News Tag: Q3

Summary of financial performance

• Net sales for the quarter amounted to SEK 75 (38) thousand. The quarter's net sales consist of revenues related to the sale of the digital pharmaceutical robot Dosell.
• Operating profit for the quarter amounted to SEK -5,680 (-5,342) thousand.
• Profit after financial items for the quarter amounted to SEK -5,751 (-6,183) thousand.
• Cash flow for the period amounted to SEK -4,513 (-6,475) 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 0.3 (1.5).
• The equity ratio at the end of the period was 75.0 (62.3) percent.

Significant events during the quarter

• The company has signed a cooperation agreement with the welfare platform Avanto Care. The collaboration means that iZafe's products are integrated with Avanto Care's platform and gives the opportunity to work more proactively with the users' medication.
• With our partners Careium AS and Hepro AS, 20 and 25 Dosell have respectively been implemented in new municipalities in Norway.
• Together with Aleris, the Company has started a pilot project for safer medication management. The goal is to introduce Dosell for the patient group that has advanced healthcare at home. During the quarter, 30 patients were introduced to the pharmaceutical robot.

Significant events after the end of the quarter

• During quarter four 2022, 12,075,688 warrants of series TO10B were exercised, representing approximately 34.1 percent of outstanding warrants. The subscription price amounted to SEK 0.26 per B-share and raised approximately SEK 3.1 million for the company before issue costs
• The company has signed a cooperation agreement with Medcam AB, which sells medical devices to the healthcare sector in the Nordic region and Europe. The primary focus will be on the Dutch market, but the potential for the company to enter several countries exists in the near future.

COMMENTS FROM THE CEO
A lot has happened in the last quarter and we continue to make strides on our growth journey – both in the Swedish and European markets.
There is a growing demand for products and services that enable more digital care where medication and adherence are crucial.

Our Dosell vending machine continues to do well across the board and we are pleased to see strong demand and positive sales for Dosell consumer through Apoteket AB. The packaging and sales of our consumer product have been crucial in moving forward in dialogues with potential partners in other European countries. We have now accumulated enough experience and documentation to streamline the processes and reduce the costs associated with selling and marketing Dosell to consumers.

Our entire business concept is based on sales through specific partners who handle sales, warehousing, logistics and marketing. With a focus on ensuring quality in small volumes at first, we will be able to scale up the volume and sales of many of our partners in more markets as early as next year.
We have also started the implementation of Dosell at Aleris ASIH (Advanced Home Healthcare) which is very exciting. The whole ASIH market relies on a different type of Dosell than the procured Dosell at regional level. It has a different design that makes it very difficult for the drug robots to handle. We can proudly say that we are the only pharmaceutical robot on the Swedish market that can handle these dose bags.

We have a clear vision to offer proactive holistic health for many more providers and patients, with a focus on these four elements:

1. Securing established and professional owners who can support the company with long-term external funding
2. Strategic acquisitions that broaden our offering and portfolio ensuring the right medicine at the right time
3. 3.Managing personal data and ensuring that the necessary integration work is implemented
4. Internationalization towards new markets and together with both existing and new partners

Since October, we have a new Board in place that will help us to realize the action plan ahead. We have secured expertise and networks around finance, digitization, GDPR, sensitive data management and legal requirements. There we now have a clear strategy and plan for acquisitions, integrations with other wellbeing platforms, sales and internationalization.

The potential acquisition of Pilloxa is very interesting as we see that there is a strong demand around the ability to ensure adherence through all stages of the patient journey and to be able to integrate data into wellbeing platforms and home monitoring. The status on this is that we have completed due diligence and are now in the final stages of negotiations.

Another milestone during the quarter is our entry into the Dutch market. The Netherlands is an important market for us as they are the foremost pioneers in dose packaged medicine. The majority of all manufacturers of dose packaging machines are based in the Netherlands, which means that once we have been successful there, there will be positive knock-on effects throughout Europe.

Finally, I would like to mention that we are in dialogue with several other players in key markets in Europe, with whom we hope to have a clear agreement shortly. In this way, iZafe can in the future contribute broadly to a more proactive holistic approach to health, resulting in better health for more people. Socially sustainable value for society – that's really important.

Summary of financial performance
• Net sales for the quarter totaled SEK 38 thousand (701). Sales for the quarter comprised revenue related to Dosell sales.
• Operating income for the quarter totaled SEK -5,342 thousand (7,255). The comparative period included the non-recurring effect from the sale of iZafe AB. Excluding the sale of iZafe, operating profit for the comparative period amounted to SEK -6,745 thousand.
• Income after financial items for the quarter was SEK -6,183 thousand (7,103). Excluding the sale of iZafe, income after financial items for the comparative period amounted to SEK -6,897 thousand.
• Cash flow for the period was SEK -6,475 thousand (8,818). The positive cash flow for the comparative period was due to the proceeds received from the divestment of iZafe AB.
• Earnings per share for the quarter, basic and diluted, were SEK -0.2 (0.2).
• Equity per share at the end of the period was SEK 1.5 (1.1).
• The equity ratio at the end of the period was 62.3 percent (87.4).

Important events in the quarter
• iZafe decided to carry out a fully guaranteed rights issue of units amounting to approximately SEK 53 million. The rights issue is fully guaranteed.
• iZafe Group held a general meeting of the shareholders, resulting in a supplementary general meeting at which a majority of shareholders requested an alternative Board of Directors, which was voted through.
The consumer pilot project has been successfully completed, with the consumer version of the Dosell medication-dispensing robot found to be safe and easy to use. Following the development of the consumer version of Dosell in Sweden, this version will also be launched in Italy in 2021.
• iZafe Group has signed an agreement with Apoteket AB to introduce Dosell on the Swedish consumer market, exclusively through Apoteket AB’s channels. The agreement with Apoteket, and its unique market position as one of the leading suppliers of medication sachets on the Swedish market, creates a direct market of the more than 200,000 people who currently take medication using medication sachets from suppliers such as Apoteket.

Important events since the end of the quarter
• The consumer version of Dosell is being launched in Sweden on apoteket.se. Dosell is now available for everyone who regularly takes medication and wants to avoid medication errors through better medication management and treatment compliance to prevent harm.
• The final outcome of the rights issue of units, consisting of shares and series TO10 B share warrants, has been published. The rights issue has been fully subscribed, with approximately 43.6 percent subscribed for using unit rights, around 4.1 percent without the use of unit rights and approximately 52.3 percent subscribed for by issue guarantors.
• Deputy Chairman Göran Hermansson and CEO Anders Segerström together subscribed for a further 458,000 units in the ongoing rights issue of units, in addition to the initial subscription.
• iZafe Group has finalized most of its PCT patent application for the Dosell medication-dispensing robot in order to prepare for the international expansion, planned to be carried out after the ongoing rights issue. Patent applications have been made in those key markets where iZafe has identified significant demand for Dosell.
• Hepro AS has last issued a final approval of the new version of Dosell and has officially approved the pharmaceutical robot in its entirety for the Norwegian market.

Comment by the CEO
With several milestones achieved, we are now letting the medical dispenser Dosell capitalize through several different sales channels, on the established market potential that the digitalization of healthcare and the increased drug consumption costs.

The rights issue that we have now carried out has given us resources to enable the upscaling and globalization of iZafe Group AB. It will also enable future acquisitions and broadening of the service and product portfolio. With a strong liquidity, we can now also work more strategically and long-term in all our decisions.

During the third quarter, we focused on completing Dosell for the consumer market, which resulted in us being approved by Apoteket AB to jointly launch Europe's first medical dispenser for the consumer market in mid-October. It also became clear that we are joining Dutch Adyen with its reliable payment solutions in the Dosell app. We see this as an obvious seal of quality, and we are happy for the collaboration. Their customers include companies such as H&M, Spotify and Telia.

During the quarter, we also worked to ensure the software and Dosell's quality in more markets. The continuous work to comply with MDR (Medical Device Regulation) continues according to plan, which is a requirement to have the classification Dosell has in the form of medical device product class 1.

The consumer product platform is secured in several countries, where we now see great potential. We have begun to approach solutions to the challenges we have had, including the complexity of the sales process and the dependence on other players in product development. Dosell is a unique product that is the first of its kind on a completely new market. This means that we need to raise the awareness towards our target groups, which is one of our highest priorities during the last quarter of the year. In November, we decided to accelerate our marketing efforts with the guidance of our new CMO and expect that this will have a major effect on sales figures during the last quarter of this year, but especially during the first quarter of 2022.
On the B2B side, several of our partners have chosen to test and secure Dosell 2.0 to ensure quality for their customers, which we view positively. However, this has led to longer lead times than we initially expected, which also had consequences for sales, which we can now begin. The tests have led to good response, results and market demand. The tests have also given us extremely important insights about our users, which further helped us to optimize the customer experience. In connection with Hepro now giving its approval for the new Dosellen, sales will also begin properly in the large Norwegian procurement that we won together last year. The collection of that data, both historically and in the future, will be important for us to provide the best and simplest support to ensure that the right medicine is taken at the right time. It is of the utmost importance that we have achieved approval and then "proof of concept" in our domestic market in order to be able to scale up in other markets in large volumes.
 
We focus on the future and are constantly exploring new expansion opportunities, both geographical and product-related, and see good potential in both areas.
We have also begun work on initiating several different future acquisitions, both on the product and company side, and we will focus on selected areas where we see a clear business potential with favorable synergy effects. We continue to work towards becoming the obvious choice when it comes to safe intake of the right medicine at the right time. Dosell that delivers medicine via sachet will be part of the customer offering where we will in future be able to supplement so we can ensure that the right medicine is taken at the right time also to users who take their medicine in other ways. In this sense, we believe that there are companies which can complement iZafe Group's portfolio in an advantageous way.

Basis for further growth
iZafe Group is a well-capitalized company operating in a rapidly growing market. Through the rights issue, we have created opportunities we have not had before. This is a crucial point to enable sales and the obvious choice in ensuring the right medicine at the right time.
We continue to work purposefully to strengthen our team, also at management level. Our latest addition is Carl-Fredrik Bothén, who has held senior positions in the market at several international companies. As marketing manager, Carl-Fredrik will be responsible for IR (Investor Relations) and for improving communication and driving and developing our marketing with a special focus initially on the Scandinavian market.
 
iZafe Group is well equipped to advance its positions during 2022. We are leaving behind an important quarter where many milestones have been achieved and with a market that shows great confidence in our product. I look forward to a strong end to 2021 and an even stronger 2022.

Condensed statement of financial performance

• Net sales for the quarter totaled SEK 701 thousand (3,344). Sales for the quarter comprise revenue related to the sale of Dosell. In previous years, this item also included revenue attributable to the iZafe Security business area, which was sold.  

• Operating profit for the quarter totaled SEK 7,255 thousand (-4,028) including one-off effects related to the sale of iZafe AB. Excluding the sale of the Security business area the operating was SEK -6,745 thousand (-4,028). 

• Operating profit for the quarter totaled SEK 7,103 thousand (-4,130) including one-off effects related to the sale of iZafe AB. Excluding the sale of iZafe Security, earnings after financial items totaled SEK -6,897 thousand (-4,130). 

• Cash flow for the period was SEK 8,818 thousand (-456), as a result of the payment received for the sale of iZafe AB. 

• Earnings per share for the quarter, basic and diluted, totaled SEK 0.2 (-0.2).

• Equity per share at the end of the period was SEK 1.1 (1.4).

• The equity ratio at the end of the period was 87.4 percent (51.7).

Significant events during the year

• iZafe Group sold the Security business area, thereby creating a dedicated and financially strong Life Science company focused on the Healthcare business area and the Dosell medication dispensing robot.

• Following a successful pilot project in Norway, iZafe’s partner Doro Care AS placed an initial order for 50 medication dispensing robots.

• iZafe’s Italian partner has initiated an operational phase at a pharmacy in the Trento region, where equipment that packages medications in sachets has been installed. 

• A pilot project was initiated with the care service provider Attendo. The goal of the project is to produce documentation for decision-making regarding the potential implementation of the Dosell medication dispensing robot for use in Attendo’s home services business.

• A pilot project was initiated with the care service provider TioHundra AB involving 30 medication dispensing robots. The results will provide a basis for identifying areas where welfare technology can contribute to more efficient, safer operations at TioHundra in Norrtälje Municipality, Sweden.

• iZafe published a patent application that the company submitted relating to the further development of the Dosell medication dispensing robot. The application is international and will enable iZafe Group to have patents approved in over 150 countries.

Comments by the CEO
 
At the beginning of the quarter the sale of iZafe Security closed successfully, thereby freeing up the resources needed to accelerate commercialization and globalization of the Dosell medication dispensing robot. The sale was carried out after the iZafe Group Board of Directors conducted an evaluation to determine how the current organization and product offering could ultimately result in profitability and a return on investment. Together with management, we concluded that iZafe should become a dedicated Life Science company, for which reason the decision to sell the safety and security business was a logical step in the process.
 
A dedicated Life Science company based on Dosell has the best prospects for growth. Through future investments in the product and market, combined with an organization that focuses solely on one business area, we become a strong participant on a rapidly growing market in Sweden and abroad.
 
I am pleased with the way that we have maintained our close contacts with customers and partners despite the coronavirus pandemic and interest in Dosell and our technology has increased as a growing number of decision-makers and opinion leaders have recognized the importance of digitalization within health services and elderly care. However, like most other participants in the market, we have noted that purchasing decisions and deployment have taken longer since health services and society have been forced to prioritize where time should be spent. Globalization has its challenges in that we have not been able to visit new markets in person. Net sales for the quarter totaled SEK 701 thousand (3,344), relating exclusively to revenue attributable to Dosell. The corresponding period last year also included revenue attributable to the iZafe Security business area, which was sold. Operating profit for the period totaled SEK 7,255 thousand (loss: -4,028) including the one-off effect related to the sale of iZafe Security. Excluding the sale, the operating loss was SEK -6,745 thousand (loss: -4,028).
 
Our business with our Norwegian partners has continued according to plan and we have seen favorable commercial development for Dosell in Norway. We have completed the validation of sachets in Finland and look forward to the upcoming first pilot project. On the Swedish market, an important milestone was achieved when we launched pilot projects with care service providers Attendo and TioHundra. The projects enable us to demonstrate the possibilities that Dosell represents regarding facilitating and creating safer medicine dispensing within the home help services and personal assistance business area in Sweden. 
 
Collaboration within the framework of the Sempli Farma project in Italy has increased sharply after the total lockdown that Italy imposed last spring. Marketing of the concept has begun with Dosell occupying a prominent position. We look forward to the developments in Italy with great excitement and we can conclude that the consumer version of Dosell that is being launched there also has great potential in other markets. We have also noticed strong interest in Dosell from other countries, especially the UK and Germany. 
 
After the end of the quarter a submitted patent application relating to further development of Dosell was published, which will enable us to achieve our ambition to create a healthcare setting at home through Dosell and the Dosell app.
 
Given current trends in society and our strong position, I am confident that we will be able to continue to launch and commercialize Dosell in our markets.