Serious concentrated female microbiologist in sterile clothing and safety goggles sitting at table and dropping reagent in petri dish while doing research in laboratory

Interim Report 2 2022/23

Phase Holographic Imaging PHI AB (publ)

Lund, December 21, 2022

AUGUST – OCTOBER

Net sales2 732 (1 818) KSEK
Operating result before depreciation (EBITDA)-4 325 (-2 733) KSEK
Net result -5 304 (-3 901) KSEK
Earnings per share-0.26 (-0.27) SEK
Gross margin59 (93) %

MAY – OCTOBER

Net sales4 767 (4 191) KSEK
Operating result before depreciation (EBITDA)-9 173 (-6 172) KSEK
Net result -11 057 (-8 370) KSEK
Earnings per share-0.54 (-0.58) SEK
Gross margin53 (75) %

In Short

  • Sales and the number of customer inquiries continue to develop positively.
  • The first orders for the fluorescence module have been received.
  • The company recently opened a combined sales and development office at the Wake Forest Institute for Regenerative Medicine in Winston-Salem, North Carolina.

CEO Commentary

Sales

The online sales and lead generation strategy continues to deliver. Since the sharp rise in September, customer inquiries have continued to grow. As a result, sales from August to October this year reached 2.7 KSEK — an increase of 50 % compared to any previous corresponding period.

The intensified online marketing has made customers aware of our HoloMonitor products and further established PHI’s non-invasive cell imaging technology, but it has also increased the marketing cost baseline. Fortunately, the marketing baseline is expected to remain relatively stable moving forward. Consequently, the marketing cost per sold unit will thus decrease as sales increase.

The first orders for the fluorescence module have been received. However, some technical issues remain to be verified by our external customer testers before the orders can be delivered. The fluorescent and holographic cell images must overlap perfectly at all times. Occasionally, the cell overlap is off by more than a few millionths of a meter, introducing a measurement error greater than our quality standards permit. Cells are small, very small. One million cells comfortably fit into one cubic millimeter.

Business Development

On the business development side, things have progressed as well.

Together with the Wake Forest Institute for Regenerative Medicine, PHI, BioSpherix, analytics leader SAS and QIAGEN have created a technology development alliance for advancing cell-based biomanufacturing. The alliance aims to develop the AI-based process control tools needed to transform today’s manual manufacturing of cell-based therapies into an automated and cost-effective process. The creation of the alliance has prompted us to establish a sales and development office in Winston-Salem, North Carolina.

North Carolina has 790 life sciences companies and 2 500 related service providers. The biggest names in pharma — Biogen, Novartis, Pfizer and more — have space there, and every day new biotechs are emerging with an NC ZIP code. The region is ranked third in National Institutes of Health funding and is a leader in biologics manufacturing. See this article for more information on the expanding biotech sector in North Carolina.

Peter Egelberg, CEO

Introducing new technology can be very rewarding, but it is never straightforward and always takes longer than expected. Nevertheless, the exposure we receive through our collaboration with the Wake Forest Institute for Regenerative Medicine has put us on the biotech map, benefiting our future clinical business but also our current pre-clinical business.

Net Sales and Result

Net sales for the second quarter amounted to 2 732 (1 818) KSEK and operating results before depreciation (EBITDA) to -4 325 (-2 733) KSEK. The net result amounted to -5 304 (-3 901) KSEK.

Rolling 12-month Sales Q2 2022-23

Investments

With an emphasis on regenerative medicine and the development of fluorescence capability, the company invested 864 (1 246) KSEK in the product, patent, and application development during the period.

Financing

Cash, cash equivalents, and unutilized granted credits amounted to 22 415 (21 261) KSEK by the end of the period. The equity ratio was 34 (-13) %.

Rights issue

The rights issue, which ended on April 13, 2022, was subscribed for a total of approximately 57 MSEK, corresponding to a total subscription ratio of 80 %. Through the rights issue, a total of 6 057 729 shares and 3 365 405 new series of series TO 3 and 1 346 162 warrants of series TO 4 will be newly issued. PHI thus received approximately 57 MSEK before issue costs. As of May 12, 2022, the number of shares in PHI amounts to 20 452 700 with a share capital of 4 090 540 SEK.

Warrants of series TO 3

Each warrant of series TO 3 entitles to subscribe for one (1) new share in PHI during the period from 11 April 2023 to 2 May 2023. The exercise price amounts to 70 % of the volume-weighted average price during a period prior to option redemption, within the interval 0.20 SEK (the company’s quota value) as the lowest, and with 11.90 SEK per new share as the highest exercise price. Upon full exercise of warrants of series TO 3 at the highest exercise price (11.90 SEK per new share), the warrants will provide the company with approximately 40 MSEK before issue costs.

Warrants of series TO 4

Each warrant of series TO 4 entitles to subscribe for one (1) new share in PHI during the period from and including 12 September 2024 to and including 3 October 2024. The exercise price amounts to 70 % of the volume-weighted average price during a period prior to option redemption, within the interval 0.20 SEK as the lowest, and with 15.45 SEK per new share as the highest exercise price. Upon full exercise of warrants of series TO 4 at the highest exercise price (15.45 SEK per new share), the warrants will provide the company with approximately 20.8 MSEK before issue costs.

Convertibles

The convertible loan to Formue Nord Fokus A/S amounts to 20 230 000 SEK with the following terms:

  • Number of convertibles: 1 700 000 convertibles, which entails the right to subscribe for 1 700 000 new shares.
  • Conversion rates: 11.90 SEK per new share until 2 May 2023 (last day in the exercise period for warrants of series TO 3) and 15.45 SEK per new share from May 3, 2023, until October 16, 2024.
  • Conversion period: the convertible holder is entitled during the period from the date of payment to October 16 2024 to convert the loan into shares.
  • Maturity: in the event that the entire loan is not converted, repayment of the loan and interest must take place no later than October 16, 2024. The company has the right to repay all or part of the convertible loan at any time until the due date, after which Formue Nord has the opportunity to accept repayment or request conversion according to the above conversion rates.
  • Interest: the convertibles run at a quarterly interest rate of 3%.

Dilution of shares

Total shares October 31, 202220 452 700
TO 3 (April 2023)3 365 605
TO 4 (September 2024)1 346 162
Convertibles1 700 000
TOTAL26 864 467

Risks

The company may be affected by various factors, described in the 2021/22 Annual Report. These factors may individually or jointly increase risks for the operation and result of the company.

Accounting Principles

The accounts are prepared in accordance with the Annual Accounts Act and general advice from the Swedish Accounting Standards Board BFNAR 2012:1 Annual accounts and consolidated accounts (K3).

Review

This interim report has not been subject to review by the company’s auditor.

Statements About the Future

Statements concerning the company’s business environment and the future in this report reflect the board of director’s current view of future events and financial developments. Forward-looking statements only express the judgments and assumptions made by the board of directors on the day of the report. These statements have been carefully assessed. However, it is brought to the reader’s attention that these statements are associated with uncertainty, like all statements about the future.

Calendar

  • March 30, 2023, Interim Report 3 2022/23

About PHI

Phase Holographic Imaging (PHI) develops and markets instrumentation for non-invasive time-lapse imaging. The company’s HoloMonitor product line is used for long-term quantitative analysis of living cell cultures, particularly in preclinical research and regenerative medicine. PHI is based in Lund, Sweden and Boston, Massachusetts.

On behalf of the Board of Directors
Peter Egelberg, CEO

For additional information please contact:
Peter Egelberg
Tel: +46 703 19 42 74
E-mail: ir@phiab.se
Web: www.phiab.com

Consolidated – PHI Group

Income statement (KSEK)

 Q2Q2YTDYTDFY
 2022/232021/222022/232021/222021/22
Net sales2 7321 8184 7674 1918 169
Cost of products sold-1 121-124-2 235-1 067-2 485
Gross profit1 6111 6942 5323 1245 684
Gross margin59%93%53%75%70%
   
Selling expenses-2 582-1 891-5 660-3 961-9 303
Administrative expenses-2 022-1 658-3 839-3 715-7 388
R&D expenses-2 239-1 947-3 938-3 617-8 817
   
Operating result (EBIT)-5 232-3 802-10 905-8 169-19 824
   
Financial net-72-99-152-201-5 557
   
Result before tax (EBT)-5 304-3 901-11 057-8 370-25 381
   
Net Result (EAT)-5 304-3 901-11 057-8 370-25 381

Balance sheet (KSEK)

 Q2Q2FY
 2022/232021/222021/22
ASSETS 
Non-current assets 
Intangible assets17 47415 67417 038
Tangible assets231235181
Total non-current assets17 70515 90917 219
 
Current Assets 
Inventory4 1472 4992 979
Short-term receivables3 1243 21136 061
Cash and equivalents20 4151 2611 424
Total current assets27 6866 97140 464
 
Total assets45 39122 88057 683
 
EQUITY AND LIABILITIES 
Equity15 544-3 00426 983
Financial liabilities22 24818 65023 424
Operating liabilities7 5997 2347 276
 
Total equity and liabilities45 39122 88057 683

Changes in equity (KSEK)

 Q2Q2FY
 2022/232021/222021/22
Opening Balance21 1348935 384
Equity issues, net0047 268
Net profit-5 304-3 901-25 381
Translation difference-2834-288
Closing balance15 547-3 00426 983
Equity ratio34%-13%47%

Cash flow analysis (KSEK)

 Q2Q2YTDYTDFY
 2022/232021/222022/232021/222021/22
Operating activities   
Net result-5 303-3 901-11 056-8 370-25 382
Depreciation8269961 7311 9974 854
Translation difference704-87-491
Operating cash flow-4 407-2 901-9 412-6 373-21 019
   
Increase (-)/decrease (+) in inventories-149-890-1 168-1 165-1 645
Increase (-)/decrease (+) in operating receivables-52434732 937-27324 580
Increase (+)/decrease (-) in operating liabilities625-209323-1 670-981
Change in working capital-48-75232 092-3 10821 954
   
Cash flow from operating activities-4 455-3 65322 680-9 4811 139
   
Investing activities   
Development expenses-864-1 246-2 130-2 747-6 539
Patents0101-326
Tangible assets0000-48
   
Cash flow after investments-5 319-4 89820 550-2 746-5 774
   
Financing activities   
Net proceeds from equity issues-4040-383-18-10 279
Increase (+)/decrease (-) in borrowings-415-8-1 17611 25015 221
   
Cash flow from financing activities-819-8-1 55911 2324 942
   
Cash flow for the period-6 138-4 90618 991-995-832
Cash and cash equivalents at the beginning of the period26 5536 1671 4242 2562 256
   
Cash and cash equivalents at the end of the period20 4151 26120 4151 2611 424
Incl. unutilized credits22 41521 26122 41521 2612 508

Data per share

 Q2Q2YTDYTDFY
 2022/232021/222022/232021/222021/22
Earnings per Share, SEK-0.26-0.27-0.54-0.58-1.76
Equity per share, SEK0.76-0.210.76-0.211.32*
Not registrated shares 31 of April0 06 057 729
Number of Shares, end of period20 452 70014 394 97120 452 70014 394 97114 394 971
Average number of shares20 452 70014 394 97120 452 70014 394 97114 394 971
Share price end of period, SEK2.9723.752.9723.755.60
*Equity per share includes subscribed but not registered shares

Parent company

Income statement (KSEK)

 Q2Q2YTDYTDFY
 2022/232021/222022/232021/222021/22
Net sales2 2836564 1292 4786 437
Cost of products sold-1 421-142-2 497-1 067-2 417
Gross profit8625141 6331 4114 020
Gross margin38%78%40%57%62%
   
Selling expenses-1 598-1 103-3 725-2 522-6 412
Administrative expenses-2 022-1 658-3 839-3 715-7 388
R&D expenses-2 239-1 947-3 938-3 617-8 817
   
Operating result (EBIT)-4 997-4 194-9 870-8 443-18 597
   
Financial net-72-99-152-201-5 557
   
Result before tax (EBT)-5 069-4 293-10 022-8 644-24 154
   
Net Result (EAT)-5 069-4 293-10 022-8 644-24 154

Balance sheet (KSEK)

 Q2Q2FY
 2022/232021/222021/22
ASSETS 
Non-current assets 
Intangible assets17 47415 67417 038
Tangible assets231235181
Financial assets003 994
Total non-current assets17 70515 90921 213
 
Current Assets 
Inventory3 3122 4992 979
Short-term receivables8 8895 23034 864
Cash and equivalents18 6340721
Total current assets30 8357 72938 564
 
Total assets48 54023 63859 777
 
EQUITY AND LIABILITIES 
Equity19 490-2 24629 513
Financial liabilities22 38018 65022 380
Operating liabilities6 6707 2347 884
 
Total equity and liabilities48 54023 63859 777

Phase Holographic Imaging PHI AB
Skiffervägen 48
224 78 Lund
Sweden
+46 46 38 60 80
info@phiab.com

Phase Holographic Imaging PHI Inc.
265 Franklin Street Suite 1702
Boston, MA 02110
USA
+1 617-963-5150
info@phiab.com

Invoicing

VAT: SE556542781101
faktura@phiab.com

Securities Identification

ISIN: SE0005504636
LEI: 549300JZR79QYESM6296

HoloMonitor® is a registered trademark
Copyright © 2012-2021
Phase Holographic Imaging PHI AB

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