Göteborg, Sweden
October 24, 2104
Financial Report January - September
Turnover and profit/loss
Net turnover was 2,542 (266) thousand SEK. Operating profit/loss was -25,363 (-17,769) thousand SEK, involving a negative operating margin (neg). Profit/loss after tax was-26,013 (-17,737) thousand SEK or SEK -2 (-3,156) per share.
Cash flow
Operating cash flow was -28,655 (-11,013) thousand SEK. Total cash flow was 7,925 (3,624) thousand SEK. During Q3, Heliospectra has invested in securing materials for future production which has influenced the cash flow negatively by 2,500 thousand SEK.
Important events July – September
- Heliospectra’s break-through order in the US – first partial order worth 200,000 SEK
- Heliospectra is participating in projects regarding the use of algae for cleaning water with 10 million SEK financing from Vinnova and Lund’s local authority as the principal
- Heliospectra is, alongside the German space agency DLR, a partner in a 4.5 million EUR project financed by the EU, concerning cultivation in space
- Heliospectra now offers the possibility to trade in the company’s shares in the USA via a so-called American Depositary Receipt (ADR) through a listing on OTC Markets under OTCQB:HLSPY with BNY Mellon as principal and Merriman as the first market maker
- Heliospectra launches its own online shop to be able to receive smaller orders from around the world
Significant risks and uncertainties
Events after the period
- Heliospectra’s first patent, previously approved in China, Russia and Hong Kong has now been approved in the US
- Heliospectra’s cooperation with MIT Media Lab regarding production of food in the future was reported in the international magazine Wired www.wired.co.uk/magazine/archive/2014/10/features/server-farm
- We see new customer categories emerging, in particular in the US, which is shown in an prepaid order from Google USA of four units of the new product RX30
Future prospects
The upcoming period will focus on the sales and marketing side. We have secured a supply capacity that can meet substantial volumes in the prioritized markets Europe and North America. Alongside direct sales, the cooperation with a number of strategic partners will be deepened by building an international distributor and retail network. The board makes no quantified forecast for 2014, but overall the company is well positioned for accelerated sales.
Upcoming reporting dates
- Financial Statement Bulletin 02/26/2015
CEO’s comments
Dear shareholders,
We continue our journey to establish Heliospectra’s products on the global market. Primary geographical markets for us are Europe and North America. The markets that we are addressing are traditional greenhouse growers of vegetables and flowers, researchers and agrotech companies as well as the fast-growing market in medicinal plants, in particular in North America.
We have made our first reference installation among greenhouse growers at Swedeponic which is the largest grower of fresh herbs in Europe with greenhouses in Sweden, the UK, Poland, Portugal and the Czech Republic. This is important because it gives us the opportunity to show potential customers how our products are installed and how they would operate in their environment. This is also a market which over time will change, with indoor growing in controlled environments and also in rooftop greenhouses. In the US, for example, the supermarket chain Whole Foods has started using rooftop greenhouses. The reputable research institute MIT Media Lab has set up MIT City FARM www.mitcityfarm.com which is about how technology will be used in urban cultivations in the future. It is of course good news that they have chosen Heliospectra as partner www.wired.co.uk/magazine/archive/2014/10/features/server-farm, which shows once more that Heliospectra offers world-leading technology.
Researchers at universities, institutions and agrotech companies are also an important market as they impact the greenhouse market. They use technology early on and test it in small environments which then results in larger installations. The agrotech-companies themselves have large growing areas, both outdoors and in greenhouses. Heliospectra has been active here from an early stage with customers across the globe with our product L4A which then formed the basis for when we constructed LX60. We have also launched RX30 to this market and which is based on the same platform as LX60 which gives us considerable benefits of scale in production.
Medicinal plants are being established in North America as a fast-growing market up from 1.43 billion US dollars in 2013 to 10.2 billion US dollars in 2017, a growth of approx. 700%. The fact is, we have a similar market in Europe with, for example, the UK-based GW Pharma growing large quantities of medicinal plants which they process and sell to MS patients in Sweden and across Europe under the trademark Sativex. They are also developing other products such as for diabetes and pain in cancer patients. In the US, the authorities have approved the growing and sale of medicinal plants in 22 states and this development will grow further through future decisions in more states. Heliospectra sees a substantial potential in capitalizing on this market as our products offer direct energy saving and make it possible to control the growing and achieve results such as reducing the growing period.
As part of the efforts on the US market, we have chosen to offer US investors the opportunity to purchase shares in Heliospectra via a so-called American Depositary Receipt (ADR). The listing on OTC Markets OTCQB:HLSPY is administrated in a cooperation between BNY Mellon and Merriman being a so-called “market maker”. There are today approx. 1500 international companies who offer an ADR at different levels with a listing on the Nasdaq and OTC. The benefit is that Americans can buy shares in their own currency, in their own time zone and via their normal share account. Heliospectra will be marketed to US investors and 30 days after Merriman has initiated its activities, other “market makers” can also participate further increasing trading volume.
We see a large potential for Heliospectra to sell our products on these expanding markets and are focusing heavily on sales and marketing of our existing products.
Staffan Hillberg, CEO Heliospectra AB
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