Yesterday, RLS released its Q4 2022 report. The full-year revenues came in at SEK1.7m (SEK16.6m), operating expenses amounted to SEK-24.5m (SEK-26.1m), and EBIT came in at SEK-24.4m (SEK-11.0m). Overall, the report did not include any major surprises; however, we believe an exciting year is ahead of us as we expect sales to start ramping up and ChloraSolv to be launched in several markets.

In October, RLS announced a fully guaranteed rights issue of approximately SEK29.4m before issue costs, estimated to amount to SEK3m, of which approximately SEK0.9m was guaranteed compensation. We learned a couple of weeks later that the subscription breakdown showed that c.70% was subscribed with and without the exercise of subscription rights. Underwriters of the rights issue were allocated c.30% of the rights issue, and RLS Global obtained SEK29.4m before issue-related costs. However, we do not believe the current cash position will be sufficient for RLS’ future business activities. We, therefore, include a capital raising of SEK20m during 2023e.

We expect more interesting quarterly reports during 2023 as we believe sales will start ramping up. We have made changes in our OPEX assumptions and added a capital raising of SEK20m during 2023e. Moreover, we have updated the Redeye Rating, which changes the WACC from 12.5% to 13.5%. These changes result in a new fair value range, including a new base case of SEK8 (9) followed by a bull and bear case of SEK11 (12) and SEK2 (2), respectively.