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Loudspring Oyj: Q1 2022 Summary

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Loudspring Oyj

Company release

26th April 2022 at 9:00 (EET)

Please note that this report is not a fully comprehensive report of all events, nor is it in any way a financial performance report. It is only a summary of the main events that have affected us and our portfolio during the quarter and before the date of this report where separately indicated below.

In the quarterly report we will not comment on every portfolio company but focus on our core holdings. To get a comprehensive overview of individual portfolio companies’ businesses one should review additional documents such as the company description and the supplement to the company description that were published in 2016, as well as the latest annual and semi-annual reports. These documents are available at loudspring.earth.
 

Loudspring Q1 summary

During the period, Loudspring has strengthened its financial position which enables the company to continue the transformation process into an industrial company through Eagle Filters. During Q1, Loudspring has i) executed a rights issue of approximately EUR 2.5 million. The rights issue was oversubscribed, and total subscriptions amounted to 124% of the offered amount ii) carried out a direct share issue of EUR 0.6 million, and iii) sold 18,1% of Nuuka Solutions Oy for EUR 2.0 million, which also will have a EUR 1.0 million positive impact on Loudsprings 2022 result. 

Key portfolio developments during Q1

Eagle Filters

  • Revenue for 2022 and order backlog were EUR 2.2 million (unaudited estimates) at the time of reporting.

  • The company received a 4-year order from a South-America utility, totalling appx EUR 0.75 million (out of which EUR 0.25 million is expected revenue recognition for 2022).

  • Eagle Filters received the FFP2 and FFP3 certification for its Saana 300 product line.

  • Logistics and production challenges continued in Q1 which affected revenue negatively for the first part of the year. New production equipment is targeted to be installed during Q2, significantly increasing production capacity starting H2 2022.

  • The company targets EUR 4.5 - 6.0 million revenue for 2022.  

  • Russia's attack on Ukraine may have negative effects on Eagle Filters material sourcing, customers and financing. Although the company does not have any assets nor significant customers in Russia/Ukraine, the general disturbance to the global energy market may affect customer demand. Also, the disturbances in material prices and availability may have an impact on production and margins.

Nuuka Solutions

  • Monthly SaaS revenues amounted to EUR 95 thousand at the end of the quarter (unaudited).

  • Nuuka raised an EUR 1.0 million equity investment from a US based venture investment company.

  • Generation of significant energy savings by using Nuuka AI in public and commercial buildings continued.

  • Customer interest for Nuuka AI products increased and the sales pipeline continued to grow but churn is also expected from older generation product.

RISKS AND UNCERTAINTIES

Loudspring Oyj (the “Company”) and its portfolio companies (the “Portfolio Companies”) are associated with a number of risks and uncertainties including but not limited to the following:

  • The Portfolio Companies of the Company are start-up and growth companies, and Company’s value depends heavily on the future development of these companies and the Company’s ability to realize the value of its investments. The Company and the Portfolio Companies are associated with significant risks and uncertainties including but not limited to: 1) risks related to financial position and availability of additional financing that they dependent on, 2) risk related to Portfolio Companies’ acquisitions, expansions and ability to sustain growth, 3) risks related to competition and technological development, 4) risks related to protection of intellectual property rights, 5) dependence on a limited number of key employees, 6) various business related risks, such as dependence on a limited number of clients, technical and warranty risks, credit loss risk and currency fluctuation risk, 7) insurance risks and 8) economic, political and regulatory risks in various markets.

  • There can be no assurance that the Company or its Portfolio Companies will become profitable, which could impair the Company’s and the Portfolio Companies’ ability to sustain their operations or obtain any required additional financing. Even if the Company or its Portfolio Companies would become profitable in the future, they may not necessarily be able to deduct the previous losses in taxation and sustain profit in subsequent periods.

  • Amendments to the laws and regulations and interpretations of laws and regulations relating to the Company’s or Portfolio Company’s business may involve negative effects to the Company or to the Portfolio Company in question. In the event of any litigation, authoritative or administrative proceedings, risks related to financial sanctions and/or limitation of business opportunities may occur. 

In addition, the Company is associated with inter alia the following risks that relate to its business operations as a development and investment company:

  • The Company’s ability to make profit fully depends on the potential exit proceeds and cash flows it may receive from its Portfolio Companies and all acquisitions and disposals of assets are subject to uncertainty. There is a risk that the Company will not succeed in selling its holdings in the Portfolio Companies at the price the shares are being traded at on the market at the time of the disposal or valued at in the balance sheet. 

  • The Company may be affected by liquidity risk if liquidity will not be available to meet payment commitments due to the fact that the Company cannot divest its holdings in Portfolio Companies quickly or without considerable extra costs.

  • The Company does not independently control its Portfolio Companies, other than its subsidiary Eagle Filters Oy, and there may occur potential interest conflicts with the other shareholders and stakeholders exercising influence over each respective Portfolio Companies' operations or the information provided by a Portfolio Company to the Company may not be accurate or adequate. Furthermore, an investment in a Portfolio Company may be affected by the existence of shareholders agreements or articles of associations containing provisions restricting transferability of the Portfolio Companies' shares or otherwise having an impact on the value of said shares.

  • Covid-19 pandemic and Russia's attack on Ukraine may cause severe negative effects to the Company and Portfolio Companies. These negative effects may include, but not be limited to, effects on operations, financing as well as negative effects on customers, suppliers, and partners. Furthermore, the pandemic and Russia's attack on Ukraine may cause completely unforeseeable negative effects.

Contact information:

Jarkko Joki-Tokola, CEO, Loudspring Oyj. Tel. +358 40 637 0501, jarkko@loudspring.earth

Erik Penser Bank AB, Certified Adviser. Tel. +46 8 463 83 00, certifiedadviser@penser.se

Loudspring in brief  

Loudspring is focused on saving natural resources. We own a portfolio of Nordic growth companies that have the potential of making a big environmental impact globally. We have selected to use our resources to develop Eagle Filters, our fully owned daughter company that provides high performance air filters for the energy industry as well as personal protective equipment. With this strategy we see a clear path to a long term profitable and scalable business, transforming into an industrial company.

The company group is listed on First North Growth Market Finland under the ticker LOUD and on First North Growth Market Stockholm under the ticker LOUDS.

www.loudspring.earth

LinkedIn: https://www.linkedin.com/company/loudspring/

Twitter: @loudspring

IG: @loudspring_earth

FB: @loudspringco

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