Good morning, welcome to this Q3 presentation with CS Medica. With us today, we have the management team of CS Medica. First, there will be a presentation, and afterwards, a Q&A where the management team will answer all questions submitted via Stokk.io. There have already been pre-submitted questions on Stokk.io for the Q&A, and the Q&A is still open so that you can submit questions live as well. I will now hand over the mic to CS Medica for the presentation. Your line is now open. Thank you so much, Anas. I think that you should switch. Yes. Thank you so much. Welcome, all of you, to this web conference call following the Q3 report released here earlier in July. If we can shift to. Yes. The agenda today, we will focus on the pre-submitted questions, as mentioned with Anas, but also dig a little deeper to those areas of importance of Q3. After that, we will have Q&A, which was submitted prior to this meeting or during this meeting. For those that are new here, CS Medica is a science-based company that combines research technologies and nature using the therapeutic values of CBD. We are the efficient OTC alternative, meaning that we are measuring us against other disease treatment areas such as Voltaren and so forth, but with the focus on nature and science. The highlights of Q3, we are happy that we managed to have an order intake accumulated for this current year of DKK 11.3 million. Due to lack of funding, unfortunately, we were not able to actually match this in the revenue, which in this Q3 was effectuated with us with DKK 673,000, compared to last year of DKK 1.1 million, being accumulated of DKK 994 and DKK 1.3 million last year. This is not satisfied for us, and we are seeking to dig to solve these funding issues with the plan that we have mentioned prior in the quarters, where we were seeking alternative funding, but ended up with the agreement with RongShi. We will dig deeper to that afterwards, but this is the current situation. We obtained the order intake that we prospected earlier, but was not able to transfer that to revenue. This also was reflected at the cash, which was negative at the end of Q3. The funding we have looked into, we managed to actually go into the agreement with RongShi at the last quarter, and we have a, a. We will walk through that, status later on, but this is our current fun-funding situation and what we are, working on to achieve right now. Yes. Thanks for that, Gitte. Thanks for the introduction. From the commercial side, just a short introduction to the order intake and the revenue, how it looks compared to the target for this year. It's correct that we are missing and we are lacking in terms of revenue. On the other hand, we are seeing a growing demand in terms of our potential customers and partners, and we see a high increase in the order intake. We're looking at SEK 11.4, which is accumulated on the year at a target of 76% of the target for this year. We see still that Q4 needs to have a high order intake in order to reach the targets, we also have some good negotiations going on. It's, it's, it's actually looking bright for the future, so we are still confident on the future. Next slide. For the market expansion, just to deep dive a little bit on the already existing markets. We've been in Denmark and Sweden and Germany, also the Netherlands, for some years now. While we have 20 markets in the EMEA region, we are still seeing also an interest from the APAC. If we look at the EMEA, it's two different partnerships. As we look at all partners within the European Union countries, they can actually launch from day to day. There is, of course, still a production translation period. We'll get to that on the next slide. We actually have partners covering 20 markets currently. Some of these markets outside the European Union, they still need the registration process as well. It doesn't mean that all the products are launched. Some of them are own label, also means a little bit longer in terms of translation and artwork. We'll get to that, but still, we are looking into 20 markets to launch within the EMEA region. Focus on APAC. Why is that? It's actually, we actually managed to close already five deals in APAC. Naturally, that comes with registration as well. That is the overall market expansion overview, and I think there was a few questions to this. Why focus also outside Europe? We still see a lot of, of openings and, and possibilities within Europe, also within our brand, while still seeing a lot of demand from business fairs and similar that we are entering, from APAC and across the Atlantic. Next slide. Just to comment, I think also, Mikkel, to add in terms of volume, the volumes in some of the markets outside Europe is very big versus when we talk to, for example, one distributor in, Balkans or something like that. Also we are measuring in regards to faster registration, but also the volume wise. Correct. Correct. Mm-hmm. Absolutely. The go-to-market customer roadmap, so how is it that we actually do business from the very first point of contact to the contract negotiation ended, we sign the contract, then that is step one. It takes everything from one to four months on average. We go into a phase of translations and artwork. That can take one to three months. It's depending on the number of products, it's depending on, is it white label, is it private label? Do they actually change the formula, or is it only change of the artwork? Naturally, for the CANNASEN brand, that we can actually sometimes we can skip, while if we are to enter the Balkan countries, we still need the translations, and those needs to be done by external parties. We go into the registration process. Registration process in Europe, zero months. Example like Mexico can be 12 months. The registration process in general is often four to six months, and that is, of course, also an extended lead time into that. We have the materials to produce and the production. We see that has been extended in terms of the macroeconomic environment of the European Union at the moment. It's ranging from three to five months. At the end, we need to do a microbiology test. We need to look at that, and it takes two weeks after the production done. We also need the delivery. Approximately one month at the end from finished product towards reaching the customers. That is, in general, the overall lead time. We can easily look into six, eight, nine months until we actually reach the market from the very get-go of the first point of contact. The slide, which, with this long go-to-market times also is inflicted the revenue because it has been longer than first expected. This also covers our negotiation with China, which actually started more than one year ago, where we have negotiated very hard in order to secure a share premium rather than a share discount that has been seen in the market. In March, where we finalized the agreement, we were sure that now we had all funding solved and things should move faster. Also in respect to the payment for all the productions to keep the order intake to be transferred to revenue a little faster. That was not the case, and when we see at the situation with China right now, we are experienced delays. First of all, it was expected that RongShi was to visit us in July, but due to them not being able to achieve the visa, it has been delayed. Until now, Denmark has closed for further visas, meaning that RongShi is now trying to get a visa through Spain, but we have not found as a final solution for when they actually will be able to achieve this visa to visit Denmark. That also means that the signing of the JV contract is delayed. We will send out a press release as soon as we have news in this area, everybody is working hard to solve these issues, and we have now further assistance from China and Danish lawyers and embassies and so forth, in order to get this up running. We have filed our very first product application to the Chinese FDA. As some of, a s those that has participated before, and also stated in this quarterly report, knows that the funding from RongShi is divided into two tranches. The first tranche will be released following the approvals of three to five products of the Chinese FDA, and the second tranche will be released following the achievement of 12-month revenue of DKK 62.4 million. As we still have our first application at the Chinese FDA, we still expect to have this first product classified and verified by the Chinese FDA, but expectedly, that will be September, due to them having used more time than first expected. As soon as we have the very first product classified and hopefully approved, when then we are ready to file the other four medical products for the Chinese FDA approval. That means that, between September and December, we still expect to receive the first transfer of DKK 30 million. If Chinese FDA is not achieved, we are parallel with that, working on local registration in other Asian countries. In September, we also have another fair together with RongShi in China, Guangzhou, which also is stated in the quarterly report. We still expect to have the first sales probably not in before December, but in Q1 of January. Right now, we still work with the deadlines as mentioned here. Everything is moving due to the very strong approval phases they have in China in the different authorities. We are parallel with the approval of the four medical of the first, and then followed by the four medical products working with setting up the production sites in our joint venture. Again, following one year, we still are working hard to achieve the second tranche, which is stated here in October 2024. March 2026, it is currently the plan to finalize the products production and installation in the high-tech zone of Ordos Inner Mongolia. Again, the first sale of the CANNASEN products produced in China is expected to be in, at the end of 2026. Overall, focus is on. We are using a lot of time working with RongShi right now to finalize and optimize these processes with the help from several instances in Denmark and China. As soon as any news arise, we will send out a press release. Yes, like, China, India we see as a strong market. Therefore we set up CANNORDIC India Pvt. Ltd. in India, as India has a very big medium class and which is also growing. What is also interesting about India is the majority of our medicine is actually produced in India. We were expecting to have the approval of the company name and the company established here in July. It was. Here in August, we are starting the registration of the four cosmetic products. We will start the registration of the medical device in September. We are expecting to commercialize the first four cosmetic products in end of this year, initiated in India. We believe we will have our first sales of the cosmetic product line in India in the beginning of 2024. For now, we are still on plan with the establishment of India. On all, just to summarize, sorry if there's a noise. I think somebody's trying to do something with the building, right, Lone? Yeah. Nevertheless, as you can see, we have worked very hardcore on five areas throughout the entire year, which is focusing on new markets, new segments, getting the MDR in place, operational excellence, also in terms of our burn rate, getting that on control, and then, of course, the funding area. The two elements that we're focused on the most is the market expansion. It's about getting the revenue, approaching the markets that has faster registration. As Mikkel also mentioned, there are some countries that we can enter faster than others, but then there's also other countries where we actually can see that the volumes are so much bigger. It might take a couple of months longer, Mikkel, but at least then you jump the volume slightly more, getting those in. We also look a lot in regards to the CBD, because we're trying to say we're medical devices with CBD. We have the knowledge and the expertise and the CBD technology, but we're also looking into the whole OTC market as such. What we see is actually entering markets which have already a very high knowledge or interest in CBD, also kind of is the entry points when we look into new markets. Then, of course, we focus on both the brand and own label volumes, because as we also said, we have a faster entry with our own brand. Also what we see is the own label, sometimes we can piggyback on brands that already exist, and then we can actually fulfill our vision to meet as many patients as possible who's looking for an alternative OTC product. That's our main purpose at this point, and of course, getting the volumes right, Mikkel. Yes. What we do is that we prioritize local partners with very strong market insights, and then also what we call boots on the ground benefits. That means that if we need to scale on our own, then the funding, Gitte, we need to talk about something else. By going together with partners that are already strong, then of course, we don't have the same amount or need for an investment. By going with partners, we can enter with them, and then they can launch faster, but they'd also have some both awareness, but also knowledge and brand recognition already that we can enter on, so we don't need to build a brand by ourself. Then, of course, the registration, local registrations, as we talked about, but especially the Chinese registration, as Mikkel just explained, but also Gitte when she talked about China. When we talk at the market expansion, those are the core areas we work hardcore on right now, constantly trying to evolve on. Then, of course, the funding, as Gitte talked about in the beginning, we have a very short focus, of course, solving the liquidity, to both solve the supply challenges, to get that up and running, but also in general, to invest in growth overall. That was just to kind of summarize what we've been talking about for the last couple of minutes. I think now it's time for Q & A's, so maybe we should switch, Anas, to the questions. Yep, perfect. Thank you for that. Let's jump directly into the questions one at a time here. The first question: Can you explain a bit the recent decrease in guidance? It is a significant decrease that requires some more information for investors to understand. I think I will dig into that. Yeah, we had to revisit the guidance due to the funding situation and the delayed in of China, of the Chinese investment. That means that even though that we managed to get the order intake, as also explained by Mikkel, we still didn't have the funding to fully to fully evolve that to revenue. Also, we saw a longer time to the market, from the first contact with the customer to actually having the invoice, meaning that the products was delivered, and invoiced. Those two we have revisited and trying to optimize, as also explained by Heidi. Revisiting the revenue and the guidance was crucial, as we saw that we simply did not have the funding to actually initiate the productions to deliver those products that should have been delivered this quarter, and also next quarter is due to the long production time, not able to land in the quarter, but in the following quarter, meaning in the Q1 of 2023, 2024. Perfect. The next question: Can you explain why a small Danish company with a revenue of only DKK 1 million is focusing a lot of time and energy on markets so far away from our culture, such as China and India? Wouldn't it be better to focus more on current deals in Denmark and Scandinavia, such as Matas, to make sure the Danish market becomes well-established and recognized by Danish retail customers before expanding to a market like India? It seems risky to focus so much on new markets when nearby markets is not established yet. Yes, good question. I think we've been through on a few of these slides. I think there's been inputs both on the process in China, which is really looking promising, as well as, as India as well. When we visit these business fairs, we see a huge demand on our products and our technology, which is quite unique globally. The demand is there from global partners, and this is why we said, "Okay, now we're actually launching in 20 countries in EMEA." We also see, and we also sign contracts from partners in APAC. Heidi had a really good point about, it's, it's also about volume and value, especially looking into the funding situation, liquidity-wise, we also need to scale up. We will never be able to scale up in the same amount of order intake and revenue if you only focus on the Danish, Swedish market. Naturally, we need to look abroad, and we need to look outside the EMEA region in order to scale and get some quantities in terms of volume. This is the natural reason why, and we have some potential partners already in the markets that we are looking to and getting a lot of questions and interest. This is why we simply need to divide our focus, so it's not only in the EMEA region, but also in APAC and outside. Can I add one comment on that one as well, being born in retail, Denmark as well? Just to give you an idea also, whatever we do to go out to the market expansions, we are in almost all online pharmacies in Denmark. We are in Matas. We actually work a lot with the Danish market. We do campaigns, all our branding. We have our own store. Just to give you a flavor of this is how we build our knowledge of, with our brand. When we work with, for example, Israel, for example, at the moment, they are just, just about to launch. We also have Romania, who just launched Alliance Healthcare. They have our brand, so we work with them extremely close on how do we get into the pharmacies, how are we working with the pharmacies, how are we working with the Danish retail in regards to campaigns, in-store, planograms, everything like that. We share, and we use Denmark as a test market. Why I say a test market is because it's, it's our back, it's our home, it's close to home. This is, of course, where we want to be. Looking at the market and the potential, it's just bigger markets out there if we want to scale. We actually do both, as Mikkel say. I'm constantly trying to jam Mikkel with how to launch and go to market when we onboard new distributors or partners abroad, with how we're doing in Denmark. It's not because we're not in Denmark, and as you can see on the slide overall, we are a lot in EMEA. We have focused on EMEA. We just want more. Does that make sense? Yes, fully. Yeah, perfect. Next question: in the Q3 report, there is DKK 4.2 million in trade receivables, most of which seems to go back to Q4 of last year. How do you view the chances of this getting paid? As yeah, I, I would say, I, I would say the same. I'm an auditor. I was also, "Oh, how can we manage these big debtors?" As explained by Mikkel, we have these very long approvals times in each local countries. Even though that we have our products approved in EMEA and also in more than 160 countries, we have pre-sales certificates, because of the CBDs still being fairly new within the pharmaceutical industry, there is a very long approval times. That is what is triggering all over. Also, why we focus more on, for example, Asia compared to Denmark, is due to the same issue. There is a lot of knowledge out there on CBD, but not in the close, close countries. What we have been doing is that, for example, in, in some countries who has said, "Okay, you will have payment terms that are longer than normal here at the, at the first invoicing, so that you can manage to get to the market before paying the invoice." That is very critical for, for our sales, and hence, that is what have been done this year. Obviously, we see this also as a big trigger due to not being able to fund the production for the next, for the next customers coming in, and that's actually what we are working with. Also, we think we will solve this when we get a little closer to the agreement and the funding from RongShi, where we will have. Right now, we are waiting for DKK 30 million, and trying to navigate to find other solution if the situation occur, where we don't have the approvals of the medical products by the Chinese FDA. We are working on several different scenarios depending on what will happen at the Chinese FDA, which will reflect all over the payment terms for debtors, the, the, the way we work with Svea, our factoring company, and so forth. Everything is, is bind together, and right now, our main focus, hence, to, to actually be able to consolidate and meet our goals is China. The next question: apparently, you have been unable to start production for lack of cash. I assume you set a budget at the start of Q1 with enough, with enough cash for the production you expected then, and that was before the RongShi agreement. What have gone wrong? Some source of financing failed to materialize? Actually, what happened in Q1, which also was also reported in Q1, was that we were working now at that time with the Svea arrangement, where we had the factoring, which would be able to fund us day to day. To actually materialize on the revenue that we were expected for the year, we would need further funding. Hence, in Q2, we made the arrangement agreement with Kapital Partner, who should help us find a proper funding solution to capitalize on these possibilities in the market. Unfortunately, that was where we saw frustration in the stock market, especially at the growth stock exchange as Spotlight and First North, where most funding was achieved with discounts between 20% and 80%. We promised very early that we would not dilute our shareholders, so that's where we saw, okay, either we go with a big discount if we should make direct issues, which was not within the Chinese agreement, where we actually had the share premium of 500%. Either we go with that, and we could meet our production times and the revenue for this year, or we could actually wait for the Chinese agreement to capitalize and then have the share premium of 500% and not dilute the shareholders, but meet the revenue goals the first year following the first term of payment with RongShi. We actually choose to compromise a little on that, on, on those two arrangements. Still we were working to find funding on the short terms. We used our family money, my money, Lone's money, to actually navigate in this area until we had the Chinese agreement signed. Capitalized and the funding transferred to our bank account. Due to the Chinese regulation, and which is much more complicated than one should think, we are delayed, and hence we have the very big reduction on the revenue goal for this year and also reduced on other prospects due to the reduced fund, sorry, revenue. We still believe that we will meet the expectation going forward, also within the revenue, especially to achieve the Tranche 2 coming from RongShi. I think I've covered everything. Yeah, just to come back on the supply chain, we also talked about Gitte, looking at MedTech in general, I think most of the ones listening to this, but also in general, it's not only the market as such, but it's the MedTech who's been hit by supply disruption overall. You can survive in two areas. You can invest in supply chain and then gear up and have stock. But then again, you can have strong strategies, and one of our focuses is, of course, to solve the supply element. As Gitte said, I think you try to be a ninja, Gitte, to solve the elements of getting stuff up, up and running. Then again, in working with own label, you can't purchase stock. You need to prepare the minute that you get the order, because then it's all about the local language, and it's all about the, the local design. There's two areas for us to fix when we, we talk about supply. I think, yeah, Lone, you're, you're looking into that, and hopefully we'll talk more about that coming into Q4. It's a big thing within the MedTech in general. Okay. Thanks for that. The next question, I think you have already covered some of it, but I will read it anyways. Has RongShi visited Copenhagen during the month of July? According to the previous presentation, JV was to be signed during the month of July. What happened? I think I covered that already, but to recap on that question, due to problems with RongShi getting the visa in Denmark, for their visit here in July, the visit has been delayed, and hence also the negotiation and signing of the JV contract. Those two goes hand in hand. Perfect. Next question: What happens with the company if there are not enough approvals from the Chinese FDA to get the first DKK 30 million from RongShi? Do you have a plan B, or will that be the end? Of course, it will not be the end. We are as probably also, you can hear from some of my questions, we are working on lots of different areas together with RongShi and our partners in, in China and Asia in general, to see how we can, how we can solve the issue. If we do not, against actually our expectation, but if we don't achieve the approval of the first product, we will try to re send the application locally in the province of China because they are looking more, they are looking different at the approvals of medical technical products in each province. Right now, we are in mainland China and hoping for that. We have also talked to RongShi about this. We have several scenarios that we work on, and as soon as we have some more concrete established, obviously we will send out a press release. We are working on scenarios to solve this issue, within the agreement of RongShi and the JV. Perfect. The next question: You wrote in the report that the first product should have been approved by the Chinese FDA today. If it hasn't been, isn't that a pretty dumb thing to pinpoint a date if you are unsure, especially when all your other timelines projection has gone out the window? All from the turnover projections from the start, DKK 150 million to 1 million, to the dates of the timeline regarding the joint venture with RongShi. Isn't it something that you think your investors begin to get tired of all these missed projections? Wouldn't it be reasonable to have a bit more conservative take on things, especially when talking to investors, so we doesn't get disappointed every time and just dropping in trust from us? That was a lot. I do understand all the frustration that have been in the market. We are working within a new field. We are combining CBD within the pharmaceutical industry. We are the first mover. We have had some disruptions in the supply chain, as also mentioned by Heidi. All these different, and also we had the COVID, actually, when we launched in Denmark. All these different outcoming what can you say? We were trying to navigate in, in, in strong water while also fulfilling the requirements of the pharmaceutical industry, the legislation of medical device products. We saw different scenarios. First, in the go-to-market strategy, we realized that it was necessary with local registration. All of this is still because we are first mover. We were very positive in the beginning, before COVID. We have re-evaluated our revenue going forward. Right now, we have the approach where we are going more conservative. That's also why we reduced the goal for this year, because we saw that we were simply not able to finalize the production. Even though we still expect to achieve the current revenue goal of DKK 25 million this year, it will be in order intake, not in revenue, due to the products not being delivered within this financial year. We try to navigate. It is very hard. We have the COVID again, we have the disruption in supply chain, and also we have the stock market being very heavy inflicted by all these macroeconomic changes that we have been through these last couple of years. Again, we will be more conservative now, and that's again why we also reduced our goal for this financial year. We learn while we are running the marathon, actually, if you could illustrate it in a more understanding way. I think also we talked about it the last time, Gitte, more based on trying to be as transparent as positive, so you understand or at least see what it is we're working with, but then maybe also adding more realistic approach or conservative, as you say. As Gitte as mentioned, we have moved to more, towards a more, you can say, realistic every day, "Wow, is that what really happened?" Versus what we see we can actually achieve. Instead of communicating what we believe we can achieve, then maybe just look into what is actually possible with the market situation, liquidity and everything for real fact. Then maybe still continue to run as fast as possible, but stay within the maybe underpromise and overdeliver instead of the reverse. I completely understand the question, but yeah. Just as a comment from me, it's, it's totally normal being a first mover. I think in any industry, you, the first mover is taking all the bumps, paving the way for everyone else, basically. Yeah. Thank you for that. Next question: Don't you think it would send a good message to the investors if you could show you still have good faith in the company with some insider buys now you have dropped the Q3 and the silence period is over, and the stock took a huge hit, and the wagering of the share on the market is very low because of the lack in confidence, and people doesn't know what to think about the company at this moment? It would be nice to see if you can show us investors that you believe in the company with buys, and that is not just the sisters or the board members, family members, Heidi and Mikkel as well. I think I will answer that question. We are following the MAR rules. That means that sometimes we can buy, other times we cannot. If we were able to buy in this market, yes, we would do, and, but sometimes it is not possible. Yeah. Next question: Your sales target for 2023 was heavily revised down to DKK 1 million. How will you be able to sell for DKK 62 million within a year after the first payment from RongShi? DKK 62 million is a sum you have never been close to in terms of sales. Yeah, it's a good question. naturally, if you see the, the tripling of the, the turnover from two years ago to last year, if you see the, the order intake for this year, which we still have high hopes for, we'll expect to reach the target, then it's not out of reach for the, the DKK 60 some million. naturally, we are looking into markets, and naturally, this follows registration approvals in China, in India, and countries as such. If we're looking into a huge Australian market, if we're looking into a Canadian market, if we're looking into the cosmetics, being able to reach fast into the U.S. market, we actually see that some of these markets have a high interest, they have a high demand, and that can bring value and volume quite fast. Naturally, it comes with registrations, but as you can see, and just explained by both Lone and Gitte, for China and India, these plans are already established. We work for them quite some time now, and we hopefully see within the end of the year, some approvals and some green lights for actually get going. This is why we didn't revise the target for next year, is because we still have a high belief in both the liquidity coming in for production, and we see the registration in markets with high value and high volume as an incentive. I hope this answers the question. Yep. Thank you for that, Mikkel. We are running into the last part of the Q&A, and the last two questions is around the Chinese FDA, I think I will just cover them in one question here. You expected a first approval from the Chinese FDA yesterday. Do you have any new status on that? Lone, will you take that? Yes. I would say it like this, if we had any news on, from the Chinese FDA, we'll definitely put it out in a press release. Whenever you are working with anything calling, registration with the pharmaceutical authorities, they might have additional questions, and especially us, where we are first mover medical device with CBD, utilizing the CBD for the different diseases. We are questions more than normal. Definitely anything will come out in a press release as soon as we know more. Perfect. That was all the questions, so now I will hand over the mic to you to end the Q&A and for some final remarks. I think we, we went through most of the elements, covered most of the questions we get, both on this forum, but also on emails, right, Gitte and Lone? I think you're the one who's getting the most. We're still available. We hope this is working for you as well. Let us know, and then, of course, as we also said, the minute that we have more information, we'll send out information. We've listened to also what you said, so we will try and be a little bit more realistic, even though we have very big dreams still, and we do believe in our products and going forward. Thanks for participating and to listening to us for what we had to say, and then, see you probably again in three months. Bye.