Stenocare published November 06, 2023 guidance for gross sales and break-even for 2024. The Company listed a number of opportunities and strategic initiatives, that had the potential to drive growth for 2024. Stenocare has successfully delivered on the strategic initiatives, but market conditions have not evolved according to expectations during H1 2024. Based on the latest market data and actual market performance, the Company is therefore updating guidance for 2024 with gross sales of 6-8 mDKK and break-even is not realistic with the new sales forecast. The Management and Board will work with the latest market data and market performance input to revise guidance for break-even in due course - including information for liquidity.

During 1H 2024, Stenocare has continued its strong performance with 2 new medical cannabis oil products approved for sales in Denmark and Australia. The new patented Astrum product has the potential to revolutionize the industry. With this the Company has shipped 15 product SKUs to 5 different countries. In Q2 2024, Stenocare further improved the financial health of the Company with the last Warrant Issue transaction being subscribed by 88,3%. At the same time the Company refinanced its short-term loans - meaning the debt of 6.0 mDKK is now reduced to 2.8 mDKK in long-term debt.

Stenocare performance on 2024 growth assumptions:
The November 2023 guidance listed four strategic initiatives as important milestones for meeting the goals and ambitions. First: The sales of medical cannabis in Denmark was key, and receiving approval from the Danish Medicines Agency to sell a new oil product was equally important. Stenocare successfully completed the approval process with the Danish Medicines Agency and introduced the new oil product to the market early in Q2 2024 as planned.

The latest data from the Danish Health Authorities show a small decline in total sales for all products with medical cannabis in the market during Q1 2024, with flucturation quarter over quarter since 2022 that show a positive total trend for the market (see graph). Stenocare has a growth strategy to win market share from the other products in the market, and this model has delivered growth for the Company since 2021. Some prices have declined as a result of increasing competition and the very dynamic Danish pricing model for pharmaceuticals. Stenocare is working to resolve certain unfavorable market dynamics concerning pricing and reimbursement principles on products that impacted the Danish market from May and onwards. This has led to slower sales growth than anticipated, even though Stenocare is expecting to deliver +20% more product units in Denmark during 2024. These market changes necessitate a reassessment of guidance.

Second: Stenocare continues developing the 5 international markets with local partners. The Company has successfully received regulatory approval to sell new products in Australia and Germany, and also formed new partnerships to increase reach to patients. It is expected that Stenocare will deliver +36% more product units across the markets. With medical cannabis being prescription-based, the promotional options for the products are limited. In some instances such as Denmark, there are also strict limitations as to promoting product towards physicians. Consequently, the adoption of medical cannabis into clinical practice has not accelerated to the extent predicted some years ago. However, the patient interest and demand seems to remain. Stenocare os working diligently to support patient access to high quality prescription-based medicial cannabis.

Third: Product innovation of Stenocare's next generation cannabis oil products, which are designed to set new pharma grade standards for efficacy and potency of medical cannabis. The potential of this patented product is global, and Stenocare succeeded having the first Astrum 10-10 oil product approved for sales in Australia and Germany faster than expected. The first sales to patients are planned for Q4 2024.

Fourth: Stenocare is working with the Danish Medicines Agency to complete the review, inspection and approval of its indoor cultivation facility in Denmark. There has been good progress in the process, and the goal is to have it completed by the end of 2024. Then Stenocare can begin exporting its bulk medical cannabis in 2025. This state-of-the-art facility will be the first of its kind in Denmark where the product quality is in full control due to the bespoke design and technological features of the facility.

In summary, even though Stenocare has managed to deliver on the guidance strategic initiatives for 2024 and total sales in units is expected to grow by +36%, the full expected sales growth has not materialised due to primarily the special situation in the Danish market. The updated guidance for 2024 is gross sales of 6-8 mDKK, and the ambition for break-even in Q4 2024 is not realistic with the new sales forecast.