BrainCool

Group
Period in brief

Jon Berg, CEO comment

In the first quarter of 2025, we delivered 20 BrainCool™ Systems, generating SEK 10.6 million in net sales during the period. The quarter’s net sales, including deliveries of single-use products, shows a continued momentum with a 24 per cent uptick compared to the same quarter last year. Net sales were, as expected, somewhat lower than the previous quarter, due to seasonal variations where end-year demand historically generates the highest quarterly sales. The agreement with ZOLL® continues to deliver according to plan.

Over the quarter, new operational changes have temporarily reduced our cash position. These changes were made to improve our shipping and payment processes with ZOLL® and help us secure long-term operational stability in productions. The cash outflow reflects two main events: the acquisition of an inventory of cooling units for the assembly of our precision cooling systems, resulting in a SEK 4 million cash decrease – with a corresponding increase in inventory assets – and a transition in shipping, from air to sea freight, to ZOLL®, creating a temporary outstanding order of SEK 17 million. These outstanding payments are due over the period. Including the expected SEK 17 million in payments and the SEK 4 million in inventory, our adjusted cash position would be SEK 29 million (MSEK 8 in cash, MSEK 17 in receivables and MSEK 4 in inventory).

In February, we received several sizeable orders for consumable products, worth SEK 8 million in total. The majority of these orders stem from our collaboration with ZOLL®, in the US and Europe, while additional orders originate from distributors in Southeast Asia. Effectively, the number of cooling pads sold in the quarter increased by more than 60 per cent compared with same quarter last year, as the installed base of BrainCool™/IQool™ System continues to increase. This positive development reflects an increased clinical adoption of our precision cooling system. Further, we received an order from ZOLL® for 10 tabletop demo versions of BrainCool™ System. The demo unit is a portable simulation equipment used in real-life demonstrations for potential customers, allowing sales professionals to more easily showcase the system’s benefits. The order value is SEK 1.7 million, and shipping was initiated during the quarter.

The ongoing program to optimize production lead times and improve gross margins has achieved key milestones. Importantly, by finalizing our shift from manual to automated robotic gluing of cooling pads, we’ve improved production output and minimized deviations, thereby significantly improving the gross margin, from 23.5% in Q4 2024 to 28.9% in Q1 2025.

To maintain a solid financial position, we have secured a credit facility of SEK 20 million, from one of our largest shareholders. The facility offers us liquidity support and strengthens our ability to manage potential cash flow fluctuations. With this enhanced flexibility, we are well-positioned to continue our growth and support our operations under the current business plan, while reducing the need for additional equity financing under foreseeable conditions. The facility extends over several years, providing a stable and long-term source of financial flexibility.

The clinical evaluation of our precision cooling systems is ongoing. We recently announced an expansion of the externally sponsored study PRINCESS 2, to several additional countries outside of Sweden: Germany, Spain, Slovenia, Austria, Belgium, Italy and Norway. Patient recruitment is advancing, and, to date, 70 patients have been included in the study.

At the same time, RhinoChill® System is being evaluated in the potentially transformative study COTTIS 2. Recruitment to the study is advancing at its expected pace, having included 42 patients. Once 100 patients have been included, we await the first interim analysis that will provide early indications of the treatment effect. The analysis will be performed after a three-month follow-up period of the 100th patient. We look forward to reporting further advances in COTTIS 2.

In summary, we conclude a successful quarter and see great opportunities over the coming period to leverage our world-class systems, deliver shareholder value and make a meaningful clinical impact globally.