Correction: Quarterly report Q2 2022: Continued development but also challenges

FINANCIAL SUMMARY

Second quarter

• Net sales for the period amounted to 685 00

• EBITDA amounted to -4,485,000

• The total assets amounted to SEK 22,464,000

Important events during the quarter

• The company acquires the intestinal flora analysis company Symbio Me AB with the aim of broadening the business and offering the market additional solutions in digital health

• The first results of the research study carried out by Karolinska Institutet, KI show that the Company's treatment is superior to other treatments on the Swedish market and that over 90 percent of the participants in the study become healthy

• The company is carrying out a targeted share issue that adds 2.5 MSEK in capital

Important events after the end of the quarter

• The company is launching an extensive savings plan with the aim of speeding up the process to reach positive cash flow

• The company's current CEO Micael Gustafsson and founder Peter Boye are leaving their roles in the company and moving into consulting roles

• The company's current operational manager - Lina Johansson - will take over the role of CEO from 1 September 2022

• The company strengthens the cash register via a convertible loan from some of the larger owners

Comments by the CEO

The quarter was characterized by a continued development of the operative activities, while events in our surrounding world - above all the Russian invasion of Ukraine - also left their mark on our operations. This showed in reduced turnover in relation to 2021, especially in April and May. The business has also been charged with one-off costs in connection with the acquisition of Symbio Me of approx. SEK 500,000. The possibilities of finding capital for continued expansion have greatly decreased, which has meant that we have been forced to think in new ways and develop new strategies linked to the current situation.
The operational activities in Sweden continue to develop, however, a reduction in turnover in relation to 2021 has unfortunately been seen. During April and May, we noticed a decline in the inflow of patients, something that can be explained partly by the increase in the patient fee implemented by Region Stockholm in April, and partly by the concern we see in the outside world, which we know usually results in a slightly lower inflow. Happily, at the end of the period we saw a return to normal and my assessment is that in the coming quarters we can return to a more normal inflow again. Sleep problems have increased both during the pandemic and in times of anxiety, something we noticed during the summer, which is normally a very calm period.

Continued focus on sales
The investment in more active sales that began at the beginning of the year continued with a strengthening of inbound sales during mid-May. This paid dividends in the form of a 100 percent increase in booked assessments during June, something that continued during the summer as well. Given that the Company usually avoids starting treatment during the summer, this will very likely affect the inflow in both Q3 and Q4. During the month of May, we have also carried out successful efforts against traditional healthcare to find "ambassadors", which resulted in an increase in the number of patients who seek us out based on the recommendation of their doctor.

Positive results from the KI study
The randomized research study carried out by Karolinska Institutet was released in a preliminary report in May and the results are very gratifying. The patients who underwent treatment experienced an average improvement in their Insomnia Severity Index (ISI) value of more than 10 points, while those in the control group experienced essentially no improvement at all. They also compared our treatment with other similar treatments in Sweden and concluded that what we offer is by far the best. The study will be completed during the summer and the final report will come in Q4 2022.

Symbio Me
The acquisition of Symbio Me, which was made in May, is part of our strategy to eventually be able to offer our patients a more complete service in the area of sleep problems but also other types of mental illness. The company offers an advanced intestinal flora analysis that can give people with recurring problems connected to the stomach answers on how these can be treated with, for example, probiotics. During the summer, we will work on improving the service and refining the marketing, in order to be able to offer the service to the market with full force during Q3 and Q4.

Changes in management
In August, the board decided to approve the plan to take the company forward that I presented. The plan includes a larger savings package, which also means that I myself will step aside and that our operational manager Lina Johansson will take over as CEO from 1 September. However, I will remain as a consultant within the business to support Lina and ensure future funding. It has been a privilege for me to work with the company and with these changes the future looks bright.

Micael Gustafsson
CEO, Learning2Sleep L2S AB (publ)