Q&A following Capital Markets Day on 9 September
Due to regulations and corporate policies, the company cannot comment or answer questions pertaining to the following topics:
- Brighter does not currently share financial forecasts. In the company’s quarterly reports, we report on the financial situation on an ongoing basis
- Brighter, as a public company, cannot comment on ongoing discussions with customers regarding potential contracts or partners. This information will be communicated through regular channels in line with the EU Market Abuse Regulation
- As a matter of corporate policy, we do not comment on rumors or speculations in the market
- We cannot comment on employees or board members private decisions (to own shares in the company)
- We cannot comment on product related matters that might give proprietary information to our competitors
- Brighter has been focusing on commercialization since 2019. When will we see results??
Brighter does not currently share financial forecasts. The Capital Markets Day was intended to explain what each market looks like, where we are in the process and what remains to be done. Brighter has for a long time focused on commercialization but we must not forget that it takes time and that all permits and many other practical details must be in place before actual sales to end users are possible. Now we have started to receive many of the permits and approvals. Our sales teams are processing distributors and other similar partners who will help us get our service on the market and developing relationships with the hospitals and healthcare organisations which are crucial in order to reach the end users (i.e. gatekeepers and decision-makers in healthcare systems). But we must also finalize our ongoing pilots/studies in order to receive results and evidence that we can use in the sales efforts, as decision-makers rely heavily on e.g. proven medical benefits and a clear user experience case. - How is the commercialization process going? Is everything proceeding on track for you to be able to start selling the product?
The work is proceeding as described in the presentation available on https://brighter.se/investors/presentations/ . See also answer to question 1 above. - Why has Brighter not received any orders in countries other than Ghana and Nigeria (before all permits are ready)?
Brighter, as a public company, cannot comment on ongoing discussions with customers regarding potential contracts or partners. However, we can comment generally that healthcare institutions, distributors etc. including end users, want to see proof of concept before committing to use a new product on their respective market. Therefore our clinical studies are of utmost importance for us to finalize. When we have information to disclose, we will do so according to MAR and non-disclosure. - To get started with sales and help patients, will you be able to sell without a connection option to get sales of Actiste started? Local storage of test results and insulin injections in computer / telephone, all to simplify for individual users?
The Actiste Diabetes Management as a Service is a cloud based IOT service that needs a connection. The test results are locally stored on the device (and a limited period can be displayed on the small screen). Export to a computer / telephone is made via the unique global e-SIM solution. - What does it mean that you now have Actiste mini available on the Swedish market?
Actiste Mini is a good complement for the Swedish market. We have a contract with Vivbon which includes Actiste Mini and also the concept validation with Chronos Care includes Actiste Mini. - Why do you not sell in Sweden? Actiste is ready for sale, right?
We have signed a contract with Vivbon and a proof-of-concept with Chronos Care. We also have ongoing user trials on the west coast. The Actiste and Actiste Mini devices are available for sale via subscription on Actiste.com. Sweden is an interesting market and clinical studies are the first steps to have clinical evidence and approach public tenders. However, the Swedish market is a healthcare system with advanced options available for diabetics free of charge to the end user. We believe the Actiste has a greater possibility to benefit end users and be an attractive solution in other less developed markets. - Why has there not been a PM saying that the Actiste mini is ready in Sweden?
The Actiste Mini product has already been released to the Swedish market. Now, we can offer the complete solution, where it actually will be possible to buy it from our site actiste.com. See also the question above.
- Market approval for Ghana and Nigeria was expected to take 6 and 9 months, respectively. What is the status?
Medical device approvals are submitted. In these countries, timing for final approvals can be a lengthy and somewhat unpredictable process. Our initial timing guidance was simply an expectation based on the information we had at the time. We have faced certain unexpected challenges along the way that increased the complexity of the process. There is always a trade-off between speed, risk and cost. We have carried this out as efficiently and cost-effectively as possible.
- Ghana and Nigeria, you mentioned that you submitted these applications. Your slides mention “Files in preparation”. Can you please clarify?
The applications for medical device approval have been submitted. The other files for other types of approval are in preparation. There is a great deal of technical and other market information that must be compiled and prepared and in some cases notarized and stamped in embassies, both in Sweden and overseas, in order to complete filings that are acceptable to local regulators. - You were hoping for revenue from Ghana and Nigeria this autumn, is it no longer relevant considering the renegotiation of agreements?
We kindly refer to the pressrelease that was communicated on on september 7 https://news.cision.com/brighter-ab–publ-/r/brighter-is-notified-that-its-distributors-in-nigeria-and-ghana-wish-to-renegotiate-the-distribution,c3411473
- You have lots of approvals in Poland and France. Does it mean a faster way to market in the EU?
EU is definitely an interesting market for us and the clinical studies are the first steps to have clinical evidence and approach the EU market. Our planning ahead can be seen in the presentation from the Capital Markets Day. https://brighter.se/investors/presentations/ - Will it be possible to sell in Sweden after the pilot data is presented at the end of the year, or are there more obstacles?
We are currently selling in Sweden today. Please visit the following link:https://actiste.com/sv/kop-actiste/ - How is the work progressing in the UAE?
Brighter, as a public company, cannot comment on ongoing discussions with customers regarding potential contracts or partners. This information will be communicated through regular channels in line with the EU Market Abuse Regulation. However, as mentioned in our Capital Markets Day presentation, we are working together with our three partners and are working actively to obtain the approvals presented during the presentation on September 9. https://brighter.se/investors/presentations/
We also continue to work with MOHAP, Ministry of Health and Prevention, where we have a dialogue about whether to start the pilot or not once they have finished reorganizing. - What does the roadmap look like for each individual market? What targets do you work towards and what schedules are followed?
This is described in the presentation available on https://brighter.se/investors/presentations/ - How do you see the possibilities of increasing sales directly to users within European countries and in the rest of the world?
We are working with focus on sales according to the presentation on September 9. https://brighter.se/investors/presentations/ . We need outstanding approvals and permits and also results from our clinical studies. Entering into a new market, even where we technically have all approvals etc., is a significant investment as it requires extensive work to achieve localization (i.e. local language and custom adaptation) of e.g. user manuals and customer support routines, and results in an enhanced regulatory burden to cover such market entries. We therefore need to carefully weigh the expected benefit that can be derived from entering into each new market. - Who are the competitors and how far have they come with market penetration?
We don’t see any direct competitors offering Diabetes management as a Service, subscription based and with everything in one device. There are various competitors on individual parts of our Actiste Diabetes Management as a Service, e.g. blood glucose meters, insulin pens etc. - When will you focus on the United States?
The USA is a very large market but it also has many tough regulations. It is included in our roadmap further on but not in the period 2021-2023 we presented during the capital market day. - What has happened to Brazil as a target market?
It’s a large and interesting market in several ways. However, it’s challenging when it comes to e.g. permanent roaming. We are monitoring developments to assess when this may be an attractive market. - What is the reaction to your solution from potential customers / partners in the market?
In general, we have received very positive feedback. Our feedback from users and actual and potential partners is that many people with diabetes lack clearly compiled data that is easily accessible to the patient in a clear and user-friendly way. This is also crucial from the care provider’s perspective, because this is necessary to evaluate the patient’s adherence in order to provide effective treatment and care. It has been very challenging for us not to be able to be present at clinics and visit care facilities during the pandemic. - How long are periods of testing in the different countries before products are accepted?
It depends on many factors and is different for every region. This is a further soft factor we consider when evaluating market entry. However, it is very difficult to find hard data with which to assess this accurately prior to entry. - Have you not already carried out clinical studies, with the CE marking you received in the EU?
Brighter is strict in following regulatory processes and, in the course of obtaining CE mark in the EU, there was no requirement to execute clinical research at the time.
- What prevents you from conducting clinical study in the UK?Brighter is following a strict process of study preparation and submission to relevant bodies in the UK and has the pleasure to collaborate with one of the UK NHS bodies in study execution. After many months of preparations, full study documentation has been submitted to the Ethical Committee for review and approval.
- Clinical Study in the UK: When does it start and when do you think it will be ready?Brighter has already submitted all study related documentation to the Ethical Committee for review and approval. First review meeting is scheduled. Following Ethical Committee approval, we expect to be able to commence the clinical research shortly thereafter, following patient recruitment etc.
- Why do you have no pilots, should you not already have pilots everywhere?
Brighter considers the data generation process as one of the most important steps in building the body of evidence for Actiste, the research data that will afterwards be shared with diabetes scientific community, front line care providers, patients and partners. We already have a few pilots prepared, but in order to initiate research activities Brighter has to align with regulatory prerequisites for each market independently. - When do you estimate that these user studies and clinical trials will be completed?
Brighter has finalized one pilot. Analysis of results and generation of publication/report are in progress. If all regulatory requirements are met – other pilots and the clinical research will be initiated in 2021. We do not see user studies and clinical trials as something that will necessarily ever be completed, and we hope that the scientific community will continue to take an interest in testing the possible benefits that Actiste can provide for diabetes management. - Are there any “rescue plans” for T06?
We are continuously working on our financing strategies to find the best solutions moving forward. But as we currently do not share financial guidance or forecasts we cannot comment further on this. We understand your concerns regarding the T06 but like any other type of investment, warrants also have drawbacks and risks. The leverage and gearing that warrants offer can benefit investors but these can also work to the investor’s disadvantage. They are high-risk instruments. Exercise of warrants will also dilute other shareholders. Terms and conditions for the T06 is to be found here: https://brighter.se/investors/share-information/ - How long will your current financing keep you up running?
We do not provide a financial forecast regarding our financing. However, as earlier communicated, we are looking at a number of possible sources of financing to ensure liquidity going forward. We will communicate once decisions are made and in accordance with laws and regulations - What does the funding look like for the future? Will there be more issues?
The commercialization of Actiste, development and expansion of the Brighter, Camanio and Nectarine Health operations requires that the Group has adequate working capital for inventory, build-up of production as well as continued product development. As communicated earlier, Brighter will inevitably need additional financing in the future to meet working capital needs and operations. We are working actively to find other financing solutions for our subsidiaries as well as to find the best possible solutions to finance the group in the future to provide a solid foundation for growth and success. The company will communicate in accordance with laws and regulations in the channels required as soon as it has something concrete to inform about. - How are the cost savings proceeding? When will we see the results of those? What is the current burn rate?
Brighter does not currently share financial forecasts, hence can we not comment on results or burn rate. However, we are continuously working with our cost saving project, in Brighter and its subsidiaries. In the company’s quarterly reports, we report on the financial situation on an ongoing basis. - Why do you sign agreements with the latest lenders at more than a 50% discount?
As previously communicated, we work continuously with various solutions for our financing. Unfortunately, it is neither easy nor cheap to obtain funding for a company that is pre-revenue, like Brighter, at the beginning of a commercialization phase. We have collaborated with the same lenders on several occasions before and also on these occasions used the same terms as in the private placement (to repay borrowed capital) that was communicated on 8 August. Typical conversion terms offered by lenders involve a discount to the lowest volume weighted share price over an extended period. When the share price is volatile and rising significantly over the period, this can lead to the impression of a greater discount than is in fact applied. - Why has Brighter not managed to bring in long-term investors?
Brighter has for several years worked to build relationships with institutional investors both directly and indirectly, as well as together with hired expert advisors, through various forms of activities and contexts (meetings, presentations, roundtables, etc.) Brighter is at the beginning of its commercialization. Even for larger companies it could take years to get those types of investors. - Does Actiste work with a diabetes button (sensor) on the arm?
At the moment the Actiste focuses on building the smallest possible solution with the largest market scope, therefore the Actiste’s initial offer is based on the “golden standard” method of measuring blood glucose with a finger prick, rather than persistent subcutaneous sensors. - Can I travel abroad with my Actiste and continue uploading my data to the cloud?
Yes you can use it the same way as you use your mobile, with global roaming. Connectivity depends, of course, on carrier coverage and availability, but with Brighter’s collaboration with Arkessa/Ericsson, Actiste is supported in most countries around the world. - What is the progress with microneedles that are under development?
This was a project at Kungliga Tekniska Högskolan. We currently have no update on this. - Will the Actiste be out on the market like a blood pressure monitor?
We cannot comment on that as it would give proprietary information to our competitors - How do you think people in developing countries who don’t have the finances for food and housing should be able to afford Actiste?
Brighter must, in each country, find sufficient payment models. The company carries out a detailed analysis of countries and what the payment model looks like before deciding to enter. Clearly there is a broad variation in wealth and living standards across the population in all countries. Brighter seeks to focus on countries with a large and growing middle class, and we believe that Actiste has the potential to create enormous cost savings for developing country healthcare systems as well as providing improved standards of care for individuals. - Will the shareholders at some point have the opportunity to physically try/feel the Actiste units?
If the pandemic allows us, maybe the next Capital Market can be held as a physical event. - You say that Actiste is mainly for diabetes-1, but today there are built-in insulin pumps in the body that measure blood sugar and release insulin when needed. How can/does Brighters Actiste compete against these?
The insulin pump users vs injection users are two different customer groups. There are benefits and drawbacks with both solutions. Even though it can be very convenient to have an insulin pump, you still have to monitor your diabetes, and an insulin pump can be cumbersome for many life situations, e.g. when doing sports. In case of a malfunctioning pump you can still need an injection pen as backup. Importantly, particularly in underdeveloped diabetes healthcare markets (where self-pay is a common set-up) it is a much more expensive solution. - In addition to Actiste and Actiste mini, do you have new modern products on the way? An upgraded Actiste perhaps? The Actiste device feels a bit outdated and has been out for a few years.
We cannot comment on that as it would give proprietary information to our competitors. - What is the status of Nectarine Health in the US and its launch there? Previously, sales start has been communicated to start in June.
Nectarine Health has been working extensively on partner agreements to help open the US market. The company has signed product trial agreements with Solutionology, Peace of Mind Aging and CK-Caregivers. The user base will remain small for the time being as we undergo our trial period and test our product for scalability. We continue to see good traction in the market around our product and partners are particularly interested in our direct to consumer product approach. - Can you comment on the status and development of Nectarine & Camanio?
Camanio is taking great strides forward. It began with a pilot project in Tomelilla municipality that aims to digitize elderly care with its digital platform, Camanio SmartCare. Camanio won the award decision KSON (Kommunalförbundet Sjukvård och Omsorg i Norrtälje) for stationary security alarms and alarm reception. This was the company’s first customer within Adda’s framework agreement, which was a significant milestone for Camanio. This was followed by Österåker Municipally and Vansbro Municipally. Nectarine Health is also underway towards commercial success, working extensively on partner agreements to help open the US market. The company has signed product trial agreements with Solutionology, Peace of Mind Aging and CK-Caregivers. See more info above. - How does the continued collaboration with Accumbo look?
We have had long going discussions with Accumbo about plans for cooperation. Brighter is still co-owner and the dialogue still exists but we do not have any concrete business plans to present at this point. - Why not sell Accumbo to raise money that can help and finance the business?
There are no current plans to sell our investment in Accumbo. As a private (unlisted) company, there is no ready market for shares in Accumbo. - Brighters Actiste right now seems to act as a big burden for Camanio and Nectarine, which do not get their right values praised in the share, why do you not spin these off and list these separately so we owners get some shareholder value? As it stands now, Actiste is acting as a subdivision for the other companies.
As earlier communicated, the Company is actively working on solutions to finance its subsidiaries. - How important is it to have 100 employees in the company?
This number is not equal to employees, its team members in Brighter, Camanio and Nectarine in total, including consultants. - Is it not possible to reduce the number of employees now that the company does not succeed in generating any revenue?
Brighter is continuously working on cost savings. The company also has employee and workplace strategies to support business competitiveness and the commercialisation, not only by cost mitigation but also through increasing employee engagement, loyalty and output. - How many sellers do you have in total? Where are they stationed, on resp. market or is everyone in Sweden?
We assume you are asking about Brighter and not the subsidiaries. Brighter’s Sales and Medical Affairs organisations are built up with a mix of local representation, local external partners and a central organization. Today we have Brighter employed teams in Sweden, UAE and Indonesia. Brighter is continuously reviewing its organization making sure that we have the right competence, at the right time in the right place. - Has it been necessary to “clean up” after previous management? If yes; How has that challenge been and is it cleared now?
We have done a tremendous amount of work over the past 9 months in order to work more efficiently with improved processes, to reduce the number of consultants, cost reductions etc. We have, in both Brighter, Nectarine and Camanio implemented a clear focus on what to do, how to do it and when to do it. - What role does Truls have left in the company?
Truls Sjöstedt is no longer working in the company and is no longer employed in Brighter.
Q&A – Directed share issue September 15, 2020
On September 15 2020, Brighter announced a share issue of SEK 21 million directed to Unwrap Finance Nordic AB. Read the full press release here. Below is a Q&A based on received questions. Should you have any additional questions not answered in this Q&A, please contact ir@brighter.se.
Details in short:
Subscription price: SEK ~2.84
Share price at the day of the announcement: SEK ~2.91
Discount: ~2.3% compared with the day of announcement, 10% compared with the vwap of the share during the period August 3 to September 11.
Is this the way transactions are going to be done to cover routine operation?
Yes, this transaction represents the primary option that Brighter currently has decided on to finance its routine operations. We have other types of transactions available to us as well, similar to this one, and we are continuously evaluating what type of transaction that is most efficient for the company as well as its shareholders at any given time.
Further to that the Board and Leadership team are working on and evaluating additional financing options to secure the funds and resources needed to pursue the ambitious expansion strategy. E.g. Directed share issues to institutions, family offices and other professional investors, and financial agreements/prepayments from large customers/distributors.
Is Unwrap Finance Nordic to be regarded as a long-term investor?
Unwrap Finance Nordic is a financial investor with whom Brighter has a long and solid relationship, but is not to be regarded as an institutional investor in that sense.
Why did you not have a lock-in clause for this transaction?
A lock-in clause is not standard when it comes to directed issues. The discount in this transaction is standard. Addition of nonstandard clauses for such a transaction would have come at a cost of a significantly higher discount.
What differentiates this transaction from the ones done with L1 and Winance? Is this a “DSF”?
This transaction with Unwrap Finance Nordic is a regular directed share issue and has no relation to the kind of agreements that were signed with L1 Capital and Winance. Those agreements had transactions with convertibles and warrants linked to them. Neither of the agreements with L1 Capital or Winance were so-called DSF either, as Brighter protected its shareholders by making sure that the shareholders received free warrants and not just the investor. Following is a visualization of the Brighter share price development during the period of L1 Capital transactions.
Will there be additional directed share issues?
Yes, likely and Unwrap Finance is likely to be part of some of these. The priority, however, is to attract long-term institutional investors, but that is not short term.
Why are you not directing a share issue to larger institutional investors, with long-term focus, instead?
Larger institutional and professional value investors typically don’t invest smaller sums that would be appropriate in this situation. With Brighter’s current market cap of approximately SEK 600 million, a large investment would also lead to a significant dilution for the current shareholders.
However, it is a priority to bring aboard this type of investors and we are actively working on making that happen, taking into account the interests of shareholders. Key is to reach the next phase in our commercialization efforts.
Does this transaction affect the terms of the outstanding TO5 warrants?
No, according to the terms for TO5 a directed issue does not trigger a recalculation. This is standard terms for warrants. Recalculation is normally triggered by preferential rights issues (företrädesemission).
Q&A – Q2 2020 Interim report
We have received questions about how to interpret the financial statements in the Q2 report released on August 31. Below follows a clarification of Brighter’s financial position.
If you have any additional questions that are not answered in the clarification, please contact IR@brighter.se directly.
What was Brighter’s financial position at the time of the report?
Cash available was a total SEK 23.5 Million, plus additionally SEK 42.7 million which is currently allocated for a short-term placement against interest (treated as a liquid asset). The SEK 7.4 million write-off is not an expected write-off from cash-flow but only to conform with IFRS to reflect a change in valuation of an underlying security.
Will Brighter need additional funding?
Yes, until Brighter reaches the stage of sales and revenue the company will need external funding, in line with Brighter’s expansion strategy.
How will Brighter keep financing the operations?
The company has a contract in place for additional funding covering routine operations for at least 12 months.
Brighter is not considering a new rights issue or a contractual financing like the ones held with L1 Capital and Winance.
Further to that the Board and leadership team are working on and evaluating additional financing options to secure the funds and resources needed to pursue the ambitious expansion strategy. E.g. Directed share issues to institutions, family offices and other professional investors, and financial agreements/prepayments from large customers/distributors.
CEO Q2 comment
General status update and comments on the Q2 report.