Brain+ publishes its Annual Report for 2023 – A year of market access, product development and a refocused commercial strategy

Copenhagen, Denmark, April 28, 2023 – Brain+ A/S (Nasdaq First North: BRAINP) 

Brain+ A/S (“Brain+”), a company pioneering health tech solutions for better dementia management, today published its Annual Report for 2023. The report emphasizes the company’s financial and business performance during the reporting year and its outlook and objectives for 2024.  

To secure the necessary funding for the company’s continued business activities and the execution of its UK focused commercial plan, Brain+ earlier today announced a partially secured unit rights issue of up to DKK 8.9 million with pre-emptive rights for its existing shareholders (see Company Announcement “Brain+ A/S announce a partially secured rights issue of units of approximately DKK 8.94 million to fund operations and execution of its UK commercialization plan.”)  

Financial highlights for 2023: 

• Gross profit for 2023 amounted to DKK 2.4 million (2022: Revised gross profit of DKK 2.6 million).  
  
  Despite initial revenues from sales, the income component of gross profit in 2023 mainly comprises revenue from grant-funded projects and income from activated own development work. Activated development work for own cost decreased in 2023 to DKK 3.5 million from DKK 5.0 million in 2022 because of the company’s transition towards market access and commercialization, which has shifted part of its resources away from development activities. 

• Staff expenses in 2023 amounted to DKK 11.0 million compared to DKK 12.1 million for 2022. The reduction in staff expenses is a result of Brain+’s diligent cost control and refocusing of resources. 

• Net loss in 2023 amounted to DKK -19.1 million (2022: DKK -9.7 million).  
  
  The higher accounting loss in 2023 was driven mainly by three elements: 1) interest expense of DKK 2.2 million related to the company’s unit rights issue in May 2023, 2) increased amortization on development projects as an additional DKK 22.7 million in activated development projects were completed and thus subject for amortization from 2023, and 3) an impairment loss of DKK 4.9 million realized on a subset of activated development projects. About half of the interest expense, and all of the increased amortization and the impairment write-down did not have any cash-flow impact. 

• As of December 31, 2023, the company's cash and cash equivalents amounted to DKK 3.1 million. 

Financial outlook for 2024 

• In 2024, Brain+ forecast a net result of between DKK -15 and DKK -12 million. 

Selected business milestones achieved in 2023 and to date in 2024: 

• Closed 5 sales contracts on pilot access to use the CST-Assistant v1.0 with four Danish municipalities, including a contract with Copenhagen municipality, initially covering 4 of the municipality's +20 dementia care centers. 

• Started a UK pilot project on the CST-Assistant in partnership with Age UK to get valuable data on product-market fit to instruct the completion of the product for commercialization.   

• Signed a contract with Quiddity Health, the #1 UK specialized health tech marketeer and sales partner to prepare and plan the UK market entry for the CST-Assistant. 

• Completed the Danish usability trial of a pilot version of v.2.0 of the CST-Assistant with valuable user performance data to feed completion of the product.  

• Received a CO-PI grant of up to DKK 3.5 million to scale implementation of CST-Assistant into dementia care in Denmark.   

• Presented our software-based CST solutions for better dementia management at two key European dementia conferences: the 33rd Alzheimer’s Europe conference and INTERDEM, the most important pan-European network of researchers and clinicians disseminating psychosocial interventions in dementia.  

• Secured intellectual property rights on key design and user interface elements of the CST-Assistant in the EU and the UK.   

• Received promising early feasibility results on the CCT technology for cognitive training in dementia from a clinical study conducted at Nottingham University. 

Kim Baden-Kristensen, CEO of Brain+, commented in connection with the Annual Report: 

"We are aiming to fundamentally improve the way people with dementia are being treated and cared for, and our ambition is three-fold: Enable people with dementia to live better lives, provide cost savings and better use of resources in elderly care, and create a successful and valuable international business.  

In 2023, we have worked on extending our collaborations and customer network in our home and test market, Denmark and shown relevance and customer demand with the first 6 initial contracts signed. In addition, we have tested our newly developed and significantly upgraded version of our CST-Assistant with 5 Danish municipalities in a successful Danish usability study conducted with the leading CST-specialist in Denmark. Via our initial market outreach in Germany, we learned that while supportive reimbursement are in place for health tech products, the German market is less attractive short-term than projected and we started to turn our go-to-market efforts towards the UK — also to focus our resources and reduce costs. The UK market has a high health tech readiness, the relevant reimbursement pathway, and, not least, the most expanded CST use, representing attractive conditions for our CST-based health tech solutions for dementia to reach proof-of-business and commercial scaling the fastest. 

He further added, "Due to lower than projected proceeds received from our unit rights issue in March 2023, our current cash position is insufficient to sustain our activities through 2024. Therefore, and as earlier communicated, we need to raise further capital and have today announced a new unit rights offering in June. With maximum proceeds from this unit rights issue, increasing sales from the end of 2024, and expected additional UK grants, we believe to be able to bridge the path towards sustained profitability of our business." 

The full Annual Report for 2023 is attached to this announcement. For further information on the company and to download the Annual Report 2023, please visit Brain+'s website: www.brain-plus.com

For more information about Brain+, please contact: 
Kim Baden-Kristensen, CEO 
Phone: +45 31393317 
E-mail: kim@brain-plus.com  

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