Enersize

New tuned-in organization and growth-adapted business model

January - March 2022

• Net sales for the first quarter of 2022 amounted to EUR 36,191 (72,748).
• Operating profit (EBIT) for the first quarter 2022 amounted to EUR -441,278 (-397,316).
• Profit before appropriations and taxes for the first quarter of 2022 amounted to EUR -448,495 (-414,577).
• The average number of employees for the first quarter of 2022 amounted to 13,0 (9,0).

Significant events in 2022

First-quarter

• Enersize renews strategic partner agreements.
  

Significant events after the period

• The company receives orders from PT Cicor Panatec in Indonesia.
• Warrants of series 1/2019 expired on April 30, 2022. No exercise of warrants occurred during the final subscription period.
• Enersize strengthens the management team – Intensifies development work and improves gender equality.
• Enersize signs letter of intent with the Chinese company Akila.
• Scania extends and expands pilot projects with Enersize.

Summary of the Group’s indicators

CEO ANDERS SJÖGREN COMMENTS

The development during the first quarter of the year has taken place in two areas. With the financing received at the end of last year, we have executed on the plan to trim and growth-adapt the organization, as well as continue the development of the next generation of cloud-based software solution for compressed air optimization.

Describe the Sales are lower than in the corresponding period last year and amounted to EUR 36,191 (72,748). This is due to the transition to the new business model to achieve recurring revenue, where we have now also implemented value-based pricing. The loss for the quarter amounted to EUR -448,495 (-414,577) and is mainly due to an increased level of overhead in connection with the launch of the Company's new business model and the construction and adaptation of the new organization. The R&D department has been expanded with the aim of developing the next generation of cloud-based software solution and expanding the patent portfolio, which has meant increased activation of development expenses.

In short, value-based pricing can be described as a profit-sharing model based on the costs that our solution reduces for the customer, where we share the savings. We cannot yet see the effects of the change in our result, which in the long run will lead to stable recurring revenues through long-term contracts. The response we receive from our customer contacts is very positive, partly on the profit-sharing approach, and partly that the threshold is lowered as the initial investment to get started with energy savings has been eliminated.

We have placed great focus on getting more new and long-term collaborations and thus important reference cases. One such example is Scania, where we have recently entered into an agreement to extend and expand the pilot project that has been underway for the past year. Among other things, we will carry out an upgrade of the existing installation and expand the collaboration with Scania, which in future will include a larger part of the facility in the Södertälje factory. Thereafter, the subscription will also be renegotiated, as the value of what Enersize delivers to Scania will increase.

We are preparing the organization for growth, which is why, with the help of the latest issue, we have invested in both expertise and the continued development of the next generation of cloud-based software solution for compressed air optimization. In addition, a number of new patent applications have also been prepared, which will add significant value and leave us alone with what we do today, and want to do in the future. The management team has been welcomed with additions and skills development through the internal recruitment of Rebeca Rubio as Software Manager and Stephanie Alvarez Fernandez as CTO. It is also in line with Enersize's profile, a company that prioritises diversification and gender equality.

The sales and marketing work has also been intensified, where we have, for example, carried out a Spring Launch to increase awareness of the much-known problem picture with compressed air, about the company Enersize and about our unique solution. Other initiatives include an Insight Webinar with leading industry experts, as well as a marketing campaign aimed at people in decision-making positions with the goal of reaching the right level and thus new customers.

During the first quarter, collaborations with our existing partner companies Momentum in Sweden and SCOPP Solutions in North Africa were also renewed. The companies, which currently actively sell our software solution, have chosen to extend their respective agreements by one year. Our partner company DAS Korea is delayed due to Covid-19, but we have nevertheless completed the onboarding process and they are now ready to start selling.

We also see a clear international interest, not least in the Pacific and in Asia, which has resulted in a letter of intent with Chinese Akila. The goal is a fully developed partnership with the goal of integrating the Enersize solution into Akila's own systems, which is an important step in the development of Enersize's scalable partner platform.

During the fourth quarter of 2021, Enersize entered into a letter of intent regarding a reverse acquisition with Terafactory. Since then, the parties have been negotiating with a view to reaching a final agreement. The process has taken a little longer than expected, but the discussion is ongoing, and more information will be published as soon as it is available.

The Board continues to actively evaluate various financing alternatives to ensure the company's long-term financing and optimal capital structure. This is to support the ongoing market establishment of Enersize's new business model, which is based on long-term customer contracts with the potential to achieve stable recurring revenues.

Anders Sjögren
CEO, Enersize