Interim report Q1 2026 for Beyond Frames Entertainment AB (publ)

First quarter, January 1 - March 31, 2026

• Sales amounted to 22,136 (39,133) kSEK
• Operating profit before depreciation and amortization and shares in associated companies'  earnings (EBITDA) amounted to -522 (3,061) kSEK, a decrease of 117% compared to the same period last year.
• Profit after financial items amounted to -7,365 (-3,760) kSEK, impacted by depreciation of capitalized development costs, which starts already during development
• EBITDA per share amounted to 0.03 (0.17) SEK
• Profit per share after financial items amounted to -0.40 (-0.20) SEK 
• Cash and cash equivalents at the end of the quarter amounted to 11,259 (14,730) kSEK. Cash and cash equivalents amounted to 8,865 kSEK at the end of the previous quarter
• After the quarter, TMNT: Empire City launched on Meta Quest, Steam VR, and Pico. Despite positive player reception and that the game is on track to be the most successful self-published game in the company's history, the game's initial commercial performance fell below the  company's expectations. As a result, after the quarter, the company announced that the previously communicated longterm sales targets for the title were being withdrawn.
• A strategic review and reprioritization of the company was announced in March and May to  strengthen the long-term positioning, by reviewing future financing alternatives, targeting an annual cost saving of 38-47 MSEK, and expand its future project pipeline beyond VR gaming to include projects targeted for PC and console distribution.

CEO Comments

Navigating a More Disciplined Market Environment. 
The first quarter of 2026 reflected a continued transition period for both Beyond Frames and the broader XR industry. While long-term engagement trends in immersive entertainment remain encouraging, the operating environment across the sector continues to demand greater financial discipline and increased efficiency.

In response to these market conditions, our primary focus during the quarter was preparing for the launch of Teenage Mutant Ninja Turtles: Empire City while simultaneously adapting the organization to current market realities.

Revenue during the quarter came in below the comparable period last year, reflecting lower activity levels across parts of the portfolio as well as a reduced number of titles in active development. At the same time, we continued to improve the company's operational structure and cost base. During March, we announced a strategic reprioritization of the organization targeting annual cost savings of approximately 23-27 MSEK. These measures were initiated proactively as part of our ongoing efforts to build a more resilient company positioned for long-term value creation and we will also expand future project pipeline beyond VR gaming to include projects targeted for PC and console distribution.

Studios and Publishing
During the quarter, Cortopia Studios finalized development and prepared for the release of our self-published game; Teenage Mutant Ninja Turtles: Empire City, the studio's largest and most ambitious project to date. Launching a globally recognized franchise in VR at this scale represents an important milestone both for the studio and for Beyond Frames as a company.

Following the end of the quarter, TMNT: Empire City launched on Meta Quest, Steam VR, and Pico. While positive player reception and community feedback have been encouraging, and the game is on track to be the most successful self-published game in the company's history, the game's initial commercial performance fell below the company's expectations. As a result, after the quarter, we announced that the previously communicated long-term sales targets for the title were being withdrawn, and that a further review of the company's financials and operations would take place.

In connection with this review, we also announced additional proposed operational measures expected to generate a further 15-20 MSEK in annual operating expense reductions, bringing the total targeted annual savings to approximately 38-47 MSEK if fully implemented. In parallel, we are engaged in discussions to extend the maturity of our revolving credit facility while also evaluating additional financing opportunities.

We acted only several days after launching because we believe maintaining financial flexibility and operational discipline is critical in the current market environment. While these decisions are difficult, they are intended to strengthen the company's long-term positioning and align our organization with the realities of today's XR market. We continue to have discussions with partners regarding future projects and are expecting to launch our next game during H2 2026.

At the same time, we continue to believe the experience, capabilities, and strategic relationships developed through projects such as TMNT: Empire City remain valuable assets for Beyond Frames moving forward. Our ability to work with globally recognized intellectual property, develop technically advanced XR experiences, and distribute across major XR 

platforms continues to differentiate the company within the immersive entertainment space. Despite the financial shortfall, platform partners and IP owners are pleased with our execution, and we look forward to working with them again on future projects.

Looking Forward
Manufacturers still continue to invest in new hardware, while smart glasses are already showing strong sales momentum and production capacity is being expanded ahead of broader market adoption. Several industry players have signaled increased volumes and additional device launches in the coming years. We are seeing opportunities to contribute with our experience in immersive design and XR content for this next generation of devices.

Our immediate priorities are clear: improving operational efficiency, protecting liquidity, and maintaining strategic flexibility while continuing to support our portfolio and long-term opportunities within immersive entertainment.

We are entering the next phase of Beyond Frames with a narrower operational focus. While near-term market conditions remain challenging, we believe the actions taken during and after the quarter position the company on a stronger and more sustainable long-term foundation.

Our objective remains unchanged: to become the global leader in immersive entertainment.

Thank you to our players, partners, team members, and shareholders for your continued trust as we execute on this vision.

Ace St. Germain,

CEO Beyond Frames Entertainment AB (publ)

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