Episurf — Interim / Quarterly Report 2025

Apr 10, 2025

INTERIM REPORT 1 JANUARY – 31 MARCH 2025

• Continued increases in sales and gross order intake combined with lower expense level
• Significant increase in European sales organisation through co-operation with Joint Operations
• First surgeries together with Johnson & Johnson-affiliated distributors successfully completed

"It is gratifying that we continue to show growth while reporting significant improvements in costs and in results. We are undergoing a major transformation in Europe with our recent agreement with Joint Operations, which has some negative impact on sales in the short term, but we are adding a significantly larger sales force in key European markets as of April 1st. During the quarter, we achieved our best sales, order intake and customer base ever – and now, focus is on continuing on the path we have taken but at an increasingly faster pace.", says Pål Ryfors, CEO Episurf Medical.

First quarter 2025 compared to 2024, Group

• » Gross order intake amounted to SEK 3.8m (2.7)
• » Group net sales amounted to SEK 4.0m (3.1)
• » Order book amounted to SEK 2.4m (2.0)
• » Loss for the period amounted to SEK -16.6m (-20.5)
• » Earnings per share amounted to SEK -0.03 (-0.07)

Significant events during the first quarter 2025

• » Episurf Medical announced that theresponse to the US FDA has been filed and addresses a request for additional information on the company's Episealer® MTP implant
• » Episurf Medical entered into a distribution agreement for several European countries with Joint Operations Ltd
• » Episurf Medical announced the outcome of the exercise of warrants of series TO13B
• » Episurf Medical announced that CFO Veronica Wallin will leave for a new postion

Significant events after the quarter

» No material events have occurred after the end of the period

Dear shareholders,

We would like to report on the first quarter of 2025 by focusing on the areas that are most important to us. First and foremost, it is gratifying that we continue to show growth while reporting significant improvements in costs and in results. We are undergoing a major transformation in Europe with our recent agreement with Joint Operations, which has some negative impact on sales in the short term, but we are adding a significantly larger sales force in key European markets as of April 1st. During the quarter, we achieved our best sales, order intake and customer base ever – and now, focus is on continuing on the path we have taken but at an increasingly faster pace.

• In the US, knee implant sales grew by 46% in Q1, but more importantly, the number of customers in the US grew by 200% in Q1. Our strategic plan requires the customer base in the US knee segment to grow by approximately 100% per year, and we are therefore ahead of our plan in the very important key figure of customer growth in the US. Pricing continues to be in line with our expectations, and the distributor network has continued to grow during the quarter. The first surgeries together with Johnson & Johnson-affiliated distributors have now been successfully completed, and we look forward to significantly higher activity in the US going forward.
• In Europe, we are focusing on our collaboration with Joint Operations, which went live on April 1. We are estimated to almost triple our sales force in the countries of Germany, the UK, Austria and Ireland, and we are really looking forward to collaborating with Joint Operations. In our strategic plan, we aim to reach approximately 250 customers in our non-US markets, and in Germany alone, Joint Operations has had almost 300 customers in recent years within the product portfolio we are now replacing, so we are convinced that the potential is there. The customer base grew by approximately 16% during the quarter, where our target in our strategic plan is just over 20%, and by completing the integration with Joint Operations, we see good opportunities to both meet and exceed our growth targets.
• Our approval process for our Episealer® MTP big toe implant is ongoing and we are in an interactive dialogue with the FDA. We have got indications that the questions we have received should be the last, but I would be cautious about drawing conclusions about a specific timeline. However, we continue to believe we are in the final stages of this process.

Costs during the quarter were SEK 2m lower than the corresponding period last year, which in combination with higher revenues improved the result before tax by SEK 4.3 million, to SEK -16.2 million. Cash flow from operating activities amounted to SEK -15.1 million, an improvement of SEK 7.2 million from the corresponding period last year. Our cost-saving program has borne fruit and we expect further improvements in the cost level as our collaboration with Joint Operations takes effect. Regarding tariffs from the US and its impact on our business, our best assessment at this time is that our product category is exempt from tariffs, which we base this on the product codes we use when delivering to the US, and the US government database. However, having said that, we experience uncertainty in this matter and we will follow the situation closely to create a better understanding of the situation and the ensuing uncertainty as it becomes clearer.

We have previously communicated a target of reaching a turnover of SEK 150-200m in the medium term, at which point we expect to become cash flow positive. In a calculation example, we can expect that we will have to double order intake and sales every year for this to happen. We reiterate that we are now fully focused on creating the prerequisites for this, which will be based on the following strategies:

• Continue to grow the knee business in the US through a steadily growing distributor network, with the goal of reaching national coverage.
• Successfully launch the Episealer® MTP implant in the US market and build an extensive sales network, either through distributors or a partner.
• Continue to grow the non-US business, now with Joint Operations as the primary sales partner.

I look forward to the next step with confidence.

Stockholm, April 2025

Pål Ryfors CEO

BUSINESS UPDATE AND FORWARD-LOOKING STATEMENTS

By the reporting date on April 10, 2025, Episurf Medical's implants had been used in 2,353 surgeries. Episurf Medical's patients are experiencing significant improvements in pain and mobility. Furthermore, they are also experiencing a short recovery time. Out of the total implant portfolio of 2,353 implants, several patients have now had their implants between 5 and 11 years since the surgery date. During the first quarter, 124 surgeries were performed with the Episealer® implant. 135 orders were approved for surgery during the first quarter.

Implant surgeries in quarter Approved orders in quarter

FINANCIAL INFORMATION

Group

Net sales and operating profit/loss

Group net sales amounted to SEK 4.0m (3.1) in the quarter. Loss before tax amounted to SEK -16.2m (-20.5) for the quarter. Other expenses, which for example includes expenses for clinical trials, marketing and product development, amounted to SEK -8.6m (-11.5) in the quarter.

Cash flow and financial position

Group cash and cash equivalents at end of period amounted to SEK 32.6m (34.6). The improved cash flow compared to the corresponding quarter last year is primarily due to increased operational focus and cost control. The board works continuously to evaluate various financing alternatives to ensure the continued operation of the business. The company has within the next twelve months additional financing needs that have not yet been secured but the board assesses that the company has good conditions to secure future financing through, for example, a new issue of shares. The equity ratio was 78.4% (78.4). Group investments in intangible assets amounted to SEK -2.4m (-0.9) for the quarter of which SEK -2.2m (-0.6) are related to capitalised development costs, remaining investments relates to patents. No significant investments have been made in tangible assets during the quarter or for the year of 2025 or 2024.

Parent company

The parent company's loss before tax amounted to SEK -9.8m (-12.9) for the quarter.

Human resources

Number of employees in the Group at end of the period was 27 (25).

Transactions with closely related parties

Shareholder and Board member Leif Ryd has received consulting fees for ongoing work as well as work for the Clinical Advisory Board during the period of SEK 0.2m (0.2).

Rights Issue and warrants TO13B

Rights Issue

During 2024, Episurf Medical carried out a rights issue and the company received approx. SEK 90m before issue costs. The rights issue meant that 375,662,430 new B shares were issued and 150,264,972 warrants of series TO13B.

In connection with the completed rights issue, guarantors had the opportunity to receive guarantee compensation in the form of units consisting of newly issued B shares and warrants of series TO13B instead of cash compensation. The guarantors were awarded shares and warrants that corresponded to a total value of approximately SEK 2.1m, which corresponds to 583,331 units consisting of 8,749,965 B shares and 3,499,986 warrants of series TO13B. The cash part of the guarantee compensation amounted to approximately SEK 7.0m.

Through the above transactions, the number of shares increased from 267,065,447 to 651,477,842, divided into 473,357 A shares and 651,004,485 B shares.

Warrants TO13B

The period for exercising warrants of series TO13B to subscribe for shares ran from and including 10 February 2025 up to and including 24 February 2025. In total, 1,586,850 warrants of series TO13 B were exercised for subscription of the same number of new shares of series B, corresponding to an exercise rate of approximately 1.03 percent. One (1) warrant of series TO13B

entitled the holder to subscribe to one (1) new share of series B in the Company at a subscription price of SEK 0.24 per share. Episurf received SEK 380,844 through the exercised warrants before costs attributable to the rights issue.

Through the exercise of warrants of series TO13B, the number of shares in Episurf increased by 1,586,850 shares of series B, from a total of 651,477,842 shares to 653,064,692 shares, of which 473,357 are shares of series A and 652,591,335 are shares of series B. The share capital increased by SEK 15,868.50 to SEK 6,530,646.92. The total number of votes in the Company after the exercise of warrants of series TO13 B amounts to 654,011,406. The exercise of warrants of series TO13 B entails a dilution effect of approximately 0.24 percent in relation to the number of shares and approximately 0.24 percent in relation to the number of votes in the Company. See more information about the transaction on the company's website.

Warrants and employee stock options

For more information about staff option programs, see Episurfs Annual Report 2024 note 9 and note 4 below.

Sustainability-related risks

Episurf strives towards monitoring and continuous evaluation of sustainability-related risks and their impact on the Group's operations and earnings. Episurf 's opinion is that this work will increase in importance, and the work could include, among other things, materiality analyses, monitoring of targets and commitments and by auditing various units within the company. The Group works towards having an established governance structure that involves both company management and the Board, and aims at continuously improve the company's sustainability activities and minimizing associated risks.

Changes related to general economic and political conditions

The situation in Ukraine entails risks of impact on the world economy with increasing cost inflation and disruptions in supply chains. Episurf has no direct exposure to Ukraine or Russia and has assessed that the company is currently not affected.

Due to the escalated conflict in Israel and Gaza since October 2023, the company is also monitoring developments in the Middle East. Episurf has a presence in several countries in the Middle East with limited sales so far and has assessed that there is no material financial impact on the company.

The US has imposed tariffs on exports goods. Regarding the impact of the tariffs on the company's business, the current assessment is that the company's product category is likely to be exempt from the tariffs. This is based on the product codes used for deliveries to the USA and information from the US authorities' database. However, the company is aware of the uncertainty and will carefully follow developments to ensure a more accurate assessment going forward.

Cyber security

Cyber security has become a significant threat in society and for Episurf, which is dependent on IT. The company has ongoing work to ensure that the company is well prepared to counter cyber-attacks and other types of intrusion.

Rounding

Due to rounding, the sum of numbers may differ.

Share information

There are two types of shares in the Company. Each Class A-share carries three votes and entitles the holder to three votes at the General Meeting, and each class B-share carries one vote and entitles the holder to one vote at the General Meeting. Class B shares have traded on Nasdaq Stockholm's Small Cap segment since 11 June 2014 with the ticker EPIS B.

31 March 2025

A-shares	473,357
B-shares	652,591,335
Total number of shares	653,064,692
Total number of votes	654,011,406

The following table notes the ten largest shareholders based on information available as of March 31, 2025

	No, Of	No. Of	Share capital	Voting rights
Name	A-shares	B-shares	in %	%
Health Runner AB (Ilija Batljan)	-	69 771 096	10,7	10,7
Sebastian Jahreskog	-	43 171 090	6,6	6,6
Fjärde AP-Fonden	-	31 907 386	4,9	4,9
Pål Ryfors (vd)	-	17 533 095	2,7	2,7
Niles Noblitt	-	14 691 811	2,3	2,2
Per Nyve	-	14 665 062	2,2	2,2
Ålandsbanken Abp (Finland), svensk filial	-	13 185 302	2,0	2,0
Abanico Invest AB	-	11 700 000	1,8	1,8
Tredje AP-Fonden	-	9 876 210	1,5	1,5
Johan Flodström	-	7 216 222	1,1	1,1
Total, 10 largest shareholders	-	233 717 274	35,8	35,7
Summary, other	473 357	418 874 061	64,2	64,3
Total	473 357	652 591 335	100,0	100,0

^*Pål Ryfors (CEO) owns 17,533,095 B-shares (8,006,925 personally and 9,526,170 subject to a call and put option to Niles Noblitt's trust Sacajo Investments LLC)

Episurf Medical's strategy rests on four key pillars:

OTHER INFORMATION

Significant risks and uncertainty factors

Episurf Medical's material business risks, for the Group as well as for the Parent Company, are to obtain regulatory approval and market acceptance, the outcome of clinical studies, the ability to protect intellectual property rights, the possibility to obtain the correct reimbursement for the Group's products and dependence on key personnel and partners. The Company does not see any new material risks for the upcoming three months. For a more detailed description of significant risks and uncertainties, refer to Episurf Medical's annual report.

The Board of Directors and the CEO hereby give their assurance that the interim report gives a true and fair view of the business activities, financial position and results of operations for the Group and Parent Company, and describes significant risks and uncertainty factors to which the Parent Company and the companies included in the Group are exposed.

Stockholm, 9 April 2025

Ulf Grunander Annette Brodin Rampe

Board chairman Board member

Christian Krüeger Leif Ryd

Board member Board member

Laura Shunk Jess Lonner

Board member Board member

Pål Ryfors CEO

The information in this interim report has not been reviewed by the company's auditor

CONSOLIDATED INCOME STATEMENT

mSEK	Note	Jan-Mar 2025	Jan-Mar 2024	Jan-Dec 2024
Operating income
Net sales	2	4,0	3,1	13,0
Capitalised development expenditure		2,4	0,9	7,6
Other operating income		0,0	0,0	0,1
Total income		6,3	4,0	20,7
Operating expenses
Merchandise		-2,7	-2,4	-9,9
Other expenses	3	-8,6	-11,5	-42,5
Personnel costs	4	-9,4	-8,5	-36,5
Depreciation and write-down of equipment and non-current assets		-2,0	-2,1	-9,0
Total operating expenses		-22,7	-24,6	-97,9
Operating loss Financial items		-16,3	-20,6	-77,2
Financial income, other		0,2	0,4	2,2
Financial expenses, other		-0,2	-0,3	-1,0
Results from net financial items		0,1	0,1	1,3
Loss before tax		-16,2	-20,5	-76,0
Tax on income for the period		-0,3	-0,0	-0,1
Loss for the period		-16,6	-20,5	-76,0
Net loss attributable to:
Parent company shareholders		-16,6	-20,5	-76,0
Earnings per share before and after dilution, SEK		-0,03	-0,07
Average number of shares		651 936 265	314 265 553	-0,15 494 825 276

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

mSEK	Note	Jan-Mar 2025	Jan-Mar 2024	Jan-Dec 2024
Net profit (loss)		-16,6	-20,5	-76,0
Other comprehensive income for the period: Other comprehensive income that may be reclassified subsequently to profit or loss for the period, net of tax		0,2	0,1	0,2
Total comprehensive income (loss) for the period		-16,4	-20,5	-75,9
The period's loss and comprehensive income attributable to
Owners of the parent		-16,4	-20,5	-75,9

CONDENSED CONSOLIDATED BALANCE SHEET

mSEK	Note	31 Mar 2025	31 Mar 2024	31 Dec 2024
ASSETS
Non-current assets
Intangible fixed assets
Capitalised development costs	5	25,4	21,3	23,9
Patents	5	11,0	11,9	11,4
Total intangible fixed assets		36,4	33,2	35,2
Equipment and right-of use asset
Right-of-use assets		6,9	5,0	2,8
Equipment		0,0	0,0	0,0
Total equipment and right-of-use asset		6,9	5,1	2,8
Total non-current assets		43,3	38,3	38,0
Current assets
Inventories		3,1	3,4	3,2
Trade receivables		2,3	2,0	2,2
Other receivables		0,9	0,7	1,3
Deferred expenses and accrued income		3,5	3,1	2,6
Cash		32,6	34,6	50,5
Total current assets		42,5	43,8	59,7
TOTAL ASSETS		85,8	82,1	97,8

CONDENSED CONSOLIDATED BALANCE SHEET

mSEK	Note	31 Mar 2025	31 Mar 2024	31 Dec 2024
EQUITY AND LIABILITIES
Equity		67,2	64,4	83,8
Liabilities
Non-current liabilities
Non-current liabilities		0,0	0,2	0,0
Non-current lease liability		3,6	1,6	0,0
Total long-term liabilities		3,6	1,8	0,0
Current liabilities Trade payables Current lease liability Other liabilities		4,6 3,0 1,2	7,9 3,1 1,3	3,2 2,3 1,6
Accrued liabilities and deferred income		6,1	3,7	6,7
Total current liabilities		15,0	15,9	13,9
Total liabilities		18,5	17,7	13,9
TOTAL EQUITY AND LIABILITIES		85,8	82,1	97,8
Equity ratio		78,4%	78,4%	85,7%
Equity per share, SEK		0,10	0,20	0,13

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Attributable to equity holders of the parent

		Attributable to equity holders of the parent
mSEK	Share capital	Other contributed capital	Reserves	Accumulated deficit incl. loss for the year	Total equity
Opening equity January 1, 2024	80,2	684,8	-0,3	-680,2	84,5
Total comprehensive income for the year				-76,0	-76,0
Other comprehensive income			0,2		0,2
Total comprehensive income			0,2	-76,0	-75,9
Transactions with shareholders Adjustment conversion warrants, net after issue
expenses		0,2		-0,2
New share issue, net after issue expenses *	5,4	68,6			74,0
Reduction of share capital	-79,1	79,1
Warrants issued to staff				1,2	1,2
Total transactions with shareholders	-73,7	147,8		1,0	75,2
Closing equity December 31, 2024	6,5	832,6	-0,1	-755,2	83,8
Opening equity January 1, 2025	6,5	832,6	-0,1	-755,2	83,8
Total comprehensive income for the period				-16,6	-16,6
Other comprehensive income			0,2	-0,5	-0,3
Total comprehensive income			0,2	-17,1	-16,9
Transactions with shareholders
Adjustment conversion warrants, net after issue expenses**	0,0	0,3			0,3
Warrants issued to staff				-0,0	-0,0
Total transactions with shareholders	0,0	0,3		-0,0	0,3
Closing equity March 31, 2025	6,5	832,9	0,1	-772,3	67,2

^* Issue expenses amounts to SEK 16.2m.

^** Expenses amounts to SEK 0.0m.

CONSOLIDATED CASH FLOW STATEMENT

Operating activities Operating loss -16,3 -20,6 Adjustments for items not included in cash flow Depreciation 2,0 2,1 Employee stock option expenses -0,0 0,4 Interest received 0,2 0,4 Interest paid -0,2 -0,3 Cash flow from current operations before change in working capital -14,3 -18,0 Change in working capital Decrease/increase in inventory 0,1 0,3 Decrease/increase in trade receivables -0,1 -0,6 Decrease/increase in current receivables -1,5 -1,8 Decrease/increase in current liabilities 0,7 -2,2 Change in working capital -0,8 -4,4 Cash flow from operating activities -15,0 -22,3 Investing activities Investments of intangible fixed assets -2,4 -0,9 Cash flow from investing activities -2,4 -0,9 Financing activities Amortisation of lease debt -0,8 -0,1 Issuance of share options 0,3 - New share issue - - Issue expenses - - Cash flow from financing activities -0,5 -0,1 Cash flow for the period -17,9 -23,3 -7,4 Cash and cash equivalents at beginning of period 50,5 57,9 57,9 Cash and cash equivalents at end of period 32,6 34,6	mSEK	Note	Jan-Mar 2025	Jan-Mar 2024	Jan-Dec 2024
					-77,2
					9,0
					1,0
					2,2
					-1,0
					-65,9
					0,5
					-0,8
					-1,8
					-3,3
					-5,5
					-71,4
					-7,6
					-7,6
					-2,4
					-
					90,2
					-16,2
					71,6
					50,5

mSEK	Jan-Mar Note 2025	Jan-Mar 2024	Jan-Dec 2024
Operating income
Net sales	0,3	0,3	1,2
Capitalised development expenditure	2,2	0,6	5,3
Total income	2,5	0,8	6,5
Operating costs
Other external expenses	-6,0	-8,6	-33,4
Personnel costs	-5,9	-4,3	-23,1
Amortisation of intangible assets and depreciation of property, plant and
equipment	-0,7	-0,8	-3,0
Total operating costs	-12,6	-13,6	-59,4
Operating loss	-10,1	-12,8	-52,9
Financial items
Write-downs of financial fixed assets and short-term investments	-	-	-150,0
Financial income, other	0,2	0,0	1,3
Financial expenses, other	-	-0,1	-0,2
Results from net financial items	0,2	-0,1	-148,9
Loss before tax	-9,8	-12,9	-201,7
Tax on income for the period	-	-	-
Loss at end of the period	-9,8	-12,9	-201,7

PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME

mSEK		Jan-Mar	Jan-Mar	Jan-Dec
	Note	2025	2024	2024
Net profit		-9,8	-12,9	-201,7
Other comprehensive income for the period:
Other comprehensive income for the period, net of tax		-	-	-
Total comprehensive income for the period		-9,8	-12,9	-201,7

CONDENSED BALANCE SHEET, PARENT COMPANY

mSEK	Note	31 Mar 2025	31 Mar 2024	31 Dec 2024
ASSETS
Fixed assets
Intangible fixed assets
Capitalised development costs	5	25,4	21,3	23,9
Total intangible fixed assets		25,4	21,3	23,9
Financial assets
Shares in group companies		80,0	208,0	66,0
Long-term receivables from group companies		7,9	32,2	17,2
Total financial assets		87,9	240,2	83,2
Total fixed assets		113,3	261,5	107,0
Current assets
Short term receivables
Trade receivables		-	-	-
Other receivables		0,3	0,5	0,1
Prepaid expenses and accrued income		1,7	2,5	1,5
Total short term receivables		2,1	3,0	1,6
Cash		27,0	20,0	43,7
Total current assets		29,1	22,9	45,3
TOTAL ASSETS		142,4	284,5	152,3

CONDENSED BALANCE SHEET, PARENT COMPANY

mSEK	Note	31 Mar 2025	31 Mar 2024	31 Dec 2024
EQUITY AND LIABILITIES
Equity		134,0	258,4	143,6
Liabilities
Non-current liabilities
Non-current liabilities to group companies		0,5	17,3	0,6
Total long-term liabilities		0,5	17,3	0,6
Current liabilities
Trade payables		1,8	5,5	1,6
Other liabilities		1,0	0,8	0,8
Accrued liabilities and deferred income		5,0	2,6	5,8
Total current liabilities		7,9	8,8	8,2
Total liabilities		8,4	26,1	8,8
TOTAL EQUITY AND LIABILITIES		142,4	284,5	152,3

STATEMENT OF CHANGES IN EQUITY, PARENT COMPANY

mSEK fund um reserve forward period equity Opening equity January 1, 2024 80,2 21,5 684,1 -382,7 -131,8 Loss for the year -201,7 Disposition according to AGM Loss brought forward -131,8 131,8 - Development fund 2,4 -2,4 - Total comprehensive loss for the period 2,4 -134,1 -70,0 Transactions with shareholders New share issue, net after issue expenses 5,4 68,6 Reduction of share capital -79,1 79,1 - Total transactions with shareholders -73,7 147,7 Closing equity December 31, 2024 6,5 23,9 831,7 -516,8 -201,7 Opening equity January 1, 2025 6,5 23,9 831,7 -516,8 -201,7 Loss for the period -9,8 Disposition according to AGM Loss brought forward -201,7 201,7 - Development fund 1,5 -1,5 - Total comprehensive loss for the period 1,5 -203,2 191,9 Transactions with shareholders Conversion of warrants* 0,0 0,3 0,3 Total transactions with shareholders 0,0 0,3 0,3	Share capital Development	Share premi	Loss brought	Loss for the	Total
					271,3
					-201,7
					-201,7
					74,0
					74,0
					143,6
					143,6
					-9,8
					-9,8
Closing equity March 31, 2025 6,5 25,4 832,0 -720,0 -9,8					134,0

^* Issue expenses amounts to SEK 16.2m.

^** Expenses amounts to SEK 0.0m.

CASH FLOW STATEMENT, PARENT COMPANY

mSEK	Note	Jan-Mar 2025	Jan-Mar 2024	Jan-Dec 2024
Current operations
Operating loss		-10,1	-12,8	-52,9
Adjustments for items not included in cash flow
Depreciation		0,7	0,8	3,0
Interest received		0,1	0,0	1,3
Interest paid		0,1	-0,1	-0,2
Cash flow from current activities before changes in working capital		-9,2	-12,1	-48,8
Changes in working capital
Decrease/increase in current receivables		-0,5	-1,7	-0,2
Decrease/increase in current liabilities		-0,4	-0,4	-1,1
Total changes in working capital		-0,9	-2,1	-1,2
Cash flow from operating activities		-10,1	-14,3	-50,0
Cash flow from investing activities
Acquisition of intangible assets		-2,2	-0,6	-5,3
Shareholder contribution		-14,0	-6,0	-14,0
Repaid group companies		14,7	6,5	43,6
Loan group companies		-5,4	-8,0	-46,9
Cash flow from investing activities		-6,9	-8,1	-22,6
Cash flow from financing activities
New share issue		-	-	90,2
Issue expenses		-	-	-16,2
Conversion warrants		0,3	-	-
Cash flow from financing activities		0,3	0,0	74,0
Cash flow for the period		-16,7	-22,3	1,4
Cash and cash equivalents at beginning of period		43,7	42,3	42,3
Cash and cash equivalents at end of period		27,0	20,0	43,7

NOTES

Note 1 Accounting policies

The interim report for the Group has been prepared in accordance with IAS 34 Interim Reports and the Annual Accounts Act. The parent company has prepared its interim report in accordance with the Annual Accounts Act and the Swedish Financial Reporting Council's recommendation RFR 2 Accounting for legal entities.

The Group's accounting policies are unchanged from previous year and these correspond with the accounting principles that were used in the preparation of the most recent Annual Report. Information according to IAS 34.16A is included in these financial statements and related notes as well in other parts of this interim report.

Note 2 Breakdown of net sales by country is as follows

mSEK	Jan-Mar 2025	Jan-Mar 2024	Jan-Dec 2024
Germany	1,8	1,7	6,1
US	0,8	0,6	2,7
Nordic	0,1	0,2	0,6
Other countries in Europe	1,2	0,6	3,2
Other countries outside of Europe	0,0	0,1	0,3
Total net sales	4,0	3,1	13,0

Note 3 Other expenses

mSEK	Jan-Mar 2025	Jan-Mar 2024	Jan-Dec 2024
Product development	1,8	0,9	7,6
Patent costs	0,5	0,2	2,2
Costs for clinical studies	0,8	2,5	8,8
Sales and marketing costs	2,4	4,1	11,9
Other expenses	3,0	3,9	12,0
Total other expenses	8,6	11,5	42,5

Note 4 Changes in outstanding stock options

Changes in outstanding stock options of series 2023/2026	31 Mar 2025	31 Dec 2024
Opening balance	2 418 835	2 479 537
Expired	-224 381	-60 702
Amount at end of period	2 194 454	2 418 835

Changes in outstanding stock options of series 2022/2025	31 Mar 2025	31 Dec 2024
Opening balance	1 456 340	1 456 340
Expired	-172 506	-
Amount at end of period	1 283 834	1 456 340

Changes in outstanding stock options of series 2021/2024	31 Mar	31 Dec
	2025	2024
Opening balance	2 256 503	2 256 503
Expired	-179 631	-
Amount at end of period	2 076 872	2 256 503

Note 5 Intangible assets

Patents, mSEK	31 Mar 2025	31 Dec 2024
Opening cost	37,2	35,7
Purchases	0,2	2,3
Sales and disposals	-0,1	-0,7
Closing accumulated cost	37,3	37,2
Opening depreciation	-25,8	-23,5
The period's depreciation	-0,5	-2,4
Sales and disposals Closing accumulated depreciation	0,0 -26,3	0,0 -25,8
Closing carrying amount	11,0	11,4
Development expenses, mSEK	31 Mar	31 Dec
	2025	2024
Closing cost	43,8	38,5
The period's capitalisation	2,2	5,3
Closing accumulated cost	46,0	43,8
Opening depreciation	-20,0	-17,0
The period's depreciation	-0,7	-3,0
Closing accumulated depreciation	-20,7	-20,0

Closing carrying amount 25,4 23,9

Closing carrying amount, patents and development expenses 36,4 35,2

DEFINITIONS

General: All amounts in the tables are presented in mSEK unless otherwise

stated. All amounts in brackets () represent comparative figures for

the same period of the prior year, unless otherwise stated.

Net debt/equity ratio: Net debt at the end of the period divided by equity at the end of the

period.

GLOSSARY

Approved orders: Orders which have been approved for surgery, are in production and

will be invoiced.

Arthritis: See Osteoarthritis.

Arthroscopy: Inspection of the inside of a joint with the help of an arthroscope.

An instrument is introduced through a small cut to investigate the inside of the joint and possibly correct any problems (a type of

keyhole surgery).

Cartilage: Shock absorbing and friction reducing tissue. This tissue that covers

the end of bones and allows movement with low friction.

Cartilage defect of grade

III (ICRS scale):

Lesion through the cartilage, exposing the bone.

Cartilage defect of grade

IV (ICRS scale):

Defect extending down to >50% of the cartilage depth.

CE marking: A CE mark means that the manufacturer or importer has the formal

approvals necessary to market and sell the product in the European

Economic Area.

Clinical results: Outcome from clinical treatment of humans, where parameters such

as efficacy and safety are evaluated.

Cobalt chrome: A metal alloy mainly consisting of cobalt and chromium, commonly

occurring in metal alloys used in knee prostheses.

Debridement: Removal of damaged tissue.

Degenerative origin: Conditions in which the cells, tissues or organs deteriorate and lose

function. In degenerative joint disease, the deterioration is due to

wear, tear or breakdown of cartilage.

ESSKA: European Society of Sports Traumatology, Knee Surgery &

Arthroscopy.

FDA: US Food and Drug Administration.

Focal cartilage defect: A cartilage defect in a well-defined area.

Femoral condyles: Two bony protuberances on the thighbone side of the knee joint

that articulate with the shinbone. The name originates from the anatomical terms femur (thighbone) and condyle (articular head).

Gross order intake: Gross order intake represents the aggregated value of Episealer®

orders received and approved by responsible surgeon during the

relevant period.

Hydroxyapatite: A mineral that is the major component of human bone tissue and

the main mineral of dental enamel and dentin.

Invasive treatment

alternative:

Treatments that require a surgical procedure.

Micro fracturing: A biological surgical technique that can be used in treatment of

focal cartilage defects (not extensive osteoarthritis) in an attempt to

stimulate the growth of new cartilage.

MRI: Magnetic resonance imaging, a medical imaging technique where

images acquired using a strong magnetic field allows the user to get

three-dimensional image data of the patient.

MTP: Short for metatarsophalangeal, refers to relations between the

metatarsal bones and the proximal phalanges (toe bones) of the

toes.

OA: See osteoarthritis.

Order book: Order book represents all orders that have been booked but where

no revenue has been recognised.

Orthopaedics: The medical specialty that focuses on injuries and diseases of the

body's musculoskeletal system. This complex system includes bones,

Joints, ligaments, tendons, muscles and nerves.

Osteoarthritis: A type of joint disease that is characterised by loss of joint function

with varying destruction of joint cartilage and the underlying bone.

Osteochondral defect: Cartilage and underlying bone defect.

Patellofemoral: Refers to relations between the patella (knee cap) and femur

(thighbone) in the knee.

Prosthesis: An artificial device that replaces a missing or injured body part, such

as artificial arm or leg. The term prosthesis is also used for certain of the implants that are used to repair joints, such as hip and knee

prostheses.

Reimbursement: Reimbursement is a word that is used generally in the healthcare

industry to describe the payment systems that apply to healthcare

costs in various countries.

Talus: A foot bone constituting a part of the ankle joint. Also referred to as

astragalus and ankle bone.

TKA: Total knee arthroplasty, total knee joint replacement, which is a

surgical procedure primarily used to relieve arthritis in which the

knee joint is replaced with artificial parts (prostheses).

Traumatic damage: Damage caused by an outside force, such as fall injuries.

The trochlea area: The part of the knee joint that is right under the knee-cap, part of

the femur (thigh bone).

UKA: Unicompartmental knee arthroplasty, partial knee joint replacement

which is a surgical procedure primarily used to relieve arthritis in one of the knee compartments. Parts of the knee joint are replaced

with artificial parts (prostheses).

THIS IS EPISURF MEDICAL

– a unique solution for every patient

EPISURF WAS FOUNDED IN 2009 on a commitment to offer people with painful joint injuries a more active and healthy life through customised treatment alternatives. We put the patient in the centre of the design of implants and surgical instruments. By combining advanced 3D imaging technology with the latest manufacturing technologies, we are able to adapt not only each implant to the patient's injury and anatomy, but also the surgical instruments used. In this way, we can ensure that each patient receives treatment that is perfectly suited to his or her anatomy and, thus, ensure a faster, more secure, and better patient-specific treatment for a more active and healthy life.

A proprietary web-based IT platform for individualised design and surgical pre-planning Episurf Medical's scalable μiFidelity® system has been developed for damage assessment, surgical pre-planning and cost-effective patient customisation of implants and associated surgical instruments. In a first step, the company's main focus has been on early stage arthritic changes in the knee joint. This is now followed by lesions in the second joint, the ankle.

Individualised implants with a focus on early stages of arthritis

Episurf Medical has two types of knee implants on the market

• » Episealer® Knee (comprising Episealer® Condyle Solo, Episealer® Trochlea Solo and Episealer® Femoral Twin) for the treatment of localised cartilage and underlying bone defects on the femoral condyles and in the trochlea area of the knee joint.
• » Episealer® Patellofemoral System for the treatment of isolated osteoarthritis of the patellofemoral joint.

Episealer® Talus

Episurf Medical has one implant for the ankle on the market

» Episealer Talus® intended for osteochondral lesions of the talar dome of the ankle joint.

Patient-specific surgical instruments

Every product is delivered with our individualised surgical drill guide Epiguide® and a set of associated surgical instrument. Further, for the ankle Episurf Medical offers an individualised sawguide, Talus Osteotomy Guide. It is intended to help the surgeon to find the correct position and depth when performing an osteotomy of the medial malleolus for access

Patents and patent applications

to the talar dome of the ankle joint.

The generation of new intellectual property and the ongoing maintenance of current IP is of paramount importance for Episurf Medical to ensure that Episurf Medical's proprietary, existing technologies and future innovations are well protected. In total Episurf Medical has more than 200 patents and patent applications worldwide, distributed over 35 patent families.

• » The first Episealer® surgery in a human was performed in December 2012, and to date, more than 2,000 surgeries have been performed.
• » Episurf Medical's head office is located in Stockholm and the company has sales representation in several countries in Europe, Asia and North America.
• » The share (EPIS B) has been listed on Nasdaq Stockholm since June 2014.

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FINANCIAL CALENDAR

Interim Report April-June 2025 11 July 2025 Interim Report July-September 2025 24 October 2025 Year-end Report 2025 6 February 2026

This is a translation of the original Swedish interim report. In the event of a discrepancy between this translation and the Swedish original, the Swedish interim report takes precedence. The information was submitted for publication, through the agency of the contact person set out below, on April 10, 2025 at 08.30 (CEST).

The following analysts follow Episurf Medical's development

Redeye Analyst:John Westborg

IR-contact

Pål Ryfors CEO Phone: +46 (0) 709 623 669

E-mail: pal.ryfors@episurf.com

Veronica Wallin CFO

Phone: +46 (0) 700 374 895

E-mail: veronica.wallin@episurf.com

Episurf Medical AB (publ) org.no 556767-0541 Karlavägen 60, 114 49 Stockholm, Sverige www.episurf.com