IRRAS

Second quarter, April – June 2023

Net revenue amounted to 10.3 MSEK (9.7).

Operating loss (EBIT) amounted to -40.5 MSEK (-35.8).

Loss after tax amounted to -40.8 MSEK (-36.9).

Earnings per share before and after dilution amounted to  SEK -0.06 (-0.46).

CEO Statement

The company’s overall revenue of MSEK 10.3 during the 2nd quarter decreased from the previous quarter, but it did represent growth of 6% from the same period during 2022.  More importantly, though, during the quarter, we have initiated steps to improve our financial position and decrease our quarterly cash burn.

During the quarter, IRRAS announced a shift in our commercial strategy that will primarily focus our resources on the United States market opportunity.  The launch of our products in the US is more mature than other global markets and will continue to contribute most of our revenue, especially with the expected expansion of our commercial partnership with Medtronic.  As part of this shift, we will close our European subsidiaries and increasingly support customers around the globe with our existing network of distribution partners.  IRRAS investors are well aware of the challenges that the evolving regulatory landscape in Europe and the COVID-19 pandemic have posed, and we are now making decisions to improve control of the company’s costs and maximize our activity in the markets that are most important to our long-term success.

The other key area of focus during the 2nd quarter was resolving our current financial situation.  The financial environment remains difficult for early-stage companies, and we’ve seen these challenges throughout our fundraising process.  Our company’s current cash runway has become extremely limited, and we must imminently finalize our long-term financing plan to fully secure ongoing operations.  The recent public offer to IRRAS shareholders confirms that optimism regarding the company’s long-term prospects still exists. We look forward to the resolution of the bid period to determine the appropriate path forward for IRRAS, our customers, and the patients that our products treat every day. 

Will Martin, CEO

Important events during the quarter

• A public offer of SEK 0.18 in cash per share to the shareholders was made on 30 June by Legacy Capital, Spetses Investments, Bacara Holdings, Lexington Holding Assets, Kleanthis G. Xanthopoulos, Panormos Holding, Philippe Audi, and Nicolas Murat, through IR Holding Bidco Inc.
• The AGM resolved on a reverse share split 1:100, amendment of the articles of association whereby the share capital shall amount to not less than SEK 20,000,000 and not more than SEK 80,000,000 and the number of shares shall be not less than 7,000,000 and not more than 28,000,000, and approved a multiyear incentive program (Program 9).
• The company announced a shift in commercial strategy to prioritize the launch of IRRAflow system in the US.  As part of this shift, IRRAS will prioritize its operations within the US and begin the process of closing its wholly owned commercial subsidiaries in Europe. The background to the shift is the extended impact of COVID-19 pandemic restrictions and the evolving regulatory landscape in Europe, which have contributed to a slower commercial development in Europe.
• In order to assess the received takeover offer, an Independent Bid Committee was appointed which, in turn, has appointed Carnegie Investment Bank AB (publ) as financial advisor, and Setterwalls Advokatbyrå AB as legal advisor in connection with the Offer. The Committee has also engaged Grant Thornton Sweden AB to provide a so-called fairness opinion regarding the Offer.

Important events after the end of the quarter

• Secured additional bridge financing of MSEK 20, which will provide working capital through the completion of ongoing financing process.
• The company stands by its previously communicated financial targets, but has decided to reassess the time horizon. The shift in the timeline is a consequence of the announced strategic shift to change its European commercial strategy. The company currently chooses to refrain from publishing a specific timeline.
• Based on Grant Thornton’s fairness opinion, its own assessment of IRRAS’ current strategic and financial position, available opportunities to obtain necessary financing for continued operations, and several other factors, the Independent Bid Committee recommends that the shareholders of IRRAS accept the public offer made by IR Holding Bidco Inc. on 30 June 2023. Grant Thornton has, based on an assessment of IRRAS market value, including an income approach, analysis of the historic share price, publicly available information, and information from the company’s management, deemed the offer as fair to IRRAS shareholders. The offer of SEK 0.18 per share corresponds to a premium of 30 percent compared to the volume weighted average share price of the IRRAS share on Nasdaq Stockholm during the 30 latest trading days up to and including 29 June 2023 of SEK 0.1387. The acceptance period in the Offer expires on 11 August 2023. IR Holding has reserved the right to extend the acceptance period.

The full report is available on the company’s website:  https://investors.irras.com/en/reports-presentations

Q2 Report 2023 – conference call and audiocast

IRRAS will host a conference call and an online presentation of its Q2 2023 interim report on August 4 at 9.00 CET. The presentation will be held in English.

Dial-in number to the teleconference will be received by registering on the link below. After the registration you will be provided phone numbers and a conference ID to access the conference:

https://conference.financialhearings.com/teleconference/?id=200794

The presentation will be webcast and can be accessed from the following web address:

https://ir.financialhearings.com/irras-q2-2023