Annual Management Board Report on Operations of the PCF Group Capital Group: 2025

The 2025 fiscal year represented a period of profound strategic retrenchment for PCF Group, as the company pivoted away from self-publishing and virtual reality development to stabilize its financial position. The primary thesis of the year’s operations centered on a return to a work-for-hire business model, prioritizing partnerships with major global entities such as Microsoft, Krafton, 2K Games, and Sony. This shift was necessitated by the termination of key projects like Gemini and the suspension of Bifrost, alongside the commercial underperformance of internal titles including Lost Rift and Tracked: Shoot to Survive.

Financially, the Group faced significant volatility, reporting a net loss of approximately 124.3 to 170 million PLN, largely driven by 131.3 million PLN in impairment charges and the amortization of development costs. Total assets declined by 42%, and equity was reduced by 45% as the company absorbed the costs of restructuring. To address liquidity constraints, PCF Group successfully executed a private placement of Series H shares, raising 19.7 million PLN, and implemented rigorous cost-optimization measures, including substantial workforce reductions. Despite these challenges, the company achieved a 5% year-over-year increase in sales revenue, supported by its ongoing co-development contributions to major industry projects.

Corporate governance underwent notable changes in 2025, with the abolition of special personal rights regarding board appointments, centralizing oversight within the Supervisory Board and General Meeting. While the company maintains a centralized internal control system overseen by the CEO and an active Audit Committee, it currently lacks formal ESG strategies or dedicated compliance departments. Moving forward, the Group remains heavily reliant on a concentrated portfolio of external partners and faces ongoing risks related to currency fluctuations, key-person dependency, and the evolving legal landscape surrounding artificial intelligence in game development.