Realfiction

Important key information and figures:
• 2% increase in total revenue in Q3-2023 compared to Q3-2022
• 8% decrease in gross profit in Q3-2023 compared to Q3-2022
• 10% decrease (6.9 points) in gross profit margin in Q3-2023 compared to Q3-2022
• Solvency ratio of 75.7% at 30 September 2023 compared to 79.9% at 31 December 2022
• Two patents granted during and after Q3-2023

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

Directional Pixel TechnologyTM (“DPT”, previously Project ECHO): We now have two of our DPT patents issued from the US Patent Office, one for the OLED version, while the second relates to a multi-view 2D LCD version. While not being at the core of our grand vision for DPT, the 2D multi-view solution has a short route to a commercial product, and it is a great example on how we constantly strive to maximize shareholder value. We have also signed an exclusive license agreement with our technology partner Hong Kong University of Science and Technology for lifetime use of their patented and superfast ferroelectric liquid crystal (FLC) technology. This is an excellent addition to our DPT IP portfolio, as we now cover all the three major display technologies: LCD, OLED and microLED. With these milestones achieved, we are now planning to demonstrate DPT to our shareholders in Denmark in December, followed by demonstrations during CES 2024 in Las Vegas in January. The CES demonstrations will be the first where we show a segment of a DPT OLED display.

We continue to be very pleased with the DPT progress achieved during the year, and the company expects to have the liquidity necessary to sustain all its operations, including the development and execution of the go-to-market strategy for DPT, at least until May 2024. This estimate does not factor in any income resulting from licensing of the DPT. We are in discussions with companies in the display industry, but we cannot be certain that these discussions will result in collaborations that generate revenue from DPT during the first half of 2024. To mitigate the risk that such income is potentially received later than May 2024, the company has initiated a process to secure a loan that potentially will finance the company until mid-2025, thereby avoiding dilution of its shareholders.

Sales activities: Even though we have a strong focus on our DPT technology in 2023, our MaaS for Exhibition and Hardware sales segments continue to provide us with important revenue streams. In Q3-2023, the total revenue was slightly higher compared to the same period last year, and we are also seeing an encouraging trend so far in Q4. In October and November, revenue from our Sales Activities exceeded 2.7 MSEK, which is 0.2 MSEK higher than the total revenue for Q2. The revenue is however still significantly lower than in Q4-2022.

CEO Clas Dyrholm comments: “We continue to progress rapidly with our DPT development efforts, while building awareness for this groundbreaking 3D display IP platform through completed and upcoming demonstrations in Asia, Europe and the US. I am very pleased that we will have a DPT OLED display demo ready for CES in Las Vegas in January, as OLED is the leading display technology for high-end TV sets and home cinema use. With our DPT IP, we have the keys to unlock a new generation of incredible social 3D experiences without the limitations of attempts using glasses, or the drawbacks of competing technologies such as single user limitations, lower resolution or high manufacturing costs.”

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

Q3 2023 (1 July – 30 September 2023)
• Revenue: TSEK 2,539 (Q3-2023: TSEK 2,481)
• Gross profit: TSEK 1,647 (Q3-2023: TSEK 1,781)
• Gross profit margin: 64.9% (Q3-2023: 71.8%)
• Result after financial items: TSEK -1,529 (Q3-2023: TSEK -1,191)
• Earnings per share: SEK -0.08 (Q3-2023: -0.01)
• Cash flow from operating activities: TSEK -243 (Q3-2023: TSEK -1,530)
• Equity: TSEK 69,979 (Q3-2023: TSEK 74,603)

Q1-Q3 2023 (1 January – 30 September 2023)
• Revenue: TSEK 7,131 (Q1-Q3 2022: TSEK 9,410)
• Gross profit: TSEK 4,587 (Q1-Q3 2022: TSEK 6,117)
• Gross profit margin: 64.3% (Q1-Q3 2022: 65.0%)
• Result after financial items: TSEK -5,812 (Q1-Q3 2022: TSEK -1,858)
• Earnings per share: SEK -0.29 (Q1-Q3 2022: 0.03)
• Cash flow from operating activities: TSEK -5,489 (Q1-Q3 2022: TSEK -2,540)
• Equity: TSEK 69,979 (Q1-Q3 2022: TSEK 74,603)