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The first quarter of 2023 shows a very good development for HBC. Revenues came in at NOK 44m vs NOK 30m last year, a growth of 48 % YoY and 32 % QoQ. The underlying growth we are seeing is coming from both the ingredients business and finished products channels.

The ingredients business continues to have solid demand growth as interest for traceable marine ingredients increases and we see an interest from both human grade petfood businesses and nutraceutical categories expanding rapidly.

The DKSH and IMCD relationships continue to build as new projects commence and the volume is growing every quarter. In sum, many new consumer health products are entering markets, using all HBC ingredients, across multiple regions across Asia and Europe.

In the first quarter of 2023, the R&D team delivered, inter alia, a presentation of our preclinical prostate cancer cell assay work of the bioactive peptides in SPH in combination with androgen deprivation therapy at the Pharma R&D meeting in Las Vegas in February 2023, and preclinical trial work with MA-022 as a drug lead in eosinophilic asthma which is expected to deliver data in Q2 2023. This follows on from the successful completion of manufacturing optimization of the lead eosinophilia modulating lipopeptide MA-022 in Q4 2022.

HBC had gross operating revenues of NOK 44.8m (30.8m) in the first quarter and an adjusted EBITDA at NOK -19.8m (-33.5m). Cash flow from operations during the first quarter was NOK 0.1m, compared to NOK -8.8m in first quarter last year. Cash and cash equivalents decreased by NOK 9.6m during the quarter, after investment and financing activities, leaving total cash balance at NOK 22.9m at the end of the period, compared to NOK 30.6m at the end of the first quarter 2022. Total equity amounted to NOK 149.0m (140.4m) corresponding to an equity ratio of 36.2 % (33.7 %) for the Group.

Highlights in the first quarter

• In Q1 2023, we delivered strong growth with gross operating revenues of NOK 44.8m, representing a YoY growth of 48 %. The Finished Goods business demonstrated a positive performance, with sales amounting to NOK 10.2m, reflecting a 70 % growth.

• Our research on the upregulation of the FTH1 gene system with an associated decrease in transferrin receptor expression, depriving tumor cells of iron and potentiating the anti-tumor activity of Standard of Care therapy, was presented at the Pharma R&D conference in Las Vegas, USA in February.

• Net cash burn significantly reduced after cost-cut initiatives and implementation of strategic growth initiatives, compared to last year. Operational cash flow was positive in the quarter.