Oct 26, 2023

Quest for Growth : Business update 30 September 2023 October 26, 2023 at 11:46 am EDT Share PRESS RELEASE The enclosed information constitutes regulated information as defined in the Royal Decree which have been MANAGER'S Source: Estimate by Capricorn Partners NV Results Quest for Growth closed the first nine months of its financial year with a net loss of €5.5 million. The return on equity capital was -3.83%, without taking into account the increase in the number of outstanding shares, amounting to around 2.9%. Quest for Growth's share price decreased by 15% over the first nine months of the year to a closing price of 5.10 euros on 30 September 2023. The discount of the share price in relation to the net asset value rose to 31.1% at the end of the quarter, compared to 24.3% at the end of 2022. Market Environment The European stock market index STOXX Europe 600 Net Return rose by 8.5% over the first nine months of 2023. The STOXX Europe Small 200 Net Return rose by 3.1% over the same period. Thus far, 2023 has had its ups and downs as far as the stock exchange is concerned. While the first quarter was still marked by problems in the banking sector and high volatility in equity markets, the bulls regained the upper hand in the second quarter. Fuelled by a technological breakthrough in artificial intelligence, the beginning of August saw both the S&P 500 in the United States and the STOXX Europe 600 reaching new heights for this year. And that's when market sentiment slowly began to turn. Investors once again had their sights on rising long-term interest rates across the world. In the US, the 10-year Treasury yield reached its highest level since the beginning of 2008. The 10-year bond yield in Germany is approaching 3%, a level not seen since mid-2011. Most companies are managing to keep profits at a high level. European Small and Mid Caps however did struggle so far in 2023 and have been underperforming considerably on the stock market since mid-2021 compared to larger and more liquid stocks. The investment climate for unquoted shares is very challenging, especially for those companies that need additional money. Investments in quoted equities The estimated gross performance of listed shares has been slightly negative over the last nine months. Exceptions to this in the portfolio thus far this year include: B&C Speakers (+33%), an Italian manufacturer of components for loudspeakers; the Liège-based Belgians from EVS Broadcasting Systems closing at 27% in positive territory; and the 'Danish' Belgians of Jensen Group posted a share price rise of just under 23%. All three companies went through an extremely difficult period during the 2020 and 2021 lockdowns. That said, during this exceptional period, all three were able to rely on a rock solid balance sheet, market leadership in a very specific niche and management with a strategic vision that looks beyond the next round of results reporting. It is these ingredients that form the basis for the strong results noted by these three companies over 2023. The company posting the biggest drop was German Stratec (-45%), a manufacturer of medical diagnostics equipment. Stratec bore the brunt of the sharp drop in demand for Covid tests. Another German company, ABO Wind, developer of renewable energy projects, saw its share price fall by almost 32% this year, unlike the steep rise in its share prices in recent years. Austria-basedMayr-Melnhof(-13%) faced a drop in demand for its cardboard products, compounded by the fact that it failed to sufficiently charge on increases in the price of raw materials to its end customers. During 2023, Quest for Growth bought one new position in SII (Société pour l'Informatique Industrielle). The company focuses on technology support and IT consultancy to companies in the aviation, telecoms and utilities sectors, for instance. In recent years, SII has achieved an above-average growth, mainly through geographic expansion in Eastern Europe. SII's founders are still on board and opt for a decentralised structure with a focus on local entrepreneurship to expand the business further. SII has a considerable net cash position and despite the strong growth, the share is valued low. Lei 19 | 3000 Leuven | Belgium | T: +32 16 28 41 00 | www.questforgrowth.com | quest@questforgrowth.com 1 We said goodbye to a total of four companies. Gurit, SAP, Steico and Umicore. The Swiss company, Gurit, a supplier in the wind power sector, saw its profitability decline significantly over the past two years. After a few good years, Steico saw growth and profitability decline in the wake of increased competition for wood fibre insulation in the domestic market in Germany. We took advantage of a temporary rebound in its share price when Irish Kingspan took over a majority interest in Steico from its founder. Umicore witnessed a further drop in the price of precious metals, while investment pressure for its battery division is set to remain high for the foreseeable future. Investments in venture and growth capital The Liege-based company Miracor Medical, specialised in interventional cardiology, was unable to attract new investors. The company has halted the pre-marketing of its PiCSO device and let go some of its employees. The value of Miracor Medical was already fully written off at the end of the 2022 financial year. After the acquisition of HalioDx in 2021, part of the escrow amount was received during the second quarter of 2023. The remaining part will be paid out later and is currently valued at a 10% discount. Investments in venture and growth funds Confo Therapeutics was able to conclude two successful agreements at the Capricorn Health-Tech Fund. Confo Therapeutics, which has developed a platform for the discovery of medicines focused on G-protein-linked receptors (GPCRs), announced a global licensing agreement with Eli Lilly to finance the further phases of the clinical development of a medicine for treating pain due to nerve damage. The company subsequently also announced a collaboration with the large Japanese pharma company Daiichi Sankyo for the development of medicines to combat neurological illnesses. For both agreements, Confo Therapeutics will receive an advance payment and milestone payments. Following the 2017 sale of Ogeda to Astellas Pharma in the Capricorn Health Tech Fund, a potential milestone payment is still outstanding. Astellas Pharma has published that its application for a new drug for fezolinetant has been approved with the US FDA. As a result, the total amount of the milestone was released by Astellas Pharma into an escrow account. This escrow account will be released and paid out to Ogeda's former shareholders after one year. The valuation has been positively adjusted as a result. During the second quarter of 2023, Capricorn Digital Growth Fund invested in the Belgian company VoxelSensors. The company is developing a revolutionary 3D perception system for fusing physical and digital worlds. Their Switching Pixels™ system is a revolutionary sensor architecture designed for laser beam scanning-based 3D perception and offers low latency at low power consumption, as is required for future extended reality applications. During the third quarter of 2023, Capricorn Cleantech Fund, which is in liquidation, sold the last shares in Avantium, a Dutch company. This leaves the fund with one participating interest in FRX Innovations. At Capricorn Sustainable Chemistry Fund, the German company Prolupin had insolvency proceedings initiated and has now been declared bankrupt. In the third quarter, the Dutch company Black Bear Carbon resorted to filing for suspension of payments. Lei 19 | 3000 Leuven | Belgium | T: +32 16 28 41 00 | www.questforgrowth.com | quest@questforgrowth.com 2 Simplified capital structure, increased number of ordinary shares and reduced rights for preference shares The Extraordinary General Meeting of 30 March 2023 has made the following unanimous decisions: The preferred class of shares A and the preferred class of shares B are merged into one class of preference shares. Of the 1,000 existing preference shares, 500 will be divided into 535,249 ordinary shares and lose their rights as preference shares. As a result, 535,249 ordinary shares will be added without increasing capital, which means the intrinsic value of each ordinary share is diluted by 2.86%. These additional 535,249 ordinary shares are subject to a lock-up obligation. Every six months, 25% of the non-transferability will be eliminated so that the shares are fully marketable as from 30 March 2025. Another 500 preference shares remain which continue to be reserved as variable incentive for the active management and on which a purchase option rests to the benefit of the Managing Company. The 500 preference shares are entitled to propose two candidate directors of the board of directors of QfG. The surplus share of the dividend that is distributed to the preferred shareholders will no longer be calculated based on the share of the net profit which exceeds the amount necessary to pay all shareholders a reimbursement which is equal to a nominal value of 6% on an annual basis, but will be calculated based on the share of the dividend which exceeds the amount necessary to pay the shareholders a reimbursement equal to a nominal value of 6% cumulative and recoverable for previous years in which there were insufficient or no dividend distributions; this is to be calculated from 1 January 2023. 7. The surplus preferential dividend entitlement is reduced from 20% to 10% so that the fraction of the surplus share of the dividend cred- ited of all shareholders is raised from 80% to 90%. Lei 19 | 3000 Leuven | Belgium | T: +32 16 28 41 00 | www.questforgrowth.com | quest@questforgrowth.com 3