Letter from the CEO October 2022

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The autumn continues to be characterized by a shaky existence on the financial markets in the form of continued rising inflation in combination with interest rate increases and higher electricity prices. Our capital acquisition process has, as a result of the world situation, dragged on and it is considerably tougher to raise capital today. We continue to meet with investors and the board has recently decided to lower the valuation of THiS Group to SEK 150 million, so that we can succeed in raising the capital we need. During the last board meeting, on 20 October 2022, the budget for 2022/2023 was revised based on the financial situation. The valuation is now in line with the new budget and the strategy we will work from in the future.

Risk minimization based on the world situation
The economic situation has meant that we have had to adapt our way of working more and more to the new situation. We are a global company with a part of our operations located in Asia. By being active on several continents, we diversify and thus minimize the risk, which feels safe. In recent months, we have placed a greater focus on the regions that are less sensitive to economic conditions.

Karuu in a pilot project with a larger player
The wholly owned subsidiary Karuu has recently started a pilot project together with a larger player with a focus on the Chinese market. The aim is to scale up the business further and we see that there is good potential to expand the product range significantly towards the end of 2022. The focus of this pilot project is on personal care and skin care products and I look forward to telling you more about the pilot project and its outcome at a later opportunity.

Signed MoU with LGR Global
We have recently signed an MoU (Memorandum of Understanding) with LGR Global, a global fintech company with innovative solutions for cross-border trade towards, among other things, the Asian market. The agreement will make it easier for our existing companies and their clients with business in Asia, and they will make it easier in the dialogues we have with future acquisition candidates.

WC in table tennis and SC in surfing
Recently, the WC in table tennis has ended and shortly the Swedish championship final in Surfing will be held in Texas. Sureka, which can be seen on the Swedish participants' shirts, has received a lot of attention during the World Cup in table tennis and is also expected to receive it shortly in the USA. Sureka is our DNA for "Connecting Health with Wealth" and it is becoming increasingly clear as a concept but also as a brand internationally.

Sureka was negatively affected by salmonella outbreaks
In recent months, great uncertainty arose regarding the availability of chocolate raw materials for the Sureka concept. The factory in Belgium, where the chocolate is made, was hit by a salmonella outbreak, which led to the factory being shut down. Now during the month of October, however, we have secured the necessary raw materials for further production in Sweden.

Manufacturing in other countries
Manufacturing and producing in other countries in order to ultimately achieve higher margins on the products has been part of our strategy and we are now in dialogues and final negotiations with several actors abroad where we are reviewing whether we can implement this in a cost-effective way.

Tough times in Europe have made production more expensive than ever and eaten up all the margin that many products of small and medium-sized companies have. For many companies it is now about survival and I strongly believe in our positioning. Manufacturing outside the Nordics will create better cost control and we will thus maintain our competitiveness.

Executive of THiS R&D
During the last board meeting, the decision was made to implement THiS R&D. The purpose is to be able to offer services and systems within blockchain technology to companies operating within our niche. I look forward to telling you more about our services and the strategic goal we have for the blockchain system we offer in the next CEO letter. The blockchain system, which was developed together with researchers and professors from, among others, KTH, is very likely one of the best investments we have implemented.

We all need to persevere now, one day this recession will turn around and then we must make sure we are well positioned. Finding new solutions makes us entrepreneurs stronger than ever and I am sure that it won't be long before brighter times await.

Ali Farmandeh,
President and CEO, THiS Less-is-more Group AB (publ)

If you don't follow us on social media, you are most welcome to do so @THiS Group

Jacob Svensson
Investor Relations

THiS Less-is-more Group AB is building a company group with a focus on health and a healthy lifestyle. These companies share the need for centralized digitization, distribution and commercialization of products and services, and through sustainable business will contribute to reducing the incidence of obesity, type 2 diabetes, cardiovascular disease and other public diseases.