Lumito AB publishes Quarterly Report 4, 2023

Financial overview
Fourth quarter
October 1 – December 31, 2023

• Net sales amounted to TSEK 0 (0).
• Result after taxes amounted to TSEK -5 777 (-6 612).
• Earnings per share before and after dilution amounted to SEK -0,03 (-0,03).
• Cash flow from operating activities after changes in working capital amounted to TSEK -5 480 (-5 153).

Full Year
January 1 to December 31, 2023

• Net sales amounted to TSEK 0 (0).
• Result after taxes amounted to TSEK -25 804 (-27 037).
• Earnings per share before and after dilution amounted to SEK -0,12 (-0,16).
• Cash flow from operating activities after changes in working capital amounted to TSEK -25 315 (-29 576).
• Cash and cash equivalents on the balance sheet date amounted to TSEK 22 454 (52 715).

Fourth-quarter sales, earnings, cash flow and personnel

Net sales for the fourth quarter of 2023 amounted to TSEK 0 (0).

Operating costs, including capitalised costs for the fourth quarter, amounted to TSEK 9 741 (13 259). A smaller share of the costs has been capitalised in the quarter compared to the corresponding period last year, TSEK 3 175 (6 329).

Operating income for the fourth quarter amounted to TSEK -6 500 (-6 863), and the result after taxes amounted to TSEK -5 777 (-6 612).

Fourth-quarter cash flow

Cash flow from operating activities during the fourth quarter amounted to TSEK -5 746 (-6 670). After changes in working capital, cash flow for the period was TSEK -5 480 (-5 153). Total cash flow for the period amounted to TSEK -332 (-11 974). During the period, loans amounting to TSEK 10 000 have been procured.

Net sales and results, full year, January 1 to December 31

Net sales for twelve months of 2023 amounted to TSEK 0 (0).

Operating costs for twelve months, including capitalised costs, amounted to TSEK 40 764 (41 911). A slightly lower proportion of the costs have been capitalized during the full year compared to the corresponding period of the previous year, TSEK 13 933 (14 314). The slightly lesser reduction in costs is primarily related to lower external costs for research and development.

Operating income for twelve months amounted to TSEK -26 525 (-27 287), and result after taxes amounted to TSEK -25 804 (-27 037).

Cash flow, Full Year

Cash flow from operating activities during twelve months amounted to TSEK -25 679 (-26 905). After changes in working capital, cash flow for the period was TSEK -25 315(-29 576). Total cash flow for the period amounted to TSEK -30 262 (17 276). During the period, loans amounting to TSEK 10 000 have been procured. The previous year’s figures included a new issue of TSEK 61 658.

Personnel

The average number of employees during the full year was 15 (15), of which 4 (3) were women.

Investments, liquidity, and financial position

On December 31, 2023, the accumulated recorded investments for capitalised research and development expenses amounted to TSEK 89 754 (76 661). The amount refers to continued development work related to the Company’s products. The capitalisation during the year has been by principles based on development, primarily consultancy costs.

Recorded investments in the patent portfolio amounted to TSEK 4 805 (3 965), most of which are investments in patents and patent applications related to the Company’s products.

Cash and cash equivalents on the balance sheet date amounted to TSEK 22 454 (52 715).

Equity amounted to TSEK 103 159 (129 977).

The equity ratio was 85 (95) percent.

The Board proposes no dividend distribution for the financial year 2023.

Significant events during the fourth quarter

• CE marking and the launch of SCIZYS are taking slightly longer than expected. The current assessment, if everything goes according to the updated schedule, is that it may be possible to finalize and obtain CE marking for SCIZYS in the first months of 2024.

• The first factory-produced SCIZYS reagent kits have been manufactured. The initial batch of Lumitos reagent solution intended for sale to end customers is now produced by Lumitos' production partner, Uniogen Oy.
• An internal feasibility study for multiplexing has commenced. The purpose is to explore the possibilities of multiplexing by adding another nanoparticle label to the company's unique UCNP-based technology.

• Digital Pathology & AI Congress in London on December 7-8. The presence is part of the company's brand-building efforts within its primary target audience, ahead of the upcoming launch of SCIZYS.

• Decision made to take a loan of 20 MSEK and conduct a free-of-charge new share issue of units consisting of subscription options TO5 and TO6 with preferential rights for existing shareholders. The issuance consists of a maximum of 4,300,781 units, equivalent to 17,203,124 subscription options of series TO5 and 17,203,124 subscription options of series TO6. Each subscription option, of each series, entitles the holder to subscribe for one (1) share in the company. The subscription price for shares subscribed for using the warrants of series TO5 is 70 percent of the volume-weighted average price of the Company's share during the period from May 13, 2024 to May 24, 2024, however, not less than the share's quotient value (currently SEK 0.025) and not more than SEK 1.20. The subscription price for shares subscribed for using the series TO6 warrants is 70 percent of the volume-weighted average price of the Company's share during the period from October 21, 2024 to November 1, 2024, however, not less than the share's quotient value (currently SEK 0.025) and not more than SEK 1.40. Regarding the loan, the first disbursement took place on December 15, and the second disbursement will occur on May 13, 2024.
• The Nomination Committee was appointed for the Annual General Meeting in 2024. The composition of the Nomination Committee consists of Mats Olsby, Masoud Khayyami, and Håkan Andersson.

Significant events after the end of the period

• A research group at Tyndall National Institute in Cork, Ireland, has published an article in Biomedical Optics Express titled "High contrast breast cancer biomarker semi-quantification and immunohistochemistry imaging using upconversion nanoparticles." Lumitos' technology with upconversion nanoparticles (UCNPs) is used in the research study.

• Lumitos CEO Mattias Lundin has informed the board that he wishes to resign as CEO of the company to assume the role of CEO in another company. Mattias Lundin has been the CEO of Lumito since March 8, 2021. Mattias will continue in his current role during the notice period, focusing on launching SCIZYS, and will leave his position no later than August 19, 2024. The board will immediately initiate the process to find his successor. Mattias is intended to be proposed as a new board member at Lumitos' regular annual general meeting.

CEO comments

The fourth quarter has been characterised by focused work on completing the type testing and strengthening our position in the market before launch. We have also ensured our liquidity through loans and the issue of warrants, which were fully subscribed several times over. A plan we decided on to benefit our shareholders in the best way.

During the quarter, an internal multiplexing feasibility study was initiated to enable simultaneous analysis of multiple markers in a single tissue sample. We believe that this technology will further strengthen our competitiveness and is therefore an important step in the right direction. At the Digital Pathology & AI Congress in London in December, we showcased our digital images to stakeholders through a new, user-friendly viewer, in collaboration with Katana Labs. The interest shown in SCIZYS is palpable and we are getting the benefits of our technology confirmed.

As we previously communicated, the goal has been to complete the ongoing type testing as part of the basis for the CE marking of SCIZYS by the end of 2023. At the beginning of the fourth quarter, we realized that this schedule would not last and that the plan needed to be adjusted by a few months. A close dialogue is held between Lumito, Nemko and Optronic to complete the type testing, and internal work is underway to complete all the documentation. In the end, we will be able to offer the best and safest product possible to our customers.

2023 has been a year where the type testing and marketing to strengthen Lumito as a brand and SCIZYS as a product have been in great focus ahead of the upcoming launch on the research market. We have been working daily to build relationships with potential customers and partners. An intense year of a lot of hard work is now behind us. I am very satisfied and happy about the interest shown by our shareholders to join and help our company take the next step by launching SCIZYS and becoming fully commercial.

We are exiting 2023 with promising results in our first international preliminary study; we were invited to present Lumito's technology at Roche's annual cancer symposium in the US, the production agreement with Uniogen is in place, our first reagent kits are ready for sale, and we are approaching the goal of the type-testing.

Now, we look ahead to a new year full of opportunities to be involved and contribute to the important development in histopathology research and to offer the market a completely new solution for digital pathology.

Lund, February 2024

Mattias Lundin
CEO at Lumito AB (publ)