To read the whole report (in Swedish), visit: http://inhalation.se/investors/finansiella-rapporter/

CEO statement

Our first quarter started out strong with an increased revenue of 17% compared to the same period the year before. We also have a continued improved operating profit through continuous cost control and a streamlined organization that is designed to reach profitability in the near term and deliver growth according to our plan.

Through the investment in the expansion of our inhalation services, we are seeing great interest and an increased pipeline of inquiries and dialogues being conducted with a large number of potential customers. Conversion to orders has been slower in Q1 than expected due to, among other things, (1) the continuing challenging financial situation for companies in biotech and pharmaceutical development and (2) the timing of the start of new inhalation projects among our customers. We are working purposefully to convert these requests into signed orders.

The ongoing research collaboration with the American FDA for our In Vitro Module DissolvIt is progressing as planned and we have so far invoiced the FDA just over SEK 2 million for completed work. We look forward with confidence to the completion of this study which is planned for the end of 2024.

Our Phase-I clinical study has now published in the respected journal "the European Journal of Pharmaceutical Sciences". This enables new collaborative discussions with companies active in the clinical market, a market that ISAB has not previously worked in, and which is estimated at around SEK 5 billion. Access and processing of customers in the clinical market will require partnership with companies that already have experience and provide products or services in the market, and where our service offering can be seen as an important complement.

We are in continued dialogue with partners in inhalation research to expand and supplement our portfolio, which in turn should lead to a higher market potential and increased customer base.

Huddinge

28 May 2024

Manoush Masarrat

CEO

• Increased revenue by 17% compared to the same period the year before.
• Continued improved operating profit on the way to positive cash flow in the short term.
• The ongoing research collaboration with the US FDA continues according to plan with the goal of being completed in the second half of 2024.
• Publication of our Phase-I clinical study in "the European Journal of Pharmaceutical Sciences", where the study results show that PreciseInhale enables `Regional Targeting' as well as greater precision and control than aerosol dosing performed with a standard commercial inhaler.

• Net revenues 3,920 kSEK (3,238)
• Operating result -775 kSEK (-2,099)
• Earnings per share before and after dilution -0.05 SEK (-0.20)

Order intake during the period SEK 402,000 (2,529)

Order backlog at the end of the period SEK 5,781 thousand (11,194)

Order intake is the value of products and services sold during the current period, i.e. sales, not to be confused with net sales.

Order backlog is signed customer contracts for both products and services that have not yet been invoiced to the customers, where work is still in progress and delivery has not yet taken place to the customer.

• On January 22, the company announced that it has entered into a strategic partnership with the German company Actarmo Medical GmbH. This is in line with the company's stated strategy to expand its portfolio within inhalation research services. Actarmo has an established customer base and expertise in formulation development, analytical testing under full good manufacturing practice (GMP) and consulting services for all aspects of inhaler delivery devices. With this collaboration, ISAB's potential market (TAM) expands by 30% to a total sum of approx. 630 MEUR.
• On March 11, the company announced the publication of its feasibility study for clinical use of the PreciseInhale platform in the prestigious publication "the European Journal of Pharmaceutical Sciences". This enables in-depth collaborative discussions with companies active in the clinical market that ISAB did not have access to before, a market with an estimated value of SEK 5 billion.

• On April 10, the company announced that it had been invited by the FDA to present the company's technology at the FDA's public workshop GDUFA (Generic Drug User Fee Amendments) on May 20, 2024. This workshop will be available to the public and the purpose is to inform about ongoing research which can contribute to and improve the development of generic medicines.
• On May 21, the company announced a product order with a value of approx. SEK 700,000. This order is from a returning long-term customer who is among the top 5 in the world in generics and has had ISAB's PreciseInhale instrument and DissolvIt module installed for several years.

Selected financial data in summary

2024 Jan - Mar 2023 Jan - Mar 2023 Jan - Dec
Net revenues, kSEKr 3,920 3,238 17,504
Operating profit kSEK -775 -2,098 -3,756
Profit after tax kSEK -799 -2,276 -4,744
Balance sheet total kSEK 16,865 14,556 18,168
Cash flow for period, -53 1,770 5,986
kSEK
Cash flow for period per -0.01 0.16 0.45
share (SEK)
Cash and cash 7,772 3,609 7,825
equivalents kSEK
Earnings per share -0.05 -0.20 -0.36
before and after
dilution kSEK
Equity, kSEK 12,155 5,162 12,954
Equity per share (SEK) 0.80 0.45 0.85
Equity ratio, % 72.07% 35.46% 71.30%
R&D costs/operating 44.56% 36.38% 38.75%
costs
Number of shares 15,167,637 11,375,734 15,167,637

Multi-year overview
kSEK 2023 2022 2021 2020 2019
Net revenues 17,504 12,194 9,422 10,137 8,949
Profit after net financial terms -4,744 -12,125 -16,609 9,875 -4,345
Balance sheet total 18,168 12,985 26,112 18,488 23,198
Equity ratio, %, 71 58 75 57 22
Average no. of employees 8 9 9 8 7

To read full report (in Swedish) go HERE. (https://inhalation.se/investors/finansiella-rapporter/)