SES Imagotag: THE CIRCULAR DANCE WITH A CHINESE TWIRL - PART I

GOTHAM CITY RESEARCH LLC www.gothamcityresearch.com info@gothamcityresearch.
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GOTHAM CITY RESEARCH LLC
SES Imagotag: THE CIRCULAR DANCE

WITH A CHINESE TWIRL – PART I
SES-Imagotag’s sphere: BOE Technology Group (and its subsidiaries’) sphere:
Chongqing
~67% of SESL’s COGS BOE Smart
were purchased from Electronics
Chongqing BOE in FY22
System Co.
~8% of SESL sales were Ltd BOE Technology Group owns 100% of Chongqing BOE
generated from BOE Smart Electronics System Co. Ltd
Chongqing in FY22
Undisclosed related party balances between SESL and BOE
SES-Imagotag SA BOE Technology Group Co. Ltd

BOE Technology Group owns 32% of SESL
(SESL FP Equity) (000725 CH Equity)
The China JV benefits from IP

BOE YiYun seems to
agreements with SESL that give the
mainly sell digital BOE Technology Group owns ~15% of the China JV
JV rights to SESL’s technology, mostly
signage, not ESLs. SESL formerly owned 51% of the China JV for nothing in return
This deal looks to be until H2 2022. SESL sold its stake in the JV at
outside of SESL’s an apparent uneconomic price to BOE YiYun
expertise and it is BOE Digital
unclear how SESL’s Technology Co
operations will
benefit Ltd
SESL sales from the China JV are mainly generated from non-ESL related revenue (the China JV)
BOE YiYun owns ~51% of the China JV
BOE YiYun
SESL owns ~9% of BOE YiYun (as part of SESL’s 51% stake divestiture from the China JV) BOE Technology Group owns at least 30% of BOE YiYun
Legend
- Orange box & background of the image: SES-Imagotag’s activities/operations with BOE Technology Group and its subsidiaries.
- Green box & background of the image: BOE Technology Group’s end of the activities/operations with SES-Imagotag.
- Blue circles: Identify the subsidiaries of BOE Technology Group Ltd that have (or had) a relationship with SES-Imagotag.
- Black text & solid arrows: Explain the nature of each activity/operation between SES Imagotag and the respective BOE entity.
- Grey text & dash arrows: Explain the ownership stakes each related party has with another.
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Page 2 of 49
Table of Contents
I. Disclaimer
II. Summary
III. Introduction
IV. Undisclosed related party transactions and round-trip revenue
V. 2019-2022 Revenue from the BOE Joint Venture are suspect
VI. EBITDA: We think 106% of 2022 profits are suspect
VII. The BOE Unwind: from win-win to diverging interests
VIII. Walmart: what “Everyday Low Price” means for suppliers
IX. Vusion Delusion I: limited real-world footprint
X. Vusion Delusion II: not a SaaS company
XI. Valuation: worth no more than EUR 30 per share
XII. End Notes
Page 3 of 49
GOTHAM CITY RESEARCH LLC
a
GOTHAM CITY RESEARCH’S OPINIONS Company: SES-imagotag SA
 2020-2022 revenue are overstated by at least 7%-13% and CEO: Thierry Gadou
2022 EBITDA is overstated by 106%.
 We believe that the financial statements are materially Ticker: SESL
misleading, incorrect, and deficient, and that an independent
and comprehensive investigation would confirm our opinions. Share price: €166.80
 SESL would trade between EUR 15 – EUR 30/share, if shares
were to trade in-line with peers. Market cap: €2.64B
SUMMARY OF THE BASES OF OPINIONS Enterprise value: €2.69B
 BOE is the largest shareholder, largest supplier, one of the 52-week high: €173.80
largest customers, JV partner, and on the audit committee.
Potential for financial malfeasance is high. 52-week low: €72.60
 BOE accounted for 71% of SESL’s H1 2022 COGSs.
 At the same time, BOE accounted for 10% of SESL’s revenue. Diluted shares outstanding:
This revenue transaction appears to be a round-trip 16M
transaction, artificially overstating revenue.
 We have identified similar transactions from 2018 to 2022 – 2022 Revenue: €621M
including undisclosed related party transactions available only
in Chinese – that reveal a pattern of behavior. 2022 EBITDA: €59M
 12%-38% of SESL’s 2019-2022 consolidated revenue do not
2022 FCF: -€48M
add up to the sum of its subsidiaries’ 2019-2022 revenue.
 We estimate that SESL’s China JV overstated 2%-7% of SESL’s 2002-2022 total FCF: -€159M
2019-2022 revenue, as the China JV generated de minimis ESL
revenue per licensing agreements. Net debt: €49M
 Over 5 years, SES’s capitalized expenses have exceeded its
direct peer, Pricer’s by 2x, as a % of revenue. Tangible book: €41M
 We estimate that the company’s 2022 SaaS revenue is closer
to 0% of revenue, not 15% of 2022 revenue as portrayed by Price/Book: 14x
the company.
FYE: Dec. 31
 SESL does not resemble a SaaS company, based on our
examination of its financial disclosures and operations. Auditors: KPMG and Deloitte
 Basic financial information in the annual report does not tie
up – usually an indicator of financial manipulation.
 We have identified accounting irregularities – explained both
in this report and in Part II – that lead us to believe SESL’s
financial statements will require restatement.
 The recently announced Walmart deal is not profitable for
SESL, based on our per unit economic calculations.
Page 4 of 49
INTRODUCTION
SES Imagotag Group (“SESL”) is in the business of installing and maintaining electronic shelf labels (“ESLs”).
The company and the ESL industry have existed for at least 30 years. On the one hand, SESL appears to be
a promising company as EBITDA has grown smoothly since 2019 1:
YE December (EUR '000) 2019 2020 2021 2022

EBITDA 4,000 16,000 32,300 58,600
YoY Growth 300.0% 101.9% 81.4%
EBITDA margin 1.6% 5.5% 7.6% 9.4%
On the other hand, SESL appears to be a low-quality company, as paper profits have failed to convert into
cash flow over time, with the company instead issuing equity + debt capital to plug the cash burn 2:
YE December (EUR '000) 2018 2019 2020 2021 2022

EBITDA 6,500 4,000 16,000 32,300 58,600
Net Income -5,900 -13,139 -7,643 2,109 18,573
Free cash flow -30,750 -16,709 -15,742 -349 -48,190
Capital issued 26,705 63,988 32,539 4,756 130
Gotham City Research has seen such conflicting qualities before. To solve this puzzle, we analyzed the
company and related entities over the last 6 months. We found that China-based BOE Technology Group
Co., Ltd (BOE), a state-owned entity turned into a mixed-use entity, has been a key
shareholder/supplier/creditor/debtor/board/JV partner, and has sit on SESL’s board and audit committee.
With this highly entangled configuration, we saw high potential for self-serving accounting manipulation.
The following facts confirmed our suspicions, especially as they coincided with large SESL share sales:
 At least 7%-13% of 2020-2022 SESL revenue are of suspect quality as they to seem to include
round-trip transactions and sham revenue from its China JV (that are unrelated to ESL revenue).
Without these sources of revenue, SESL would have missed 2021 & 2022 revenue guidance.
 A November 2022 BOE filing, available only in Chinese, reveals that as of 30 Sep 2022 BOE’s
balances facing SESL amounted to 71% of SESL’s accounts payable and 18% of its accounts
receivable as of June 30, 2022. These related party payables & receivable are undisclosed by SESL.
 106% of SESL EBITDA 2022 is of doubtful quality after accounting for suspect 2022 revenue and
the capitalization of what appears to be standard operating expenses.
SESL claims to be a “leading retail SaaS company”, yet we estimate that SaaS revenues are closer
to 0% of total sales, not 15% as implied by the company.
 In 2022, SESL’s COGS per unit worsened for the first time just as SESL reduced its supply chain
dependence on BOE for the first time. SESL also signed what appears to be a suspiciously
unfavorable IP agreement with BOE, coinciding with BOE’s large 2022 share sales.
This report – Part I – focuses on why we believe revenue and profits are overstated, and how the quality
of the business and its trajectory are misunderstood. Part II focuses on accounting irregularities which
lead us to believe that SESL’s financial statements are incorrect and will require restatement.
Page 5 of 49
Undisclosed related party transactions and round-trip revenue
SES Imagotag: a clear difference between the Before BOE and After BOE picture
SES Imagotag’s CEO, Thierry Gadou, joined SESL in 2012 (he previously was CEO of Hubwoo which was a
failure1). Under his leadership, SES merged with Imagotag, forming SES-Imagotag in 2014. Despite these
changes, SESL’s results & share price languished for years until BOE entered the scene 2:
€ 190
€ 180 SESL FP: Stock Price Chart
€ 170
€ 160
€ 150
€ 140
€ 130
€ 120
After BOE
€ 110
€ 100
€ 90
€ 80 Before BOE
€ 70
€ 60
€ 50
€ 40
€ 30
€ 20
€ 10
€0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
What changed? BOE became SESL’s largest shareholder by the end of 2017 3 and largest supplier by 20194:
YE December (%) 2018 2019 2020 2021 2022

BOE total ownership as % of SESL shares outstanding 74.4% 68.5% 68.5% 60.2% 32.4%
BOE purchases as % of Total Company COGS 5.4% 47.3% 66.5% 70.1% 67.0%
SESL’s revenue growth and EBITDA margins all improved soon after BOE became its largest supplier 5:
SESL Revenue and EBITDA
YE December (EUR '000) 2019 2020 2021 2022
Revenue 247,585 290,264 422,868 620,860
EBITDA 4,000 16,000 32,300 58,600
Revenue growth 17.2% 45.7% 46.8%
EBITDA margin 1.6% 5.5% 7.6% 9.4%
SESL claims to be “the leading retail IoT SaaS solution” but we see evidence of something else
What is SESL’s secret recipe to revenue growth and EBITDA margin expansion since 2019? SESL claims to
be “the leading retail IoT SaaS solution” and presents its “VAS” segment (“VAS” is the term the company
uses to refer to software/cloud business) as if its software revenue has grown from 8% of revenue in 2017
to 15% of revenue by 2022.6 Upon a superficial glance, the Company’s SaaS narrative seems plausible.
However, upon closer examination, we see something else entirely, i.e. we see evidence that:
1. the company’s SaaS revenue is closer to 0% than 15% of revenue as implied by the purported
“VAS” revenue (as we discuss in detail later in this report).
2. 2019-2022 revenues are overstated by at least 7%-13%, which means most – if not all – of EBITDA
is overstated as well.
In this section, we examine how we believe round-trip revenues helped overstate revenue.
Page 6 of 49
SESL’s consolidated revenue does not reconcile to the sum of its subsidiaries’ revenue: why?
One of the analytical approaches that has helped us detect material fraud is to compare a company’s
consolidated financial results (e.g., revenue, earnings) with the sum of its subsidiaries’. We have found
that legitimate companies tend to provide clear explanations or reconciliations, whereas suspect
companies usually do not. In the case of SESL, we found that consolidated revenues exceed the sum of its
subsidiaries by 25%-38%, between 2020-2022. These differences are unexplained by the company 7:
2018 -
YE December (EUR '000) 2018 2019 2020 2021 2022 2022
Sum of subsidiaries and equity interests revenue 193,307 221,386 214,353 307,015 501,168 1,437,229
Reported Consolidated revenue 187,855 247,585 290,264 422,868 620,860 1,769,432
Difference 5,452 -26,199 -75,911 -115,853 -119,692 -332,203
Difference % of Sum of subsidiaries and equity interests 2.8% -11.8% -35.4% -37.7% -23.9% -23.1%
Possible explanations for the unexplained differences between consolidated vs sum of subs’ revenue:
1. Some portions of SESL’s consolidated revenues – up to 25%-38% – are misleading and incorrect.
2. SESL does not provide enough standard and necessary information to reconcile these figures.
At least 7%-13% of 2020-2022 revenue appear suspect
Some of the unexplained differences shown above might have a good explanation. However, we found
that at least 7%-13% of 2018-2022 of revenue are suspect, for the following reasons 8:
 Evidence of round-trip revenue between SESL and BOE in 2018, 2021, and 2022.
 BOE Digital Technology (the “JV”) generated little to no ESL revenue (contrary to how SESL
portrays it), which affects 2%-7% of SESL’s 2019-2022 total revenue.
YE December (EUR '000) 2018 2019 2020 2021 2022

Sales to BOE Technology 13,700 40 10 11,206 48,121
BOE Digital Technology Co Ltd 0 4,245 20,085 29,597 31,000
Total Company Sales 187,855 247,585 290,264 422,868 620,860
Sales to BOE Technology + BOE Digitial Sales as % of Total Company Sales 7.3% 1.7% 6.9% 9.6% 12.7%
Is SESL selling to itself? Round-trip transactions between BOE and itself
Limited and cryptic disclosures buried in SESL filings suggest SESL has been recognizing sales to BOE
entities as revenue from 2018-2022. For example, Note 29 of SESL’s 2022 AR states “$53.1 million of sales
of components with Chongqing BOE Smart Electronic System Co. Ltd (BOE’s factory based in Chongqing)” 9:
Page 7 of 49
Note 23 of SESL’s 2022 AR provides a similar disclosure10:
What does “sales of components with Chongqing BOE Smart Electronic System Co. Ltd” mean? Does that
mean BOE purchased $53.1 million of ESLs (finished goods) from SESL? If that is what these disclosures
mean, then 7.8% of 2022 SESL’s sales would be circular transactions of no substance – i.e. round-trip
transactions, especially so given the following facts:
 BOE is a manufacturer, and through Chongqing BOE Smart Electronics System Co., Ltd has been
SESL’s largest supplier of ESLs in the relevant time periods.11
 SESL’s disclosures regarding inventory, payables, and its relationship with BOE entities, as well as
shipping records, reveal that SESL purchases finished goods from BOE.12
 There is no compelling reason why Chongqing BOE Smart Electronics System Co should purchase
ESLs from SESL, as BOE could manufacture more ESLs itself as necessary. 13
We thought that perhaps there’s a translational issue in the English versions of the SESL annual reports,
and that the French versions might provide clarity. However, we reviewed the French versions of the
disclosures and found them just as cryptic.
2022 Undisclosed related party transactions (only in Chinese) clarify evidence of round-trip revenue
A BOE filing dated November 29, 2022, and available only in Chinese makes it clear and unambiguous
what SESL has been hiding or obfuscating: BOE bought goods from SESL, and has an IOU as of 9/30/2022 14:
The excerpt above from the BOE filing reveals receivables and payables between BOE and SESL, as of
September 30, 2022 (we have provided the amounts in the table below) 15:
BOE (RMB million) As at 30/09/2022

Receivable 909
Payable 195
So per the BOE filing, BOE is owed RMB 909 million from SESL and BOE owes SESL RMB 195 million, as of
September 30, 2022. These are very material amounts from the perspective of SESL’s balance sheet.
Page 8 of 49
SESL does not disclose these material related party payables and receivables transactions. Here is how the
payables and receivables from the BOE filing, appear from SESL’s perspective 16:
SESL (EUR '000) From BOE % of SESL Total

Trade Payables 120,000 71.1%
Trade Receivables 25,000 18.0%
 To evaluate exactly how material these amounts disclosed by BOE are, we compare them to
SESL’s balance sheet items (payables and receivables) as of June 30 th, 2022, since SESL provides
balance sheets on a semi-annual and annual basis only.
 SESL’s total trade payables and receivables balances were EUR 168,859 thousand and EUR
138,581 thousand respectively, for the period ending on June 30 th, 2022.
 Thus, the undisclosed payables and receivables from BOE as of September 30 th represent 71%
and 18% of SESL’s June 30th payables and receivables balances, respectively.
Round-trip transactions in prior years indicate a pattern of behavior
2021 Round-trip sales: Like 2022, SESL sold $13.2 million of ESL components to BOE in 2021. These round-
trip sales represented nearly 3% of SESL’s total 2021 sales 17:
2020 and 2019 Round-trip sales: the round-trip sales amounts were insignificant in these years. However,
SESL did benefit from the suspect revenue originating from its JV, as we discuss in the next section.
2018 Round-trip sales: Soon after BOE acquired its stake in SESL shares in 2017, BOE and SESL engaged in
significant related party transactions totaling EUR 13.7 million, or 7% of SESL’s 2018 total sales. We found
evidence of these transactions – EUR 8.1 million sales of components and EUR 5.6 million consulting fees
– buried in the SESL 2018 AR18:
Page 9 of 49
Possible motivations for these round-trip revenue transactions between 2018-2022
Why did BOE and SESL engage in these round-trip transactions? We believe SESL and BOE’s objective was
to provide BOE ample opportunity to sell SESL shares. The following observations support our view:
 The round-trip and JV revenue helped SESL beat revenue guidance for 2021 and 2022 (of EUR
400 million and EUR 600 million respectively) and boost paper profits as well. Without these
sources of revenue, SESL would’ve missed revenue guidance in 2021 and 2022. In fact, SESL
would’ve missed revenue guidance in 2022 if one were to remove just one of these sources.
 Timing of BOE share sales coincides too neatly with 2021 and 2022 round-trip revenue – BOE
sold a significant number of its SESL shares in 2021 and 2022, coincidentally at the same time
these dubious and material sources of revenue were recognized.19
 Round-trip revenue boosted SESL’s 2022 H1 revenue results, just 2 months before BOE’s
massive share sale – Round-trip revenue accounted for 9.7% of SESL’s total H1 2022 revenue20
and 7.8% for the entire fiscal year 2022’s revenue. SESL reported these H1 results in September
2022, just two months before BOE’s massive share sale in November of that year. 21
YE December (EUR '000) 2018 2019 2020 2021 H1 2022

Sales to BOE Technology 13,700 40 10 11,206 27,865
Total Company Sales 187,855 247,585 290,264 422,868 285,865
Sales to BOE Technology as % of Total Sales 7.3% 0.0% 0.0% 2.7% 9.7%
 BOE’s SESL share sales boosted its bottom-line, accounting for 18% of its 2022 net profits 22
YE December (RMB '000) 2021 2022

Proceeds from SESL share sales 115,806 1,343,607
BOE's Net Income to common shareholders 25,960,752 7,550,878
Proceeds as % of BOE's Net Income 0.45% 17.79%
 These suspect transactions represent less than 0.5% of BOE’s revenues – Because the round-
trip revenues and JV revenues represent only a tiny portion of BOE’s total revenues, we suspect
that BOE and SESL treated these suspect activities as a high “ROI” activity 23
YE December (EUR '000) 2018 2019 2020 2021 2022

BOE Technology Group: Revenue 12,331,867 14,853,107 16,973,658 30,594,828 24,204,275
China JV Revenue + Roundtrip Revenue 13,700 4,285 20,095 40,803 79,121
China JV Revenue + Roundtrip Revenue as % of BOE Tech. Revenue 0.11% 0.03% 0.12% 0.13% 0.33%
In this section we focused on how round-trip transactions between SESL and BOE helped overstate
revenue. In the next section, we discuss how SESL used its JV to overstate SESL’s 2019-2022 revenue.
Page 10 of 49
2019-2022 Revenue from the BOE Joint Venture are suspect
SESL’s China Joint Venture was a resounding ESL success – if the reported figures are to be believed.
In 2019 SESL announced that the company was entering into a joint venture with BOE and JD Digits to
form BOE Digital Technologies (the “JV”).1 SESL was to invest EUR 13.8 million into the JV for a 51% stake.2
The objective of this JV per SESL was to “accelerate its penetration of the Chinese market”.3 The JV would
“further aid SES-imagotag's penetration of the Chinese market”. 4 The JV appears to have been a success
in driving ESL sales in China, as the JV revenue grew from EUR 4 million in 2019 to EUR 31 million by 2021 5:
YE December (EUR '000) 2019 2020 2021 2022

SESL reported consolidated revenue 247,585 290,264 422,868 620,860
BOE Digital Technology Co. Ltd revenue 4,245 20,085 29,597 31,000
BOE Digital Techology as % of Total Revenue 1.7% 6.9% 7.0% 5.0%
The JV appears to have grown ESL sales in China, as also evidenced by SESL’s self-promotion 6:
Despite owning 51% of the JV, SESL consolidates 100% of its financials onto its own consolidated financial
statements. Whether this accounting treatment is permissible or not, we believe it is non-obvious and
very misleading to investors. For example, SESL would’ve missed revenue guidance in both 2021 and 2022
(EUR 400 million and 600 million revenue guidance in 2021 and 2022, respectively) were the company to
have elected the more conservative equity method to account for the JV 7:
YE December (EUR '000) 2019 2020 2021 2022

SESL reported consolidated revenue 247,585 290,264 422,868 620,860
BOE Digital Technology Co. Ltd revenue 4,245 20,085 29,597 31,000
SESL revenue with China JV revenue deconsolidated 243,340 270,179 393,271 589,860
As we dug deeper, the JV revenue looks far more suspicious, but in a few very different ways:
 We are unable to reconcile over 99% of the JV’s 2019-2022 revenue, as we estimate that ESL
revenue was less than EUR 1 million, combined for the JV, between 2019-2022.
 We were unable to identify what exactly the reported 2019-2022 JV revenue represents.
We discuss the evidence that supports our beliefs in the remainder of this section.
Page 11 of 49
Why we believe the JV’s 2019-2022 total ESL revenue less than EUR 1 million
The JV’s ESL revenue has been de minimis, contrary to what the reported figures and SESL’s other
representations about the JV (for example, SESL includes the JV’s revenue as “rest of the world” revenue 8)
indicate, according to these facts:
 SESL entered into licensing agreements with the JV whereby SESL would get compensated if the
JV sold ESLs in China. However, SESL generated de minimis revenues from these agreements
between 2019-2022 implying the JV failed to generate meaningful ESL revenue in China. 9
 Observations from Chinese sources in the field reveal that the JV failed to grow ESL revenue in
China, as we further explain later in this section.
 SESL divested its entire 51% JV stake in Q3 2022 for EUR 13.8 million10 – the same amount it paid
for it in 2019.11 We find this is a suspiciously low price, given the JV’s revenue grew ~ 8x since SESL
first purchased the stake. This low valuation implies to us that the JV failed to grow ESL revenue.
SES’s royalty revenue from BOE Digital is nearly zero, suggesting BOE Digital ESL sales are near zero
SESL and BOE Digital entered into licensing agreements whereby the JV would pay SESL royalties based
on the JV’s sales of ESLs in China. For example, the JV paid SESL EUR 4,000 royalty revenue in 2021 12:
At a rate of 1% of revenue, a EUR 4,000 royalty implies ESL sales of only EUR 400,000 for the JV in 2021, a
tiny fraction of the supposed EUR 29.6 million of total revenue the JV generated in 2021. 13 For the other
years, SESL indicates fees have been zero14:
YE December (EUR '000) 2019 2020 2021 2022

Technology Licensing agreement None None 4 None
 2019 and 2020: “no technology license fees were invoiced in financial year 2019, since the joint
venture had barely started operations” 15 and “€0 thousand received by SES-imagotag SA”16
 2021: A new licensing agreement was signed whereby SESL would receive 1% of the JV’s
revenue in license income. Just EUR 4,000 of royalties were paid to SESL in 2021, implying
revenue of EUR 400k. Suspiciously, the agreement was signed on 28th December 2021, a few
days before SESL’s fiscal year end, and even more suspiciously, backdated to January 1, 2021. 17
 2022: “In view of the deconsolidation of BOE Digital Technology Co, Ltd on 30 September 2022,
no invoices were issued by SES-imagotag SA for the financial year” 18
Page 12 of 49
SESL’s explanations regarding its 2019 and 2020 licensing agreement with the JV are suspect
SES and BOE Digital entered into a similar licensing agreement in 2019, but 2 years later in SESL’s 2021
AR, SES claims the 2019 agreement was never signed, nor implemented because “start-up on the Chinese
market justified postponing the IP license” – which makes no sense whatever the meaning of this cryptic
statement, given the JV’s 2019 and 2020 reported revenue figures were material and growing 19:
If the JV generated immaterial ESL revenue, then what do the reported JV revenues represent?
ESL revenue doesn’t seem to account for the JV’s 2019-2022 revenue, and SESL doesn’t explain what they
are. Worse, SESL adds to the confusion by including the JV’s revenue as “rest of the world” revenue, as if
the JV’s revenue were ESL revenue. We see 3 possible explanations:
1. The JV did sell material volumes of ESLs, but somehow circumvented the licensing agreement in
place between it and SESL, thus avoiding royalty fees for SESL, despite SESL being perfectly
aware of this situation, as the JV’s revenues are reported in its 2022 AR, and SESL not disclosing
anything about it (“explanation #1”).
2. The JV’s 2019-2022 ESL sales are indeed immaterial. Instead, the JV’s revenue comes from
unexplained, possibly suspect sources, akin to round-trip revenue between it and BOE. This
makes the classification of the JV’s revenue as “rest of the world” revenue all the more
suspicious (“explanation #2”).
3. The reported 2019-2022 BOE Digital Technology revenue is fictitious (“explanation #3”).
We believe the facts better support explanations #2 and #3 than explanation #1, because if #1 were true:
 The JV would have a visible and vibrant ESL presence in China. We see the contrary, as we further
explain in the next paragraphs.
 SESL would not have divested its entire stake in the JV for the same price it invested in it.
The JV’s 2019 revenues may exist, but mostly come from the sale of non-ESL digital signage
We have identified concrete evidence that the JV might have generated sales in 2019, at least in part,
from a wholly different activity: digital signage (i.e. displays that are not ESLs). The JV’s revenue mostly
consisted of “digital signage”, according to disclosures only found in SESL 2019 AR20:
Page 13 of 49
There is no mention of ESL in these disclosures. For context, ESL is a phrase used profusely throughout
the ARs, so their absence supports that digital signage refers to non-ESL displays. Also, note that the
screenshots say that the JV’s 2019 sales consisted “mainly” or “mostly” of digital signage sales. This detail
is noticeably absent in SESL’s 2020, 2021, and 2022 AR, where the JV’s revenue are unexplained.
Non-ESL digital signage differ from ESLs
Just so we are clear, digital signages and ESLs are different products. The following images from BOE
illustrate real-life examples of what digital signage looks like. They are notably larger than ESLs 21:
See below how digital signage are significantly larger than the typical range of ESL models 22:
Digital
signage
ESLs
Observations from Chinese sources reveal that the JV’s ESL footprint is minimal
Contrary to the reported revenue figures and how SESL has presented the JV, China-based diligence
reveals that the JV has a small, non-growing, irrelevant ESL business. In fact, most of the content
associated with the JV centers around digital signage, according to these Chinese sources.
Page 14 of 49
 The JV’s Chinese website, boedt.cn, is barebone and doesn’t suggest a flourishing business –
The website has limited functionality and updates according to the wayback machine archives 23
 The product section of the JV’s Wechat page focuses on digital signage, not ESLs - We examined
each of the product categories shown below, and none of them are ESLs. 24
Page 15 of 49
 The FAQs and User instructions on the JV’s Wechat page focuses on digital signage, not ESLs –
the “frequently asked questions” content focuses on digital signage not ESLs, and the usage
instruction/manual section as well.25
 The JV shares the same phone number as BOE26:
The source of JV’s 2020-2022 revenue remains unaccounted for
Beyond 2019, we were unable to find concrete evidence that the JV revenues consist of digital signage
sales. We did not find any further explanations in the SESL AR 2020, 2021, or 2022. And the JV’s 2019-
2022 revenue generated from ESL’s was de minimis, as previously discussed. Thus, by way of direct and
concrete evidence, the source of JV’s 2020-2022 revenue is, at best, unaccounted for.
Based on indirect evidence discussed above (China-based field research), we can infer that some of the
JV’s 2020-2022 revenue might be derived from digital signage sales. This, in part, supports explanation #2
(that the JV’s revenues are represented by digital signage sales, not ESL sales). But accounting
irregularities surrounding the JV – which we discuss in Part II of our report – elevate our concern that
explanation #3 (i.e. The JV’s revenue comes from unexplained, possibly suspect sources, akin to round-
trip revenue between it and BOE) may also be correct. In the next section, we explain why we believe
SESL’s income overstatements are not limited to the revenue level but apply to costs/expenses as well.
Page 16 of 49
EBITDA: We think 106% of 2022 profits are suspect
In their latest AR 2022, SESL claims “significant improvement in profitability in 2022” 1:
Indeed, the Company’s profitability appears to have improved as evidenced by its EBITDA margins 2:
Comparing EBITDA margins

YE December 2019 2020 2021 2022
SESL FP 1.6% 5.5% 7.6% 9.4%
PRICB SS 13.8% 11.4% 8.7% 3.7%
SoluM (248070 KS) 8.3% 7.7% 4.7% 6.6%
SES Imagotag is an installer of ESLs. The ESL market is highly competitive, subject to price wars and supply
chain disruptions.3 Unsurprisingly, SESL’s direct publicly traded peers’ financial results are volatile, as
illustrated in the table above. In contrast, SESL’s EBITDA margins are smooth and growing. SESL’s EBITDA
margins look more like a growing SaaS business’ margins, whereas its peers’ margins look more like low-
quality commodity company margins. Is SESL a higher quality business versus its peers?
2022 EBITDA is too good to be true: deducting the round-trip sales alone wipes out nearly all EBITDA
We believe the apparent difference in EBITDA margin profile between SESL and its peers is due to SESL’s
shenanigans. As we discussed in the prior two sections, a large portion of the company’s 2020-2022
reported revenue is suspect. In fact, if we simply adjust their 2022 EBITDA by reversing the effect of the
round-trip revenue of EUR 48 million, that alone wipes out 82% of the EBITDA. EBITDA margin would be
1.7%, far lower than its publicly traded peers4:
2022
Sales 620,860
Reported EBITDA 58,600
Roundtripped revenue 48,121
EBITDA 10,479
EBITDA overstatement 82%
EBITDA margin 1.7%
Note we are conservative in our above adjustment: we don’t adjust for the JV revenue overstatement.
That would more than fully wipe out EBITDA. This validates our belief that SESL’s business model is not
profitable, and that profitability does not improve with scale. Furthermore, as we discuss in the Walmart
section, this absence of profitability with scale is likely to persist in future periods, as we calculate that the
Walmart contract may itself may be highly unprofitable.
Page 17 of 49
2022 EBITDA is negative after reversing the company’s aggressive cost capitalizations
We found suspect accounting not only on the revenue level, but on the expense side as well. Because of
BOE multi-faceted relationship with SESL – largest shareholder, supplier, customer, creditor, debtor, JV
partner – it puts BOE in a unique position to influence decisions on all accounting related matters, not just
revenue-related matters.
If we adjust SESL’s 2022 EBITDA not just for the round-trip sales, but excess and (we think) inappropriate
capitalization of costs, the company is not profitable, but loss making on an EBITDA basis 5:
2022
Sales 620,860
Reported EBITDA 58,600
Roundtripped revenue 48,121
Capitalized costs 14,281
EBITDA -3,802
EBITDA overstatement 106%
Over 5 years, SESL’s capitalized expenses have been 2x that of Pricer’s as a % of revenue. SESL consistently
capitalizes far more than Pricer, even though they are in the same business. We believe this excess
difference is improperly capitalized and should be treated as operating expenses (FYI, if we were to apply
US GAAP standards instead of IFRS, SESL’s cost capitalizations would look even more improper).
The Company has never generated Free cash flow: FCF not improving over time nor with scale
SESL has never generated free cash flow, and FCF is consistently and materially worse than net income 6:
2002 -
YE December (EUR '000) 2017 2018 2019 2020 2021 2022 2022
Free cash flow -20,947 -30,750 -16,709 -15,742 -349 -48,190 -158,753
Net income/(loss) -21,069 -5,900 -13,139 -7,643 2,109 18,573 52,246
 Cumulative Free cash flow has been negative since inception – On a cash flow basis, SESL was a
low quality business before BOE, and remains a low quality business even after BOE.
 Free cash flow has not improved over time nor with scale – Cash burn has worsened with scale,
suggesting the possibility of diseconomies of scale, rather than economies of scale. This would
make sense if its incremental revenue growth were driven by customers who hold all the
bargaining power in negotiation of pricing and other terms. Historically, Walmart has been such
a customer to its suppliers/vendors, as we discuss in the Walmart section of our report.
 EBITDA and Net income have never converted into Free cash flow –2022 EBITDA and net
income are notably positive, while 2022 free cash flow is notably negative. If EBITDA and
(consequently) net income is adjusted for the related party round-trip sales and excess cost
capitalization, all three metrics are far more in-line with one another.
Page 18 of 49
SESL’s EBITDA and Free Cash Flow look even more suspect after comparing against its peers
SES Imagotag and its peers operate in the ESL industry, a hardware-centric industry with low margins,
typified by sporadic large contract roll-outs. As such, financial results can be volatile with large swings in
working capital. For example, Pricer’s financial results demonstrate these dynamics. In some years Pricer
burns cash, in others, generates cash. Over time, they reconcile7:
Pricer Metrics
YE December (SEK '000) 2018 2019 2020 2021 2022
EBITDA 110,027 138,099 200,691 154,014 84,234
Net Income 87,275 97,740 127,476 79,133 4,787
Free cash flow 56,103 95,373 202,921 -241,545 194,780
That has not been the case with SESL, where earnings have not reconcile with earnings over time 8:
SESL Metrics
YE December (EUR '000) 2018 2019 2020 2021 2022
EBITDA 6,500 4,000 16,000 32,300 58,600
Net Income -5,900 -13,139 -7,643 2,109 18,573
Free cash flow -30,750 -16,709 -15,742 -349 -48,190
Capital issued 26,705 63,988 32,539 4,756 130
Despite how bad the Company’s historical as well as recent free cash flow generation have been, the
company claims: “SES-imagotag begins 2023 with a strong balance sheet”.9 As a matter of fact, the
company’s cash position would seem to be at its worst position in years, by our calculations:
1. Cash position at a multiyear low with Largest YoY decline in cash in the company’s history:
YE December (EUR '000) 2014 2015 2016 2017 2018 2019 2020 2021 2022
Total cash and cash equivalents 16,155 32,553 33,314 38,478 29,578 73,108 88,605 89,759 33,937
YoY growth -27.2% 101.5% 2.3% 15.5% -23.1% 147.2% 21.2% 1.3% -62.2%
2. Lowest cash balance as a % of revenue in its history:
YE December (%) 2014 2015 2016 2017 2018 2019 2020 2021 2022
Total cash and cash equivalents as % of Revenue 19.9% 29.3% 18.8% 25.1% 15.7% 29.5% 30.5% 21.2% 5.5%
3. Lowest cash balance as a % of debt in its history:
YE December (%) 2014 2015 2016 2017 2018 2019 2020 2021 2022
Total cash and cash equivalents as % of Debt 142.4% 210.0% 123.2% 74.2% 63.0% 95.6% 99.6% 101.2% 41.1%
Page 19 of 49
The BOE Unwind: from win-win to diverging interests
Soon after BOE became SESL’s largest owner, SESL’s per unit cost economics improved
SES Imagotag and BOE have not only mutually benefited from all the suspect accounting maneuvers we
described in prior sections. The BOE/SESL relationship also benefited SESL on the COGS side as well 1:
YE December 2017 2018 2019 2020 2021 2022
COGS ("Purchases consumed") (EUR '000) -103,697 -133,955 -189,372 -217,776 -319,101 -479,586
Stated # of Labels installed 160,000,000 170,000,000 200,000,000 230,000,000 300,000,000 350,000,000
Implied estimate of Labels sold 10,000,000 10,000,000 30,000,000 30,000,000 70,000,000 50,000,000
Avg COGS / Avg Labels sold (EUR per unit) * EUR 9.10 EUR 11.88 EUR 8.08 EUR 6.79 EUR 5.37 EUR 6.66
*- We take the 2-yr average of both COGS and Estimated labels sold; with the "2-yr average" being the analysis year and the year prior.
 SESL has benefited from having a large, stable supplier in BOE, as supply chain disruptions in the
industry can be problematic, leading to fulfillment/execution complications.
 We estimate that soon after BOE became SESL’s largest supplier in 2019, SESL’s average cost per
label produced declined through 2021, improving SESL’s margins2:
COGS per Estimated Labels sold (EUR per unit) - 2 year average
€ 14.00
€ 12.00
€ 10.00
€ 8.00
€ 6.00
€ 4.00
€ 2.00
€ 0.00
2015 2016 2017 2018 2019 2020 2021 2022
SESL EUR 3.38 EUR 6.53 EUR 9.10 EUR 11.88 EUR 8.08 EUR 6.79 EUR 5.37 EUR 6.66
SESL’s per unit costs started rising just as BOE and its interests began diverging in 2022
BOE’s stake in SESL shares has declined from 68.5% at the end of 2020 to 32.4% by year end, 2022 3:
YE December (%) 2018 2019 2020 2021 2022

BOE total ownership as % of SESL shares outstanding 74.4% 68.5% 68.5% 60.2% 32.4%
 Just as BOE’s ownership fell particularly sharply from 2021 to 2022, BOE’s role as a supplier started
declining in 2022 as well, for the first time in their relationship.
 The decline of SESL’s dependence on BOE coincided with a noticeable rise in costs for SESL in
2022, as average cost per label sharply rose for the first time in years, as shown in the chart above.
Therefore, we suspect that SESL enjoyed an artificial and transient cost benefit from 2019-2021 by virtue
of its relationship with BOE, not a result of its own manufacturing or operational excellence.
Page 20 of 49
Evidence that diverging interests between SESL and BOE are becoming conflicts of interests
Gotham City Research believes that the divergence of interest between BOE and SESL in recent years is
morphing into a conflict of interests. Specifically, BOE seems to have grand aspirations of becoming the
preeminent supplier for all ESL companies, not just to SESL. The following facts support our opinion:
a. Field Research in China revealing the existence of BOE-branded ESLs

b. BOE Chongqing’s supply exclusivity agreement ending within the next 7 months
c. 2022 Cross Licensing agreement between BOE Digital Technology Co Ltd and SESL
d. Observable patterns of BOE’s behavior and long-term strategy
BOE Chongqing Supply agreement: is exclusivity ending?
SESL entered into an exclusive manufacturing agreement with Chongqing BOE Smart Electronics System
Co., Ltd on 1 July 2019 for a term of four and a half years.4 Given that BOE has significantly sold shares
within the last 2 years, and that its share of SESL COGS has declined for the first time ever in 2022, perhaps
BOE is making advanced preparations to extricate itself from the exclusivity agreement 5:
YE December (EUR '000) 2018 2019 2020 2021 2022

Purchases from BOE Technology 7,200 89,500 144,879 223,783 321,136
Total Company COGS ("Purchases consumed") 133,955 189,372 217,776 319,101 479,586
BOE’s and SESL’s incentives are diverging, so whatever historical benefit SESL experienced as a result of
this exclusivity agreement, its unwind may continue to reverse those benefits.
Cross licensing agreement: from 2-year term to unspecified term, and from royalty-based to free
Prior to 2022, SESL had entered into licensing agreements with BOE Digital Technology in 2021 that were
fixed term in nature and provided SESL with compensation. For example, in 2021 the agreement was for
a period of two years and provided a royalty fee arrangement6:
According to the 2022 AR, SESL has now entered into a new licensing agreement – a “cross licensing
agreement” that allows the JV (which SESL divested) to continue using SESL’s historical IP, but without
having to compensate SESL7:
Page 21 of 49
And for an unspecified duration8:
This maneuver seems suspect to us, as BOE seems to be getting something for nothing, just as SESL and
BOE’s interests have started diverging:
 SESL divested its JV stake in 2022 at the same price that SESL paid for it in 2019, despite the fact
the JV’s reported revenue grew 8x.
 SESL effectively exited its presence in China, by fully divesting its interest in the JV.
 Just as SESL exits China, it gave uncompensated and indefinite IP rights to a BOE-linked entity.
BOE’s new agreement with SESL, which grants it free uncompensated use of SESL IP and for unspecified
duration – coupled with other IP moves by Chongqing BOE Smart Electronics Systems 9 – supports our
belief that BOE has grander ambitions of supplying ESLs to a broader universe, maybe even going direct
to market as well. BOE branded ESL solutions, that lack any mention of SES Imagotag, furthers our view.
BOE refers to ESLs as BOE Vusion Series ESLs on August 2022, no mention of SES Imagotag
In a BOE press release published on August 5th, 2022, available only in Chinese, BOE announces that their
BOE-branded price tags won an award10:
Page 22 of 49
In the press release, the only BOE executive mentioned is Bai Feng, described as a VP of BOE, and General
manager of smart retail business. Bai Feng was also on SESL’s board until November 29, 2022, and also
appears as a legal representative and/or manager of the JV (BOE Digital Technology) and BOE YiYun. 11
In a WeChat post found on the JV’s WeChat page, and commenting on the award that the press release
discussed, there are pictures showing BOE Vusion ESLs, with no mention of SES Imagotag 12:
A photo of a BOE exhibit at a 2018 conference showing ESL models displayed on one of its tables 13:
Page 23 of 49
BOE has faced accusations of IP theft before: Is history repeating?
BOE was originally called Beijing Oriental Electronics Group Co., Ltd. In 2001, it was renamed BOE
Technology Group Co., Ltd. It began as a state-owned enterprise fueled by billions in state funds. From its
humble origins, BOE has become a major supplier of screens/displays to the likes of Apple. 14 How did BOE
grow? Tech transfer from foreign companies appears to have been a core driver of its success 15:
“BOE, which was technically behind in the display industry, plans to transfer technology from
foreign countries to catch up with advanced companies and establish a joint venture with foreign
display companies by providing cheap labor.”
As BOE grew and benefitted from foreign IP, it faced allegations of theft and cheating, including:
 BOE accused of stripping technology – BOE acquired Hydis. Soon after the acquisition, BOE faced
allegations from Korean unions that it stripped Hydis of technology before allowing it to fail. 16
 BOE believed to be among Chinese companies that illegally acquired Samsung bendable-screen
technology – In November 2018, South Korean prosecutors indicted executives at a Samsung
Electronics supplier group accused of leaking the smartphone maker's latest display technology
to Chinese rivals. An industry source identified BOE as one of the recipients of the stolen IP. 17
 Apple display supplier BOE may lose all iPhone 14 orders after trying to cheat – BOE was
apparently experiencing problems that it decided to cheat, by quietly lowering the specs on the
iPhone displays it made.18
These historical patterns of alleged behavior remind us of SESL and BOE’s current relationship. In BOE’s
Chinese filings, BOE referred to SESL as a consolidated and integrated subsidiary. 19 But according to SESL’s
filings, their relationship has never been described in the same manner.
Perhaps when BOE owned over 50% of shares (which was as recently as November 2022), BOE saw and
treated SESL as its subsidiary, and saw the relationship as a win-win. Yet as BOE has divested SES shares
over the last few years, and as its share of SESL’s COGS has started to decline, we wonder if BOE has
positioned itself to win regardless of how SESL fares in coming years. That would explain the motive
behind the actions identified in this section of the report and follow historical patterns as well.
Page 24 of 49
Walmart: what “Everyday Low Price” means for suppliers
In late April, SESL announced an expanded Walmart (“WMT”) announcement 1, and financial markets
reacted very positively. We believe the following facts may lead to a reassessment of the deal:
 We calculate that the Walmart Deal may not be profitable for SES Imagotag
 We estimate that incremental revenue may be lower than expectations
 Walmart’s past deals with other suppliers shows that SESL shareholders may have reason to worry
The Walmart Deal may not be profitable
In North America, Walmart is widely associated with its slogan, Everyday Low Price2:
To deliver on this slogan, Walmart has historically extracted low prices from its suppliers and vendors.
That is how Walmart has been able to pass on low prices to customers, proving better value than its
competition. Consequently, being a supplier to Walmart is typically not a highly profitable endeavor.
Our calculations reveal that SESL is in no different position: Walmart is paying (i.e., SESL is receiving)
revenue of ~EUR 5.30 per ESL3:
Stores in Phase 1 500

ESLs installed in Phase 1 60,000,000
ESLs installed per store 120,000
WMT US store base 4,717
ESL per store 120,000
Total ESLs 566,040,000
Total Revenue potential from WMT Deal (EUR) 3,000,000,000
Implied Revenue per ESL € 5.30
Sell-side analysts have independently indicated similar levels of revenue per ESL. 4 The Average selling
price per ESL for this deal is low relative to SESL’s historical averages. Even worse, SESL’s COGS per ESL
have been higher than this EUR 5.30 figure.
Page 25 of 49
With the BOE unwind, and SESL’s COGS per unit rising, we wonder how much margin SESL can generate.
By our calculations, SESL would generate a large loss selling to WMT at EUR 5.30 per ESL, if SESL COGS per
ESL remains at 2022 levels of EUR 6.66 per ESL, as shown below 5:
Why we believe incremental revenue from the Walmart contract may disappoint expectations
Walmart has been a SESL customer for over 10 years, growing to ~400 stores just in Canada by
2021/20226:
Based on the above information, we believe that WMT has become SESL’s largest customer accounting
for 34% of SESL’s total 2022 revenue as described below7:
Page 26 of 49
If we are correct that Walmart is SESL’s largest customer as of 2022, then Walmart has contributed EUR
211 million of 2022 revenues for SES.
Based on the Walmart deal’s Phase 1 details, we estimate that the deal generates EUR 212 million on an
annualized basis8:
SESL FY22 Total Revenue (EUR '000) 620,860

SESL stated largest customer as % of Total Revs 34.0%
Implied Revs generated by largest customer (EUR '000) 211,092
Phase 1 stores 500

Phase 1 ESLs installed per store 120,000
Implied Revenue per ESL € 5.30
Phase 1 Revenue (EUR '000) 317,999
Phase 1 Timeframe 1.5 years
Phase 1 Annualized Revenue (EUR '000) 211,999
These amounts – the implied annualized revenue from Phase 1 and existing 2022 revenues from Walmart
– are nearly identical in amount. Thus, Phase 1 of the Walmart contract seems to preserve, rather than
build on the existing rate of revenue generation from Walmart. Furthermore, sell-side analysts have also
independently indicated similar levels of Phase 1 revenue.9
How Important is SES Imagotag to Walmart: Walmart makes no mention of SESL
SES Imagotag has heavily promoted its relationship with Walmart historically, including its recent deal,
with a large volume of press releases and slide presentations. Contrary to SES’s heavy promotion of this
relationship, we found no mention of “Imagotag” or “Vusion” within Walmart’s corporate website 10:
Page 27 of 49
This suggests to us that SES Imagotag is less critical to Walmart than Walmart is to SES Imagotag. In fact,
given the growing number of ESL players, we believe SESL is far more replaceable for Walmart than widely
believed. Given that SESL’s customer concentration has worsened, we believe SESL is very vulnerable.
How Walmart’s deals with PlugPower and Canoo may foreshadow SES Imagotag’s fate
European-based investors may not be as familiar with Walmart’s reputation nor its specific business
maneuvers as they are to an American audience. For example, from an American perspective:
 Walmart’s “Everyday low prices” typically translates to poor profitability for its suppliers/vendors.
 Walmart deals including warrants have not necessarily spelled good news for its counterparties.
We examine two such deals that included warrants: Walmart’s deals with PlugPower and Canoo.
Walmart and Plug Power first entered into a deal on February 26 th 2014.11 After initial excitement over
the deal (the red circle shows when the deal was announced), PLUG shares declined over 75% below its
pre-deal share price (and nearly 90% from its Walmart deal peak share price) within 2 years 12:
Page 28 of 49
Walmart and PlugPower enter into another deal in 2017, after the 2014 deal
On 21st July 2017, Walmart and PlugPower entered a new deal13, after the initial transaction with Walmart
had apparently been so negative that it required Walmart to step in and guarantee transactions on
PlugPower’s behalf to alleviate financial stress. We believe this is a concrete example of how Walmart’s
“Every-Day Low Price” can spell disaster for its vendors’ profitability.
As we can see in the share price chart of PLUG after its 2017 deal, here too after some initial positive
reaction to the deal, shares actually fell below 50% pre-deal levels within the next 1.5 years 14:
The Canoo Walmart Deal terms resembles the SES Imagotag Walmart Deal
In July 2022, Canoo entered a deal with Walmart.15 WMT committed to buy up to 10,000 EVs from Canoo,
and also received warrants linked to achieving revenue targets. This deal was structured very similarly to
the transaction SESL and Walmart agreed to in April of this year. As we can see in the share price chart
below, after Canoo executed the Walmart transaction, shares rose from already depressed levels, but
have since then declined -66% below the pre-WMT deal share price levels 16:
Page 29 of 49
Vusion Delusion I: limited real-world footprint
SES Imagotag claims to be “the leading retail IoT SaaS solution”
What exactly is SES Imagotag? Its website, press releases, communications directed at investors, would
give the substantial impression that SESL is an innovative tech company. For example, the company claims
to be “the leading retail IoT SaaS solution”, and that the “Vusion Cloud is sold as SaaS” 1:
SESL’s public disclosures directed at all audiences as shown above, give the impression the company is a
SaaS company. Additionally, the company’s communications directed at investors fortifies this impression
as SESL presents a pro forma construct – VAS business – outside of the audit, where they define VAS as
“Value Added Software & Services” – 15% of their total revenue, a material portion of their total revenue 2:
Page 30 of 49
Why we believe SaaS revenue is closer to 0% of total revenue not 15% of total revenue
SESL leaves us with the perception that SaaS is a prominent, sizable, and growing part of the business. We
believe SaaS revenue are far smaller than depicted by the company and its promoters – closer to 0% than
15% of total revenue for the following reasons:
1. Limited real-world footprint: we find that real SaaS companies and solutions are easy to identify
in the real world. In SESL’s case we find limited real-world presence, including minimal web
traffic, app downloads, product/pricing information, and software/programming headcount.
2. Absence of SaaS disclosures in audited reports: We find a conspicuous absence of operating and
financial metrics that real SaaS companies transparently promote, including ARR/MRR,
subscriber counts, deferred revenue related to SaaS, SaaS-related revenue recognition details,
and SaaS revenue segment disclosures in their audited financial statements.
Limited real-world footprint: This is not what a Real SaaS company and solution look like
Real software/SaaS companies, and their solutions, are very easy to track down. And their motive is
obvious: real SaaS companies want to maximize the likelihood that visitors to their website will sign-up
for a trial or payment soon after landing on their websites. We see this with real SaaS companies, such as
Salesforce. After we google “Salesforce” and go to their main site, this is what we see, ‘Start Free Trial’ 3:
Upon clicking ‘Start Free Trial’ we immediately see preliminary pricing, product features 4:
Page 31 of 49
Microsoft Office does something similar, in fact as soon you arrive on their landing page, you immediately
see a menu of pricing and product schemes for their different SaaS solutions 5:
That’s not what we see with SESL’s Vusion. The information they provide on their website looks more like
a generic website, with buzzwords lacking substance behind them.
1. Unclear what (if any) software they are selling, or how it’s priced
2. No evidence of trial options
3. No SaaS product specific contact information, just generic contact info
Below we show the landing page to http://www.ses-imagotag.com6: Where’s the SaaS? Where’s the trial?
Page 32 of 49
If we hover over ‘Solutions’ on SESL’s website we see “THE LEADING RETAIL IOT SAAS SOLUTION” 7:
The ‘contact us’ button shown above didn’t even work
We see no mention of a trial (free or otherwise) on SESL’s website. We also don’t see pricing information,
download details for software, nor demos.8 The so-called “Brochure” is a 2-pager with no clarifying
information; rather it is full of fluff.9
Page 33 of 49
If we scroll down all the way to the bottom, we see another ‘contact us’ button 10:
This time the ‘contact us’ works, except it redirects to the generic ‘contact us’ page 11:
SES Imagotag doesn’t look like a SaaS company, when compared against Salesforce.com:
Feature Real SaaS (e.g. CRM, MSFT) SES Imagotag
Trial/demo YES NO
Product/pricing YES NO
Product-specific contact us YES NO
Generic buzzwords NO YES
Clear path to payment YES NO
Page 34 of 49
Limited Web traffic for their cloud URLs
We audited SESL’s cloud platform URL, vusion.cloud.io. The website barely receives any visitors. We used
3 different website traffic services: Semrush, SE Ranking, and NeilPatel. In all three cases, Vusion.cloud.io
only had 1-2 visitors per month in all of 2022. In 2023, the website had only 1-20 visitors per month. 12 We
suspect that we accounted for most of those visits this year, as part of our diligence process.
2022 2023
Jan Feb Mar April May June July Aug Sept Oct Nov Dec Jan Feb Mar April
Semrush 0 0 0 0 0 0 1 1 0 0 1 1 1 5 9 10
SE Ranking 0 0 0 0 0 0 0 0 0 1 1 1 8 12 21 25
NeilPatel 0 0 0 0 0 0 0 0 0 0 0 2 1 2 12 12
We also audited portal.imagotag.com for traffic per month and observed similar results (0-5 visitors per
month).
Despite promoting itself as “the leading retail IoT SaaS solution” We find no mention of software
engineers/developers/programmers under their employee ‘categories’ 13:
In our experience, real software/SaaS companies headcount includes a large number of engineers.
6 out of the 7 written reviews on the Google Play Store complain that the VSION Link app doesn’t work
The app VUSION Link is on the Google Play store. Among the 7 written reviews, 6 of them complain the
app doesn’t work at all, or in some form, and the comment accompanying the only positive review (in
terms of rating) barely makes any sense14:
Page 35 of 49
Page 36 of 49
Vusion Delusion II: not a SaaS company
SES Imagotag claims to be “the leading retail IoT SaaS solution” but reminds us of Quindell plc
In 2014, Gotham City Research exposed a suspect company called Quindell plc (“QPP”) listed in the UK.
Quindell was led by Its CEO, Robert Terry, who had no prior record of success as CEO of a public company.
Quindell used related party transactions and suspect accounting to overstate revenue and profits.
Quindell also made verifiably false and misleading claims about its SaaS business.1 SESL today reminds us
of Quindell from 9 years ago. In this section, we focus on how SESL’s SaaS claims remind us of Quindell’s,
particularly when comparing their respective SaaS-related financial disclosures.
SES does not disclose standard SaaS metrics: SaaS is either small or non-existent per disclosures
True software/SaaS companies prominently disclose and discuss SaaS/software operating metrics. SESL
does not. This makes no sense, if SESL is legitimately a SaaS company: both SESL and its existing investors
have massive financial motivation to heavily promote SaaS metrics (if they exist). Why? Because real SaaS
companies command high premium valuations.
It is not crazy to infer that SESL – highly capable of misleading promotion and deceit – does not disclose
SaaS metrics because they don’t exist. SaaS, as a revenue driver, does not exist:
 The company does not disclose Annual Recurring Revenue nor Monthly Recurring Revenue
(“ARR” and “MRR”) nor monthly/yearly software subscriber count.
 Neither SESL’s Deferred revenue numbers, nor footnote details, resemble a SaaS company’s; no
mention of software/SaaS/cloud in the company’s deferred revenue disclosures.
 Neither software/Saas/cloud are mentioned as a source of revenue in the very detailed
“Revenue from contracts with customers” section (the revenue recognition section).
 Audited statements (unlike their non audited, pro forma “VAS revenue” which they conveniently
disclose only outside of audited reports) clearly indicate they are material in only one business:
installing and maintaining ESLs.
SESL’s Deferred revenue levels and disclosures do not look like a SaaS company’s disclosures
Deferred revenues are not disclosed as stand-alone line items on the balance sheet; instead, they are
buried within the notes to the financial statements. It is odd that SESL does not disclose subscriber figures,
MRR/ARR, or deferred revenue – all of these are standard disclosures by software/SaaS companies. And
the levels of deferred revenue they report do not resemble those of SaaS companies either 2:
YE December (EUR '000) 2018 2019 2020 2021 2022

Total revenue 187,855 247,585 290,264 422,868 620,860
Deferred revenue 2,472 4,571 5,060 1,624 15,998
Deferred revenue as % of Total revenue 1.3% 1.8% 1.7% 0.4% 2.6%
Page 37 of 49
The low levels of deferred revenue as % of revenue look more like a Quindell rather than a Salesforce
(Quindell was a fraud that pretended to be SaaS, and Salesforce is a well-known SaaS company) 3:
2018 2019 2020 2021 2022

CRM US 66.4% 64.5% 62.4% 59.3% 59.0%
Quindell * 0.0% 0.0% 2.7% 1.6% 1.3%
SESL FP 1.3% 1.8% 1.7% 0.4% 2.6%
* - Quindell's numbers are from the years 2009, 2010, 2011, 2012 and 2013 respectively.
Receivables vs Deferred revenue do not resemble those of a software company
Software companies sell a product that is barely tangible – up front for cash on either subscription or lump
sum basis – and then earn revenue over time, as its customers consume over the lifetime, and as the
company meets its obligations to service the software.
As a result of this business feature, SaaS companies’ deferred revenue tends to exceed accounts
receivable. SESL looks peculiar, as instead, receivables consistently exceed deferred revenue 4:
YE December (EUR '000) 2018 2019 2020 2021 2022

Deferred revenue 2,472 4,571 5,060 1,624 15,998
Trade Receivables 72,254 82,839 87,201 120,234 109,247
Deferred revenue as % of Trade Receivables 3.4% 5.5% 5.8% 1.4% 14.6%
When compared against QPP and CRM, here too SESL looks more like QPP and not CRM 5:
Deferred revenue as % of Trade receivables

2018 2019 2020 2021 2022
CRM US 178.4% 173.9% 172.7% 161.9% 160.5%
Quindell * 0.0% 0.0% 1.3% 1.2% 1.5%
SESL FP 3.4% 5.5% 5.8% 1.4% 14.6%
* - Quindell's numbers are from the years 2009, 2010, 2011, 2012 and 2013 respectively.
No mention of software/SaaS/cloud under revenue recognition section of the audit report
We do not see any mention of software, SaaS, or revenue within the revenue recognition section of the
financial statements (i.e. the Revenue from contracts with customers (IFRS 15) found within 6.1.2 in the
Notes to the consolidated financial statements)6:
Page 38 of 49
Company’s description regarding deferred revenue/income does not sound like SaaS
SESL describes deferred revenue/income as relating to installations or maintenance contracts in all

instances mentioned in their annual reports, there is no mention of software or SaaS 7:
Page 39 of 49
No mention here either8:
Note that SESL uses the terms ‘deferred revenue’ and ‘deferred income’ interchangeably.
From the 2022 AR, referred to as deferred revenue9:
From 2021 AR, referred to as deferred income10:
Page 40 of 49
The company has only one operating segment according to its audited financial statements
SESL makes very clear in its audited financial statements, the company has only ONE operating segment 11:
According to IFRS 8 (specifically 8.13)12:
IFRS 8.13 states: An entity shall report separately information about an operating segment that meets
any of the following quantitative thresholds: a) Its reported revenue, including both sales to external
customers and intersegment sales or transfers, is 10 per cent or more of the combined revenue, internal
and external, of all operating segments. b) The absolute amount of its reported profit or loss is 10 per
cent or more of the greater, in absolute amount, of i.) the combined reported profit of all operating
segments that did not report a loss and ii.) the combined reported loss of all operating segments that
reported a loss. c) Its assets are 10 per cent or more of the combined assets of all operating segments.
SESL seems to be intentionally blurring the perceived segments of its business,
In non-audited communications with investors, the company presents its results as if it has two operating
segments (where VAS contains Cloud/SaaS)13:
Page 41 of 49
So herein lies the deception:
 On the one hand, SESL, in its audited financial statements, presents its business as if it consists
of only one operating segment.
 On the other hand, SESL presents its business as if it consists of two segments, including a SaaS
segment they label as VAS, in all its investor materials outside the scope of its auditors.
We estimate SES’s SaaS revenue is closer to 0% of total revenue, not 15% of revenue
Based on limited real-world footprint and the company’s financial disclosures which do not confirm the
presence of SAAS as a business, we have come to two conclusions:
1. SAAS revenue is closer to 0% of total revenue, not 15% as would be implied by VAS.
2. What the company calls SaaS is actually more of a feature that the company provides its
customers, as part of their installation/maintenance, than a standalone business nor product.
We believe SaaS revenue is ~0% of revenue, for all the reasons stated in this and the prior section of the
report. But in the remote chance the company’s deferred revenue disclosures are materially inaccurate
and incomplete, and they do contain SaaS revenues (the company’s current disclosures clearly state that
deferred revenue pertains to installation and/or maintenance contracts, not SaaS/software contracts),
then in that scenario, we estimate that SaaS has been at most 2.7-5.3% of total revenue, not 15% 14:
Estimating the true SaaS revenue for SESL

YE December (EUR '000) 2018 2019 2020 2021 2022
Average SaaS Revenue 5,039 9,318 10,314 3,310 32,611
Total revenue 187,855 247,585 290,264 422,868 620,860
Implied SESL Average SaaS revenue as % of Total Revenue 2.7% 3.8% 3.6% 0.8% 5.3%
We estimate SESL’s SaaS revenue by taking their deferred revenue balances and multiplying them by a
factor to arrive at estimated SaaS revenue. The factor is derived from a range of deferred revenue as %
total revenue from SaaS company, Salesforce.com, as we have more than 20 years of data to work with.
The Vusion Illusion: fake since inception? SESL can’t get their Vusion story straight
When did Vusion launch? In some parts of its 2021 Annual Report, SESL claims Vusion launched in 2018.
While in other parts of the same 2021 Annual Report, the company claims Vusion launched in 2017 15:
Page 42 of 49
Valuation: worth no more than EUR 30 per share
Is SES Imagotag a good business?
Valuation considerations that CEO Thierry Gadou will not reveal 1:
 SESL has not generated cumulative free cash flow over 20 years, FCF has worsened over time.
 Earnings quality is very low, as EBITDA and free cash flow tell very different stories.
YE December (EUR '000) 2018 2019 2020 2021 2022

EBITDA 6,500 4,000 16,000 32,300 58,600
Net Income -5,900 -13,139 -7,643 2,109 18,573
Free cash flow -30,750 -16,709 -15,742 -349 -48,190
Capital issued 26,705 63,988 32,539 4,756 130
 We estimate that Revenue and EBITDA are overstated, as discussed in this report.
 Contrary to how the company portrays itself as a SaaS /cloud business – implying that the quality
of its business has been improving – we don’t see evidence of these improvements.
 We estimate SESL would’ve run out of cash but for its capital raises and BOE rescue.
 The CEO’s public company track record is highly questionable.2
If SESL trades in-line with its peers, then SESL is at best a EUR 30 stock
 SESL shares currently trade at a premium to its peers, on a revenue multiple basis. If shares
were simply to trade in-line to its peers’ average price/revenue multiple, SESL is a EUR 30 stock 3:
 If the market were to warrant that shares deserve a discount to peers, due to the issues we
discussed in this report, shares would trade materially lower than EUR 30 per share.
Page 43 of 49
End Notes
Introduction
1. SESL 2019 – 2022 Annual Reports. 2021 Annual Report, as originally reported
- We define Free Cash flow as: Cash flow from Operating Activities - Cash flow from Investing
Activities - Repayment of Leases (most, if not all, of the “leases” are not leases in the
conventional sense as we discuss in Part II)
- Capital issued is calculated as: Loans issued + Amounts received from shareholders during
share increase
- Leasing-related debt started being stated by SESL from 2019 onwards following SESL's
application of IFRS 16 on January 1, 2019.
Undisclosed related party transactions and round-trip revenue
1. https://www.google.com/finance/quote/PROAC:EPA?sa=X&ved=2ahUKEwjQz-
7xps__AhWYZ8AKHamtD4kQ3ecFegQIKhAf&window=MAX
2. Bloomberg 'Historical Price Table' function
3. SESL press release dated 21st December 2017
6. SESL 2017 – 2022 Annual Reports and company presentations
8. SESL 2018 - 2022 Annual Reports. 2021 Annual Report, as originally reported
- The 2020 and 2021 'Sales to BOE Technology' figures reported in USD by SESL. We convert
to EUR.
- The 2022 'BOE Digital Technology' sales are from Q1 22 to Q3 22 only. This is because the JV
was deconsolidated by Q4 of FY22.
9. SESL 2022 Annual Report
11. SESL 2018 – 2022 Annual Reports
12. SESL 2018 – 2022 Annual Reports, https://www.seair.co.in/us-import/product-electronic-shelf-
label/i-ses-imagotag/e-boe.aspx
13. SESL 2019 Annual Report: “In addition, an exclusivity agreement was signed in the second half of
2019, with the entity holding the Chongqing plant of the BOE group: the volume projection over
the next five years indicates that the company will not use all of the production currently installed
by the plant.”
14. BOE Technology Group press release (in Chinese) dated 29 th November 2022
15. BOE Technology Group press release (in Chinese) dated 29 th November 2022
16. Information disclosed by BOE from the November 2022 press release is compared to SESL’s H1
2022 Payables and Receivables (obtained from their H1 22 Semi-Annual Report).
Page 44 of 49
19. SESL 2021 and 2022 press release and Annual Reports
20. SESL 2018 – 2021 Annual Reports and H1 2022 Semi-Annual Report
21. SESL press release dated 22nd November 2022
22. The 'Proceeds from SESL share sales' row = sum of BOE’s implied gain/(loss) from its stake sales
in SESL in 2021 and 2022 (converted in RMB). The 'BOE’s Net Income to common shareholders'
row is obtained from BOE’s 2022 Annual Report.
23. The 'BOE Technology Group: Revenue' row are BOE Technology Group’s 2018 – 2022 filings
(disclosed in RMB that we convert to EUR). The 'China JV Revenue + Roundtrip Revenue' row is
from SESL’s 2018 – 2022 Annual Reports. 2021 Annual Report, as originally reported
- The 2022 'BOE Digital Technology Co. Ltd revenue' is from Q1 22 to Q3 22 only. This is
because the JV was deconsolidated by Q4 FY22.
2019-2022 Revenue from the BOE Joint Venture are suspect
1. SESL press release dated May 17th 2019

4. SESL press release dated May 17th 2019
because the JV was deconsolidated by Q4 FY22.
6. SESL CMD presentation dated 9th November 2022
because the JV was deconsolidated in FY22.
8. SESL 2021 Annual Report and November 2022 CMD presentation
21. https://www.boe.com/en/Enterprise/DigitalSignageDisplay
22. https://dh.yesky.com/378/657932378.shtml
Page 45 of 49
23. www.boedt.cn
24. The JV’s WeChat pages, available in-app
25. The JV’s WeChat pages, available in-app
26. Image on left-hand side: www.boedt.cn and image on right-hand side: Baidu web search
EBITDA: We think 106% of 2022 profits are suspect

2. SESL 2019 – 2022 Annual Reports. 2021 Annual Report, as originally reported by SESL
3. Risk factors in SESL’s 2022 Annual Report
5. SESL 2018-2022 Annual Reports. Pricer Annual Reports 2018-2022
7. Pricer 2018 – 2022 Annual Reports
Activities
share increase
9. SESL FY22 Results presentation dated March 8th 2023
The BOE Unwind: from win-win to diverging interests
2. The chart shows our Avg COGS / Avg labels sold calculations from the table above this chart
Page 46 of 49
9. https://www.patentguru.com/assignee/chongqing-boe-smart-electronics-system-co-ltd
10. https://www.boe.com/company/dynamic-385195f167e74cb294a11797862e2fdb
11. https://www.actusnews.com/en/ses-imagotag/pr/2022/11/29/changes-to-ses-imagotag_s-
board-of-directors-and-nomination-of-peter-brabeck-letmathe
12. The JV’s wechat pages, also here: https://www.shifair.com/informationDetails/31449.html
13. https://dh.yesky.com/378/657932378.shtml
14. https://cio.economictimes.indiatimes.com/news/strategy-and-management/how-a-tumbling-
chinese-company-became-the-largest-display-maker/68683035
15. https://gigazine.net/gsc_news/en/20211214-china-oled-supplier-boe-technology/
16. https://cio.economictimes.indiatimes.com/news/strategy-and-management/how-a-tumbling-
chinese-company-became-the-largest-display-maker/68683035?redirect=1
17. https://asia.nikkei.com/Business/Companies/Samsung-supplier-indicted-in-leak-of-OLED-tech-
to-China
18. https://9to5mac.com/2022/05/20/apple-display-supplier-boe/
19. BOE Technology Group 2022 Annual Report
Walmart: what “Everyday Low Price” means for suppliers
1. SESL press release dated 27th April 2023

2. https://www.google.com/search?rlz=1C1CHBF_en-
GBGB979GB979&sxsrf=APwXEdciv0s8jmrcOoZgRNkGdiUWBJPa2g:1687210804290&q=walmart+
everyday+low+price&tbm=isch&sa=X&ved=2ahUKEwi-
mpqFptD_AhUaRsAKHZFCBwMQ0pQJegQICxAB&biw=2400&bih=1211&dpr=0.8
3. Non-calculations are from SESL’s press release on the Walmart deal dated 27 th April 2023. The
Walmart US store base taken from Walmart’s 10K filing as of January 31, 2023.
4. Oddo broker report
5. The chart shows our Avg COGS / Avg labels sold calculations from the table in the “BOE Unwind:
from win-win to diverging interests” subsection of this report
6. SESL Q1 23 sales presentation dated 27th April 2023
8. SESL’s 27th April 2023 press release on the Walmart deal, and also SESL’s 2022 Annual Report.
9. Stifel and Portzamparc BNP Paribas Group broker reports
10. Searches on Walmart’s corporate website
11. https://www.globenewswire.com/news-release/2014/02/26/613448/9619/en/Plug-Power-
Receives-Milestone-Order-From-Walmart-for-Multi-Site-Hydrogen-Fuel-Cell-Deployment.html
12. PLUG US stock price chart via Bloomberg from June 2013 to December 2018
13. https://www.globenewswire.com/news-release/2017/07/21/1055627/0/en/Plug-Power-
Announces-Expanded-Collaboration-With-Walmart.html
14. PLUG US stock price chart via Bloomberg from January 2016 to December 2019
Page 47 of 49
15. https://corporate.walmart.com/newsroom/2022/07/12/walmart-to-purchase-4-500-canoo-
electric-delivery-vehicles-to-be-used-for-last-mile-deliveries-in-support-of-its-growing-
ecommerce-business
16. GOEV US stock price chart via Bloomberg from January 2021 to June 2023
Vusion Delusion I: limited real-world footprint
1. https://www.ses-imagotag.com/
2. The first 2 images are from SESL’s CMD presentation dated 9 th November 2022, and the third
image is from SESL’s FY22 Sales presentation dated January 26 th 2022
3. https://www.salesforce.com/
4. https://www.salesforce.com/form/signup/freetrial-elf-v2-easy/?d=cta-jumbotron-1-freetrial-
elf_360&elfez=y
5. https://www.microsoft.com/en-ww/microsoft-365/business/compare-all-microsoft-365-
business-products?market=hk
6. https://www.ses-imagotag.com/
7. https://www.ses-imagotag.com/products/cloud-platform/
8. https://www.ses-imagotag.com/contact-us/
9. SESL brochures per Industry (ex: Grocery, Pharmacy) downloaded by us
10. https://www.ses-imagotag.com/products/cloud-platform/
11. https://www.ses-imagotag.com/contact-us/
12. Semrush, SE Ranking and NeilPatel tracking data through April 2023
14. Google Play App Store reviews
Vusion Delusion II: not a SaaS company
1. https://www.gothamcityresearch.com/post/2014/04/22/quindell-plc-a-country-club-built-on-
quicksand
- The 2022 'Deferred Revenue' number is from SESL's English 2022 Annual Report.
3. CRM US and SESL FP figures calculated from their respective 2018 – 2022 Annual Report filings.
Quindell’s figures are calculated from their 2009 – 2013 filings.
- For SESL, the 2022 calculation is based on the 'Deferred Revenue' figure in SESL's English
2022 Annual Report.
- The 2022 ‘Deferred Revenue’ figure is taken from SESL's English 2022 Annual Report.
5. CRM US and SESL FP figures calculated from their respective 2018 – 2022 Annual Report filings.
Quindell’s figures are calculated from their 2009 – 2013 filings.
Page 48 of 49
12. https://www.ifrs.org/content/dam/ifrs/publications/pdf-standards/english/2022/issued/part-
a/ifrs-8-operating-segments.pdf?bypass=on
13. SESL CMD presentation dated 9th November 2022
14. The 'Average SaaS revenue' row is calculated based on the average MIN, MAX, Average, and
Median Deferred revenue as % of Total Revenue of CRM US from 2002 to 2022. The 'Total
revenue' row is obtained from SESL’s 2018 – 2022 Annual Reports (2021 Annual Report, as
originally reported).
Valuation: worth no more than EUR 30 per share
Activities - Repayment of Leases
share increase
2. Thierry Gadou’s only prior stint as CEO of a publicly traded company was with Hubwoo. Hubwoo
is a failure.
3. Chart data compiled from Bloomberg
Page 49 of 49

SES Imagotag: THE CIRCULAR DANCE WITH A CHINESE TWIRL - PART I

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SES Imagotag: THE CIRCULAR DANCE

SES-Imagotag’s sphere: BOE Technology Group (and its subsidiaries’) sphere:

Undisclosed related party balances between SESL and BOE

SES-Imagotag SA BOE Technology Group Co. Ltd

The China JV benefits from IP

BOE YiYun owns ~51% of the China JV

SUMMARY OF THE BASES OF OPINIONS Enterprise value: €2.69B

YE December (EUR '000) 2019 2020 2021 2022

YE December (EUR '000) 2018 2019 2020 2021 2022

YE December (%) 2018 2019 2020 2021 2022

At least 7%-13% of 2020-2022 revenue appear suspect

YE December (EUR '000) 2018 2019 2020 2021 2022

Is SESL selling to itself? Round-trip transactions between BOE and itself

BOE (RMB million) As at 30/09/2022

SESL (EUR '000) From BOE % of SESL Total

Round-trip transactions in prior years indicate a pattern of behavior

YE December (EUR '000) 2018 2019 2020 2021 H1 2022

YE December (RMB '000) 2021 2022

YE December (EUR '000) 2018 2019 2020 2021 2022

YE December (EUR '000) 2019 2020 2021 2022

YE December (EUR '000) 2019 2020 2021 2022

YE December (EUR '000) 2019 2020 2021 2022

Non-ESL digital signage differ from ESLs

 The JV shares the same phone number as BOE26:

The source of JV’s 2020-2022 revenue remains unaccounted for

Comparing EBITDA margins

2. Lowest cash balance as a % of revenue in its history:

3. Lowest cash balance as a % of debt in its history:

YE December (%) 2018 2019 2020 2021 2022

a. Field Research in China revealing the existence of BOE-branded ESLs

BOE Chongqing Supply agreement: is exclusivity ending?

YE December (EUR '000) 2018 2019 2020 2021 2022

The Walmart Deal may not be profitable

Stores in Phase 1 500

SESL FY22 Total Revenue (EUR '000) 620,860

Phase 1 stores 500

How Important is SES Imagotag to Walmart: Walmart makes no mention of SESL

The ‘contact us’ button shown above didn’t even work

Feature Real SaaS (e.g. CRM, MSFT) SES Imagotag

Product-specific contact us YES NO

Generic buzzwords NO YES

Clear path to payment YES NO

YE December (EUR '000) 2018 2019 2020 2021 2022

2018 2019 2020 2021 2022

Receivables vs Deferred revenue do not resemble those of a software company

YE December (EUR '000) 2018 2019 2020 2021 2022

Deferred revenue as % of Trade receivables

No mention of software/SaaS/cloud under revenue recognition section of the audit report

SESL describes deferred revenue/income as relating to installations or maintenance contracts in all

From the 2022 AR, referred to as deferred revenue9:

From 2021 AR, referred to as deferred income10:

According to IFRS 8 (specifically 8.13)12:

SESL seems to be intentionally blurring the perceived segments of its business,

Estimating the true SaaS revenue for SESL

Valuation considerations that CEO Thierry Gadou will not reveal 1:

YE December (EUR '000) 2018 2019 2020 2021 2022

Undisclosed related party transactions and round-trip revenue

2019-2022 Revenue from the BOE Joint Venture are suspect

1. SESL press release dated May 17th 2019

EBITDA: We think 106% of 2022 profits are suspect

1. SESL 2022 Annual Report