Year-end Report January – December 2021

lmportant commercial progress

• New CEO appointed.
• First commercial hydrogen project.
• Air Quality sensor integrated in AAC's customer offer.

Outcome October-December

• Net sales amounted to 680 (23) kSEK.
• Profit after net financial items amounted to -3,041 (-4,494) kSEK.
• Basic and diluted earnings per share: -0,23 (-0,41) SEK.
• Cash flow from operating activities and investing activities: -1,360 (-2,207) kSEK.

Outcome January-December

• Net sales amounted to 2,335 (1,177) kSEK.
• Profit after net financial items amounted to -11,620 (-12,795) kSEK.
• Basic and diluted earnings per share: -0,89 (-1,27) SEK.
• Cash flow from operating activities and investing activities: -17,968 (-10,007) kSEK.

Significant events October-December

• Johan Rask was appointed CEO of lnsplorion.
• Successful pilot project in UK for lnsplorion's air quality sensor leads to dealer agreement.
• Hydrogen sensor in its first commercial pilot study.  
• Insplorion changes Certified Advisor to Naventus.

Significant events after the end of the period

• Hydrogen centre, where lnsplorion isa partner, financed by the Swedish Energy Agency.

Finwire.tv: Watch CEO Johan Rask and CFO Per Giljam comment and answer questions about the year-end report at 5.00pm today February 24, 2022 at https://www.finwire.tv/webcast/insplorion/presentation-q4-2021/

A word from the CEO

I, Johan Rask, have been the new CEO of lnsplorion since February 1st this year. I took over from Patrik Dahlqvist, who, after eight years in the position, has chosen to take on a challenge in another industry. The main content of this 'word from the CEO' therefore describes events and developments in which I have not been operational. Consequently, the following text is the outcome of a coordinated effort between myself and Patrik Dahlqvist.

First commercial hydrogen project

The close of 2021 was largely marked by progress in the development of our gas sensor platform. The hydrogen sensor took an important step in that a Swedish company in the transport sector will, via a feasibility study, evaluate how lnsplorion's hydrogen sensor can be customised in one of their customers' existing applications. The study is our first industrially funded hydrogen sensor project, with an order value of approximately SEK 100,000. The primary aim of the feasibility study is to evaluate the sensor's performance, but also to specify how the sensor can be read remotely via fibre, for example.

Air quality sensor integrated in AAC Eurovent's offers to customers

During the year, a number of customer projects were implemented with the air quality sensor. A feasibility study was carried out together with the British company AAC Eurovent during the summer. The purpose was to clarify how our air quality sensor can work together with their air filtration system for one of their customers. The goal for AAC Eurovent is to develop tailor-made solutions for reducing N02 (nitrogen dioxide) for properties, as well as in other areas of use. The results of the feasibility study provided a positive message, meaning the customer project enters the next phase at the same time as AAC also adds our N02 sensor in its offers to customers within the framework of a non-exclusive distribution agreement for the UK.

TechForH2 centre of excellence funded by the Swedish Energy Agency

There isa lot going on when it comes to hydrogen, and we have a strong business focus on customers who can quickly assimilate and work with our technology in attractive niche applications. In parallel, we are working strategically to expand our network with larger players in more long-term projects, both in Sweden and internationally. In the beginning of 2022, for example, the Swedish Energy Agency allocated a grant to TechForH2. This is a Hydrogen Centre with a focus on strengthening world-class research and innovation. The work is being led by Chalmers University of Technology and, in addition to lnsplorion, RISE, Siemens Energy, PowerCell Sweden, Scania, Volvo GTT, GKN Aerospace, Oxeon, Stena Teknik and Johnson Matthey are also taking part. lnsplorion's work in the project is in the area of "a sustainable future hydrogen economy", with a focus on mobility applications and heavy transport solutions. The fact that we are involved in these major projects is of great value to lnsplorion. It both reinforces our position as the leading sensor developer in strategic areas, and strengthens contacts with the major players who are potential customers and partners when we scale up our sensor business in the coming stages.

Research within the EU with lnsplorion instruments

During the autumn, the company EIFER, the European Institute for Energy Research based in Germany, bought an X1 instrument. The sale is one example of how our measuring instrument business is strengthening our sensor applications, in this case the hydrogen sensor. The group within EIFER that will use the instrument is focusing on hydrogen as an energy carrier within the EU, with research and development relating to issues within production, distribution and use.

Battery sensor projects continue to spread knowledge about NPS

Regarding the various battery sensor projects, it can be said that they were running according to plan at the end of 2021. The continuous work in the various ongoing battery projects leads to in-depth relations-hips and new insights into the existing collaborations with the players we already know. At the same time, our long-term work is seeing more people opening their eyes to our NanoPlasmonic Sensing technology, and we are noticing the growing interest.

Closing words

It is going to be a lot of fun and very exciting to lead lnsplorion forward. During my initial time, the focus, of course, is on creating a deeper understanding of our business, our customers, and the world around us, and, in the next step, see what implications this may have for our strategic priorities in the future.

With that said, we have a good starting point. We have a strong team, with both breadth and depth, anda unique technology platform with great potential in areas under-going significant change, where large investments are being made. We have also begun to gain a commercial foothold. Combined, I think this bodes well for the future.

Together with the team, our efforts will continue to focus on the commercialisation of our platform.

Gothenburg, February 24th 2022
Johan Rask, CEO