Equity research Artificial Solutions: Improved financial strength and proven investor interest

Yesterday, 19 June 2024, Artificial Solutions (the company or ASAI) completed a directed share issue amounting to SEK 50 million. As stated in the press release, the amount was increased by SEK 10 million due to high demand among long-term institutional investors. This successful share issue to long-term institutional investors implies several key points:

• It highlights the attractiveness of the investment case.
• It strengthens the cap table in case future growth capital is needed.
• It improves the financial position.

The net proceeds will be used to enhance sales and marketing by hiring new senior account managers and executing targeted campaigns in the US and UK. Additionally, the funds will finance a rebranding and intensified efforts to strengthen brand identity and customer engagement. Lastly, the net proceeds will be used for innovation and ongoing development and provide working capital until the company becomes self-financed.

For 2024, we expect net sales of SEK 82m, equivalent to a growth of 35% fuelled by increased usage. We anticipate net sales of SEK 118 in 2025. Thus, we expect an accelerated growth rate of 44% in 2025. With a strengthened cash position, the company will enhance its sales activities, including targeted campaigns in the US and UK, which in turn provide additional support to our projections.

Furthermore, in our initiation report, we estimated that the company needed to raise about SEK 60m until it became self-financed. That was above the SEK 50m before costs that were raised in the directed share issue. However, it affects the valuation to a limited extent. A fair value per share of SEK 1.0 is calculated in a base scenario.

Please see our initiation of coverage report here.

Disclaimer

Carlsquare AB, www.carlsquare.se, hereinafter referred to as Carlsquare, is engaged in corporate finance and equity research, publishing information on companies and including analyses. The information has been compiled from sources that Carlsquare deems reliable. However, Carlsquare cannot guarantee the accuracy of the information. Nothing written in the analysis should be considered a recommendation or solicitation to invest in any financial instrument, option, or the like. Opinions and conclusions expressed in the analysis are intended solely for the recipient.

The content may not be copied, reproduced, or distributed to any other person without the written consent of Carlsquare. Carlsquare shall not be liable for either direct or indirect damages caused by decisions made on the basis of information contained in this analysis. Investments in financial instruments offer the potential for appreciation and gains. All such investments are also subject to risks. The risks vary between different types of financial instruments and combinations thereof. Past performance should not be taken as an indication of future returns.

The analysis is not directed at U.S. Persons (as that term is defined in Regulation S under the United States Securities Act and interpreted in the United States Investment Companies Act of 1940), nor may it be disseminated to such persons. The analysis is not directed at natural or legal persons where the distribution of the analysis to such persons would involve or entail a risk of violation of Swedish or foreign laws or regulations.

The analysis is a so-called Assignment Analysis for which the analysed company has signed an agreement with Carlsquare for analysis coverage. The analyses are published on an ongoing basis during the contract period and for the usually fixed fee.

Carlsquare may or may not have a financial interest with respect to the subject matter of this analysis. Carlsquare values the assurance of objectivity and independence and has established procedures for managing conflicts of interest for this purpose.

The analysts Markus Augustsson, Herman Kuntsscher, and Christopher Solbakke do not own and may not own shares in the analysed company.