Realfiction

Important key information and figures:
• DPT commercial discussions are progressing according to plan and a positive outcome is predicted in Q3-2024
• Lower cash outflows support financial runway into 2025
• 51% increase in total revenue in Q2-2024 compared to Q2-2023
• 44% increase in gross profit in Q2-2024 compared to Q2-2023
• 6% decrease (3.9 points) in gross profit margin in Q2-2024 compared to Q2-2023
• Solvency ratio of 56.2% at 30 June 2024 compared to 75.4% at 31 December 2023

During and after the period, Realfiction has experienced the following development in its business:

Directional Pixel Technology™ (“DPT”): In the second quarter of 2024, we continued to have a strong focus on commercializing our groundbreaking Directional Pixel Technology™ platform. As stated previously, we have reached the final stage of some commercial negotiations under NDA related to our DPT platform. These negotiations continued during the second quarter. This means that we still predict the disclosure of a first commercial agreement for our DPT platform by the end of September. It is however important to note that all negotiations carry the risk of non-acceptance from either party, as well as potential delays. A good example of the strong and broad interest in our DTP platform from the global display industry is that Steen Iversen, our Director of Advanced Display Technology, has been invited as a keynote speaker at an upcoming conference held by the microLED technology developer PlayNitride in connection with the Semicon trade fair in Taiwan. The topic of Steen’s keynote is our HybridScan DPT display version.

Mixed Reality displays: Despite our strong focus on commercializing our DPT platform, we noticed a 51% revenue increase from our sales activities related to our Mixed Reality displays in Q2-2024 compared to the same period in 2023. This was due to an increase in activity among our partners and end-customers during the summer, which is not something we have seen in previous years. In addition to the positive development in Q2, the stronger summer activity has created a healthy order book for the coming months.

Financial runway: Like in Q1, we see a reduction of our cash outflows from operations and investments by TSEK 427 in Q2-2024 and TSEK 2,318 in H1-2024 due to the shift to the commercialization phase from the development stage. This lower level of cash outflows allows all our business operations, including the execution of our DPT go-to-market strategy, to be financed into 2025 with the funding from the loan we received in February 2024.

CEO Clas Dyrholm comments: “We’ve seen another promising quarter in line with our communicated go-to-market plan for our DPT platform. Additionally, we are observing continued signs of market readiness for multiview 2D/3D displays, and we have a financial runway extending into 2025. Despite not having tangible DPT news to announce this quarter, we remain optimistic about the future of DPT and Realfiction. I anticipate being able to update our investors within the next 32 days as we move closer to finalizing our first DPT commercial agreement. “

We highlight the following key figures from the Q2 Interim Report:

Q2 2024 (1 April – 30 June 2024)
• Revenue: TSEK 2,508 (Q2-2023: TSEK 1,643)
• Gross profit: TSEK 1,511 (Q2-2023: TSEK 1,053)
• Gross profit margin: 60.2% (Q2-2023: 64.1%)
• Result after financial items: TSEK -8,508 (Q2-2023: TSEK -2,935)
• Earnings per share: SEK -0.43 (Q2-2023: -0.15)
• Cash flow from operating activities: TSEK -6,122 (Q2-2023: TSEK -1,964)
• Equity: TSEK 52,309 (Q2-2023: TSEK 72,844)

H1 2024 (1 January – 30 June 2024)
• Revenue: TSEK 4,211 (H1-2023: TSEK 4,592)
• Gross profit: TSEK 2,583 (H1-2023: TSEK 2,940)
• Gross profit margin: 61.3% (H1-2023: 64.0%)
• Result after financial items: TSEK -16,631 (H1-2023: TSEK -4,283)
• Earnings per share: SEK -0.85 (H1-2023: -0.22)
• Cash flow from operating activities: TSEK -11,503 (H1-2023: TSEK -5,246)
• Equity: TSEK 52,309 (H1-2023: TSEK 72,844)