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Simris Alg interim report January-March 2022

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  Q1, JANUARY–MARCH 2022

  • Net revenue was 3 206 (492) kkr of which US was 275 (308) kkr.
  • Operating result was -4 144 (-7 462) kkr.

KEY EVENTS IN Q1

  • The Board convened an Extraordinary General Meeting to carry out a rights issue of approximately 25.1 mkr, a directed set-off issue and the issuance of warrants.
  • Two orders were received for biomass of microalgae totaling 3.0 mkr. They were delivered during the quarter.
  • The number of shares and votes in Simris Alg AB was changed as a result of the conversion of 250 000 A shares into B shares. In accordance with the conversion reservation specified in the Articles of Association §7 Conversion reservation, shareholders of Class A shares have requested conversion to Class B shares.
  • Simris Alg withdrew its EFSA application for Omega-3 oil from the microalgae strain Phaeodactylum tricornutum as the company found other strains that are more cost-effective to grow for Omega-3 oil.

KEY EVENTS AFTER Q1

  • Simris Alg has appointed Julian Read as CEO, starting on May 16, 2022. Julian was most recently Managing Director (Nordics) for Dyson, and before that marketing director (Nordics) for Omega Pharma.
  • On Friday, April 8, 2022, an Extraordinary General Meeting was held in Simris Alg AB (publ). Decisions were made on a rights issue of shares, on a directed issue of shares with payment by set-off and on directed issues of warrants. The incumbent CEO, Julian Read, has the right to subscribe for the warrants.
  • The Board resolved to change the language of communication to English as a result of the company having an international board where only 1 in 4 members has a Swedish background.
  • The Board resolved to postpone the company’s Annual General Meeting until May 25, 2022.
  • Simris Alg published investment memorandum regarding Rights Issue on 20 April, 2022.

COMMENTS FROM THE CHAIRMAN

Dear Shareholder

The first quarter of this year has been a most encouraging one, especially when we compare it with the two previous quarters.

As you are now aware, the new Board of SIMRIS (appointed May 2021) took the view that to turn the business around would require some very tough and painful decisions to be made. These included a full organisational re-boot, an aggressive approach to cost cutting, and an equally aggressive approach to revenue generation.

Effectively, in the second half of 2021, we spent almost all of our time and energy just fixing problems. This is never pleasant for entrepreneurs: by nature we are business builders, with a deep desire to focus our energy on developing sales.

I am proud to say that as we entered Q1 of 2022, almost all of that hard and unpleasant work had been done. Along the way we successfully developed new strategic relationships that enabled us to sell our high-quality fucoxanthin, and in this quarter we have processed and shipped two large orders with a combined value of approximately 3.0 mkr. Full credit for this success must go to our strong team for their valued work and technical capabilities. Significantly, revenue for this quarter is up 550 percent on the same quarter last year.

Recognising that we want to be a business that is about much more than just fucoxanthin, or EPA Omega 3, we have made a lot of effort to strengthen our R&D. In so doing we have conducted (for the first time in the history of SIMRIS) a scientific hot-water extraction on defatted microalgae biomass under the close supervision of our CSO Prof. Dr. Claudia Grewe from the Anhalt University of Applied Science. This process was conducted in-house, at our facility in Hammenhög, and represents a major milestone as we progress toward our goal of adding value to what we produce by downstream processing internally.

This hot-water extraction can be compared to making a “tea” and in this “tea” we search for natural compounds that are desirable as skincare actives. Once identified, the next step is for us to isolate these compounds, evaluate them in the lab for performance (in vitro testing) and then later we test on human skin (in vivo testing) to develop claims. This sequence enables us to verify and support any marketing claims that attest to the performance of these actives, which is critical if we are to sell these actives to the major players. Already we are seeing some encouraging signs that are in line with our expectations, and our two PhD students are progressing this work in our labs.

This quarter has also been memorable (at least for me personally) for another important reason: I spent a lot of my time in the second half of last year looking for a CEO that I felt could lead SIMRIS, not just for the next few years, but for its foreseeable future as we build it to be a major player in the global microalgae space. Great CEO’s are not available “off the shelf”. They are almost never looking for a job, and they are always held onto tightly by their current employers who value them highly. Fortunately for me it was in this quarter that my most favoured CEO candidate decided that he and SIMRIS were finally aligned and thus the appointment of Julian Read as SIMRIS’ CEO has recently been announced. Julian starts with us on 16th May and I am hugely excited about this.

Finally, as would be expected after all this time spent fixing the business and repositioning it for an ambitious future, we must “put fuel in the tank” to ensure that the company is on a secure financial footing. No CEO should begin a new journey with one hand tied behind their back, and hence the Board have committed to a substantial Rights Issue and concomitant Bridge Loan conversion. This ensures no dilution under the Rights Issue for those shareholders that take up their Subscription Rights, and also ensures that the new Board directors have “skin in the game” by converting the full value of their bridge loans.

The next few years are promising to be transformative, as we build an agile and adaptive organisation with a profit focus. As always, thank you for your support and loyalty - it is greatly appreciated.

For further information, please contact:

Steven Schapera, chairman, Simris Alg AB
Tel: +44 791 771 5533, email: steven@simris.com

This information is information that Simris Alg is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 22 April 2022, 08.00 CET.

About Simris Alg

Simris Alg is a pioneering biotechnology company dedicated to the enormous potential of microalgae in the discovery and production of high-quality bioactive substances and alternatives to unsustainable marine ingredients. We are engaged in research, development, and production of bioactive substances from microalgae, for nutraceutical, cosmetic and pharmaceutical applications. Our technology provides access to bioactive substances with new functions, while at the same time replacing unsustainable raw materials from endangered marine species and ecosystems.

Simris Alg’s share is traded on Nasdaq First North Growth Market with the ticker SIMRIS and ISIN-code SE0008091664. Mangold Fondkommission AB is the Company’s Certified Adviser, reachable by tel: 08-503 015 50 and email: ca@mangold.se.

 

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