NEXSTIM PLC HALF-YEAR REPORT JANUARY 1 – JUNE 30

Company announcement, Helsinki, August 16, 2024 at 9 am (EEST)

NEXSTIM PLC HALF-YEAR REPORT JANUARY 1 – JUNE 30, 2024 (UNAUDITED)

NEXSTIM CONTINUED TO GROW AND IMPROVED ITS PROFITABILITY IN THE FIRST HALF OF THE YEAR

The figures in parentheses refer to the previous year’s comparative period, unless otherwise stated.

January–June 2024 in brief

• The company’s net sales were EUR 3.2 million (2.5), with an increase of 26.9 %
• Net sales growth adjusted for currency exchange rates was 26.8 %
• System sales were EUR 1.2 million (1.1), with an increase of 11.4 %. Recurring net sales accounted for EUR 1.9 million (1.4), with an increase of 39.1 %
• The net sales of the Diagnostics Business were EUR 1.6 million (1.3) with an increase of 16.3 %
• The net sales of the Therapy Business were EUR 1.6 million (1.2) with an increase of 39.0 %
• EBITDA was EUR -0.5 million (-1.1)
• The operating result was EUR -0.9 million (-1.4)
• The result for the period was EUR -0.9 million (-1.4)
• The company strengthened its cash position by agreeing with Finnvera to finance the further development of the NBS 6 system with a loan of 1.5 million euros and by issuing a convertible bond, which was subscribed for 0.7 million euros

Business overview

Nexstim is a Finnish medical technology company operating in international markets. Its proprietary navigated Transcranial Magnetic Stimulation (nTMS) technology allows for personalized treatment and diagnostics for patients with challenging brain diseases and disorders. Nexstim provides solutions for non-invasive brain stimulation through diagnostic and therapy applications.

Key performance indicators

Future outlook

Based on business forecasts, the company expects its comparable net sales to grow and operating result to improve in 2024.

CEO Mikko Karvinen comments on the development during the period:

The first half of 2024 was in line with our expectations for Nexstim in terms of net sales growth and result improvement. In the first half of 2024 we achieved total net sale of EUR 3.2 (2.5) million with a 26.9% increase. The sales margin increased to EUR 2.6 (2.0) million driven by the favorable development of our sales prices and the successful procurement of key hardware components in the current inflationary environment. With the growth in net sales and sales margin we also achieved positive development in operating result which was EUR -0.9 (-1.4) million, and a result of EUR -0.9 (-1.4) million for the period. The favorable development also resulted in a positive operating cash flow of EUR 0.7 (-1.4) million. I would like to thank Nexstim's customers, personnel, partners and investors for the continuation of this positive development.

In line with our main strategic objective, we have continued to focus on profitable net sales growth. The sales forecast looks promising also for the full year 2024. Based on the strong first half and full-year business forecasts, we reiterate the guidance published in the annual report and estimate an improvement in the company's comparable net sales and operating result for the full year 2024. Our current growth is supported by our strong distributor partner network which we benefited from in the first half of the year particularly in European system sales. Especially in the Diagnostics Business it is crucial that we continuously develop and train our distributor partner network. This enables us to deliver our sales and marketing messages effectively and comprehensively to all markets. We have also made effective use of our global team structure to ensure positive development in profitable growth. This is reflected in a modest 3 % increase in operating expenses in the first half of the year, while serving Nexstim's customers better and more efficiently. In our chosen therapeutic application areas (MDD, major depression and chronic pain), our unique technology is already achieving clear clinical results and contributing to the profitability of our customers' operations. We are also continuing discussions on new strategic partnerships to further scale the use of our technology in care.

Diagnostics and Therapeutics business update

We have continued to grow our Diagnostics (NBS, Navigated Brain Stimulation) and Therapy (NBT ^® , Navigated Brain Therapy and NBS 6) Businesses through the sale of new systems in our key markets in the US and Europe. This growing portfolio of systems is generating a steady stream of income, adding stability and predictability to our operations.

The Diagnostics Business grew in the first half of 2024 with net sales of EUR 1.6 (1.3) million, an increase of 16.3%. We delivered a total of 4 new diagnostics systems in the first half of 2024. More than 230 diagnostics systems have been sold so far to research universities and leading hospitals worldwide. We are pleased that more and more of our customers are choosing to use Nexstim systems for both diagnostic and therapeutic purposes. The NBS System 5 configuration, NBS 5+, has enabled diagnostic and therapeutic applications on the same system. This offering allows the US market to have all FDA 510(k) indications available on the same system. All diagnostics systems delivered in the first half of 2024 have both diagnostic and therapeutic applications. We see the combination platform as a clear competitive advantage and we want to enable the launch of the NBS 6 combination system, the latest product generation, in key markets in late 2024.

Net sales from the Therapy business increased by 39.0% in H1 2024 to EUR 1.6 (1.2) million. The growth was particularly driven by recurring revenue in the Therapy Business, which consists of increased service and maintenance contracts, sales of consumables and system leases due to the growth in the installed base. In total, we delivered 1 new NBT ^® system and 5 new NBS 6 therapy systems in the first half of 2024; 5 in North America and 1 in Europe and the rest of the world. On the Therapy side, at the end of the first half of 2024, a total of 94 Nexstim systems with therapy applications installed (35 in the US and 59 in Europe and the rest of the world) were in use worldwide for the treatment of depression and chronic neuropathic pain. This number includes both NBT ^® and NBS 6 systems and NBS systems with optional additional NBT software installed.

Nexstim's cash and cash equivalents as of 30 June 2024 totaled EUR 3.0 (2.1) million. The company strengthened its cash position at the end of the first half of the year by issuing a EUR 0.7 million convertible bond, which also enabled it to raise a EUR 1.5 million digitalization and innovation loan from Finnvera.

Strategic focus on growth and profitability

In line with our strategy to the end of 2024, Nexstim will continue to provide patients with personalized and effective treatment and diagnostics for severe brain diseases and disorders. We are updating our strategy and preparing to share more about this as the renewal work progresses. Based on the work already done so far, I believe that our strategy will continue to build on strong growth in both diagnostics and therapy. The growth and profitability performance of both our Diagnostics and Therapy businesses will play a key role in our efforts to minimize our future capital needs on our journey towards continued profitability.

In June 2024 we announced a dispute relating to the licensing of our technology to medical technology company Magnus Medical, Inc. ("Magnus Medical") of the United States. The licensed technology relates to the NBT ^® system developed by the Company, subject to certain limitations, and patents related to that technology, which are licensed for use in the limited treatment of neuropsychiatric disorders. Nexstim's software applications and stimulating electric field modelling were excluded from the license. The total value of the agreement was estimated at approximately 17 million euros, including a five-year royalty period. Magnus Medical provided Nexstim with additional information on the launch of its first commercial product which, based on further analysis by the Company and an external party, led to a disagreement regarding the use of the licensed technology. Nexstim continues to gather additional information regarding Magnus Medical's commercial product and plans to take the following steps to defend its financial interests and intellectual property rights under the long-term agreement. We reiterate our assessment in our February financial statements release and our June company announcement that the Company does not currently expect to receive royalty income from Magnus Medical during 2024 in its business forecasts. Nexstim does not currently provide an estimate of the total value or financial expectations for the royalty period due to ongoing discussions regarding the dispute.

Our second key strategic objective for 2024 is the launch of our new NBS 6 diagnostics system, enabling easy-to-use hardware and future add-on modules in the same system. The development and launch of the new product generation has been an essential part of Nexstim's strategy for the 2020-2024 period. NBS 6 is a new combination system built on Nexstim's unique, clinically established technology and its modular system concept makes it easy to add new features to existing systems. The new solution creates long-term value for Nexstim's customers and investors alike. The first launch in April-May 2023 concerned therapy applications. Nexstim's NBS 6 system has FDA marketing and distribution approval for the treatment of major depression in the US and is CE-approved in Europe for use in the treatment of major depression and chronic neuropathic pain. The first NBS 6 systems were successfully delivered to customers in the US in late 2023 and we have successfully continued delivering systems to the highly competitive US therapy market during 2024. We will continue the development of the system during the remainder of 2024, with the aim of launching diagnostic applications as part of the new NBS 6 system in line with our strategic objective.

Our third main strategic objective for 2024 is to expand the network of Nexstim partners and clinics primarily in the US and Europe. As evidence of the positive development of our strategic partnerships we announced in May that our US subsidiary Nexstim, Inc. has signed a strategic alliance agreement with Inomed Inc. to strengthen marketing, sales and application support collaboration between the two companies in the US. We believe the strategic agreement will strengthen the long-term growth prospects for our diagnostics business in the important US market.

With the expansion of the network of partner clinics, Nexstim systems would be installed in neuroscience clinics and possible investments would be made in clinic management service organizations in the vast US market. Our first joint venture PNC Management Services, LLC operates with our partner Dr. Kuluva and his clinic in California. In the first half of 2024 we have been working with another strategic partner to launch a services business in the US with Dr. Nadkarni's clinic in New Jersey. The partnerships mentioned above will allow us to work even closer to patients and collect accurate data from the patient interface to help our future development efforts. This data can lead to further development in our clinic business model or the advancement of new indications. Nexstim's venture capital firm Nexstim Investments LLC’s purpose is to expand Nexstim's network of partner clinics in the United States in collaboration with carefully selected top experts in the field. We will continue to develop the collaborative model with Dr. Kuluva, Dr. Nadkarni and other experts, enabling Nexstim's TMS technology to treat more and more patients in the US. We are currently negotiating with new potential partner clinics in the US to grow our network of partner clinics in the important therapy market.

Building future growth paths

Our systems are clearly differentiated from other TMS equipment on the market today that do not have navigation capabilities. In the future the need for navigation functionality is likely to become even more important in technologies that are used to treat brain diseases in an increasingly diverse range of ways. This could open a new market for TMS treatments for Nexstim distinct from the current treatment of patients suffering from severe depression or chronic neuropathic pain.

In the first half of 2024, we announced a planned collaboration with Sinaptica Therapeutics, Inc. for the treatment of Alzheimer's disease. As part of the planned collaboration, Nexstim will develop, manufacture and deliver Sinaptica's patented precision neuromodulation system based on the Nexstim NBS 6 medical TMS and neuronavigation systems and associated software including integrated EEG software. Under the letter of intent Sinaptica's hardware modifications would include a patented workflow that would be integrated with a third-party EEG device and Sinaptica's proprietary cloud-based personalization engine (MAINTAIN™). The envisaged partnership would be a global 10-year exclusive arrangement, renewable for three-year periods at a time. In the first phase of the envisaged partnership Nexstim would provide its product development resources to develop an integrated system for Sinaptica's Phase III clinical trials which are expected to start in 2025. Nexstim would manufacture and deliver at least 20 Sinaptica precision neuromodulation systems and provide maintenance and support services for the clinical trials. The total estimated value of the first phase of the collaboration is approximately EUR 6 million for the first two years after the signature of the definitive agreements. The financial structure of the agreement consists of an exclusive royalty payment upon signature, a milestone-based product development project and system sales. The systems supplied for the clinical trial would also generate recurring income for Nexstim during the trial period, based on maintenance and support of the hardware and software, as well as disposable parts. The letter of intent is non-binding and subject to finalization and approval.

The collaboration would enable the tailored use of our new NBS 6 therapy system and our unique EEG visualization software in Sinaptica's breakthrough treatment for Alzheimer's patients. Demand for our navigated TMS technology has been steady and growing in the field of TMS-EEG research, and we are excited to see our systems being used in unprecedented therapy solutions for new clinical indications. Nexstim's technology is leading the way in neuroscience research, collecting accurate diagnostic data and delivering reliable, precise and accurate treatment. We look forward to the opportunity to support Sinaptica, first with a development project and research systems and later on the way to a commercial future meeting the great need for safe and effective treatments for Alzheimer's disease.

Nexstim has also successfully expanded its global distribution partner network in recent years, and we believe that further significant growth can be achieved in the future, particularly in the Diagnostics business through increasingly broad marketing and distribution partnerships. Through such strategic distribution partnerships, it is possible to cost-effectively reach an increasing number of customers with information about Nexstim's system and services, as well as potential representation in markets where it would not be as quickly and economically feasible to build on its own. The technological leadership of our products, their ease of use, and the scalability of additional modules create an attractive platform for growth through partnerships.

Building owner value in exceptional circumstances

Despite the tightening global political situation our expectations for the rest of 2024 are in many ways positive. Our current business is heavily focused on the EU and the US, and we will continue to refrain from doing business in the Russian market. Nexstim will continue its determined efforts to develop personalized and effective methods for the treatment and diagnosis of severe brain diseases and disorders. We strongly believe that our work will support shareholder value growth over the long term through increasingly strong competitive advantages, rapid growth and improved financial results. We remain optimistic about the future but will continue to monitor developments in the global political landscape while advancing our own business.

Nexstim’s business areas

Diagnostics Business

• Nexstim’s NBS 5 system is the only CE-marked and FDA-cleared non-invasive solution for pre-surgical mapping of the motor cortex in brain cancer. Clinical data has been generated demonstrating the value of Nexstim’s unique navigation system for pre-surgical mapping with regard to patient outcomes.
• The system allows surgeons to be better prepared and more aggressive with tumor resection, due to their confidence in the location of the motor and speech cortex because of pre-surgical mapping.
• More than 230 diagnostic systems have been sold to research universities and leading hospitals across the world.

Therapy Business

• Nexstim’s NBT ^® and NBS 6 systems are based on its unique navigated Transcranial Magnetic Stimulation (nTMS) technology, which allows for personalized, accurate, reproducible, and non-invasive brain stimulation.
• In May 2018, Nexstim launched its Navigated Brain Therapy (NBT ^® ) system in the United States for the treatment of MDD, following FDA clearance in November 2017.
• Nexstim launched the NBS 6 system for therapy use in 2023. The NBS 6 is a new generation Nexstim system with a modular system concept that makes it easy to add new features to existing systems.
• Both NBT ^® and NBS 6 systems are CE marked for the treatment of major depression and chronic pain, and have FDA approval for the treatment of major depressive disorder (MDD).
• Active commercial installed base of 94 therapy systems across four continents (including both NBT ^® and NBS 6 systems and NBS systems with optional NBT ^® add-on software installed).

Publication of financial information

The financial statements bulletin for the financial year that will end on December 31, 2024, will be published on or around February 27, 2025.

Results briefing on August 16, 2024

The company will hold two live webinars for the media, investors, and analysts on Friday, August 16, 2024. Mikko Karvinen, CEO, and Joonas Juokslahti, CFO, will present the company’s financial and operational results, and will answer questions.

The first webinar will be held in Finnish at 10.30 am (EEST). The second webinar will be held in English at 3 pm (EEST).

Webinar details:

To attend the webinars, please register via the links below. Registered participants will receive more information via email.

Webinar in Finnish on August 16, 2024, at 10:30 am (EEST): Sign up here >> Webinar in English on August 16, 2024, at 3 pm (EEST): Sign up here >>

Helsinki, August 16, 2024

Nexstim Plc

Board of Directors

Further information is available on the website www.nexstim.com or by contacting:

Mikko Karvinen , CEO +358 50 326 4101 mikko.karvinen@nexstim.com

The Company’s Certified Advisor is Carnegie Investment Bank AB (publ).

Distribution: Nasdaq Helsinki Key media outlets

About Nexstim Plc

Nexstim is a Finnish, globally operating growth-oriented medical technology company. Our mission is to enable personalized and effective diagnostics and therapies for challenging brain diseases and disorders.

Nexstim has developed a world-leading non-invasive brain stimulation technology for navigated transcranial magnetic stimulation (nTMS) with highly sophisticated 3D navigation providing accurate and personalized targeting of the TMS to the specific area of the brain.

Nexstim’s Diagnostics Business focuses on commercialization of the Navigated Brain Stimulation (NBS) system. The NBS System 5 is the only FDA cleared and CE marked navigated TMS system for pre-surgical mapping of the speech and motor cortices of the brain.

Nexstim’s Therapy Business markets and sells the NBS System 6 which is FDA cleared for marketing and commercial distribution for the treatment of major depressive disorder (MDD) in the United States. In Europe, the NBS 6 system is CE marked for the treatment of major depression and chronic neuropathic pain.

Nexstim shares are listed on Nasdaq First North Growth Market Finland.

For more information, please visit www.nexstim.com

Attachment

• 1.2_Nexstim Plc_Half-Yearly Report H1 2024 EN_FINAL