Year-End Report 2022

ChromoGenics received order from Vasakronan and enters into cooperation in Germany

Q4 2022

• In Q4 2022, ChromoGenics’ net sales amounted to SEK 3.5 (13.7) million, a decrease of SEK 10.2 million compared to the corresponding quarter in 2021. A weakened market situation and challenges in the production had a negative impact on net sales for the quarter.
• ChromoGenics’ operating loss for the fourth quarter of the year amounted to SEK -11.6
  (-14.7) million, which is an improvement of SEK 3.2 million compared to the corresponding period in 2021. The company’s operating result benefits from lower external costs as a result of lower costs for rented personnel and consultants among other. The operating result was however negatively impacted by costs of around SEK 0.3 million related to the bridge financing raised in conjunction with the preferential rights issue conducted during the quarter and a provision for bad debts of around SEK 0.3 million.
• On October 5, 2022, the Swedish Energy Agency announced that it was granting ChromoGenics a deferment of its repayment obligation including amortization and interest until October 1, 2025. The decision is subject to a condition stating that an additional status update and reporting shall be done in August 2024, at which point the Agency has the right to reconsider the decision. The granted deferment is not specified by amount.
• On October 6, 2022, the Board of Directors resolved on a preferential rights issue of around SEK 39.7 million, which was subject to and subsequently received approval from the Extraordinary General Meeting of the company on November 8, 2022. To secure its financing need until the preferential rights issue was completed, the company raised a bridge loan of SEK 7.0 million.
• The preferential rights issue, which ended on November 29, was subscribed for approximately SEK 18.0 million with the support of unit rights and approximately SEK 1.4 million without support of unit rights. The remainder, approximately SEK 12.4 million, was subscribed for by issue guarantors in accordance with the issue guarantee agreements entered into with the company. ChromoGenics thus received SEK 31.7 million before issue expenses. The Swedish Companies Registration Office registered the issue on December 15, 2022.
• On December 7, 2022, the Board of Directors resolved on a directed new issue of 347,698 units to guarantors who have chosen to receive their guarantee commission in the form of newly issued units in ChromoGenics that were resolved upon by the Board on October 6, 2022, and approved by the Extraordinary General Meeting on November 8, 2022. Payment was made by the set-off of the claim. The Swedish Companies Registration Office registered the issue on December 15, 2022.
• On December 9, ChromoGenics announced it received an order for ConverLight® Static glass of approximately SEK 1.1 million for delivery during Q1 2023. The order refers to ConverLight® Static glass for one of Vasakronan’s properties in Uppsala. The project entails the upgrade and renovation of existing windows.
• On November 25, ChromoGenics announced that it had entered into an agreement with Vator Securities AB (“Vator Securities”) regarding the service Certified Adviser. Vator Securities will take over as the company’s Certified Adviser (CA) on February 26, 2023. Until then, Erik Penser Bank will continue to act as Certified Adviser for the company.
• On December 20, ChromoGenics announced it had signed a letter of intent with Hero-Group in Germany regarding the manufacturing, marketing and distribution of dynamic glass ConverLight® Dynamic.
• For the period October – December 2022, profit/loss after tax amounted to SEK -12.4    (-15.8) million, which corresponds to earnings per share of SEK -0.23 (-2.23), basic.
• Order intake for Q4 2022 amounted to approximately SEK 2.8 (3.2) million. The order volume at the end of the fourth quarter amounted to 7.2 million (14.7).
• Cash and cash equivalents amounted to SEK 24.1 (18.9) million on December 31, 2022.
   

EARNINGS PERFORMANCE IN SUMMARY

EVENTS AFTER THE END OF THE PERIOD

• On February 13, ChromoGenics announced it received an order for ConverLight® Dynamic glass of approximately SEK 1.0 million. The order involves ConverLight® Dynamic glass and control systems for a ceremony building under construction at the Järva cemetery in Stockholm for delivery during the summer of 2023.
   
• On February 15, ChromoGenics announced it enters into cooperation with SECM in France regarding manufacturing, marketing and distribution of the dynamic glass ConverLight® Dynamic.
   
• On February 15, ChromoGenics announced it introduced patent-pending ConverLight® Interlayer. ConverLight® Interlayer enables the glazing industry to manufacture smart dynamic glass without the need to invest in new equipment. ConverLight® Interlayer is accelerating the implementation of ChromoGenics partner strategy by simplifying partner production of ConverLight® Dynamic glass.
   

Comments from the CEO

ChromoGenics is a proptech company that contributes to more daylight and well-being indoors, higher energy efficiency, and a decreased footprint for the real estate industry.

Strategic activities that increase the scalability of the business
During the quarter, we have taken important steps in our strategic direction: to cooperate with select partners in the glass industry and focus more on our core competence, i.e., production and development of electrochromic films. We are thus increasing the scalability of our business, improving cash flow, reducing capital tie-up and shortening the road to profitability.

The market for laminated glass is large, around USD 21 billion globally, and consists of many regional actors that have good knowledge and local business relationships. The goal was to start to cooperate with two partners in 2022, which we did. We see good possibilities for growing together with both Finn Glass and HERO-Group. The goal for 2023 is to start to cooperate with an additional five partners and grow our business with them. We have now also started a cooperation with SECM in France, which has good experience from selling and manufacturing advanced glass solutions to France, Switzerland and other countries. We are now seeing high activity in these markets.

To lower the threshold and accelerate our strategy, we have developed and applied for a patent for ConverLight® Interlayer. This product makes it possible for laminated glass producers to manufacture smart dynamic glass in their regular operations without investments and is garnering considerable interest. We have also developed the next generation control system, which halves the cost per glass and enables fully wireless installations, which makes us unique on the market.

ESG, energy efficiency improvements and increased market processing create opportunities
We are seeing that the number of building starts in the residential sector has decreased sharply in Sweden, while commercial building starts are not showing the same negative trend. We believe that the increasing requirements around ESG and energy streamlining will create opportunities for us.

Our priority is on widening the market preparations in Europe in cooperation with other companies and focusing on communal properties such as nursing homes, schools and preschools in Sweden. Sales activities are high with positive response in these focus areas. We believe this is the right path, and that it will generate desired results in the form of an increase in order intake and sales.

Production
During the quarter, we faced challenges with the mechanical robustness in the production process. Lifespan, performance and quality are good, but deficiencies in the mechanical robustness created production shortages and waste.

Increasing the robustness of production and reducing waste levels are a priority, and these efforts are underway with the help of experts. A positive impact from this work is that we have been able to quadruple the rate of production of one of our thin films. An important step for lowering production cost and raising capacity.

Our solutions, in particular ConverLight® Interlayer, are generating considerable interest among new and existing partners. We are seeing a high level of activity in the market in Europe and increasing sustainability ambitions such as NollCO2 and BREEAM Excellent certifications in the Nordic region. We have a strong offer and a unique and scalable technology to capitalize on these trends.

I would like to conclude by thanking our new shareholders and those who have supported us through the years for your renewed confidence.

Fredrik Fränding, CEO 

This information constitutes such information that ChromoGenics AB is obligated to disclose in accordance with the EU Market Abuse Regulation. The information was submitted by the above-mentioned contact persons for publication on February 17, 2023, at 8:30 AM CET.

Contact:
Fredrik Fränding, CEO
Erik Elfström, CFO & Head of Investor Relations
Tel: +46 (0) 18 430 0430
E-mail: info@chromogenics.com

This report, together with previously published interim reports, is available in its entirety on the company’s website.
https://chromogenics.com/financial-reports/

About ChromoGenics
ChromoGenics is a proptech company producing smart dynamic glass that improves indoor environments and well-being and lowers buildings’ energy consumption, operating expenses and impact on the climate. The company’s product ConverLight® Dynamic is based on a unique patented technology from the Ångström Laboratory in Uppsala, where electrochromic coatings are sputtered onto plastic film. The result is a dynamic film that can be laminated between glass layers, which provides buildings with good solar protection and lowered environmental impact from production, transport and use. The dynamic film is easy to transport and can be applied by local partners in the glass industry, which means it is possible to avoid long-distance shipping of bulky glass. All of ChromoGenics’ products strive to follow the key words environment and health. This means a focus on environmentally friendly material, lower energy consumption, increased access to daylight and views and improved indoor comfort.

The company’s production facilities in Uppsala have been financed in part by a conditional loan from the Swedish Energy Agency. ChromoGenics’ share (CHRO) is listed on Nasdaq First North Growth Market, and Erik Penser Bank is the Certified Adviser.

ChromoGenics