Following our all-encompassing restructuring process, I believe we have now reached a stage where we are ready to fully implement our growth plans.  With several newly employed sales and marketing staff, together with existing staff being in a post IPO phase, we are now reaching a consolidating phase where we must make sure that we utilize the full potential of all staff members individually and as a team. All together they are the ones that in their daily job meet our company’s strengths and weaknesses, and more importantly, they are the ones that also see areas where things possible can be done differently and more effectively. I am very impressed with the overall level of knowledge, professionalism and commitment from our organization that is now in the process of being adapted to fulfil our challenging goals.

During the coming months, our clinical trials are to be finalized in phase III, which opens up for our final approval by the notified bodies under the new MDR, lifting our medical products from a class I to a class IIa or III.  During the next two years, we are now able to initiate the notified body approval, product by product, securing us a full adoption of the new MDR within the legislation window.

We are very proud, that we last week managed to break ground on a bigger scale. With our agreement with, Chinese-based CBF SciTech Ltd[1], we are now lifting our business to a new level. The agreement will ensure the first presence of the CANNASEN products in Asia and include minimum orders covering the first three years of a total of DKK 134,4 million[2]. All our efforts are now paying off, and I strongly believe that this is only the beginning. Our collaboration negotiations with several of the BIG pharmaceutical players proceed according to plan, but due to increased interest in the amounts of products and markets to be included in these agreements, the closing of orders is delayed. Although this overall is positive, this process is delaying our sales. The delays caused by the COVID-19 lockdown have now caught up with us, which we had to realize when revising the production planning for Q3. We are now in a situation where we cannot bring the orders into production in time to have them included in the revenue of 2021/2022.  Altogether, this is causing a staggering in our revenue goals of one year.  Even that we lower our revenue goal for 2021/2022, now set to DKK 12 million, we maintain our revenue expectation covering 2021/2022 measured in orders, with a total of DKK 50 million.  But due to our current production time, the orders cannot be included in the revenue of 2021/2022.  The DKK 50 million in orders is already included in our current order pipeline, which is constantly evolving, currently amounting to DKK 205 million in total, all pipeline phases included.  We will focus on closing the full order pipeline, but unfortunately, the majority of this being realized in our coming financial years, due to added production time.

Our PIM (Product Information management system) is live and now used to share data with distributors in the negotiant phases as well as in the following normal operations.  Our CIM (Clinical Information Management system) is live in a beta version ready for the preliminary test.

All these developments together with the ongoing sales work give me great confidence in CS MEDICA’s ability to execute according to our strategy. Having left some tough times behind us, there is an intense focus in the organization and sales as we have headed into Q3. 
 

Objectives and activities May

Distributor sale (Cannordic): In the May month we have the following events and expectations;

• Next week, we have our Vitafoods Europe 2022 Innovation Tours, where we were chosen as one of the most innovative companies with unique, cutting-edge ingredients, formulations, and products.
• 1 distributor agreement signed

Btc channel sales (Galaxa Pharma): Currently we have more than 500 sale channels in the Nordic area, with more to come.  In May the following agreements and CANNASEN® CBD product releases and launches are expected to be fulfilled;

• Product launch in Denmark
  - CANNASEN® CBD Nasal Night
• Expected start up the Launch Amazon sales channel in Germany
   

Postponed from April – follow up

Distributor sale (Cannordic): Postponed from April we look forward to closing our white label agreement within the coming week.

Btc channel sales (Galaxa Pharma): Postponed from April the following agreements and CANNASEN® CBD product releases and launches are expected to be fulfilled in May.

• Launch  -  Dinapoteker.dk- online
  Psoriasis, Arthritis, Anti-Hair loss Serum, Pain Patch, Protective nasal gel, PSOR + ATOPIC lotion
• Launch   - Apotekeren.dk + landing page
  Psoriasis, Arthritis, Anti-Hair loss Serum, Pain Patch, Protective nasal gel, PSOR + ATOPIC lotion
• Launch  - cannasen.dk – brand web shop
  All CANNASEN® CBD products

Clinical trials: The following clinical trial Phases postponed from April will be finalised in May;

Clinical trial - phase III

• Arthritis gel versus Placebo
• Arthritis gel & Arthritis Caps versus Arthritis gel & Placebo Caps

Technology: The preliminary test of our CIM in beta version, is postponed due to a lack of resources and focus on sales. We expect to be able to start up this test within the next coming months, to secure our launch of post-market-clinical trials together with local disease organizations, such as Psoriasis and Arthritis organization in Denmark.  Studies like this are incredibly important, not only for the data they bring but also in terms of relationship building with disease organizations, medical practitioners, business administrators and future leaders. They are a key part of our commercialization efforts.

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Hope you enjoyed this first CEO letter.  We are looking forward to keeping you updated with our company’s industry and field of business in future CEO letters. 

For more information about CS MEDICA, please contact:
Lone Henriksen, CEO
Phone: + (45) 71 20 30 47
Email: lh@galaxapharma.com
Website: https://www.cs-medica.com/

CS MEDICA A/S is a Danish medico cannabis company founded in 2011. CS MEDICA is committed to developing, manufacturing, and commercializing over-the-counter (OTC) medical device products containing cannabinoids. The Company runs its business through the two fully-owned subsidiaries, Galaxa Pharma A/S (distributor and representative of foreign manufacturers in the Nordic, registered medical device product distributor) and CanNordic A/S (Medical device developer and seller (BtB), registered medical device product manufacturer). CS MEDICA distributes products across the European borders and is headquartered in Copenhagen, Denmark.

The company is listed on Spotlight Stock Market in Stockholm (symbol: "CSMED"). For more information about CS MEDICA cs-medica.com.