2 | Annual Report 2023, Observe Medical ASA
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Contents
Board of Directors' Report 2023 | 11 |
Declaration in Accordance with §5-5 of the Securities Trading Act | 23 |
Management and Board of Directors | 24 |
Corporate Governance | 26 |
Sustainability Report | 37 |
Consolidated Financial Statements 2023 | 47 |
Explanatory Notes to the Consolidated Financial Statements 2023 | 54 |
Parent Company Observe Medical ASA Annual Financial Statements 2023 | 86 |
Auditor's report | 104 |
Alternative Performance Measures (APMs) | 110 |
3 | Annual Report 2023, Observe Medical ASA
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Observe Medical in brief
Observe Medical is a Nordic medtech company that develops, markets and sells innovative medtech products for the global market. Observe Medical is committed to improving patient welfare and patient outcomes, improving clinical data accuracy and promoting positive health economics.
Observe Medical seeks to drive growth by leveraging its expertise in sales and commercialization of its broad portfolio of medical technology products, mainly in urine measurement, ultrasound, anesthesiology/ICUs, surgery and wound care, in combination with seeking distribution opportuntinities and targeted M&A.
The Group is headquartered in Oslo, Norway, with wholly-owned subsidiaries in Narvik, Norway, Gothenburg in Sweden, Copenhagen in Denmark, Oulu in Finland and Seattle in the US. In addition, Observe Medical has a distributor and partner network internationally.
The current portfolio of proprietary products consists of Sippi®, a CE marked digitalized system for urine measurement, the UnoMeter™ portfolio consisting of manual urine measurement products and solutions for measuring intra-abdominal pressure, and the Biim ultrasound probe, which is a unique, wireless and pocketable ultrasound probe, that can scan patients and review images in seconds.
For further descriptions of the products see section "About Observe Medical portfolio".
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Highlights 2023
Jan
Jun
Jul
Sep
Oct
Nov
Dec
Recruitment of new CCO
In January 2023, Jørgen Mann was appointed as the Company's Chief Commercial Officer. He brings more than 20 years of experience in sales and senior management roles from leading global medtech companies in Europe such as Unomedical, Getinge Group, Smith&Nephew and Fresenius Medical Care
CE certification for UnoMeter™ 500
Attained CE certification for UnoMeter™ 500 under the EU's Medical Device Regulation
Addressing liquidity challenges
Initiated short term cost-saving measures, including temporary layoff of staff. Moreover, the Company engaged in constructive dialogues with its creditors to manage short-term liquidity
UnoMeter™ agreement signed
Signed agreement with Convatec to acquire the trademarks and other intellectual property rights relating to the UnoMeter™ portfolio
Observe Medical established an integrated setup with a highly effective and high quality manufacturing partner
A new manufacturing partnership was established with a Chinese manufacturer of medical devices. After intensive work to integrate our quality measures and product design, UnoMeter™ 500 was launched in October 2023 with manufacturing on this platform
First shipment of UnoMeter™ 500
First shipment of UnoMeter™ 500 products to distributors in Poland and Spain. Secured significant framework agreement: Awarded onto the NHS Supply Chain (NHSSC) Framework with UnoMeter™ 500 in UK
Delivery of additional 20 Biim Ultrasound probes to Fresenius
Expanding distribution network
- 20 countries covering approx. 55% of the historic Convatec sales of the UnoMeter™ portfolio. LOI signed with Vingmed for exclusive Nordic distribution of UnoMeter™
Carried out a share capital increase - Rights Issue
The Company aimed to raise between minimum NOK 18 million and maximum NOK 55 million in gross proceeds in the Rights Issue. The total gross proceeds from the Rights Issue were NOK
35.7 million, of which NOK 21.5 million was settled by way of cash payment and NOK 14.1 million was settled by way of set-off against the shareholder loans
5 | Annual Report 2023, Observe Medical ASA
5 | Annual Report 2022, Observe Medical ASA
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Key figures
Observe Medical had operating revenues of NOK 27.9 million in 2023, an increase of NOK 8.4 million YoY and a gross result of NOK 9.3 million, an increase of NOK 4.1 million YoY.
EBITDA growth by NOK 8.4 million YoY mainly driven by sales of UnoMeter™ products and lower OPEX.
Net finance negative of NOK 9.1 million (NOK 8.4 million in 2022) mainly consisting of net interest expenses of NOK 6.6 million, net currency effect of NOK
4.3 million and a net income of NOK 1.8 million related to changes in consideration on contingent liabilities.
Result for 2023 is negative NOK 60.3 million (negative NOK 50.7 million in 2022).
Observe Medical had an equity of NOK 115.6 million at December 31, 2023. In December 2023 Observe Medical has issued 137,193,548 new shares in connection with the Rights issue for gross proceeds of NOK 35.7 million. Expenses related to the capital increase amounts to NOK 5.0 million.
(Amounts in NOK thousand, expect EPS, | 2023 | 2022 |
equity ratio and number of employees) | ||
Revenue | 27,942 | 19,521 |
Gross result | 9,287 | 5,177 |
EBITDA before non-recurring items* | -34,330 | -45,133 |
EBITDA | -37,693 | -48,212 |
EBIT | -51,263 | -59,143 |
Net finance | -9,082 | 8,418 |
Result | -60,345 | -50,725 |
EPS | -1.05 | -1.08 |
Equity | 115,606 | 138,306 |
Total balance | 253,537 | 215,812 |
Equity ratio | 45.6% | 64.1% |
Number of FTE's at 31 December | 9 | 17 |
- Non-recurringexpenses in 2023 is primarily related to UnoMeter™ tooling project that was discontinued and the Ferrari L. acquisition process. In 2022 non-recurring expenses was related to expenses in connection with the acquisition of Biim Ultrasound AS, and severance pay to former CEO and CTO.
Note that consolidation of Biim Ultrasound is part of the Group from March 2022
Letter from the CEO
2023 has been a transformative year for Observe Medical as we expand globally and strengthen our position in the market. The acquisition of the UnoMeter™ and Abdo- Pressure™ portfolio from Convatec was pivotal, aligning with our goal to be a leading player in the global urine measurement market. With initial UnoMeter™ 500 shipments in October and achieving production levels comparable to Convatec's historical output for the UnoMeter™ 500 product, we are poised to meet international demand. By year's end, we had received orders from over 20 countries, highlighting our growing global market presence. Our primary focus moving forward is to accelerate production and successfully bringing the UnoMeter™ Safeti Plus product to the market. This will further expedite the commercial pathway for our own digital and automated urine meter product, Sippi®.
During the late parts of 2023, the Company conducted a strategic review of the Nordic distribution operations with the intention to assess the relevance of the business for the Group. The platform was initially established to test and launch our own branded products. Given the expansion of our global distribution capabilities, which now fulfill our initial testing and pre-launch needs, the business has become less crucial for our core operations. Consequently, we have decided to transfer the business to Vingmed, which alignes with the establishment of the distribution partnership agreement with Vingmed for the UnoMeterTM portfolio in the Nordic region. The planning for this transfer started in late 2023 and the transfer is expected to be finalized during H1 2024.
Our partnership with Fresenius remains strong, highlighted by our recent delivery of 20 Biim ultrasound probes in November. To date, we have successfully delivered a total of 285 ultrasound probes to Fresenius, reinforcing our ongoing collaboration. Fresenius has spent more than 1.5 years on educational and training support for approximately 265 of its educational dialysis clinics, which has been necessary and needed to optimize the use of the Biim technology amongst key personnel. The intention is to secure that Fresenius is ready for a broader implementation for use of the Biim ultrasound probe in all their approximately 2,700 dialysis clinics in the US. In parrallell, we evaluate various strategic options for the Biim project based on, among other, the outcome of the progressing discussions with Fresenius and the financial resources available to Observe Medical.
To secure the commercial efforts for our workstreams, we completed a Rights issue in December 2023, which aimed to raise between minimum NOK 18 million and maximum NOK 55 million in gross proceeds. We managed to raise NOK 35.7 million (21.5 million in cash), which will be used to cover the working capital needs in relation to the ramp up of production and sale of the UnoMeter™ portfolio.
As we navigate these challenging yet exciting times, we've seen some changes within our leadership in the beginning of 2024. I took on the role of interim CEO following Rune
7 | Annual Report 2023, Observe Medical ASA
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Nystad's shift to Chief Development Officer, and Johan Fagerli stepped up as Interim CFO. I am confident that this leadership team will effectively continue leading our global commercial efforts alongside our growing portfolio of products.
Despite some challenges, 2023 was a year full of great achievements and opportunities. I am thankful for the Observe Medical team who faced every challenge head-on, and to our shareholders for their ongoing support. Our ambition and goals for the future remains unchanged, and I look forward to updating you all soon.
Jørgen Mann
Interim CEO
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About the Observe Medical Portfolio
Observe Medical has a portfolio of medtech devices and disposables within Urine measurement, measuring of intra-abdominal pressure and Ultrasound. In addition, the Company aim to be a preferred sales and commercialization platform for medtech companies, both through targeted M&A and distribution opportunities.
Sippi® - The Digital, Automated Urine Measurement System
Observe Medical's Sippi® system brings urine measurement at hospitals up to today's standards by measuring and capturing data digitally and fully automated.
Sippi® provides patient data accuracy and saves significant time and effort for healthcare professionals.
SippSense™
Alert for biofilm
- replace bag
Base unit
SippCoat™ | Disposable unit | |||
Biofilm prevention
UnoMeterTM - The Manual Urine Measurement system and intra- abdominal pressure measurement solution.
Observe Medical introduced in 2023 a manual urine measurement system to a broad global distribution network. The manual system is an important step for Observe Medical to be established as a preferred supplier in this segment which will create a unique market access channel for our existing portfolio and will catapult Sippi® to the market.
9 | Annual Report 2023, Observe Medical ASA
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Biim wireless pocketable ultrasound device
Biim Ultrasound probe is a wireless pocketable ultrasound device. It is a unique, cost efficient and small handheld wireless device that makes the technology available where its needed. The Biim Ultrasound system consists of an ultrasound probe and an App for display of the ultrasound image and/or video.
Biim offers nurses and medical staff an easy to use ultrasound device which ensure accuracy and quality in the treatment of their patients.
Biim has an agreement with Fresenius Medical Care with an aim to roll-out Biim Ultrasound probe in their approximately 2,700 dialysis clinics in the US. As of year end 2023, a total of 285 ultrasound probes have been delivered to Fresenius educational clinics.
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Observe Medical ASA published this content on 30 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 May 2024 09:09:23 UTC.