Q2 – iZafe Group

iZafe Group Q2 Interim Report, April-June 20234

iZafe Group AB (publ.) presents today, August 30, its report for the second quarter.

Financial Performance in Summary

Net sales for the quarter amounted to SEK 168 thousand (SEK 403 thousand). The decrease in sales during the quarter is primarily attributable to an adjustment of previously invoiced amounts from Q1. Approximately 5% of the units produced did not meet quality standards and have therefore been adjusted in this quarter, with invoicing planned for a later date. The quarter’s sales reflect revenue from the sale of the digital medication robot Dosell and the medical device Pilloxa.
The operating result (EBIT) for the quarter amounted to SEK -4,011 thousand (SEK -5,097 thousand).
The operating profit before depreciation (EBITDA) for the quarter amounted to -3,027 (-3,135) TSEK.
The result after financial items for the quarter amounted to -4,037 (-5,136) TSEK.
The period’s cash flow from operating activities amounted to -4,155 (-2,253) TSEK.
Earnings per share for the quarter before / after dilution amounted to -0.02 (-0.02) SEK.
Equity per share at the end of the period amounted to 0.1 (0.2) SEK.
The solidity at the end of the period amounted to 73.3 (82.4) percent.

Significant events during the quarter

The Board of Directors of iZafe Group has resolved on a directed issue of 25 million B shares, raising SEK 5 million for the company before transaction costs. Simultaneously, 25,053,288 warrants of series TO14B are being issued, which could raise an additional SEK 7.5 million upon full subscription. The funds will be used to expand the workforce, increase production volumes, and intensify sales and marketing efforts in existing and new markets.
iZafe Group’s partner, Zafe Care Systems AB, has won a contract with Kristianstad Municipality for the delivery of 150-190 Dosell units, with a total order value of approximately SEK 3.7-4.3 million. The agreement spans four years, from 2024 to 2028.

Significant events after the end of the quarter

iZafe Group AB has received a confirmed order for 500 Dosell units from its partner Ti medi, with planned delivery to Spain in August 2024. The Dosell units will be integrated into Ti medi’s new concept, which combines their pouch packaging machines with the Dosell medication robot to enhance patient medication adherence through pharmacies in Spain.
iZafe Group AB has decided to enter into a loan agreement of SEK 5.5 million with Exelity AB instead of proceeding with the previously planned warrant exercise, TO14B, due to high costs and financial uncertainty. The issued warrants will therefore be canceled. The loan will be used to increase production volumes and strengthen sales and marketing activities to drive sales in both existing and new markets.

Comments from CEO
Dear shareholders, customers, and employees,

Our journey to revolutionize healthcare through innovation and digitalization continues to yield concrete progress and positive results. During the second quarter, we have experienced the most accelerated demand for our products to date, further strengthening our market position.

We have recently produced 500 Dosell units, which have been invoiced to our partner in Spain. The delivery will take place at the end of August, and the revenue from this order will be recognized upon delivery. Our partner, Ti-Medi, plans to launch Dosell in Spain according to the previously communicated customer journey at the end of the third quarter, which means that we expect to see the first active Dosell units in the Spanish market and the associated revenues starting from the fourth quarter.

In the Swedish market, we are now witnessing a clear upswing during Q2. The demand for our solutions is increasing significantly, and we have already won a tender for 150 units in Kristianstad. Together with our existing projects with the Västra Götaland Region and other municipalities, we plan to begin the implementation of Dosell in 25 municipalities across Sweden in the coming quarter. This means that more organizations will benefit from our solution to ensure the right medication is administered at the right time.

Our expansion in the Netherlands continues to progress despite previous challenges. We experienced disruptions in our supplier’s network connectivity during the quarter, which affected the operation of the Dosell units. Our network provider has now resolved these issues, but we are working in parallel to switch to a new provider to ensure maximum operational reliability going forward. TCCN, our new dedicated partner in the Netherlands, has taken over the market’s previous contracts and is making a significant investment in Dosell by opening a dedicated office and developing a platform that integrates with Dosell for a unique packaging solution that has been very well received by customers. We have so far delivered over 1,000 units to the Netherlands and look forward to increasing our presence with more units this fall.

The new Dosell 3.0, which has now been produced and delivered in collaboration with our new production partner, marks an important milestone for us and future-proofs the market. During Q2, we secured the production of an additional 1,500 units, of which 500 are destined for Spain and 150 for Kristianstad. This enables us to quickly meet the growing demand in both the Dutch and Nordic markets.

To ensure that we can meet the increasing demand and continue our growth journey, we have also secured a loan of SEK 5.5 million. The decision to replace a planned warrant exercise with this loan ensures that we can focus on scaling up production and strengthening our recurring revenue, which is central to our long-term success.

We also look forward to launching the markets in Norway and Finland this fall, in collaboration with our partners there, who have now further dedicated their commitment to Dosell. This, together with our strong position in Sweden and the Netherlands, positions us for an exciting period with many new opportunities and expansions.

On October 1st, we welcome our new CFO, who will be a key player in our swift pursuit of profitability. With the increased sales we are now seeing, our goal is to achieve cash flow positivity as soon as possible.

I would like to conclude by thanking all our employees, partners, and shareholders for your continued support and commitment. Together, we are heading towards a bright future with continued strong growth and innovation in sight.

Thank you for being part of our journey.

Anders Segerström
Chief Executive Officer, iZafe Group

About iZafe Group AB (publ.)

iZafe Group is a Life Science company that conducts research, development and marketing of digital medical solutions and services for safer medication management at home.

The company leads the development of digital drug dispensing through the drug robot Dosell as well as the SaaS solution Pilloxa with the smart pillbox. The company's solutions reduce the risk of incorrect medication in the home, increase compliance, relieve public health care, increase the quality of life for patients and create a safer environment for relatives.

The customers consist of private individuals, pharmaceutical companies and public and private healthcare providers in Sweden, the Nordics and globally. iZafe Group primarily sells through well-established partners who already have long and deep customer relationships with the prioritized customer groups. The head office is in Stockholm.

iZafe Group AB has been listed on the Nasdaq First North Growth Market since 2018. Mangold Fondkommission AB is the company's Certified Adviser. Further information is available at www.izafegroup.com

Interim Report Q2 2024

Kvartalsrapport Bild Nyheter

Correction: iZafe Group Q2 Interim Report, April-June 2023

The MAR stamp was mistakenly not included in the initial PM.

iZafe Group AB (publ.) presents today, August 25, its report for the second quarter.

Financial Performance in Summary

Net sales for the quarter amounted to SEK 403 (84) thousand, a growth of 380% compared to the corresponding quarter last year. The increase in turnover can partly be attributed to organic growth, partly to growth through acquisition, when Pilloxa was acquired in December 2022. Excluding the turnover from the acquired company, the growth amounted to 198%. The quarter’s turnover consists of income attributable to the sale of the digital pharmaceutical robot Dosell and the sale of the medical device Pilloxa. Pilloxa AB was acquired on 28 November 2022 and is therefore not included in the quarter’s turnover for the previous year.
Operating profit for the quarter amounted to SEK -5,097 (-5,184) thousand.
Profit after financial items for the quarter amounted to -5,136 (-5,233) TSEK.
Cash flow for the period amounted to SEK -3,496 (-7,155) thousand.
Earnings per share for the quarter before / after dilution amounted to SEK 0.0 (-0.1).
Equity per share amounted to SEK 0.2 (0.4) at the end of the period.
The equity ratio at the end of the period amounted to 82.4 (81.8) percent.

Significant events during the quarter

iZafe has signed a cooperation agreement with Spanish Ti-Medi for the rights to sell and market the medication robot Dosell. Ti-Medi’s minimum commitment over a four-year period is worth at least SEK 12 million.
iZafe has signed a cooperation agreement with MDM Pulse for the right to sell and market the medicine robot Dosell in Portugal. MDM Pulse’s minimum commitment over a five-year period amounts to SEK 12.2 million to subsequently generate a recurring license income of at least SEK 4.2 million annually.

Significant events after the end of the quarter

iZafe successfully completed all necessary technical integrations and adaptations to launch Dosell on the Dutch market. The company will now deliver 50 units for testing. After successful testing, the remaining 1,000 units will be delivered successively during the year.

Comments from CEO
I am pleased to share with you the latest progress and developments in our company during the past quarter. Despite an initially low turnover, our focus on the right strategies and measures has resulted in a positive increase in our turnover. This increase, although it may be modest, marks a turning point in the right direction. Together with our continuous effort to streamline and reduce costs, we now stand on a stable foundation.

I feel confident that the liquidity we obtained in March will be sufficient to bring us to a cash flow positive position. Our determination to optimize our finances and capital utilization has set us on this promising path forward. I would like to express my heartfelt thanks to you for your continued trust and investment in our company. Your faith in us has been a decisive factor in our success.

During the first half of the year, we communicated about several significant orders that lie ahead. Now our top priority is to ensure that the deliveries of these orders are carried out smoothly. One of our most challenging tasks is to deliver 1,000 units to the Netherlands before the end of this year. The first 50 units will be used to guarantee a seamless customer experience with our innovative solution, uniquely tailored to the needs of the Dutch market. The setup is a result of our joint work with investments from both the partner, Dutch IVE Ventures, and us, where IVE Ventures invested in a comprehensive system where Dosell has a key function. Tests are currently underway and are expected to be completed shortly. When potentially needed fine adjustments in the customized system solution are in place after feedback from the tests, we will gradually deliver the remaining units according to plan.

We also see positive progress in Spain, where plans are progressing as previously communicated. During Q2, an agreement worth minimum SEK 12 million over four years was secured, including 1,800 Dosell units. The Spanish partner Ti-Medi delivers today solutions to facilitate correct medication to over 650 pharmacies in Spain and Portugal. During the autumn, we are working intensively to adapt Dosell and the customer journey for the Spanish market, which will hopefully lead to an extensive launch during the first quarter of 2024.

Also in Italy we have worked further to develop our collaborations. Our partner has been working for some time to achieve a wider acceptance of sachets in the Italian market. They are currently conducting a funding round to secure the necessary capital to accelerate sales of our pharmaceutical robots along with their innovative sachets on a larger scale.

In the UK, we are on the verge of completing our first pilot, which is a milestone for us. This marks the start of gradually increasing sales that are expected to pick up from the turn of the year. The UK is a market with huge potential, and we foresee steady growth as the market matures.

In our home region, the Nordics, our work with municipalities in Sweden and Norway has yielded results. The decision to expand the use of Dosell within these municipalities is a clear indication that our product is appreciated for its simplicity, functionality and its ability to relieve care by ensuring correct medication at the right time. I am optimistic that we will see increasing demand also here in the Nordics during the autumn, and a positive trend that is expected to grow significantly in the coming year.

Our latest acquisition, Pilloxa, has added additional value to our portfolio. Our focus now is on ensuring customer satisfaction through smooth deliveries and maximizing the potential of our new customers. Going forward, we aim to merge our concepts into a world-unique concept that can help the patient at all stages; regardless of how they manage their medication, but right now our primary focus is on ensuring that Dosell deliveries to our partners around Europe.

In summary, we are stronger and more well prepared than ever. With a stable liquidity that is expected to bring us to a cash flow positive position, together with the majority of orders received and a growing demand, we are enthusiastically looking forward to the upcoming autumn. I am convinced that, together with my amazing team, we will be able to achieve outstanding results.

Again, many thanks for your invaluable trust as a shareholder.

Anders Segerström
CEO, iZafe Group

About iZafe Group AB (publ.)

iZafe Group is a Life Science company that conducts research, development and marketing of digital medical solutions and services for safer medication management at home.

The company leads the development of digital drug dispensing through the drug robot Dosell as well as the SaaS solution and the connected dose bag Pilloxa. The company's solutions reduce the risk of incorrect medication in the home, increase compliance, relieve public health care, increase the quality of life for patients and create a safer environment for relatives.

iZafe Group AB has been listed on the Nasdaq First North Growth Market since 2018. Mangold Fondkommission AB is the company's Certified Adviser. Further information is available at www.izafegroup.com

Interim Report Q2 2023

Intervju Q2 2023 iZafe Group

Omslagsbild Q2 2023

iZafe Group Q2 Interim Report, April-June 2023

iZafe Group AB (publ.) presents today, August 25, its report for the second quarter.

Financial Performance in Summary

Net sales for the quarter amounted to SEK 403 (84) thousand, a growth of 380% compared to the corresponding quarter last year. The increase in turnover can partly be attributed to organic growth, partly to growth through acquisition, when Pilloxa was acquired in December 2022. Excluding the turnover from the acquired company, the growth amounted to 198%. The quarter’s turnover consists of income attributable to the sale of the digital pharmaceutical robot Dosell and the sale of the medical device Pilloxa. Pilloxa AB was acquired on 28 November 2022 and is therefore not included in the quarter’s turnover for the previous year.
Operating profit for the quarter amounted to SEK -5,097 (-5,184) thousand.
Profit after financial items for the quarter amounted to -5,136 (-5,233) TSEK.
Cash flow for the period amounted to SEK -3,496 (-7,155) thousand.
Earnings per share for the quarter before / after dilution amounted to SEK 0.0 (-0.1).
Equity per share amounted to SEK 0.2 (0.4) at the end of the period.
The equity ratio at the end of the period amounted to 82.4 (81.8) percent.

Significant events during the quarter

iZafe has signed a cooperation agreement with Spanish Ti-Medi for the rights to sell and market the medication robot Dosell. Ti-Medi’s minimum commitment over a four-year period is worth at least SEK 12 million.
iZafe has signed a cooperation agreement with MDM Pulse for the right to sell and market the medicine robot Dosell in Portugal. MDM Pulse’s minimum commitment over a five-year period amounts to SEK 12.2 million to subsequently generate a recurring license income of at least SEK 4.2 million annually.

Significant events after the end of the quarter

iZafe successfully completed all necessary technical integrations and adaptations to launch Dosell on the Dutch market. The company will now deliver 50 units for testing. After successful testing, the remaining 1,000 units will be delivered successively during the year.

About iZafe Group AB (publ.)

iZafe Group is a Life Science company that conducts research, development and marketing of digital medical solutions and services for safer medication management at home.

iZafe Group AB has been listed on the Nasdaq First North Growth Market since 2018. Mangold Fondkommission AB is the company's Certified Adviser. Further information is available at www.izafegroup.com

Interim Report Q2 2023

Intervju Q2 2023 iZafe Group

Omslagsbild Q2 2023

iZafe Group Q2 Interim Report, April-June 2022

iZafe Group AB (publ.) – presents today, August 26, its report for the second quarter.

Summary of financial performance

Net sales for the quarter amounted to SEK 84 (12) thousand. The quarter's net sales consist of revenues related to the sale of the Dosell digital pharmaceutical robot.
Operating profit for the quarter amounted to SEK -5,184 (-7,962) thousand.
Profit after financial items for the quarter amounted to -5,233 (-8,258) TSEK.
Cash flow for the period amounted to SEK -7,155 (-5,400) thousand.
Earnings per share for the quarter before / after dilution amounted to SEK -0,1 (-0,2).
Equity per share at the end of the period amounted to SEK 0,4 (0,4).
The equity/assets ratio at the end of the period was 81.8 (39.5) percent.

Significant events in the quarter

The company has launched an updated version of Dosell that includes several new improvements and features that enhance both the user experience and reliability.
During the month of June, the company has delivered a large batch to Apoteket AB, which has had a high demand for the company's products and has sold out of its stock.

Significant events after the end of the quarter

iZafe signs a Letter of Intent to acquire Pilloxa AB. Pilloxa has developed a technical platform for improved adherence that pharmaceutical companies use to design digital patient support. The purchase price will be paid in 70,874,308 newly issued iZafe shares with an indicative value of approximately 30 million SEK.

COMMENTS FROM THE CEO
Our vision is to ensure health through better adherence and in the last quarter we have taken an even bigger step through our updated vision and strategy presented in May.

During the second quarter, we focused on consumer advertising, which continues to deliver good results and improved Dosell's performance. At the same time, we are seeing increased interest among municipalities in both pharmaceutical robots and the data they can bring to medication management. After the end of the quarter, we announced a letter of intent to acquire Pilloxa AB.

The acquisition of Pilloxa creates a unique position in digital health
With the acquisition of Pilloxa, we have the opportunity to create a more comprehensive offering that meets the different needs of consumers, from independent medication management to the choice of a smart connected pillbox or a fully automated medication robot.

The acquisition of Pilloxa also gives us access to additional sales channels as we complement each other very well. Pilloxa has had pharmaceutical companies as its primary customer group and has developed a unique SaaS solution as well as support for the conduct of clinical studies. Immediately after the acquisition, we will start the journey towards making Pilloxa's solution more commercially viable in our existing sales channels.

Pilloxa's employees and the expertise they bring, are an important part of the acquisition. They come in with the right kind of knowledge and the experience we need to create a company that takes the position of being the leader in the market to ensure adherence to medication and ultimately, to demonstrate the health benefits of it. We are working to optimize our organization to cut costs and prepare for a future merge.

The company is continuing discussions with investors, who are keen to see more acquisitions and organic growth in a market that is largely untapped. Following our communication regarding the acquisition of Pilloxa, interest has increased further – which is positive for future funding of the company in addition to the warrant program TO10B which, depending on the stock price, will provide a better capital contribution.

B2C – continual increased sales and the potential outside Sweden
In recent months, we have invested in television advertising to spread awareness of Dosell. As a result, we now sell around 100 units a month via the Apoteket website and the consumer version of Dosell accounts for around 90% of all dispensations today. This is a very good start for a brand-new type of product and service, but not enough and hence need to find more ways to get higher volumes out.

Our investment here in Sweden with the consumer version of Dosell has been crucial in creating the experience and knowledge needed to export the solution to other countries and markets. In all dialogues with potential partners, there has also been interest in our vision's future solutions, which we will now be able to sell and distribute much more quickly in connection with the acquisition of Pilloxa.

However, the concept in Italy continues with delays due to production and software changes. The Italian market has great potential where we see great advantages in the customer being able to have their medicines packaged in sachet bags directly by the local pharmacy together with their Dosell. In the Swedish market this is a challenge where we see long lead times to get their medicines in sachet bags if they do not already use it when they have bought their Dosell. Therefore, we see great potential in the Italian concept, which is also applicable to more markets in Europe.

B2B – interest in medication data
We see a clear trend that more municipalities are starting to demand pharmaceutical robots, with many tenders just coming out in both Sweden and Norway.

We have also noticed strong demand from welfare platforms that want to get data on medication. With the acquisition of Pilloxa, this becomes a complete solution for welfare platforms as we can provide even more data around medication adherence.

Continuous improvement
We are constantly working to improve Dosell's performance. As we communicated in the spring, we had production challenges and a software release that included improvements necessary for our partners to deploy their Dosell in the field. These elements were completed too late into the summer holidays and as a result our partners are now able to go live after the summer months.

We have an exciting and intense period ahead of us. Our many partners and customers will start up the use of Dosell, we will finalize all the elements around the acquisition and ensure to develop an attractive joint future offering.

About Us

iZafe Group is a Swedish Life-Science company that develops and markets medical and digital security solutions to create safer drug handling at home. The company’s digital medication dispenser Dosell reduces the risk of incorrect medication, increases security for family and relatives and relieves public care personnel. The products form a holistic concept that facilitates patient medication and gives those who are treated at home better conditions for a happy and safe life. Customers today consist of public and private care providers in Sweden, the Nordic countries and globally. iZafe Group sells primarily through well-established partners who already have long and deep customer relationships with the priority customer groups. The head office is located in Stockholm.

The company is listed on the NASDAQ First North Premier Growth Market. FNCA Sweden AB is the company's Certified Adviser. Phone: +46 (0) 8 528 00 399. E-mail: . Further information is available at www.izafe.se/investor-relations/.

Q2 Interim Report IZafe Group 2022