Coala-Life Group AB quarter three 2023

Third quarter 2023

• Net sales increased to SEK 14.1 M (5.0).
• EBITDA amounted to SEK -30.0 M (-27.8).
• Operating income totaled SEK -32.3 M (-28.2).
• Profit after tax was SEK -31.4 M (-18.5).
• Earnings per share was SEK -0.1 (-0.3).
• Cash flow from operating activities was SEK -6.4 M (-36.1).

The period, January 1, 2023 – September 30, 2023

• Net sales increased to SEK 39.8 M (7.5).
• EBITDA amounted to SEK -90.5 M (-99.4).
• Operating income totaled SEK -97.1 M (-101.7).
• Profit after tax was SEK -94.3 M (-88.6).
• Earnings per share was SEK -0.4 (-1.4).
• Cash flow from operating activities was SEK -65.1 M (-122.5).

Events in the quarter

• On September 25, the outcome was announced of the warrants that were issued in the first quarter of 2023, and the company received approximately SEK 5.5 M less issue costs.
• On September 19, the company took out a bridge loan of SEK 5 M to secure short-term liquidity needs.
• On September 11, the company initiated a cost-saving program to reduce total costs by 30% that it is deemed will be fully implemented in January 2024.
• On September 1, CFO Richard Roa left the company and the company’s controller Robin Danielsson Källmark was appointed interim CFO.
• On August 2, the company announced that Emma Strömfeldt had resigned as a Board member of Coala Life Group AB (publ).
• On July 11, the company issued a notice to attend an Extraordinary General Meeting on July 31 for a resolution on a directed new share issue for some of the company’s largest owners. The directed new share issue was approved at the Extraordinary General Meeting, which will raise SEK 17 M for the company, less transaction costs.

Events after the end of the quarter

• On November 21, the company announced that the Board of Directors is proposed to resolve during an Extraordinary General Meeting on December 22, 2023 on an upcoming rights issue of approximately SEK 75.4 M and on warrants of approximately SEK 18,8 M. The rights issue is planned to run from January 8, 2024 to January 22, 2024 and the subscription period for the warrants is planned to run between May 30, 2024 to June 12, 2024.
• On November 21, the company entered into new brigde loan agreements of SEK 20 M together with existing loans of SEK 5 M.

Extract from comments from the CEO, Dan Pitulia
Coala Life’s focus is the US market for remote patient monitoring (RPM) in the home environment, where we offer Managed RPM, a full-service solution. Our service provides patients and the health care sector with solutions for non-invasive and patient-centered indicative decision support, using algorithms to predict heart and lung disease and thereby contribute to avoiding certain conditions developing. Our strategic goal is to dramatically improve quality of life and clinical outcomes for the millions of patients affected by chronic or acute cardiovascular and other diseases.

We operate in a market undergoing rapid growth. According to Medi-Tech Insight, the global healthcare consultancy, the total RPM market in the US will reach over USD 18 billion by 2026, with an annual rate of growth of 25%. Coala Life is well positioned to take part in this growth, and we have high expectations for our future progress.

Our sales growth has been good, in particular since our operations in the US started up in earnest in the spring of 2022. Sales in the third quarter was SEK 14.1 M, compared with SEK 5.0 M in the year-earlier period. Sales from January to September totaled SEK 39.8 M (SEK 7.5 M in the year-earlier period). The gross margin remained high, totaling 85% (83) for the period.

Our expanded venture in the US market has required a professional organization that is capable both as regards attracting new clinics as part of sales initiatives and delivering on the follow-up, reporting and assistance that patient monitoring requires. This has involved a substantial increase in the organization, and the average number of full-time employees and consultants in the period was 89 (39) and has lead us to not yet achieve improvements in operating income, which for the third quarter totaled SEK -32.3 M (-28.2). The company therefore initiated a cost-saving program in September to lower its total costs by 30%. The effect of the measures we have taken to date will be a gradual reduction of costs, and the program is expected to be fully implemented in January of 2024. Further efficiency improvements have now been identified, with savings of just over SEK 5 M on an annual basis, and these will also yield a full effect in Q1 2024.

Comments from our CEO can be read in full in the interim report.

The interim report is available on the company´s website:
https://investors.coalalife.com/en/investor-relations/financial-reports-and-presentations/