NeoDynamics Interim Report Jan-June 2023

Second Quarter 2023

• Revenues amounted to SEK 343 (222) thousand, of which SEK 20 (10) thousand net sales, i.e., sales of finished products.

• Net loss amounted to SEK -26,086 (-17,423) thousand.

• Loss per share amounted to SEK -0.22 (-0.16).

•  Cash and cash equivalents amounted to SEK 7,754 (20,067 at year-end) thousand.

Significant events during the quarter

• NeoDynamics AB (publ) held an Extraordinary General Meeting on 3 April 2023. The Extraordinary General Meeting resolved to increase the share capital, and to resolve that the board of directors, for the period until the end of the next annual general meeting, shall consist of four directors (previously six).

• The Annual General Meeting was held on the 23rd May. The full agenda, proposals and resolutions can be found on the company website, www.neodynamics.com, under regulatory press releases.

• NeoDynamics, Inc. announces U.S. availability of NeoNavia, the first and only pulse biopsy technology. The system was commercially introduced at the American Society of Breast Surgeons annual meeting, on the 27th April.

• The final data set from NeoDynamics’ PULSE study was presented at The SBI Breast Imaging Symposium in Maryland, USA. The study demonstrated a success rate of 93% of biopsies from the lymph node.

• The board of directors of NeoDynamics resolved, subject to approval by an extraordinary general meeting, to carry out a rights issue of shares and warrants with preferential rights for existing shareholders, for an initial amount of up to approximately SEK 72 million to finance commercialization and marketing activities in the USA and Europe.

Significant events after the end of the quarter

• Results of NeoDynamics’ PULSE study presented at the 42nd Annual Congress of the German Society of Senology, Munich. The study has demonstrated that pneumatic pulses promoted high needle control and stabilization of target lesions during insertion of the needle and that it was possible to obtain multiple samples with a single insertion.

• NeoDynamics AB (publ) held an Extraordinary General Meeting on 27 July 2023. The Extraordinary General Meeting resolved to adopt new articles of association, approve the board’s resolution on June 22, 2023 on a new issue of units with preferential rights for existing shareholders, reduce the share capital and to authorise the board of directors to resolve on issues of shares, warrants and/or convertible instruments as further outlined in Appendix 5 of the minutes of the EGM of the articles of assocaition.

CEO Comment

Promising feedback from the US

NeoNavia® configured with the FlexiPulse needle was commercially launched in the US at two prestigious conferences at the end of April / beginning of May. This was a great opportunity for us to meet and interact with key opinion leaders and practitioners, and the feedback received has been very positive.
The US health care market is very open to new and innovative ways of working, as little advancements have been made in this area for many years. Our go-to-market strategy in the US is to work narrow and deep with top university hospitals, and we are currently in advanced negotiations with several leading university hospitals.

Testing and fine-tuning continues in Europe

In Europe, the first batch of CorePulse needles was delivered to clients in Germany in April and evaluations were subsequently carried out. The trials showed great yield results, but also that additional minor fine-tuning of the CorePulse needle was needed. As always, high quality remains our top priority. The required adjustments have now been implemented and new deliveries are expected in September.

Our PULSE study is coming to the very end, and the full study will be published in the Autumn of 2023. Already now, we can conclude that this study has given us prestigious entries to present abstracts and share our data both in 2022 and 2023. We consider this to be a very good ‘return on investment, which will further support our commercial efforts in the US.

Our COMPULSE study in the UK is progressing according to plan. It is a comparative study using the FlexiPulse needle to demonstrate product performance for ultrasound-guided biopsies of axillary lymph nodes in patients with breast cancer. More than 100 patients (out of 400) have already been recruited (and biopsied) and the recruitment process is running according to plan. All COMPULSE study centres have confirmed that they intend to use our needles commercially, in parallel to participating in the study, further validating their commitment to the product.

Financing to be secured via rights issue of up to SEK 72m initially

Since the Autumn 2022, we have worked diligently to raise long term financing to fund operations and secure the commercial launch of NeoNavia in the US.

The markets have been challenging, however, we have decided on a rights issue which we announced on 22 June. This will allow us to raise sufficient capital to sucessfully commercialize our product in the US, and it also allows all existing shareholders the opportunity to participate in the issue as well.

As a token of trust, both the Management and Board of NeoDynamics are participating in the rights issue. The board’s resolution on the rights issue was approved by the EGM on 27 July.

We are very grateful that key investors have provided bridge financing, just as they have committed to participating in the rights issue, which is 80% guaranteed upfront.

Financial performance in Q2

As a result of the implemented extra product fine-tuning of our CorePulse needle in Q2, we do not expect to generate substantial revenue until the latter part of H2 2023. Our administrative costs have been higher in this quarter than the same time last year, due to the onboarding of key sales staff in our US organisation. The outlook for 2024 remains encouraging as we expect to start generating both revenue and operating cash flow towards the end of 2023.
                       
CEO Anna Eriksrud

The report in full is attached as a pdf file to this press release and can also be found on the company's website on the following link: https://www.neodynamics.com/en-gb/reports