	Total
	EUR	EUR	EUR
1 January 2023	39.613.425	1.545.240	41.158.665
Cash effective changes
Repayment of lease liabilities	0	-409.898	-768.695
Repayment of financial liabilities	-1.009.992	0	-1.009.992
Net Cash flows	-1.009.992	-409.898	-1.419.889
Interest paid	-1.125.146	0	-1.125.146
Non-cash effective changes
Extension of lease liabilities	1.000.000	228.813	1.228.813
Total accrued interest expense	1.605.760	0	1.605.760
Acquired through business combination	103.742	117.000
Non-cash change	2.709.502	345.813	3.055.315
31 December 2023	40.187.789	1.481.155	41.668.944

The loans acquired through business combination have been redeemed right after the acquisition.

Note 8: Other Information

8.1 Related parties

On October 30, 2019, the Company entered into a loan agreement with its shareholder Bridge Intermediate Holdings S.à r.l. Please see note 6.13 Loans and borrowings for details on this transaction.

The following table provides information on transactions that have been entered into with related parties for the relevant reporting period:

Loans to / from related parties	2023 EUR	2022 EUR
Loans from parent entity (Bridge Intermediate Holdings S.à r.l.)
Loans advanced	24.377.628	24.377.628
Interest charged	2.401.096	1.747.956
End of year	26.778.723	26.125.584

On October 31, 2019, CoreMedia GmbH entered into a corporate advisory and monitoring service agreement with OGC. The agreement foresees the provision of certain monitoring services by OGC for a cost-plus margin fee. During the reporting period, EUR 1,000,000 have been charged by OGC under this agreement (2022: EUR 500,000).

The following table provides information on compensation of the key management personnel of the Group during the reporting period:

Key management personnel compensation	2023 EUR	2022 EUR
Short-term employee benefits	1.661.466	1.248.506
Termination benefits	0	0
Total	1.661.466	1.248.506

The amounts disclosed in the table are the amounts recognized as an expense during the reporting period related to key management personnel.

Participants in the LTI Agreement may potentially benefit in the future. As of December 31, 2023, no expenses in relation to the LTI Agreement have been recognized, for further details see Note 6.12.

8.2 Auditor's fees

The Annual General Meeting elected Baker Tilly GmbH Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, Hamburg as auditors for the period from January 1, 2023 to December 31, 2023. The activities are disclosed in the table below.

Auditor`s fees	2023 EUR	2022 EUR
Audit of financial statements	84.000	75.000
Other conculting services	0	1.900
Total	84.000	76.900

8.3 Going concern assumption

The consolidated financial statements have been prepared based on the going concern assumption. Management expects that CoreMedia will be able to meet all its payment obligations, also in the future. CoreMedia's ability to continue as a going concern is dependent on the shareholder continuing to act as a financial sponsor and the continued financing from the lender.

8.4 Exercise of Exemption Options

The subsidiary CoreMedia GmbH, Hamburg, included in the consolidated financial statements of CM Bridge Holdings GmbH, exercises the exemption option under Section 264(3) of German Commercial Code (HGB) in fiscal year 2023.

8.5 Events after the reporting date

In March 2024, the term loan facility with HSBC Innovation Bank Ltd was extended until September 27, 2025. Further the revolving facility has been extended from EUR 3,000k up to an amount of EUR 5,000k. It also expires on September 27, 2025.

No further material events have occurred after the reporting date.

April 26, 2024

The Managing Directors

gez. Sören Stamer

gez. Robert Morrison Young III

gez. Paul Bridwell

Management report for the Fiscal Year from January 1 to December 31, 2023

A. General information on the Group

1. Business activities of the Group

The parent company of the CoreMedia Group (referred to below as CoreMedia or Group) is CM Bridge Holdings GmbH, Hamburg, which was founded on July 22, 2019. The consolidated group comprises the following subsidiaries: CoreMedia GmbH, Hamburg, CoreMedia UK Ltd., London/UK, CoreMedia Corporation, Arlington (VA)/USA and a newly acquired Subgroup (referred to below as BySide or Subgroup) with the parent company ByLabs Unipessoal Lda. Porto/Portugal. The share purchase agreement was closed on July 28, 2023, with an effective date of July 31, 2023. CM Bridge Holdings holds a direct 100% stake in CoreMedia GmbH. CoreMedia GmbH in turn holds a direct 100% interest in the following subsidiaries (CoreMedia UK Ltd., London/UK, CoreMedia Corporation, Arlington (VA)/USA and ByLabs Unipessoal Lda. Porto/Portugal). The newly acquired Subgroup consists of ByLabs Unipessoal Lda. which holds 100% of the shares of BySide - Lead Activation S.A. and 10% of the shares of BySide Brasil LTDA Sao Paolo/Brazil. The remaining 90% of the shares in BySide Brasil LTDA are held by BySide - Lead Activation S.A.. Whenever it is referred to CoreMedia "legacy" we are referring to the CoreMedia Group before the acquisition.

The corporate purpose of CM Bridge Holdings GmbH is the acquisition, holding and administration of domestic and foreign companies and the provision of services to group companies or third parties. CoreMedia GmbH was founded in 1996 at its registered office Hamburg and is, today, one of the leading international providers of content management system (CMS) and digital experience platform (DXP) solutions. It is the most significant subsidiary within the Group. Both CoreMedia GmbH and CoreMedia Corporation are operationally active and generate revenues for the Group, in particular through the licensing of internally developed software solutions. CoreMedia UK Ltd. is a pure sales and marketing company. ByLabs Unipessoal Lda. is the holding company for the newly acquired subgroup and the corporate purpose is the acquisition, holding and administration of domestic and foreign companies and the provision of services to group companies or third parties. BySide - Lead Activation S.A. corporate object is computer consultancy and programming, computer and telecommunications equipment consultancy, training in IT and telecommunications. Provision of voice and data services. Import, export, representation and marketing of computer equipment and programs, communication and image consultancy. BySide - Lead Activation S.A. is operationally active and generates revenues for the Group, in particular through the licensing of internally developed software solutions. The entity in Brazil also generates revenues but has no employees and uses the platform which was developed by BySide - Lead Activation S.A.. Research and development activities are carried out at CoreMedia GmbH in Hamburg and BySide - Lead Activation S.A. in Porto.

At the end of 2019, a domination and profit and loss transfer agreement was concluded between CoreMedia GmbH and CM Bridge Holdings GmbH, which became effective with the beginning of the fiscal year 2020.

CoreMedia's key business is the licensing of utilization rights to CoreMedia software solutions, which are developed by employees in the R&D department. With these solutions, companies are able to develop high-quality digital omnichannel services, to operate them efficiently, flexibly, scalably, robustly and securely, and to sustainably improve operational added value. The scope of application ranges from corporate websites, extranets, intranets to apps and e-commerce stores.

The further transition from perpetual licenses to rental licenses and CoreMedia Content Cloud Service continued in fiscal year 2023. Following the trend in the software industry, CoreMedia had decided in fiscal year 2016/17 to offer customers CoreMedia Content Cloud - Self-Managed (CMCC-Self-Managed) as a standard rental license and a cloud solution (CoreMedia Content Cloud - Service (CMCC-Service) instead of purchasing perpetual licenses. This step is of strategic advantage since, in the medium term, less cyclical but more constantly rising and better plannable revenues and more stable cash flows are achieved. We will continue to sell perpetual licenses to existing customers on a case by case basis only.

2. Information on research and development

In the fiscal year 2023 CoreMedia acquired Byside. Byside's software products were rebranded as CoreMedia Engagement Cloud. Content Cloud and Engagement Cloud were integrated into the CoreMedia Experience Platform. Both R&D organizations were integrated, and the R&D investments continued in 3 areas:

• Content Cloud investments

• Engagement Cloud investments

• Product integration investments

Content Cloud investments:

The focus within product development was on the continuous further development of the CoreMedia Content Cloud, which is offered as a service and for self-management. In order to generate content with AI, integrations were built with OpenAI's chatGPT and Wonk.ai opening up AI capabilities to Content Cloud.

The development of a Campaign Management addon was completed, which will be offered as a ready-to-go hosted service, seamlessly plugging into existing Service customer's content infrastructure. Focus was placed on allowing for efficient, fast management, scheduling, and impact-measuring of global campaigns for the web and other relevant channels.

Security and Compliance play a more dominant role in the software industry. Content cloud will continuously move to the latest version of 3rd party components like Springboot and Java. Content Cloud has been upgraded to Springboot 3.2 and Java 17.

The look and feel of the Content Cloud back-office application "Studio" has been updated within the current technology stack. This "refresh" improves Studio's User Interaction and User Experience.

Further intensive work was done on Content Cloud - Service and the extensive customizability for customers was further developed. Additional self-service interfaces and APIs were added and stabilized that further empower customers to perform routine operative and deployment tasks without manual support from CoreMedia.

Engagement Cloud investments:

Via live panels in Engagement Cloud V4 most important customers statistics can be viewed in real-time. The cloud contact center will continue to develop in areas like agent support. A powerful AI integration with ChatGPT transcribes customer calls with agents. It summarizes the call, and it determines the most important emotions of the customers and agents.

The chatbot functionality of Smarkio was integrated into Engagement Cloud.

In 2023 to continue to ensure enterprise grade product level, security and licensing improvements have been made. Next to that one production zone moved from Altis to NOS to improve reliability of the engagement cloud product and services.

Product integration investments:

Engagement Cloud and Content Cloud are two products that co-exist within the Digital Experience Domain. They do not have over-lapping functionality but need close and seamless integration. The integrations have been focused on using Engagement Cloud functionality within Content Cloud Studio. Engagement Cloud's A/B testing, and Engagement Cloud's segments are now seamlessly available in Studio. Next to that Engagement Cloud V3 has been refreshed in such a way it matches Content Cloud's look and feel for these features.

In the fiscal year 2023, an average of 54 (PY: 55) people worked in research and development for the Content Cloud product and the activities took place in Germany. An average of 25 people worked on the Engagement Cloud product. These research and development activities took place in Porto. A total of € 6,146k was spent on research and development in the fiscal year 2023. Of this, development costs of € 1,988k were capitalized as internally generated intangible assets.

B. Economic Report

1. Macroeconomic conditions

The global economic and geopolitical situation is uncertain. The world economy has shown resilience, but in most countries near and medium-term growth outlooks remain subdued and downside risks are elevated. In the context of tightening monetary policy stances to bring down inflation, successive shocks, including Russia's war on Ukraine, are weighing on the economy and on macro-financial stability, including financial sector stress. Inflation has moderated somewhat, but underlying price pressures remain sticky.[1]

Rising geoeconomic fragmentation risks are making it more difficult to respond to shared challenges, which calls for decisive steps to rebuild trust. The global peace dividend is shrinking, and with it, the resources available to support the vulnerable. Protectionism is on the rise, hampering global trade and eroding hard-won gains from integration. Confronting shared challenges, such as the climate crisis and digitalization, will require overcoming differences and boosting international cooperation.[2]

Global growth is projected at 3.1 percent in 2024 and 3.2 percent in 2025, with the 2024 forecast 0.2 percentage point higher than that in the October 2023 World Economic Outlook (WEO) on account of greater-than-expected resilience in the United States and several large emerging market and developing economies, as well as fiscal support in China. The forecast for 2024-25 is, however, below the historical (2000-19) average of 3.8 percent, with elevated central bank policy rates to fight inflation, a withdrawal of fiscal support amid high debt weighing on economic activity, and low underlying productivity growth. Inflation is falling faster than expected in most regions, in the midst of unwinding supply-side issues and restrictive monetary policy. Global headline inflation is expected to fall to 5.8 percent in 2024 and to 4.4 percent in 2025, with the 2025 forecast revised down.[3]

With disinflation and steady growth, the likelihood of a hard landing has receded, and risks to global growth are broadly balanced. On the upside, faster disinflation could lead to further easing of financial conditions. Looser fiscal policy than necessary and than assumed in the projections could imply temporarily higher growth, but at the risk of a more costly adjustment later on. Stronger structural reform momentum could bolster productivity with positive cross-border spillovers. On the downside, new commodity price spikes from geopolitical shocks - including continued attacks in the Red Sea - and supply disruptions or more persistent underlying inflation could prolong tight monetary conditions.[4]

2. Industry-specific conditions

The IT industry's landscape is continually shaped by technological advancements and digital transformation efforts.

Global Investments and Enterprise Spending:

Gartner indicates a 5.5% increase in global IT spending, reaching $4.6 trillion in 2023 and achieve a 6.3% compound annual growth rate (CAGR) from 2022 through 2027. Enterprises are channeling funds into cloud services, cybersecurity, and AI, recognizing these technologies as essential for enhancing operational efficiency and gaining a competitive edge.[5]

Web Content Management (WCM) Systems:

Global Industry Analysts, Inc projects the WCM market to expand to $18.6 billion at a CAGR of 16.1% by 2030. The surge in demand for solutions that offer personalized, engaging digital experiences underscores the critical role of WCM in modern digital strategy.[6]

Digital Experience Platforms:

According to "Verified Market Research on Digital Experience Platforms", the market is projected to hit $35 billion by 2030, growing at a CAGR of 13.44% from 2022 to 2030 driven by rising customer expectations and the need to understand them, growing adoption of Wide Web 2.0 technologies, and high deployment of cloud-based solutions. Organizations can use DXP to identify the customer's urgent needs and supply the appropriate content across a variety of digital channels. [7]

Gartner states as a strategic planning assumption, that by 2026, at least 70% of organizations will be mandated to acquire composable DXP technology, as opposed to monolithic suites, compared to 50% in 2023. [8]

Conclusion:

At a critical juncture, the IT industry's future hinges on digital transformation. As businesses invest in technology to satisfy changing consumer demands, the significance of web content management and digital experience platforms becomes increasingly apparent. Embracing these trends and overcoming related challenges will be crucial for sustained success.

3. Business performance

3.1 Comparison with the previous year

During the 2023 reporting year the CoreMedia GmbH has acquired the BySide Group with an effective date of July 31, 2023. The initial consolidation of the above-mentioned companies of the consolidated group took place on July 31, 2023. The figures for the previous year are therefore not comparable with those for the 2022 reporting year.

3.2 Sales development

In the 2023 reporting year, revenues amounted to € 27,265k (PY: € 26,822k), consisting of recurring revenues from the licensing of rights to use CoreMedia Content Cloud software solutions (79% of total revenues (PY: 85%)), re-occurring revenues from the licensing of rights to use CoreMedia Engagement Cloud (formerly BySide) software solutions (7% of total revenues (PY: 0%)) and revenues from additional services such as consulting and training for customers and partners (14% of total revenues (PY: 15%)). The revenue growth in 2023 was especially driven by inorganic growth related to the BySide acquisition. For CoreMedia "legacy" sales were below plan due to macroeconomic uncertainties, which impacted buying decisions among our existing and potential customers.

In 2023 the CoreMedia Group generated a total comprehensive loss of € -4,993k (PY: € -1,042k), which is composed of € -4,967k (PY: € -1,068k) result from the income statement and € -26k (PY: € 26k) result from other comprehensive income.

3.3 Capital expenditure

Capital expenditure totaling € 2,383k (PY: € 2,497k) related to the purchase and development of software and operating and office equipment.

As in previous years, this figure includes investments in internally generated software. The capitalization of the underlying development costs amounted to € 1,988k in the fiscal year 2023 (PY: € 2,141k).

3.4 Personnel and social areas

The average number of employees in the CoreMedia Group (excluding managing director) increased from 156 in the previous year to 194 in the fiscal year 2023. This increase is mainly due to the acquisition of the BySide Group. The BySide acquisition leads to an average increase of 35 employees.

3.5 Financing measures

The Loan with the Silicon Valley Bank has been transferred to the HSBC Innovation Bank Ltd. Further, this loan has been extended from October 31, 2024 to September 27, 2025. In addition to that there is a shareholder loan in place which expires on October 31, 2029. Beyond that no further long-term financing measures were carried out in the reporting period.

C. Overall position of the Group

1. Net Assets

Total assets increased to an amount of € 57.178k (PY: € 52,840k) with the Company's total assets comprising € 48,806k (PY: € 43,470k) non-current assets and € 8,372k (prior year: € 9,369k) current assets. Of the non-current assets, € 45,359k (PY: € 40,653k) consist of intangible assets, which in turn comprise € 33,359k (PY: € 29,742k) derivative goodwill. The goodwill derived from the following two transactions: 1) On July 31, 2023, CoreMedia GmbH acquired 100% of the shares in ByLabs Unipessoal Lda. The goodwill arose in the course of the initial consolidation and the related purchase price allocation. 2) On October 31, 2019, CM Bridge Holdings GmbH acquired 100% of the shares in CoreMedia GmbH. The change in this goodwill is solely attributable to exchange rate fluctuations, which are recognized directly in equity under cumulative other comprehensive income. The goodwill arose in the course of the initial consolidation and the related purchase price allocation.

Current assets decreased by € 997k from € 9,369k to € 8,372k and consist in particular of trade receivables, contractual assets, other current assets and cash and cash equivalents. The decrease is particularly due to lower contractual assets as well as lower cash and cash equivalents on the one hand and higher trade receivables on the other hand.

Total liabilities and equity consist of non-current liabilities of € 41,052k (PY: € 42,901k), current liabilities of € 12,749k (PY: € 11,129k) and equity of € 3,377k (PY: € -1,190k). Non-current liabilities mainly consist of non-current financial liabilities amounting to € 39,465k (PY: € 39,695). These consist in particular of the long-term portion of the loan from HSBC Innovation Bank Ltd in the amount of € 11,680k (PY: € 12,402k) and the loan from the shareholder Bridge Intermediate Holdings S.à.r.l/Luxembourg in the amount of € 26,779k (PY: € 26,126k).

Current liabilities mainly consist of deferred income in the amount of € 6,354k (PY: € 5,569k), current financial liabilities in the amount of EUR 2,204k (PY: 1,463k) and provisions in the amount of € 1,778k (PY: € 2,511k). Deferred income increased due to the fact that there are more rental license agreements that CoreMedia has already billed before the reporting date, but where the performance by CoreMedia is still outstanding within a certain period after the reporting date. Current financial liabilities increased in particular due to the drawn down revolving facility in the amount of EUR 1,000k.

2. Financial position

The Group was financed in the reporting period from cash inflows from operating activities and a capital injection from it's shareholder in the amount of EUR 9,560k. During the course of the reporting year 2023 the SVB term loan and the revolving facility with the SVB have been transferred to the HSBC Innovation Bank Ltd. In 2024 the loan has been extended for one additional year and the revolving facility has increased by EUR 2 million to EUR 5 million. The revolving facility is limited until September 27, 2025. CoreMedia has no other credit lines beyond this. The loan was taken out on September 27, 2019 in the amount of €14,500k, and is due on September 27, 2025. It bears a nominal interest rate of Euribor plus 4% margin. Another loan was taken out on October 30, 2019 with the shareholder of CM Bridge Holdings GmbH, Bridge Intermediate Holdings S.à.r.l/Luxembourg, in the amount of € 25,265k. This is due on October 31, 2029 but can be repaid without penalty or surcharge at any time before this date. The loan bears a nominal interest rate of 2.5%.

The equity ratio increased from -2.3% to 5.9% due to a capital injection of EUR 9,560k from the shareholder of the parent company of the group. Please refer to section F. of this report for more information on the going concern assumption.

Cash and cash equivalents decreased by € 673k to € 3,645k in the reporting period. Cash flow from operating activities (€ -690k) and investing activities (€ -8,066) were negative, whereas cash flows from financing activities (€ 8,119k) was positive. The financing cash flow is positively influenced in particular by the capital injection of € 9,560k by the Shareholder Bridge Intermediate Holdings S.à.r.l/Luxembourg and negatively influenced by the repayment of the HSBC loan and the leasing liabilities as well as the interest paid to HSBC. As in previous years, investments were made in internally generated software in the year under review. The capitalization of the underlying development costs amounted to € 1,988k in the fiscal year 2023. Apart from this, there were no significant investments. It is planned to invest further in product development in the future. A cash flow forecast is continuously prepared and monitored and controlled by the management. Based on this forecast, no liquidity bottlenecks are foreseen in the future. The Group's ability to meet its payment obligations is not at risk due to the current financing and liquidity situation.

3. Results of operations

In the 2023 reporting year, revenues amounted to € 27,265k (PY: € 26,822k), consisting of recurring revenues from the licensing of rights to use CoreMedia Content Cloud software solutions (79% of total revenues (PY: 85%)), re-occurring revenues from the licensing of rights to use CoreMedia Engagement Cloud (formerly BySide) software solutions (7% of total revenues (PY: 0%)) and revenues from additional services such as consulting and training for customers and partners (14% of total revenues (PY: 15%)). The revenue growth in 2023 was especially driven by inorganic growth related to the BySide acquisition. For CoreMedia "legacy" sales were below plan due to macroeconomic uncertainties, which impacted buying decisions among our existing and potential customers. For further information regarding the different revenue streams and geographical markets please refer to 5.1 "Revenues" in the notes to the consolidated statement of profit or loss.

Sales were offset by cost of sales amounting to € 10,639k (PY: € 9,119k), resulting in an operating profit of € 16,625k (PY: € 17,703k). The cost of sales consists in particular of salary expenses for employees in the areas of cloud operations, support and consulting, as well as hosting costs and the amortization on the internally generated software platform and customer relationship. These result in a gross profit of 61.0% (PY: 66.0%).

In addition, other expenses of € 22,125k (PY: € 18,056k) were incurred. The increase is mainly due to higher costs in the research and development, sales and administrative areas. The increase in the sales department is mainly due to additional personnel-related costs from the BySide acquisition. The increase in the administrative area is mainly due to higher personnel-related costs because of the BySide acquisition and higher acquisition-related transaction costs. Research and development costs increased mainly due to higher personnel-related costs due to the acquisition of BySide.

The financial result is influenced by the financing expenses resulting from the two loans mentioned above and is negative at € 1,664k (PY: € 1,368k).

In 2023 the CoreMedia Group generated a total comprehensive loss of € -4,993k (PY: € -1,042k), which is composed of € -4,967k (PY: € -1,068k) result from the income statement and € -26k (PY: € 26) result from other comprehensive income.

In addition to sales and net income, annual recurring revenue (ARR) and adjusted EBITDA are key performance indicators for managing the Group.

ARR (annual recurring revenue) is the revenue, normalized on an annual basis, that the Company expects to receive from its customers for the provision of products or services. In addition to the revenue forecast, the key figure provides management with information on the Company's growth and development for a specific period for individual products and industry segments. ARR developed positively in fiscal year 2023 and is above the previous year, however the result came in below budget. Both the U.S. and ROW contributed to the growth in 2023.

Adjusted EBITDA corresponds to EBITDA before non-operating earnings effects or before special effects and is used by management to ensure a like-for-like comparison of operating profit over several financial years. In fiscal 2023, approx. EUR1.6MM of one-time expenses were attributable to the acquisition and integration of BySide and Smarkio. Adjusted EBITDA in 2023 developed positively despite the bookings shortfall and is above the budgeted figure. OPEX was lower than budgeted due to lower and slower hiring, lower bonus and commission payout.

Overall, the net assets, financial position and results of operations (EBITDA) of the CoreMedia Group are positive, despite the lower-than-expected revenues due to a challenging macroeconomic environment stemming from the ongoing war in Ukraine, high interest rates and elevated inflation.

D. Risk Report

Risks to future development and risk management

As an internationally operating group, CoreMedia is exposed to various risks within its business activities. Risks are defined in the broadest sense as the danger of not achieving financial, operational or strategic goals as planned. To secure the Company's long-term success, it is essential to identify and analyze risks and to eliminate or limit them by means of suitable control measures. CoreMedia has various instruments at its disposal within the framework of risk management, with which risks can be identified and analyzed at an early stage and appropriate measures can be taken.

1. Economic risks

The following list of risks is in descending order of importance.

• For many of CoreMedia's customers, the purchase and introduction of CoreMedia products involves major capital expenditure and is therefore subject to an investment decision process. Uncertainties triggered by changes in the political, legal, technological, or social situation can have a negative impact on CoreMedia's business and net assets, financial position and results of operations, both by reducing the general willingness to invest and to implement CoreMedia products and by delaying the timing of such investments. The tightening of monetary policy continues to drive fears of a recession. In addition, the ongoing war in Ukraine and continued elevated levels of inflation negatively impact the market participants sentiment. If a recession were to occur in CoreMedia's markets, this could have a negative impact on CoreMedia's business. On the technological front the rapid adoption of AI could pose a risk that is difficult to quantify at this time.

• Regular market observations are carried out to monitor changes and requirements in the market, as well as competitive behavior and customer requirements. In addition, extensive analyses (including forecasts, see also measures relating to financial risks) are prepared in order to be able to take countermeasures in good time if necessary.

2. Market risks

• CoreMedia's positioning in the CMS/DXP and e-commerce environment could be questioned if technically superior competitor products were to be launched on the market without CoreMedia being able to further develop its own product technologically. This could have a significant negative impact on revenue development and thus on CoreMedia's economic situation. In order to stay technically up to date, development and diversification potential is countered with close customer relationships and regular monitoring of the market and the competition.

• As a result of company mergers, the success of new development models such as microservices, new delivery models such as software-as-a-service (SaaS) or open-source solutions, competitors of CoreMedia could gain market share. Thus, the acquisitions show that consolidation is taking place in CoreMedia's market segment. A possible consequence could be a loss of revenue due to customer uncertainty and significantly increased competition from larger companies or new competitors, which could be challenging for CoreMedia.

• In contrast, CoreMedia is convinced that it has the right strategy for this competitive environment. CoreMedia also sees the current consolidation phase in the CMS/DXP industry as an opportunity to further strengthen its own market position. However, CoreMedia cannot rule out the possibility that its profit situation could be significantly impacted by increased price pressure on the market.

• CoreMedia generates a significant proportion of its revenues from its large existing customer base. In the event of declining customer satisfaction, existing customers could decide not to renew their maintenance contracts, not to conclude new license or other contracts for additional products or services, or to downgrade the scope of their maintenance contracts. This could have a significant direct impact on CoreMedia's revenues and earnings, as well as an indirect negative image effect, which in turn could have a weakening effect on new customer business. Based on CoreMedia's overall stable business development in the CMS/DXP existing customer business in the past fiscal years and the technology strategy recognized by both analysts and customers, this seems rather unlikely. In addition, the satisfaction of CoreMedia customers worldwide is monitored so that CoreMedia can identify trends at an early stage and take preventive measures.

• The rapid development and adoption of AI could prove to be disruptive and therefore could pose a significant risk to CoreMedia's products.

3. Risks of the business strategy

• A key element of CoreMedia's strategy is internationalization, particularly the extension of business activities in the USA. In this context, the expansion of a distant market and the maintenance of an infrastructure for this are of the utmost importance. Measures to gain market share in an international environment are always associated with risks that could have a negative impact on CoreMedia's financial position and results of operations. In particular, reference should be made to increased market entry costs.

In all international sales territories, sales are fundamentally challenging, as general brand awareness and ecosystem maturity are underdeveloped. Efforts are therefore being made to position CoreMedia through industry-specific marketing sales and marketing campaigns and with well-established partners. In addition, as part of the weekly sales forecasts and the regional 'Monthly Sales Status Reports', particular emphasis is placed on tracking lead and opportunity planning in the international offices, in order to be able to initiate countermeasures if necessary.

Overall, CoreMedia has proven in recent years that it can successfully manage the associated risks. CoreMedia therefore considers the risk to the Company as a whole from internationalization to be necessary and acceptable overall due to the very international orientation of CoreMedia's customers and competitors.

Particularly in the context of the expansion into the USA, patent risks may become considerably more important (see also patent risks under 8. Other relevant risks). The greater the visibility of CoreMedia in the market, or rather the more visible the customers acquired by CoreMedia, the greater the risk of claims being made by third parties arising from possible patent infringements.

4. Human resources risks

• Continued layoffs at big tech companies seem to have lessened the difficulties in filling vacancies in the technical area (including IT specialists). However, there is still a considerable demand for IT specialists and compensation remains elevated.

Overall, CoreMedia also sees opportunities in 2024 to be able to recruit sufficient technically qualified employees with the potential to increase business success.

5. Financial risks

• CoreMedia's balance sheet and group currency is the Euro. However, part of the business is conducted in US Dollars. As a result, periodic fluctuations in the US Dollar can have an impact on CoreMedia's revenues and earnings.

CoreMedia monitors potential exchange rate risks on the basis of balance sheet items and expected cash flows continuously. Regarding USD, there is a natural hedge of cash flows due to the subsidiary in the United States. In case of a significant increase in sales invoiced in foreign currencies, exchange rate hedging transactions are planned if necessary.

• The CoreMedia Corporation's financial performance for the fiscal year 2023 was in line with plan.

• Fluctuations and declines in CoreMedia's license business can have an impact on service and maintenance revenues, which generally follow the development of license revenues with a time lag. A significant decline in the percentage of total revenues accounted for by software revenues could therefore have a significant negative impact on business activities, net assets, financial position, results of operations, and cash flows.

To take account of the importance of license, support, and subscription revenues, specific performance indicators, (e.g. growth rate, margin) are regularly reviewed and analyzed.

• Another risk is the default of receivables. However, in the past fiscal years, bad debt losses have been a negligible factor.

• Overall, numerous instruments are used to manage financial risks. For example, net liquidity including forecasts, is reviewed on a weekly basis to manage liquidity. A comprehensive reporting system is used to prepare status reports on a periodic basis and make them available to those responsible to obtain the best possible overview of the Company's financial position and to exercise controls. In addition, an active receivables management system is in place.

• Overall, CoreMedia considers itself to be well positioned for a company of its size with the given control instruments to be able to quickly and effectively counteract any financial risks that arise.

6. Project risks

• A significant impairment to the expected development of business and earnings as a result of customer project risks in the context of contracts for work and services can lead to considerable financial risks (e.g. delays, additional costs, penalties).

• Overall, the risk is considered to be limited, as contracts are predominantly concluded on a service contract basis, and risk matrices are drawn up when planning large-scale contracts for work and services, and a project controlling tool is used during the term of the project to assess any risks. The number of lawsuits against CoreMedia from the operating business has been negligible to date. CoreMedia generally counters risks arising from implementation by partners by sending technical experts to the projects in question and maintaining close relationships with the companies belonging to the CoreMedia partner program. Project risks are managed by taking out insurance in the form of an IT business liability policy.

7. Product risks

• In order to develop new and expanded products to the full satisfaction of customers, long development and testing periods are sometimes required. In this context, CoreMedia is subject to various risks: for example, planned market launches may be delayed, market requirements may not be met in full, or products may not fully satisfy CoreMedia's high quality standards. New products or product enhancements may also contain unrecognized errors with each re-release or software bug fixes and patches. In addition, long development times in rapidly changing markets can mean that the products developed are already obsolete at the time of launch.

To prevent such risks, CoreMedia takes measures in the first year after the market launch of a new software version to rectify any defects immediately in close cooperation with the first buyers of the product. However, there is no guarantee that all defects can always be corrected to the complete satisfaction of the customer. For this reason, it is conceivable that in some cases customers may demand a refund of amounts paid, compensation for damages, replacement of the CoreMedia software or other concessions.

• For customers of "CoreMedia Content Cloud Service" and "CoreMedia Engagement Cloud", CoreMedia operates the technical infrastructure itself, which means that technical errors - including those for which CoreMedia is not responsible - can also lead to the failure of business-critical websites of customers. It is conceivable that in some cases customers may make additional claims. CoreMedia counters this risk with the redundant and highly available architecture of the CoreMedia on-cloud solution. In addition, certain service level agreements are defined in the corresponding contract texts, which allow a certain degree of error tolerance. In addition, a cyber security insurance policy is in place with coverage up to USD 7.5MM.

• In the cloud environment, CoreMedia naturally handles customer data, some of which is personal and/or sensitive (e.g. passwords). Particularly in light of the EU General Data Protection Regulation, which will be subject to penalties from May 2018, there is a risk here that EU regulations may be unintentionally violated in rare cases. This could result in corresponding sanctions, which could have a negative impact on CoreMedia's net assets, financial position and results of operations. CoreMedia counters this risk by thoroughly examining the relevant regulations and by designing the service to take security and data protection into account. In addition, audits of the service by independent experts ("penetration tests") are carried out on a regular basis, most recently in September 2023. In addition, CoreMedia has achieved ISO27001 re-certification, an internationally recognized industry standard for information security.

• The use of cloud infrastructure from service providers such as Amazon Web Services, Microsoft Azure, etc. involves significant costs. The actual costs are very much dependent on usage and implementation and are therefore not fully under CoreMedia's control. As the CoreMedia Content Cloud Service business model provides for capacity-based fixed prices, the profit margin for a cloud customer cannot be fully planned. There is a risk that unforeseen usage patterns or unfavorable implementation details could result in higher costs than planned, which would have a negative impact on the profit margin. CoreMedia counters this risk through detailed, contractually stipulated usage caps, beyond which CoreMedia is entitled to pass on additional costs to the customer.

• CoreMedia software is primarily used in Internet, intranet and extranet applications, which are generally of great importance for the customer's business processes. This increases the risk described in the event of actual or alleged defects in CoreMedia's products and services.

• CoreMedia's contractual texts generally contain clauses designed to limit warranty risks. However, these clauses cannot cover all eventualities, nor can CoreMedia always ensure their validity beyond doubt within the framework of the applicable legal system. Such incidents could have a negative impact on CoreMedia's net assets, financial position and results of operations, as well as on its reputation. However, CoreMedia counteracts the risks described above through project management and project monitoring, as well as through customer-oriented procedures (in some cases, early involvement in projects to identify risks at an early stage and to be able to take countermeasures). The generally high quality of CoreMedia products achieved as a result of this is confirmed by the low level of expenses for customer escalations and claims arising from operating business, as well as high customer satisfaction ratings, which have already been described under the risk category "Project risks". CoreMedia therefore considers it unlikely that product defect claims from customers will have a significant impact on the planned development of earnings.

8. Other relevant risks

• CoreMedia protects its intellectual property. This includes the registration of patents for CMS and trademarks. CoreMedia's license and confidentiality agreements contain corresponding clauses. However, there can be no assurance that these measures to protect CoreMedia's innovations will be sufficient to prevent third parties from infringing these intellectual property rights. Such infringement could cause damages that cannot be effectively punished by law. For example, the legal systems and courts of some countries in which CoreMedia distributes its software do not provide effective legal remedies to enforce its own intellectual property rights. Each piece of software contains numerous components or modules for different functions. Some of these functions may involve intellectual property rights. CoreMedia respects the intellectual property rights of others. However, there can be no assurance that CoreMedia will not be precluded from using certain technologies in the future by the patents of third parties, or that it will not have to enter into unfavorable licensing agreements or pay high royalties to use these technologies.

• In the past, however, third parties have never accused CoreMedia of infringing intellectual property rights, hence Management believes that the risk of claims arising from patent infringements is currently low.

E. Opportunities Report

CoreMedia expects the opportunities for organic CMS/DXP growth in 2024 to improve in the second half of the year. The acquisition of BySide and Smarkio in 2023 is forecasted to achieve accelerated growth through the realization of cross-selling opportunities, expansion of the products and services portfolio, and the geographic expansion into Southern Europe and LATAM. The further expansion of the partner network is expected to further accelerate CoreMedia's growth. In the USA CoreMedia has reorganized the leadership team to be better positioned to win new logos, realize greater upsells, and achieve higher customer retention.

With regard to organic growth, CoreMedia sees opportunities in the expansion of existing customers with regard to a) upsell of capacity, features and/or maintenance & support b) expansion of the platform for enterprise license customers c) conversion of existing customers who are still using older product generations to the latest CoreMedia product generation. Being a risk on the one hand the accelerated adoption of AI is also considered to be an opportunity for growth on the other hand as it expands the capabilities of our product suite. AI will simplify the user interface and will be able to automate repetitive tasks. This in turn reduces the time e.g. to launch campaigns and increases the adoption of our product suite. This strengthens our market position and therefore could help us to generate more bookings and increase retention.

CoreMedia is convinced that it has the right strategy for the competitive environment with its newly expanded product and services offering, expanded geographic reach the co-operations it has entered into. CoreMedia also sees the current consolidation phase in the CMS/DXP industry as an opportunity to further strengthen its own market position.

F. Assessment of the risk and opportunity situation at the CoreMedia Group

There are no risks endangering the going concern of the Group in the reporting period. All entities are showing positive equity on a standalone basis as well as at the group level. There were no particular structural changes in the Group's risks. According to our current assessment, there are no risks that could endanger the existence of the Company.

For a holistic picture of the business activities, the opportunities of the Group must be considered in addition to the risks. We are in a good position, based on our competencies and innovative capabilities, to capitalize on the growing ecommerce sector. At the same time, these factors enable us to successfully counter the risks that arise. Furthermore, we are convinced that we have suitable processes, measures and instruments to identify important opportunities and manage the relevant risks.

G. Forecast Report

Despite the uncertainties in the market as outlined above, our growth prospects for 2024 are more positive compared to 2023. Overall, CoreMedia is forecasting for the Group's earnings to remain in line with 2023 due to investments in BySide and Smarkio. According to corporate planning, liquidity is ensured in the short and medium term, particularly from operating activities, taking into account existing credit lines and financing options. Furthermore, CoreMedia is forecasting an ARR of >EUR 27 million and an adjusted EBITDA of EUR 3.3 million for the fiscal year 2024. The goal set by the shareholder is primarily the growth of recurring revenues and not the profitability of the company. A negative result on a net income basis is planned.

H. Forward-looking statements

This Management Report contains forward-looking statements. These are based on views and assumptions of CoreMedia, which in turn are based on available information. All statements contained in the Management Report that are not historical facts are forward-looking statements. These forward-looking statements result from CoreMedia's current expectations and assumptions based thereon, which CoreMedia has made with respect to, among other things, the following factors: general economic and industry developments, ability to hire and retain employees, competition in the software industry, implementation of corporate strategy, development and introduction of new products and services, ability to exploit intellectual property, regulatory and political environmental conditions, adaptation to technological progress, market acceptance of CoreMedia products and services, terrorist threats and war risks, integration of acquired companies, fulfillment of customer expectations and other risks and uncertainties. These risks and uncertainties are described in the section "Risks of Future Development and Risk Management." Words such as "expect," "believe," "anticipate," "continue," "estimate," "predict," "intend," "be confident," "assume," "plan," "predict," "should," "should," "may," "will," "outlook" and "targets" and similar expressions with respect to CoreMedia are intended to identify such forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ from expectations. The forward-looking statements reflect the views as of the date they were made. Readers are cautioned not to place undue reliance on these statements. CoreMedia assumes no obligation to the public to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Hamburg, April 26, 2024

CM Bridge Holdings GmbH

gez. Sören Stamer

gez. Robert Morrison Young III

gez. Paul Bridwell

[1] https://www.imf.org/external/pubs/ft/ar/2023/

[2] https://www.imf.org/external/pubs/ft/ar/2023/

[3] https://www.imf.org/en/Publications/WEO/Issues/2024/01/30/world-economic-outlook-update-january-2024

[4] https://www.imf.org/en/Publications/WEO/Issues/2024/01/30/world-economic-outlook-update-january-2024

[5] https://www.gartner.com/document/code/795168

[6] https://www.researchandmarkets.com/reports/5310761/web-content-management-systems-global-strategic

[7] https://www.verifiedmarketresearch.com/product/digital-experience-platform-market/

[8] https://www.gartner.com/document/4968531

Bestätigungsvermerk des unabhängigen Wirtschaftsprüfers

An die CM Bridge Holdings GmbH, Hamburg

Prüfungsurteile

Wir haben den Konzernabschluss der CM Bridge Holdings GmbH und ihrer Tochtergesellschaften (der Konzern) − bestehend aus der Konzernbilanz zum 31. Dezember 2023, der Konzern-Gewinn- und Verlustrechnung, der Konzerngesamtergebnisrechnung, der Konzerneigenkapitalveränderungsrechnung und der Konzernkapitalflussrechnung für das Geschäftsjahr vom 1. Januar 2023 bis zum 31. Dezember 2023 sowie dem Konzernanhang, einschließlich einer Zusammenfassung bedeutsamer Rechnungslegungsmethoden - geprüft. Darüber hinaus haben wir den Konzernlagebericht der CM Bridge Holdings GmbH für das Geschäftsjahr vom 1. Januar 2023 bis zum 31. Dezember 2023 geprüft.

Nach unserer Beurteilung aufgrund der bei der Prüfung gewonnenen Erkenntnisse

• entspricht der beigefügte Konzernabschluss in allen wesentlichen Belangen den IFRS, wie sie in der EU anzuwenden sind, und den ergänzend nach § 315e Abs. 1 und Abs. 3 HGB anzuwendenden deutschen gesetzlichen Vorschriften und vermittelt unter Beachtung dieser Vorschriften ein den tatsächlichen Verhältnissen entsprechendes Bild der Vermögens- und Finanzlage des Konzerns zum 31. Dezember 2023 sowie seiner Ertragslage für das Geschäftsjahr vom 1. Januar 2023 bis zum 31. Dezember 2023 und

• vermittelt der beigefügte Konzernlagebericht insgesamt ein zutreffendes Bild von der Lage des Konzerns. In allen wesentlichen Belangen steht dieser Konzernlagebericht in Einklang mit dem Konzernabschluss, entspricht den deutschen gesetzlichen Vorschriften und stellt die Chancen und Risiken der zukünftigen Entwicklung zutreffend dar.

Gemäß § 322 Abs. 3 Satz 1 HGB erklären wir, dass unsere Prüfung zu keinen Einwendungen gegen die Ordnungsmäßigkeit des Konzernabschlusses und des Konzernlageberichts geführt hat.

Grundlage für die Prüfungsurteile

Wir haben unsere Prüfung des Konzernabschlusses und des Konzernlageberichts in Übereinstimmung mit § 317 HGB unter Beachtung der vom Institut der Wirtschaftsprüfer (IDW) festgestellten deutschen Grundsätze ordnungsmäßiger Abschlussprüfung durchgeführt. Unsere Verantwortung nach diesen Vorschriften und Grundsätzen ist im Abschnitt "Verantwortung des Abschlussprüfers für die Prüfung des Konzernabschlusses und des Konzernlageberichts" unseres Bestätigungsvermerks weitergehend beschrieben. Wir sind von den Konzernunternehmen unabhängig in Übereinstimmung mit den deutschen handelsrechtlichen und berufsrechtlichen Vorschriften und haben unsere sonstigen deutschen Berufspflichten in Übereinstimmung mit diesen Anforderungen erfüllt. Wir sind der Auffassung, dass die von uns erlangten Prüfungsnachweise ausreichend und geeignet sind, um als Grundlage für unsere Prüfungsurteile zum Konzernabschluss und zum Konzernlagebericht zu dienen.

Verantwortung der gesetzlichen Vertreter für den Konzernabschluss und den Konzernlagebericht

Die gesetzlichen Vertreter sind verantwortlich für die Aufstellung des Konzernabschlusses, der den IFRS, wie sie in der EU anzuwenden sind, und den ergänzend nach § 315e Abs. 1 und Abs. 3 HGB anzuwendenden deutschen gesetzlichen Vorschriften in allen wesentlichen Belangen entspricht, und dafür, dass der Konzernabschluss unter Beachtung dieser Vorschriften ein den tatsächlichen Verhältnissen entsprechendes Bild der Vermögens-, Finanz- und Ertragslage des Konzerns vermittelt. Ferner sind die gesetzlichen Vertreter verantwortlich für die internen Kontrollen, die sie als notwendig bestimmt haben, um die Aufstellung eines Konzernabschlusses zu ermöglichen, der frei von wesentlichen falschen Darstellungen aufgrund von dolosen Handlungen (d.h. Manipulationen der Rechnungslegung und Vermögensschädigungen) oder Irrtümern ist.

Bei der Aufstellung des Konzernabschlusses sind die gesetzlichen Vertreter dafür verantwortlich, die Fähigkeit des Konzerns zur Fortführung der Unternehmenstätigkeit zu beurteilen. Des Weiteren haben sie die Verantwortung, Sachverhalte in Zusammenhang mit der Fortführung der Unternehmenstätigkeit, sofern einschlägig, anzugeben. Darüber hinaus sind sie dafür verantwortlich, auf der Grundlage des Rechnungslegungsgrundsatzes der Fortführung der Unternehmenstätigkeit zu bilanzieren, es sei denn, es besteht die Absicht den Konzern zu liquidieren oder der Einstellung des Geschäftsbetriebs oder es besteht keine realistische Alternative dazu. Außerdem sind die gesetzlichen Vertreter verantwortlich für die Aufstellung des Konzernlageberichts, der insgesamt ein zutreffendes Bild von der Lage des Konzerns vermittelt sowie in allen wesentlichen Belangen mit dem Konzernabschluss in Einklang steht, den deutschen gesetzlichen Vorschriften entspricht und die Chancen und Risiken der zukünftigen Entwicklung zutreffend darstellt. Ferner sind die gesetzlichen Vertreter verantwortlich für die Vorkehrungen und Maßnahmen (Systeme), die sie als notwendig erachtet haben, um die Aufstellung eines Konzernlageberichts in Übereinstimmung mit den anzuwendenden deutschen gesetzlichen Vorschriften zu ermöglichen, und um ausreichende geeignete Nachweise für die Aussagen im Konzernlagebericht erbringen zu können.

Verantwortung des Abschlussprüfers für die Prüfung des Konzernabschlusses und des Konzernlageberichts

Unsere Zielsetzung ist, hinreichende Sicherheit darüber zu erlangen, ob der Konzernabschluss als Ganzes frei von wesentlichen falschen Darstellungen aufgrund von dolosen Handlungen oder Irrtümern ist, und ob der Konzernlagebericht insgesamt ein zutreffendes Bild von der Lage des Konzerns vermittelt sowie in allen wesentlichen Belangen mit dem Konzernabschluss sowie mit den bei der Prüfung gewonnenen Erkenntnissen in Einklang steht, den deutschen gesetzlichen Vorschriften entspricht und die Chancen und Risiken der zukünftigen Entwicklung zutreffend darstellt, sowie einen Bestätigungsvermerk zu erteilen, der unsere Prüfungsurteile zum Konzernabschluss und zum Konzernlagebericht beinhaltet.

Hinreichende Sicherheit ist ein hohes Maß an Sicherheit, aber keine Garantie dafür, dass eine in Übereinstimmung mit § 317 HGB unter Beachtung der vom Institut der Wirtschaftsprüfer (IDW) festgestellten deutschen Grundsätze ordnungsmäßiger Abschlussprüfung durchgeführte Prüfung eine wesentliche falsche Darstellung stets aufdeckt. Falsche Darstellungen können aus dolosen Handlungen oder Irrtümern resultieren und werden als wesentlich angesehen, wenn vernünftigerweise erwartet werden könnte, dass sie einzeln oder insgesamt die auf der Grundlage dieses Konzernabschlusses und Konzernlageberichts getroffenen wirtschaftlichen Entscheidungen von Adressaten beeinflussen.

Während der Prüfung üben wir pflichtgemäßes Ermessen aus und bewahren eine kritische Grundhaltung. Darüber hinaus:

• identifizieren und beurteilen wir die Risiken wesentlicher falscher Darstellungen im Konzernabschluss und Konzernlagebericht aufgrund von dolosen Handlungen oder Irrtümern, planen und führen Prüfungshandlungen als Reaktion auf diese Risiken durch sowie erlangen Prüfungsnachweise, die ausreichend und geeignet sind, um als Grundlage für unsere Prüfungsurteile zu dienen. Das Risiko, dass aus dolosen Handlungen resultierende wesentliche falsche Darstellungen nicht aufgedeckt werden, ist höher als das Risiko, dass aus Irrtümern resultierende wesentliche falsche Darstellungen nicht aufgedeckt werden, da dolose Handlungen kollusives Zusammenwirken, Fälschungen, beabsichtigte Unvollständigkeiten, irreführende Darstellungen bzw. das Außerkraftsetzen interner Kontrollen beinhalten können.

• gewinnen wir ein Verständnis von dem für die Prüfung des Konzernabschlusses relevanten internen Kontrollsystem und den für die Prüfung des Konzernlageberichts relevanten Vorkehrungen und Maßnahmen, um Prüfungshandlungen zu planen, die unter den gegebenen Umständen angemessen sind, jedoch nicht mit dem Ziel, ein Prüfungsurteil zur Wirksamkeit dieser Systeme abzugeben.

• beurteilen wir die Angemessenheit der von den gesetzlichen Vertretern angewandten Rechnungslegungsmethoden sowie die Vertretbarkeit der von den gesetzlichen Vertretern dargestellten geschätzten Werte und damit zusammenhängenden Angaben.

• ziehen wir Schlussfolgerungen über die Angemessenheit des von den gesetzlichen Vertretern angewandten Rechnungslegungsgrundsatzes der Fortführung der Unternehmenstätigkeit sowie, auf der Grundlage der erlangten Prüfungsnachweise, ob eine wesentliche Unsicherheit im Zusammenhang mit Ereignissen oder Gegebenheiten besteht, die bedeutsame Zweifel an der Fähigkeit des Konzerns zur Fortführung der Unternehmenstätigkeit aufwerfen können. Falls wir zu dem Schluss kommen, dass eine wesentliche Unsicherheit besteht, sind wir verpflichtet, im Bestätigungsvermerk auf die dazugehörigen Angaben im Konzernabschluss und im Konzernlagebericht aufmerksam zu machen oder, falls diese Angaben unangemessen sind, unser jeweiliges Prüfungsurteil zu modifizieren. Wir ziehen unsere Schlussfolgerungen auf der Grundlage der bis zum Datum unseres Bestätigungsvermerks erlangten Prüfungsnachweise. Zukünftige Ereignisse oder Gegebenheiten können jedoch dazu führen, dass der Konzern seine Unternehmenstätigkeit nicht mehr fortführen kann.

• beurteilen wir Darstellung, Aufbau und Inhalt des Konzernabschlusses insgesamt einschließlich der Angaben sowie ob der Konzernabschluss die zugrunde liegenden Geschäftsvorfälle und Ereignisse so darstellt, dass der Konzernabschluss unter Beachtung der IFRS, wie sie in der EU anzuwenden sind, und der ergänzend nach § 315e Abs. 1 HGB anzuwendenden deutschen gesetzlichen Vorschriften ein den tatsächlichen Verhältnissen entsprechendes Bild der Vermögens-, Finanz- und Ertragslage des Konzerns vermittelt.

• holen wir ausreichende geeignete Prüfungsnachweise für die Rechnungslegungsinformationen der Unternehmen oder Geschäftstätigkeiten innerhalb des Konzerns ein, um Prüfungsurteile zum Konzernabschluss und zum Konzernlagebericht abzugeben. Wir sind verantwortlich für die Anleitung, Beaufsichtigung und Durchführung der Konzernabschlussprüfung. Wir tragen die alleinige Verantwortung für unsere Prüfungsurteile.

• beurteilen wir den Einklang des Konzernlageberichts mit dem Konzernabschluss, seine Gesetzesentsprechung und das von ihm vermittelte Bild von der Lage des Konzerns.

• führen wir Prüfungshandlungen zu den von den gesetzlichen Vertretern dargestellten zukunftsorientierten Angaben im Konzernlagebericht durch. Auf Basis ausreichender geeigneter Prüfungsnachweise vollziehen wir dabei insbesondere die den zukunftsorientierten Angaben von den gesetzlichen Vertretern zugrunde gelegten bedeutsamen Annahmen nach und beurteilen die sachgerechte Ableitung der zukunftsorientierten Angaben aus diesen Annahmen. Ein eigenständiges Prüfungsurteil zu den zukunftsorientierten Angaben sowie zu den zugrunde liegenden Annahmen geben wir nicht ab. Es besteht ein erhebliches unvermeidbares Risiko, dass künftige Ereignisse wesentlich von den zukunftsorientierten Angaben abweichen.

Wir erörtern mit den für die Überwachung Verantwortlichen unter anderem den geplanten Umfang und die Zeitplanung der Prüfung sowie bedeutsame Prüfungsfeststellungen, einschließlich etwaiger bedeutsamer Mängel im internen Kontrollsystem, die wir während unserer Prüfung feststellen.

Hamburg, den 30. April 2024

Baker Tilly GmbH
Wirtschaftsprüfungsgesellschaft
Steuerberatungsgesellschaft

gez. Britta Martens ,German Public Auditor

gez. Stefanie Hartmann, German Public Auditor

Feststellung des Konzernabschlusses zum 31. Dezember 2023

Der Jahresabschluss zum 31.Dezember 2023 mit einer Bilanzsumme von EUR 57.177.873 und einem negativen Gesamtergebnis von EUR 4.993.093 wurde von der Gesellschafterin am 03. September 2024 festgestellt. Der Konzernabschluss zum 31. Dezember 2023 ist damit festgestellt.