FINANCIAL SUMMARY

Second quarter, 1 April - 30 June 2020

• Net sales amounted to kSEK 5,292 (2,758), a 92 percent increase compared with the corresponding period in 2019.

• Profit or loss before tax amounted to kSEK 93 (-1,388).

• Net sales amounted to kSEK 3,946 (2,060).

• Profit or loss before tax amounted to kSEK -579 (-1,346). 

First half-year, 1 January - 30 June 2020

• Net sales amounted to kSEK 10,202 (4,721), a 116 percent increase compared with the corresponding period in 2019.

• Profit or loss before tax amounted to kSEK 371 (-2,507).

• Total equity amounted to kSEK 14,991 at the end of the period.

• Cash and cash equivalents amounted to kSEK 7,700 at the end of the period.

• Net sales amounted to kSEK 7,741 (3,466).

• Profit or loss before tax amounted to kSEK -553 (-2,131).

• Total equity amounted to kSEK 56,207 at the end of the period.

• Cash and cash equivalents amounted to kSEK 685 at the end of the period.

Result and position

The Group's result for January - June 2020 amounted to kSEK 371 before taxes, or SEK 0.029 per share. The number of shares outstanding was 12,540,810 as of 30 June 2020. Cash and cash equivalents at the end of the period amounted to kSEK 7,650.

SIGNIFICANT EVENTS DURING THE SECOND QUARTER

• Announced that order intake across the European markets continued without significant impact from the corona crisis.

• NHS Oxford University Hospitals in the UK included Redsense as a precautionary measure against Venous Needle Dislodgement in their patient safety guidelines and patient information.

• Redsense obtained MDR registration on the new legislation's original date of application. (Application of the EU's revised legal framework for medical devices will be mandatory from May 26, 2021, following a one-year postponement due to COVID-19.)

• Growing US dialysis provider Sanderling Renal Services, headquartered in Tennessee, announced that it had selected the Redsense system.

• Munson Healthcare, serving more than 500,000 residents in northern Michigan, adopted the Redsense system in its home dialysis services.

• In early June, the Company announced its largest single order in company history, from one of its US distributors.

• In cooperation with the distributor Dirinco, an evaluation programme launched in the Netherlands to test a new version of the Redsense Alarm that enables a direct connection into the nurse call system of a clinic.

• Two members of Redsense Medical's senior sales management acquired shares in the Company under a personal incentive programme adopted in 2016 through an agreement between them and the CEO.

COMMENTS FROM OUR CEO

The successful trajectory continues with a net-profit 1st half-year

We reached a historic first net-profit half-year with a sales of SEK 10.2 million, more than doubling, 116 percent, the result versus the same period last year; this is already 77 percent of last year's annual sales.

Q1 2020 marked the Company's first positive quarterly result and in Q2, we have repeated that feat with a record quarter. Sales for the quarter reached SEK 5.3 million, which is a 92 percent improvement on Q2 2019 and a 6 percent improvement on the first quarter. This brought the result for the year thus far to SEK 371 thousand.

Strong order intake and further acknowledgement

We have not seen any significant negative impact on the order intake on our European markets. We did expect our product to show demand resilience since it is used for life-saving and essential treatments, in particular with the growing focus on home treatment; however, having said that, the limited access to customers due to the pandemic may lead to longer lead-times and delay growth, particularly in acquiring new customers.

In the UK, we received further acknowledgement during the quarter that our solution is becoming accepted as part of the general protocol for safe treatment, when NHS Foundation Trust Oxford University Hospitals made explicit mention of our solution in their guidelines and information.

The US remains the driving force

The US continues to serve as our driving force, stimulated by the US policy encouraging and creating incentives for home and nocturnal hemodialysis, and we have seen encouraging news from that market during the quarter. Sanderling and Munson have joined the dialysis providers that are turning to Redsense to improve the safety of their patients. It is worth considering that the US policy initiative aims to increase the rate of home dialysis from 12 percent, numbers including PD, to a high 80 percent of new patients by 2025, so there is every reason to believe that demand for reliable solutions will continue to grow.

In these challenging times with less face to face meetings, specifically in the clinical environment; we have changed to a high degree of digital customer meetings, training and interactions, which works well with our established customer base and have proved to be time efficient as well. We have however experienced that interaction with new customers is limited. Also, the pandemic is impacting the hospital budgets, limiting funds for new initiatives.

We have strengthened our supply chain, managed to accommodate longer delivery lead-times, found new ways to interact with our customers and thus shown the ability to innovate and lead the way, and I am proud and humbled by the effort of the dedicated team at Redsense, which make me certain that our greatest successes are still to come. Redsense Medical is looking towards a second half of the year as inspiring as the first and that we will proceed to make a difference in the outcome of patients worldwide.