Banner image showing gloved hand holding a cell flask.

Interim Report 3 2022/23

Phase Holographic Imaging PHI AB (publ)

Lund, March 28, 2023

NOVEMBER 2022 – JANUARY 2023

Net sales3 264 (2 736) KSEK
Operating result before depreciation (EBITDA)-3 453 (-5 626) KSEK
Net result -4 412 (-6 732) KSEK
Earnings per share-0.22 (-0.47) SEK
Gross margin60 (72) %

MAY 2022 – JANUARY 2023

Net sales8 031 (6 927) KSEK
Operating result before depreciation (EBITDA)-12 626 (-11 798) KSEK
Net result -15 468 (-15 102) KSEK
Earnings per share-0.76 (-1.05) SEK
Gross margin56 (72) %

In Short

CEO Commentary

In the spring of 2022, PHI carried out a right issue. The goal of the right issue proceeds was:

The objectives aim to take advantage of the newly created opportunities that our unique non-invasive reagent-free imaging technology provides. The success and ongoing industrialization of clinical regenerative medicine and cell-based therapies require non-invasive imaging, contrary to conventional drug development. Unlike traditional drugs, the cells are the treatment and can, therefore, under no circumstances be contaminated by analytical reagents or foreign substances, which is our unique edge.

During PHI’s third quarter, the pieces have come together:

Within the ReMDO collaboration, we have so far created an alliance with Biospherix, SAS and QIAGEN to develop advanced cell manufacturing technology. The alliance has received a grant for in-kind resources from Wake Forrest Institute for Regenerative medicine (WFIRM) and ReMDO. Furthermore, to learn from the absolute leader in regenerative medicine and to consolidate our position as an important player in developing quality standards for biomanufacturing, we have opened an office adjacent to WFIRM.

With our well-reputed partners in the ReMDO project, the launch of the fluorescence unit, GAMP compliance and, above all, the need for non-invasive imaging technology within biomanufacturing, the board, I and our staff are convinced that the world is our oyster!

Patrik Eschricht, CEO

The Greater Perspective

In late 2022 the US Food & Drug Administration (FDA) created a “super office” to, in their own words, address the substantial growth in the development of innovative, novel products and the ever-changing public health landscape.

Evelyn Villarreal, former Spinal Muscular Atrophy patient.

Over 7 000 rare diseases affect more than 30 million people in the United States, according to the FDA.

Evelyn was not expected to reach her second birthday. But fortunately, she was one the first infants to receive a newly developed gene therapy that today cures the rare genetic disease she suffered from, Spinal Muscular Atrophy, affecting one in 10 000 newborns.

However, her Zolgensma treatment costs $2.1 million per treatment — the second most expensive drug in the world. The currently most costly drug is another one-time gene therapy but for hemophilia (swe: blödarsjuka), priced at $3.5 million per dose when recently approved by the FDA.

The main motivator for the change within the FDA is the realization that we (humanity) now have the tools to cure many rare diseases; it’s merely a matter of applying the tools correctly, safely and cost-effectively.

In his presentation, Taking Cell & Gene Therapy to the Next Level, FDA director Peter Marks laid out the FDA’s strategy for making rare disease treatments available to all patients. As Dr. Marks explains, 7 minutes into the presentation, efficient and reliable manufacturing is essential to make such therapies commercially and economically viable.

Cell morphology mirrors the all-important quality and health status of a cell. The ability to non-invasively quantify the 3-dimensional morphology of cells directly in the cell culturing environment is a unique feature of our HoloMonitor product line, which has the potential to become a keystone technology in cost-effective biomanufacturing.

The FDA needs support from innovative technology companies like PHI. Through the Alliance to Advance Cell-based Biomanufacturing, PHI has the opportunity to work with the FDA to fulfill its vision of an efficient manufacturing process to make custom treatments commercially viable and, not least, affordable. With the continued support from our shareholders, nothing can stop us.

Links

Net Sales and Result

Net sales for the second quarter amounted to 3 264 (2 736) KSEK and operating results before depreciation (EBITDA) to -3 453 (-5 626) KSEK. The net result amounted to -4 412 (-6 732) KSEK.

Investments

With an emphasis on regenerative medicine and the development of fluorescence capability, the company invested 1 195 (1 288) KSEK in the product, patent, and application development during the period.

Financing

Cash, cash equivalents, and unutilized granted credits amounted to 13 572 (12 838) KSEK by the end of the period. The equity ratio was 29 (-41) %.

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:

Dilution of shares

Total shares January 31, 202320 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

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
Patrik Eschricht, CEO

For additional information please contact:
Patrik Eschricht
Tel: +46 702 69 99 61
E-mail: [email protected]
Web: www.phiab.com

Consolidated – PHI Group

Income statement (KSEK)

  Q3 Q3 YTD YTD FY
  2022/23 2021/22 2022/23 2021/22 2021/22
Net sales3 2642 7368 0316 9278 169
Cost of products sold-1 304-894-3 539-1 961-2 485
Gross profit1 9601 8424 4924 9665 684
Gross margin 60% 72% 56% 72% 70%
  
Selling expenses-1 974-3 168-7 634-7 129-9 303
Administrative expenses-2 671-2 901-6 510-6 616-7 388
R&D expenses-1 641-2 394-5 579-6 011-8 817
  
Operating result (EBIT)-4 327-6 621-15 231-14 790-19 824
  
Financial net-85-111-237-312-5 557
  
Result before tax (EBT)-4 412-6 732-15 468-15 102-25 381
  
Net Result (EAT)-4 412-6 732-15 468-15 102-25 381

Balance sheet (KSEK)

  Q3 Q3 FY
  2022/23 2021/22 2021/22
ASSETS  
Non-current assets  
Intangible assets17 82516 01917 038
Tangible assets652185181
Total non-current assets18 47716 20417 219
 
Current Assets  
Inventory3 6572 2172 979
Short-term receivables6 0513 82036 061
Cash and equivalents11 5721 7911 424
Total current assets21 2807 82840 464
 
Total assets39 75724 03257 683
 
EQUITY AND LIABILITIES  
Equity11 357-9 85526 983
Financial liabilities22 38028 76323 424
Operating liabilities6 0205 1247 276
 
Total equity and liabilities39 75724 03257 683

Changes in equity (KSEK)

  Q3 Q3 FY
  2022/23 2021/22 2021/22
Opening Balance15 547-3 0045 384
Equity issues, net47 268
Net profit-4 412-6 732-25 381
Translation difference222-119-288
Closing balance11 357-9 85526 983
Equity ratio29%-41%47%

Cash flow analysis (KSEK)

  Q3 Q3 YTD YTD FY
  2022/23 2021/22 2022/23 2021/22 2021/22
Operating activities    
Net result-4 412-6 732-15 468-15 102-25 382
Depreciation8749952 6052 9924 854
Translation difference312-120312-138-491
Operating cash flow-3 226-5 857-12 551-12 248-21 019
   
Increase (-)/decrease (+) in inventories490282-678-883-1 645
Increase (-)/decrease (+) in operating receivables-2 927-60929 540-88224 580
Increase (+)/decrease (-) in operating liabilities-1 579-2 110-1 256-3 780-981
Change in working capital-4 016-2 43727 606-5 54521 954
   
Cash flow from operating activities-7 242-8 29415 055-17 7931 139
   
Investing activities    
Development expenses-1 195-1 288-3 325-4 035-6 539
Patents-1 -326
Tangible assets-538-538-48
   
Cash flow after investments-8 975-9 58311 192-21 828-5 774
   
Financing activities    
Net proceeds from equity issues -10 279
Increase (+)/decrease (-) in borrowings13210 113-1 04421 36315 221
   
Cash flow from financing activities13210 113-1 04421 3634 942
   
Cash flow for the period-8 84353010 148-465-832
Cash and cash equivalents at the beginning of the period20 4151 2611 4242 2562 256
   
Cash and cash equivalents at the end of the period11 5721 79111 5721 7911 424
Incl. unutilized credits 13 57212 83813 57212 8382 508

Data per share

  Q3 Q3 YTD YTD FY  
  2022/23 2021/22 2022/23 2021/22 2021/22  
Earnings per Share, SEK-0,22-0,47-0,76-1,05-1,76 
Equity per share, SEK0,26-0,680,76-0,681,32* 
Not registrated shares 31 of April   6 057 729 
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, SEK1,9018,601,9018,605,60 
*Equity per share includes subscribed but not registrated shares

Parent company

Income statement (KSEK)

  Q3 Q3 YTD YTD FY
  2022/23 2021/22 2022/23 2021/22 2021/22
Net sales2 7512 3936 8804 8716 437
Cost of products sold-916-815-3 413-1 882-2 417
Gross profit1 8351 5783 4672 9894 020
Gross margin 67% 66% 50% 61% 62%
   
Selling expenses-843-2 534-4 568-5 056-6 412
Administrative expenses-2 671-2 901-6 510-6 616-7 388
R&D expenses-1 641-2 394-5 579-6 011-8 817
   
Operating result (EBIT)-3 320-6 251-13 190-14 694-18 597
   
Financial net-85-111-237-312-5 557
   
Result before tax (EBT)-3 405-6 362-13 427-15 006-24 154
   
Net Result (EAT)-3 405-6 362-13 427-15 006-24 154

Balance sheet (KSEK)

  Q3 Q3 FY
  2022/23 2021/22 2021/22
ASSETS  
Non-current assets  
Intangible assets17 82516 01917 038
Tangible assets652185181
Financial assets3 994
Total non-current assets18 47716 20421 213
 
Current Assets  
Inventory3 2722 2172 979
Short-term receivables11 6335 89734 864
Cash and equivalents10 947834721
Total current assets25 8528 94838 564
 
Total assets44 32925 15259 777
 
EQUITY AND LIABILITIES  
Equity16 086-8 60729 513
Financial liabilities22 38028 65022 380
Operating liabilities5 8635 1097 884
 
Total equity and liabilities44 32925 15259 777