Interim Report January-June 2021

PARANS SOLAR LIGHTING AB (PUBL) 556628-0649

THE GROUP – SECOND QUARTER IN SUMMARY
•    Net sales reached 5 052 KSEK (657)
•    Profit/loss totaled -6 742 KSEK (-3 934)
•    Earnings per share: - 0,059 SEK (-0,069)
•    Number of shares: 105 035 562 (56 793 893)
•    Cash and bank balances: 14 572 KSEK (15 586)

SIGNIFICANT EVENTS DURING SECOND QUARTER
•    Parans established and legalized its fully owned subsidiary in Qingdao, China, by the name of Parans Light Technologies (PLT).
•    PLT has during the quarter built up an organization with the necessary critical ability to design, sell and deliver customer      projects for all three product categories (5G Smart Towers, IoT Streetlights and SP4-systems) with primary focus on IoT Streetlights. PLT has today 16 staff members including administration, sales engineers, development- and technical engineers plus supply chain related experts to handle production and delivery tasks.
•    Today four Chinese distributors have been contracted for sales of all three product categories.
•    PLT has built up a network of sub suppliers for all relevant components relating to IoT Streetlights and they are now finalizing the work to enable volume production and delivery.
•    As PLT was legalized in April, the frame agreement relating to five construction projects in the sub district of Chengyang district, Qingdao, was transferred to PLT. Please see PM from 6 & 7 April. We are currently in the final stages of the tender process for one of those projects.
•    Parans Solar Lighting AB was de-listed from Spotlight Stock Market. BeQuoted was contracted to handle continued trade on their OTC-list.

COMMENTS FROM OUR CHAIRMAN, DR. FRED SUN
This is the first quarter since Parans was delisted, and it is also the biggest challenge faced by the new board of directors after taking office. During this period, the board of directors spent a lot of time making a detailed analysis and evaluation of Parans' past, present, and future. We believe that under the current situation, Parans should focus on the sales of energy-saving products and services for the IoT LED streetlights in the Chinese market on the one hand, and on the other hand, must greatly cut down the operating expenses. At the same time, the company is also developing a new generation of low-cost and compact SP5 solar system products for broader customer bases, which are expected to be launched on the market by the end of the year. We still firmly believe that as long as the above measures are implemented resolutely, Parans will have great chance to achieve the goal of profitability and re-listing in the next 12 months.

After the efforts of the past quarter, the PLT team building has reached the scale of 16 employees. This is the basic requirement for the completion of sales contracts. Without a strong team, Parans would not be able to complete delivery and confirm sales. It is unrealistic to only talk about the sales contract without talking about the delivery capability. In the long run, Parans has a very bright future. I hope that shareholders would continue to support us with great patience. Thanks!

COMMENTS FROM THE CEO
Continued China focus
Parans short term objective is to reach a cashflow positive stage as soon as possible, to create the necessary conditions for long-term development and internationalization. This is the main reason for us to prioritize our activities in China since we believe that the possibilities to generate significant sales with healthy margins with primary focus on IoT Streetlights are in this market. It will be done while at the same time reducing our operating expenses in general.

The company has during the second quarter spend significant resources on the build-up of the necessary capabilities in our subsidiary in China. To manage all currently ongoing sales projects with focus on IoT Streetlights it is critical to have sufficient internal capabilities to design and respond promptly to customer requirements and demands from their construction projects. Also, since several of the ongoing sales projects involve a financing solution in the total offering, part of the work is to also manage this part. This solution is called EMC and means Energy Management Contract.

In the currently ongoing sales projects, we have installed test and demo installations of streetlights for two potential customers so that they can evaluate various data such as energy consumption and light quality. The pictures below show one test installation on a street in Qingdao West Coast District where we have installed 50 units on a street segment.

Continued sale of SP4-systems
Parans has during the second quarter sold and derived SP4-systems to customers in Sweden, USA, Czech Republic, China, and Switzerland. Because of our prioritization towards the Chinese market, our focus outside China has been towards SP4 sales and mainly to high potential markets where we have existing sales partners with long term capability.

The production and delivery work for the tunnel order is ongoing, and the plan is to have shipped all goods before the end of September. Then during Q4 and party into first quarter 2022 the installation and commissioning work will be done.

We have also initiated development of the next generation fiber optic daylight system with focus on significant cost reduction to increase market attractiveness.

Re-listing on a new marketplace
Parans objective is to re-list on a new marketplace as soon as possible. To create the best possible preconditions for a successful listing process the company has decided that a first critical objective is to be able to show a clear and positive trend in sales numbers. The company must show a period of stability and stringency in its communication to the market. This is one key reason why the company only will communicate in broader terms during its quarterly reports, but it will obviously also communicate significant events that has stock price valuation effect as those events happen. The company must re-build market confidence and this can only happen as the above-mentioned objectives are achieved.

COMMENTS TO THE SECOND QUARTER
Parent company net sales increased to 8 079 (1 716) KSEK and includes SP4-system deliveries to customers in Sweden, Switzerland, USA Czech Republic, and China, and the first deliveries of optical fiber cables to the tunnel project in Holland. Operating result is -6 207 (- 3 802) KSEK and it is affected by costs taken during the first and second quarter for incoming component deliveries to be used for the tunnel project. In addition, the result is affected by costs of depreciation on patents and trademarks. The asset will generate revenues in the form of royalty and licence fees from the subsidiary PLT in China.

Since new year the financial fixed assets have increased to 10 487 (45) KSEK caused by the start up
of the subsidiary in China. Share capital amounts to 20 322 KSEK. 50% of the share capital has been paid, and the remaining amount will be paid at the latest 2024.
Cash and bank balances were reduced from year start to 4 780 (15 586) KSEK related to negative cash flow from operating activities.

AUDIT
This report has not been subject to review by the company’s auditors.

NEXT REPORT

Parans continuously publishes financial information four times per year. Next date for information is 26 November 2021 where the Q3 report will be published.

26 August 2021

Parans Solar Lighting AB (publ)
The Board of Directors