Inify Laboratories AB

Interim report for the third quarter 2022

This is Inify Laboratories

Our vision World leading cancer diagnostics for everyone!

Who we are

We are a cross-professional team including corporate, technical, laboratory operations and medical expertise. All with extensive skills in their individual profession as well as extensive experience within healthcare and the pathology domain from different perspectives.

What we do

Inify Laboratories are building and establishing an ultra-modern laboratory concept that will provide cancer diagnostics within histopathology, initially for diagnosing prostate cancer. Diagnostic services will be offered to both public and private healthcare providers. The business model and technical setup allows for scalability in volume, diagnosis, and geographical expansion.

How we do it

We construct a unique setup of systems and processes enabling a fully digital, standardized and AI-supported workflow to optimize quality and shorten response times. Services will be offered for selected cancer types, where specialization together with an optimal system and seamless machine-human integration is the standard.

Why we do it

Clinical pathology is currently under high pressure, with heavy workloads and limited – even declining – resources in many regions. Aging populations, increasing cancer incidence, and more frequent exams and screening programs further increase the workload. Solving the problem by manpower alone is simply not possible, as there is an acute lack of medical professionals within pathology. High workload combined with limited access to specialized expertise and modern technology increases the risk of diagnostic errors while limiting time and investments for modernization.

Third Quarter Highlights

Laboratory build on track
Expanding the team with medical expertise
Simulation lab to support development

Letter from the CEO

Advancement towards opening – premises almost ready for occupancy and system installation

The third quarter was yet another period of development progress across the entire company, targeting the opening of our first laboratory and center of excellence for prostate cancer diagnostics in the first half of 2023.

Premises – Campus Solna, Sweden

Earlier in the year, a five-year leasing contract was signed for premises where our headquarter and first laboratory will be housed. The premises are now in the final stages of completion, and we will move in mid-Q4.

The physical layout and infrastructure are uniquely designed for an optimal workflow and work environment for our laboratory personnel. Parts of instrumentation for sample handling and preparation, scanning and diagnostics have already been delivered, while other equipment and inventory will be delivered upon access to the premises. Installation of laboratory equipment and IT systems will take place well before the end of the year, which is in line with our original plan.

Development

In an impressively short time, we have built a simulation lab where we further improve, test and verify our development work and ensure that it fits well into the upcoming production environment. The system has an optimized and standardized workflow for pathological prostate diagnostics with statistical process control. Anything from hardware/software connectivity to advanced AI predictions and workflow improvements can be tested in the simulation laboratory. It is a powerful environment for our continuous development efforts within prostate cancer

diagnosis, as well as for future expansion toward additional diagnoses.

Development of our quality system, including processes and documentation required for accreditation application, have been integrated across all development activities in the company.

Organization

Our new Chief Medical Officer (CMO) Dr. Claes Lindh was onboarded in September. The CMO is instrumental in our cross-professional organization, and he was immediately introduced to multiple projects where his contribution is of the highest importance.

We have also recruited additional employees within our R&D group, as well as laboratory personnel who will be onboarded in the upcoming quarters.

Recruitment processes for several open positions within R&D and laboratory personnel are ongoing, and we expect to complete them before the end of the year.

Market activities

During the quarter we have furthered our dialogue with prospective customers, including private and public healthcare providers. The interest and feedback remain very positive – due to both the urgent need and the fact that we create a "All parts of the company are in forward motion according to plan, and our growing, dedicated team has full focus on our target."

unique, specialized concept that can take diagnostic services within prostate cancer to a new level in terms of productivity, quality and predictability.

In parallel, we have intensified our efforts to map markets and potential customers internationally, with a primary focus on Scandinavia and northern Europe.

Summary

–

All parts of the company are in forward motion according to plan, and our growing, dedicated team has full focus on our target. This progress, paired with the positive response from customers, reinforces our ever-growing optimism regarding a successful market entrance and subsequent growth.

Fredrik Palm Chief Executive Officer

What attracted me to Inify Laboratories was the opportunity to meet the demands of prostate cancer diagnostics in a new way, a digital diagnostic approach for the 21st century!

With a standardized laboratory workflow, we can improve both turnaround time and specimen quality – crucial factors for enabling high quality digital pathology. It was also exciting to have the chance to utilize AI technology in the routine clinical workflow, and to collaborate in the continuous improvements of the algorithms.

I am convinced that the combination of standardized, high-quality laboratory services, strict quality assurance, AIbased clinical decision support tools, and specialized pathological expertise can give rise to a new paradigm in prostate cancer diagnostics.

Inify Laboratories brings together all the necessary concepts and all the required competencies to make this shift possible.

What struck me most when I started working at Inify Laboratories was the curiosity and dedication that characterized the entire organization. Working together, and learning from each other, is vital in directing the whole company's creative energy toward our common goal. Also, through interdisciplinary collaboration we can safeguard that all the components of the diagnostic chain are optimized. These features are critical for the company's growth and its groundbreaking progress in cancer diagnostics.

"What attracted me to Inify Laboratories was the opportunity to meet the demands of prostate cancer diagnostics in a new way, a digital diagnostic approach for the 21st century!"

Since joining, I have gained many new insights and perspectives on prostate cancer diagnostics from laboratory and technical professionals. These features will give Inify Laboratories the tools to unleash the full potential of AI-supported digital pathology in cancer diagnostics.

Claes Lindh Chief Medical Officer

–

Third Quarter Results 2022

Company development

Inify Laboratories AB is a Swedish company, with registration number 559345-4431 and with it's registered office in Stockholm, Sweden.

The company was incorporated in November 2021 as a subsidiary to ContextVision AB. After a resolution at an extraordinary general meeting in December 2021, Inify Laboratories was spun-off by a dividend of shares that was carried out in February 2022. The company is currently building it's first laboratory and office facilities. It's business will be pathology services for healthcare providers, focusing on prostate cancer for a start.

Financial development

Due to the recent forming of the company it has not yet any customer contracts and no revenue has been recorded. The first revenues are expected during the first half of 2023, depending on the speed of rebuilding of the offices, installation of equipment, necessary accreditation of the laboratory and market acceptance. The company's costs mainly consist of personnel costs and other external costs.

Cash-flow and financing

Prior to the spin-off from the former parent company (ContextVision) in February 2022, assets were transferred from the parent company to Inify Laboratories with a total value of SEK 31.3 million. The assets transferred included tangible assets amounting to SEK 0.7 million, intangible assets amounting to SEK 10.1 million and bank funds of SEK 20.5 million. At an extraordinary general meeting on 9 May 2022, it was resolved to carry out a private placement and a subsequent offering of NOK 150 million, to secures long term funding for the company. The raised capital was paid to the company during July. Cash and bank assets at 30 September amounted to SEK 144.5 millions.

Tangible and intangible assets

During the third quarter 2022 Inify invested SEK 2.8 millions in tangible assets. The current intangible assets consist of the product INIFY Prostate™ which the company intends to use as an internal tool in the cancer diagnosis process.

Since the company currently is establishing it's first laboratory, further investments in laboratory equipment and hardware for research can be expected during the coming periods.

Leasing

The company signed a leasing agreement for a combined office and laboratory facility at Campus Solna in June 2022. The premises are currently being rebuilt and adapted to suit the business. Tentative move-in date is in November 2022. The premises will house both the first laboratory as well as the head office for the company. In connection with signing the leasing agreement a deposit of SEK 875 thousand was paid.

Personnel resources

At September 30th, 2022 the company had 16 employees, all located in Sweden. Since the date of incorporation in November 2021 and onward, new personnel resources have regularly been recruited to join the company.

Incentive program

The Company's general meeting resolved on 9 May 2022 to implement a long-term incentive program for employees (the "Employee Incentive Program") and a long-term incentive program for board members (the "Board Member Incentive Program"). The long-term incentive program consists of a maximum of 3,935,599 options, divided between the Employee Incentive Program and the Board Member Incentive Program. Assuming that all options are exercised, this will correspond to a total dilution of approximately 8% based on the number of outstanding shares at the date of this report.

Extraordinary General Meeting

On August 30th the company held an Extraordinary General Meeting for its shareholders. At the AGM it was resolved that;

Grant Thornton Sweden AB was elected as external auditing company, with Joakim Söderin as auditor in charge, for the period until the end of next general meeting, Present auditors, Ernst & Young AB, were released from office.
Remuneration to the board and auditors was decided according to the following:
Remuneration to the chairman of the board is SEK 300.000.
Remuneration to other members of the board, whom are not also main shareholders, is SEK 200.000.
Remuneration to the auditors will be paid against invoicing, approved by the company.

Risks and uncertainties

The major risk factors and uncertainties for the company comprise, but are not limited to, risks related to the business and industry in which the Company operates, legal and regulatory risks, risks related to the Issuer's financial situation and risks relating to the shares and the listing of the shares on Euronext Growth Oslo. For further details on the company's risk factors, please see the Information Document that was published in connection with the listing on Euronext Growth in June 2022. The risks and uncertainties have not changed significantly since then.

Related party transactions

There has been no significant transactions with related parties during the period.

Basis of preparation

The condensed financial statements for the 3rd quarter 2022, ending September 30th 2022 have been prepared in accordance with the Swedish Annual Accounts Act (1995:1554) and the Swedish Accounting Board's general advice BFNAR 2012:1 Annual accounts and consolidated accounts ("K3"). The condensed financial statements do not include all the information and disclosures required in the annual financial statements.

The company was incorporated on 10 November 2021 and it's first financial year has been extended to cover the period from establishment until 31 December 2022. Comparative figures for previous periods are therefore not available.

This report has not been reviewed by the company's auditors.

New and changed accounting principles

No new or changed accounting principles have had effect on the accounting for the period.

Subsequent events

During the period between period-end and the issuance of this report no other significant events have occurred.

Shareholder information

Inify Laboratories AB was listed on Euronext Growth Oslo on June 20th, 2022 under the ticker INIFY (ISIN SE0017486103).
The company has a total of 45,236,750 shares outstanding. All shares have equal rights and are freely transferable.

Financial calendar

This quarterly report will be published on the company's website on the 26th of October 2022. For further information, please visit www.inify.com.

17 August 2022	Publication of Q2 2022 Financial report
30 August 2022	Extraordinary General Meeting
26 October 2022	Publication of Q3 2022 Financial report
	22 February 2023 Publication of Q4 and full year 2022 Financial report