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ANNUAL REPORT

2 BONESUPPORT 2021 ANNUAL REPORT

BONESUPPORT™ is a fast growing orthobiologics company that focuses on innovative

products for the treatment of bone disorders. The company develops and sells injectable

bio-ceramic bone graft substitutes based on its CERAMENT® platform, which remodels to

bone and has the ability to release pharmaceuticals to promote healing.

BONESUPPORT markets CERAMENT®|BONE VOID FILLER (BVF), CERAMENT®|G and

CERAMENT®V, and is developing pre-clinical product candidates that are designed to promote

bone regrowth. BONESUPPORT’s products focus on trauma, revision arthroplasty (replacement

of joint prostheses), chronic osteomyelitis (bone infection) and foot and ankle surgery.

BONESUPPORT has its registered oce in Sweden and is listed on Nasdaq Stockholm.

Net sales in 2021 amounted to SEK 213 million (181) and the company had 98 (95)

employees at year-end.

CERAMENT® is a registered trademark of BONESUPPORT AB

TABLE OF CONTENTS

3 2021 in brief

4 Mission, Vision and Strategy

6 Message from the CEO

8 CERAMENT

12 Market expansion

16 Research and Development

18 Health Economics

22 Sustainability

26 Operations in overview

28 Directors’ Report

35 Financial statements 2021

46 Notes to the nancial statements

61 The Board's assurance

62 Auditor's report

67 BONESUPPORTs share

68 Corporate Governance Report 2021

73 The Board of Directors

74 Group Management

76 Denitions - Alternative performance

measures

77 Glossary

The company's formal annual accounts and consolidated accounts are included on pages 28–65 in this document.

BONESUPPORT 2021 ANNUAL REPORT 3

Sales

213

SEKm

Margin

Prot/Loss

-81

SEKm

Earnings/share

-1,34

SEK

FINANCIAL RESULTS

2021

IN BRIEF

IMPORTANT EVENTS

In February 2021, the company announced that the U.S. Food and

Drug Administration (FDA) had informed BONESUPPORT that the

company's De Novo application for CERAMENT G for bone

infection required additional information and clarication. The

requested supplements were submitted in September to the FDA.

At the end of February 2022, the FDA announced that nal

notication of the De Novo application is delayed, as a lagging

eect of the pandemic and high workload within the agency.

In April, the company was awarded a GPO-contract with Premier.

Premier is a leading healthcare and purchasing network with over

4,100 U.S. aliated hospitals.

In July, the company received “breakthrough device designa-

tion” for CERAMENT G for the indication trauma.

The company announced in September that the results of the

company's Investigational Device Exemption (IDE) study

FORTIFY were non-conclusive. The primary safety parameter for

CERAMENT G was met.

In December, Michael Wrang Mortensen joined the company in

the newly established role as Executive Vice President (EVP)

Research & Development (R&D) and Operations.

COVID19PANDEMIC

Despite the gradually increased ratio of fully vaccinated in the

population, the pandemic has continued to have a major impact

on healthcare resource priorities and the number of postponed

orthopedic surgeries. In 2021, we have periodically experienced

continued local restrictions, to varying degrees and with large

regional dierences.

CERAMENT has shown positive health economic eect as well as

shortened hospital stay and can benet from an increased focus

on procedures that reduce the large backlog in orthopedic care.

Net sales increased by 18% (23% in constant ex-

change rates) and amounted to SEK 213 million (181).

The North America segment increased by 22% (31%

in constant exchange rates) and the EUROW seg-

ment reported a sales increase of 12% (13% in

constant exchange rates).

The gross margin was 89% (89).

Operating prot amounted to SEK -81 million (-99).

Earnings per share before and after dilution were

–1.34 SEK (-1.72).

4 BONESUPPORT 2021 ANNUAL REPORT

MISSION

Improve health and quality of life for

patients with bone injuries

BONEUPPORT’s unique product technology

has properties with the potential to revolutio-

nize the care of patients with bone disorders by

enabling faster rehabilitation, limiting the num-

ber of surgical procedures and reducing the

risk of severe infections. For patients, this

means that they can return to a more normal

life more quickly.

Since its foundation, BONESUPPORT’s products

have been used in approximately 70,000 surgi-

cal procedures in more than 20 countries. The

most common procedures consist of bone dis-

orders where the body is unable to perform na-

tural healing and single-stage operations in

connection with bone infection.

Our soul ...

... our heart

BONESUPPORT 2021 ANNUAL REPORT 5

VISION

To become a global leader in

orthobiology

BONESUPPORT’s unique technology means

that over time the company’s injectable bioce-

ramic bone graft substitutes remodel to natu-

ral bones and have the ability to release drugs.

This enables new treatment standards in the

treatment for bone diseases/skeletal injuries.

The company’s ambition is to grow sales by 40

percent a year after the pandemic, including

rapid expansion in the U.S., which is the world’s

largest healthcare market.

STRATEGY

The strategy is based on three pillars:

Innovation – BONESUPPORT has the market’s

most innovative solution for the treatment of

bone disorders.

Clinical and health economic evidence –

The clinical evidence for the CERAMENT plat-

form continues to grow and now amounts to

more than 240 publications and abstracts. An

important milestone for BONESUPPORT is the

CERTiFy study, which shows that CERAMENT is

at least as good as autograft.

Eective commercial platform –

BONESUPPORT’s commercial and medical or-

ganization provides healthcare with products,

information, service and training.

Our soul ...

... our heart

VISION AND MISSION

6 BONESUPPORT 2021 ANNUAL REPORT

CEO EMIL BILLBÄCK COMMENTS ON THE PROGRESS IN 2021

CONTINUED STRONG

SALES GROWTH DESPITE

ONGOING PANDEMIC

With sales growth of 23

percent, we continued to

take significant market

share in 2021

BONESUPPORT 2021 ANNUAL REPORT 7

Despite the consequences of the COVID-19-pandemic in 2021, it was

BONESUPPORT's best year ever. Sales of SEK 213 million correspond to

growth of 23 percent over 2020 and 44 percent over 2019, in constant

exchange rates. The sales growth is a material conrmation of

CERAMENT's clear benets and our strong commercial model and

means that we continued to take signicant market share from other

treatment options.

During the pandemic, we saw a direct correla-

tion between the number of orthopedic surge-

ries and the incidence of COVID-19, as well as res-

trictions related to the pandemic. Due to

lockdowns, our capacity for physical customer

meetings was limited, especially in Europe but

also in parts of the U.S. This meant that our custo-

mer interactions in some regions was largely

done through digital meetings. The pandemic

thus aected not only the number of orthopedic

surgeries, but also new customer contacts and

the possibility of winning new customers.

In 2021, the healthcare backlog increased in ort-

hopedic procedures and in the fourth quarter it

reached its highest level ever in Sweden and the

U.K. – the markets where we have the best ac-

cess to this type of data. CERAMENT can cost-ef-

fectively help reduce healthcare backlog

through its unique benets that enable a one-

step procedure.

In February 2021, the FDA announced that it re-

quired additional data and supplements of pa-

tient data to complete the assessment ahead of a

potential market approval for CERAMENT G for

the indication bone infection. In September 2021,

we submitted the requested data and the con-

trol group - which is compared to the treatment

group of 163 patients - now contains data from

over 200 patients. At the end of February 2022,

the FDA announced that nal notication on the

De Novo application is delayed, as a lagging ef-

fect of the pandemic and high workload within

the agency.

CERAMENT G received a breakthrough device

designation for the indication trauma in February

2021. However, the pandemic not only aected

our sales and new customer processing, but also

meant that the follow-up of patients in the

FORTIFY study was negatively aected. With a

drop-out rate of 29 percent, the study became

non-conclusive, which means that the study did

not meet the requirements for a PMA applica-

tion. Following a potential market approval for

the indication bone infection, we will explore al-

ternative opportunities to reach market approval

also for additional indications.

During the year, we continued to drive market

penetration in hospitals and clinics within the

framework of previously won GPO agreements.

In April, we were also able to announce that we

had signed an agreement with Premier. Premier

is one of the largest group purchasing organiza-

tion (GPO) networks in the United States, with

over 4,100 aliated hospitals. In January 2022 we

announce that we signed a distribution agre-

ement with OrthoPediatrics to distribute

CERAMENT BVF to OrthoPediatrics’ network of

250 children's hospitals in the U.S. The agre-

ement represents an important strategic expan-

sion for CERAMENT into a previously unaddres-

sed network of hospitals.

Despite the challenges in the market, impacted

by the pandemic in 2021, we strengthened our

market position, mainly through expanded mar-

ket access and market penetration. Our goal, gi-

ven a more normalized post-pandemic market

dynamic, is to grow sales by 40 percent per year.

Emil Billbäck

CEO

MESSAGE FROM THE CEO

8 BONESUPPORT 2021 ANNUAL REPORT

CERAMENT

Eective and

natural healing

WHEN BONE INJURIES OCCUR THAT DO

NOT HEAL

There are several dierent situations in which the

natural healing of bone injuries does not work.

This can occur, for example, in complicated bone

fractures (trauma), revision arthroplasty (replace-

ment of joint prosthesis), tumors and in case of

infection. This may be due to missing bone frag-

ments, or that the surgeon has had to remove

dead or damaged bone tissue, so that the dama-

ge becomes too large for the bone to heal. If the-

se injuries are not treated, there is a risk of severe

complications. Traditionally, orthopedists have

treated bone injuries that do not heal themselves

using the patient's own bone tissue transplanted

from another part of the bone structure, so-cal-

led autograft, or through donated bone tissue,

known as allograft.

TRADITIONAL TREATMENT STANDARD

Since autograft consists of the patient's own

bone tissue, tolerance and healing are usually

good. However, autograft requires an additional

surgical intervention (as a rule at the hip bone) to

harvest the bone tissue to be transplanted. The

availability of bone tissue may also be limited in

relation to the need. Each procedure takes extra

surgical resources from the healthcare system, in-

creases the risk of infections which could extend

the period of medical care. Nearly 50 percent of

patients experience restrictions on daily activities

for up to six months as well as long-term pain

from the procedure. There are studies that show

that many patients even experience pain up to

ten years after the procedure. Allograft is aected

by limited access and quality and poses a risk of

transmission of viral diseases.

CERAMENT is a synthetic bone graft substitute for the treatment of

bone injuries. The material has unique advantages in that it promotes

bone remodeling, which means that within six to twelve months,

CERAMENT is resorbed and replaced by the patient's own bone

tissue. CERAMENT is injectable and visible on X-rays, making it ideal

for minimally invasive surgery. CERAMENT is also available as a

combination product with two dierent types of antibiotics,

CERAMENT G (gentamicin) and CERAMENT V (vancomycin). The

antibiotics are released locally for about 30 days and protect the

bone healing from infection.

1. Long-term Autograft Harvest Site Pain After Ankle and Hindfoot Arthrodesis. Judith F. Baumhauer et al.

BONESUPPORT 2021 ANNUAL REPORT 9

OUR PRODUCTS

10 BONESUPPORT 2021 ANNUAL REPORT

CERAMENT – A SYNTHETIC ALTERNATIVE WITH ESSENTIAL BENEFITS FOR THE PATIENT

AND THE HEALTHCARE SYSTEM

CERAMENT is remodeled into endogenous bone, which means

that the original injury is replaced by the patient’s own bone

within six to twelve months. The CERTiFy trial, a randomized con-

trolled trial of 135 patients, showed that CERAMENT is an equal

alternative to the previous gold standard treatment of autograft.

CERAMENT is a synthetic bone substitute, eectively eliminating

the need for additional surgical procedures to harvest bone tiss-

ue and hence the risk of shortage of material. Studies have shown

that many patients experience restrictions in daily activities for up

to six months after the procedure, as well as long-term pain from

the donor site.

The great advantages of CERAMENT are:

More ecient use of healthcare resources

Easy to use

Unlimited availability

No need to take bone from donors

Elimination of complications such as long-term pain

CERAMENT WITH ANTIBIOTICS – WHEN THE RISK OF INFECTION ASSOCIATED WITH BONE INJURIES IS HIGH

Chronic bone infection, open trauma fractures, and unsuccessful

bone healing are a few of the conditions that are strongly associ-

ated with the risk of (re)infection. Postoperative infection is not

only associated with signicant suering for the individual, but

also involves an extensive use of resources and a cost burden for

society-at-large. Hoekstra et al (BE) showed that the healthcare

costs for patients who suered a deep infection were on average

ve times higher than for those who did not get an infection, in

the case of severe tibia fractures. The combination products

CERAMENT G and CERAMENT V eectively promote and protect

bone healing by eluting high-dose local antibiotics at levels that

eliminate bacterial growth. With CERAMENT G and CERAMENT V,

a high local concentration of antibiotics is maintained, for approx-

imately 30 days with negligible systemic inuence and side ef-

fects. Treatment with CERAMENT G and CERAMENT V has shown

a drastic reduction in re-infection in cases of chronic bone infec-

tion and elimination of infection incidence in open tibia fractures

(see section Clinical evidence, page 16). CERAMENT G and

CERAMENT V enable healthcare to perform single-stage opera-

tions in connection with injuries caused by infection or when

there is a high risk of infection. This contributes to fewer days of

care in hospitals and thus better healthcare economy.

As CERAMENT has been proven to be as eective as autograft in

healing bone injuries, the need for an additional operation is eli-

minated, resulting in better utilization of resources concerning

both surgical teams and operating theaters. A product that can

both regenerate bone and at the same time elute high doses of

local antibiotics over approximately 30 days has also opened up

the possibility of using single-stage surgery in the treatment of

bone infections and open fractures.

The benets of CERAMENT G and CERAMENT V

High local antibiotic concentration without systemic impact

Possibility of treating with a surgical single-stage operation

Increased possibility of being infection-free

Increased possibility of rapid bone healing

Reduced risk of amputation

A Belgian study by Hoekstra et al1 involving 358 patients, studied the costs of tibia fractures. The study showed that the medical costs

for patients aected by a deep infection were on average ve times higher than for those who did not get an infection, which resul-

ted in the cost of treatment increasing from EUR 9,500 to EUR 48,700.

1. Hoekstra et al. Economics of open tibial fractures: the pivotal role of length-of-stay and infection. Health Econ Rev 2017;7:32

BONESUPPORT 2021 ANNUAL REPORT 11

OUR PRODUCTS

12 BONESUPPORT 2021 ANNUAL REPORT

MARKET EXPANSION

Successful customer base

expansion in North America

The successful customer base expansion that has

been ongoing in the U.S. since we shifted distribu-

tion strategy almost three years ago, continues to

deliver stable sales growth. The increasing market

penetration can be attributed, among other

things, to the contracts signed with larger Group

Purchasing Organization (GPO) in previous years

and which were expanded with Premier during

the year, one of America’s largest purchasing

networks. This has enabled the introduction of

CERAMENT BVF in a variety of hospitals and clinics

that have not previously been addressed and in-

formed about the benets of CERAMENT.

With a broad and loyal customer base in the U.S.,

we have built a strong foundation for continued

geographical expansion and increased market share.

At the end of the year, our commercial organization

in the United States had 19 employees and more

than 40 contracted distributors. BONESUPPORT re-

ports the net sales to the customer on whom the

distributors receive a commission.

22 %

growth (31% CER) in

North America 2021

Continued commercial progress

despite the impact from the

pandemic

During the year, we have further strengthened our position in North America as

well as revitalizing our distributor markets, including the establishment of hybrid

models in Italy and Spain, but also including the market expansion to Australia

and South Africa that began the year before. The hybrid model involves qua-

lied personnel from BONESUPPORT working side by side with the local dist-

ributor's sales force. The COVID-19-pandemic has also had a signicant impact

on market conditions in 2021. Despite the impact of the pandemic, growth

amounted to 18 percent, 23 percent at a constant exchange rates. The growth

is mainly driven by the strengthened customer base in North America together

with the larger GPO contracts signed, and a periodically and geographically

dispersed recovery from the pandemic in EUROW.

1. Revenue growth in constant exchange rate, CER

BONESUPPORT 2021 ANNUAL REPORT 13

COMMERCIAL ORGANIZATION AND MARKET

Continued commercial progress in

EUROW despite the pandemic

In Europe, CERAMENT is sold by both the compa-

ny's own sales organization and by distributors.

Germany, United Kingdom, Switzerland, Sweden,

Denmark and BENELUX countries are key markets

where BONESUPPORT has its own sales represen-

tatives. In other European markets and in other

parts of the world (ROW), the company coopera-

tes with specialist distributors.

Despite the continued impact of the COVID-19-

pandemic on marketing and sales opportunities,

we have continued to strengthen our market

presence during the year, partly by establishing a

hybrid model in Italy and Spain, and partly

through the market expansion to Australia and

South Africa that began the year before. The hy-

brid involves qualied local sta from

BONESUPPORT working side by side with the

local distributor's sales representatives.

During the year, we have built on the positive

and appreciated experiences of our digital edu-

cations and meetings that continue to be well at-

tended and have received high score on these.

Periodically, the COVID-19 infection rate in socie-

ty has enabled the physical meetings that are so

important for our new customer processing, but

we have continuously, with large geographical

dierences, experienced periods of extensive lock-

downs and dicult priorities in healthcare systems.

12 %

growth (13% CER)

in EUROW 2021

In-house sales

company and

distributors

U.S.

Own sales

companies

BENELUX

Denmark

Switzerland

United Kingdom

Sweden

Germany

Hybrid markets

Italy

Spain

Distributors

Finland

France

Ireland

Croatia

Norway

Poland

Austria

Australia

Colombia

Canada

Oman

Saudi Arabia

South Africa

1. Revenue growth in constant exchange rate, CER

14 BONESUPPORT 2021 ANNUAL REPORT

BONESUPPORT FOCUS MARKET REPRESENTS

USD 0.7 BILLION OF THE ADDRESSABLE GLOBAL

BONE GRAFT MARKET OF USD 1.3 BILLION.

The market for bone grafts is growing by 5% per year

THE GLOBAL MARKET FOR BONE GRAFT AMOUNTS TO USD 3.3 BILLION

Orthopaedic diseases and injuries are the second most common cause

of physical impairments. The demographic structure is a driving factor

for an increasing need for treatment of the diseases of the organs of

movement: an increasing number of elderly people leads to higher in-

cidence of osteoporosis and osteoarthritis combined with the desire to

remain active longer and an increased sporting activity.

Bone has the ability to heal completely, without leaving any traces of

injury. However, bone damage that leads to voids and bone defects

may occur when the damage to the bone is too large to heal sponta-

neously or when the natural healing process is inhibited, for instance in

case of infection. The most common underlying causes of bone voids

and bone defects are complicated fractures (trauma), revision arthro-

plasty (replacement of joint prostheses), bone infection or benign

bone tumors. The obvious benets of synthetic bone grafts mean that

their use will grow steadily, at the expense of autograft and allograft.

BONESUPPORT’s CERAMENT products are synthetic bone grafts and

are unique in their ability to remodel to bone within 6-12 months and,

in the case of CERAMENT G and CERAMENT V, to release antibiotics to

protect the bone healing process from infection.

39%

Approved

indications for

CERAMENT

61%

Indications where

CERAMENT is not yet

approved:

Spine and Cranio-

Maxillofacial

Total bone graft market

USD 3.3 billion

25% Top 5 Europe

USD 0,7 billion

25% U.S.

Other countries

720 thousand surgical

procedures per year

BONESUPPORTs

addressable market

USD 1.3 billion

BONESUPPORT

focus market

BONESUPPORT 2021 ANNUAL REPORT 15

Trauma 55%

Revision arthroplasty 19%

Diabetes foot injuries 17%

Cysts and bone tumors 6%

Chronic bone infection 3%

Indications for

bone graft

Treatment options

bone graft

INDICATIONS AND

TREATMENT OPTIONS

Previous standard treatment

(organic grafts/transplantation):

In about half of all patients, everyday

activities are adversely aected for up to

six months after treatment with autograft

due to pain at the donation site. 39% of

patients experience long term pain from

the donor site.

Allograft fails on between 25-50% of

occasions requiring additional treatment

stages.

1. Lementovski et al. ‘Acute and chronic complications of

intracortical iliac crest bone grafting versus the traditional

corticocancellous technique for spinal fusion surgery.’

Orthopedics(2010);33.

2. http://www,surgeryencyclopedia,com/A-Ce/Bone-

Grafting,html

3. Zheng et al, Mechanism of bone allograft failure, J Bone Joint

Surg Br 2002 vol, 84-B no, SUPP III 234

4. Refers to addressable market

■

Synthetic bone graft 31%

■

Allograft 27%

■

Autograft 25%

■

Allograft DBM 17%

Allograft DBM

Autograft

Allograft

Synthetic bone graft

COMMERCIAL ORGANIZATION AND MARKET

16 BONESUPPORT 2021 ANNUAL REPORT

RESEARCH AND

DEVELOPMENT

BONESUPPORT’s clinical development program focuses on further developing CERAMENT’s properties,

broadening clinical application areas and leveraging CERAMENT’s unique drug-eluting properties via the

development of combination products which promote bone healing.

A number of combinations with CERAMENT have

been studied to add osteoinductive properties, i.e.

the capability to actively stimulate bone healing.

Among other research activities, the company has

conducted research in the form of preclinical can-

didates which combined CERAMENT with bisp-

hosphonates, bone morphogenic proteins (BMP),

bone marrow aspirate (BMA) and demineralized

bone matrix (DBM). Priority product candidates for

own development are CERAMENT combined with

bisphosphonate and CERAMENT combined with

DBM, while CERAMENT combined with BMP is a

candidate for potential partner development.

Bisphosphonate is a well-established substance

for the treatment of osteoporosis and is used to in-

hibit the activity of osteoclasts, resulting in impro-

ved bone healing and bone density. Demineralized

bone matrix is based on allograft which is reduced

in minerals. The material has been shown to have

wide usage in conditions and situations where na-

tural bone regrowth is weak.

Preclinical research has shown that the addition of

zoledronic acid to CERAMENT can increase bone

volume and improve the anchoring of screw im-

plants. Further preclinical research has shown that

the combination of CERAMENT, zoledronic acid

and bone morphogenic protein-2 (BMP-2) can also

be used in reconstruction of large segment de-

fects instead of bone transplantation.

CLINICAL EVIDENCE, A STRATEGIC

CORNERSTONE

One of the three cornerstones of BONESUPPORT’s

strategy is to provide industry-leading scientic

and clinical evidence that validates the many be-

nets of CERAMENT. Already today there is a

comprehensive database of more than 240 rese-

arch publications and abstracts of preclinical and

clinical studies with CERAMENT.

RESULTS FROM CERTIFY DRIVES

CHANGE IN STANDARD OF CARE

CERTiFy is a randomized, controlled clinical trial

conducted at 20 trauma centers in Germany with

135 patients. The study, which was done on tibia

plateau fractures, shows that CERAMENT BVF can

replace autograft as the standard of care. The

study conrmed that CERAMENT has the ability

to be converted to bone. In addition, treatment

with CERAMENT BVF resulted in signicantly

lower patient-experienced post-operative pain

and a signicantly lower blood loss.

BONESUPPORT expects the results of the study

published in The Journal of Bone and Joint

Surgery in December 2019 to represent a miles-

tone in driving change in the standard of care

and that more clinics in consultation with the pa-

tient will choose CERAMENT over autograft.

THE SOLARIO STUDY

BONESUPPORT supports the SOLARIO study

(Short or Long Antibiotic Regimes in

Orthopedics), with the aim of investigating if

synthetic bone graft substitutes containing anti-

biotics can lead to shorter treatment time com-

1. Hofmann et al. Autologous Iliac Bone Graft Compared with Biphasic Hydroxyapatite and Calcium Sulfate Cement for the Treatment of Bone Defects in Tibial Plateau Fractures, The Journal of Bone and

Joint Surgery: February 5, 2020 - Volume 102 - Issue 3 - p 179-193.

BONESUPPORT 2021 ANNUAL REPORT 17

RESEARCH AND DEVELOPMENT

pared to systemic antibiotics and thereby reduce

risk of antibiotic resistance, side eects and addi-

tional costs. The study is led by the Oxford

University Hospital’s NHS Foundation Trust in col-

laboration with EBJIS (European Bone and Joint

Infection Society). SOLARIO is a randomized un-

blinded European multicenter study that is ex-

pected to include 500 patients. The rst patient

was recruited in February 2019 and the study is

expected to be closed during Q1 2023. A positive

result of the study may contribute to a paradigm

shift in the protocol for treating bone infections.

THE CONVICTION STUDY

The French CRIOAc Network has initiated

CONVICTION, a randomized controlled trial to

evaluate the ecacy of CERAMENT G in the treat-

ment of osteomyelitis. The French Ministry of

Health has decided to fund the study. A research

grant from BONESUPPORT to partially nance the

products used in the study, has been awarded.

The study will evaluate the eectiveness of

CERAMENT G in the treatment of osteomyelitis.

The study is a national multicenter study and will

be conducted by clinics that are part of the

CRIOAc network.

A positive outcome of the study would mean

that a large commercial opportunity will arise in

the French market and that improved reimburse-

ment status is obtained.

2. CRIOAc (Reference Center for Osteoarticular Infections) is a health care network in France that is implemented through a nationwide health ministry program to improve outcomes in the management of

bone and joint infections.

18 BONESUPPORT 2021 ANNUAL REPORT

HEALTH

ECONOMICS

One of the largest challenges when introducing new and innovative

healthcare treatment is to ensure that healthcare systems around the

world understand the value of the treatment and include it in the

care oered to the patient. BONESUPPORT undertakes a variety of

activities to ensure that the company’s products are included in the

remuneration systems where our products are marketed.

One of the obvious health economic benets

that comes from the clinical benets CERAMENT

oers is a reduced utilization of healthcare re-

sources. A reduced number of re-infections as a

result of treatment with CERAMENT G and

CERAMENT V in a one-step procedure naturally

leads to fewer return visits and fewer surgeries

and, as a consequence, fewer hospital stays.

Improved clinical outcomes also have a positive

impact on society as a whole - such as reduced

sick leave, reduced need for rehabilitation and

care. The signicance of health benets and the

calculation models for evaluating the cost-eec-

tiveness of health benets dier between die-

rent healthcare systems. Our teams therefore

work closely with local expertise to increase our

ability to include the CERAMENT platform more

quickly in replacement systems in new markets.

CERAMENT G and CERAMENT V free up healthcare resources …

BONESUPPORT 2021 ANNUAL REPORT 19

HEALTH ECONOMICS

CERAMENT G and CERAMENT V free up healthcare resources …

CERAMENT G AND CERAMENT V  PROVIDE A MORE COSTEFFECTIVE MEDICAL CARE

WITH FEWER SURGICAL PROCEDURES AND SHORTER PERIODS OF HOSPITALIZATION

0 - 2 weeks 3 - 4 weeks 5 - 6 weeks 7 + weeks

One-step surgery to heal

skeletal injuries while

reducing the risk of

infection

Reinfection

rate: 4,3%

One stage

procedure

Reinfection

rate: 13-36%

Multi stage

procedure

One surgical procedure

Injection of CERAMENT G/V

Promotion and protection of bone healing

TREATMENT WITH

CERAMENT G & V

Multi-stage surgery to

prevent infection and

heal skeletal injuries

1st surgical procedure

Placement of non-absorbable

antibiotic carrier

2nd surgical procedure

Harvest bone graft (autograft)

3rd surgical procedure

Removal of non-absorbable antibiotic

carrier plus bone transplantation

Plus systemic antibiotics

TRADITIONAL

TREATMENT

Bone healing

20 BONESUPPORT 2021 ANNUAL REPORT

HEALTH ECONOMIC MODEL OSTEOMYELITE USA

One of the major projects that has been started in 2021 is a cost

and benet analysis of what a change of treatment regime to a

one-step procedure with CERAMENT G could mean for the

American healthcare system. The modeling, which is based on av-

ailable clinical data and cost data from CMS, Centers for Medicare

& Medicaid Services, takes place in collaboration with national ex-

pertise in health economics and clinical orthopedics. The goal is

for this study to be completed in the second quarter of 2022.

BONESUPPORT 2021 ANNUAL REPORT 21

CERAMENT G OR CERAMENT V CONTRIBUTES TO REDUCED

DAYS OF CARE IN PATIENTS WITH BONE INFECTION¹

The Nueld Orthopaedic Center (NOC) has shown that they

have been able to reduce the degree of re-infection in oste-

omyelitis patients by 56 percent compared to their previous

standard of treatment. In an analysis involving approximately

25,000 patients who underwent surgical treatment for oste-

omyelitis in 2013-2017, the patient group treated at NOC after

the introduction of CERAMENT G or CERAMENT V in a one-step

procedure was compared with patients cared for at other

hospitals in England. The results presented in The Journal of

Bone and Joint Infection¹ showed that CERAMENT G or

CERAMENT V in a one-step procedure contributed to signi-

cantly improved patient outcomes. The hospital stay, in con-

nection with osteomyelitis surgery and the following two years,

were on average 16 days shorter for the group that received

CERAMENT G and CERAMENT V at NOC. In addition, patients at

NOC had a signicantly lower risk of amputation (6.47 percent)

compared to the Rest of England control group (12.71 percent).

With the addition of CERAMENT G or CERAMENT V in the treat-

ment of osteomyelitis, the total saving in the number of days of

care associated with surgery and subsequent care, could

amount to approximately GBP 44 million annually, calculated

on 6,250 treated patients per year.

1. Ferguson, J et al. A retrospective cohort study comparing clinical outcomes and

healthcare resource utilisation in patients undergoing surgery for osteomyelitis

in England: a case for reorganising orthopaedic infection services, J. Bone Joint

Infect., 6, 151–163

REDUCED RISK OF DEEP INFECTIONS WITH CERAMENT G AND CERAMENT V

Another area where CERAMENT G and CERAMENT V could help

reduce healthcare costs is in the treatment of open tibial fractu-

res. Open tibial fractures represent about 15 percent¹ of all tibial

fractures and have a high incidence of infection, with no bone

healing as a result. Bone infections often lead to great suering

for the patient and very high healthcare costs.

In a Belgian study by Hoekstra et al² of 358 patients, the cost of

tibial fractures was studied. The study showed that healthcare

costs for patients aected by a deep infection were on average

ve times higher than for those who did not get an infection,

resulting in the cost of treatment increasing from EUR 9,500 to

EUR 48,700. There are a number of studies that show that

CERAMENT contributes to cost-eective care by reducing the

number of deep infections. One of these is a study by Aljawadi

et al³ on 80 patients with severe open tibial fractures treated

with CERAMENT G in a one-step procedure. In the study, one

patient (1.3 percent) suered from a deep infection compared

with historical references of up to 52 percent incidence of infec-

tion. This shows that one-step treatment with antibiotic-eluting

CERAMENT for open tibial fractures can eectively reduce the

incidence of cost-driving infections.

2. Hoekstra et al. Economics of open tibial fractures: the pivotal role of length-of-

stay and infection. Health Econ Rev 2017;7:32

3. Aljawadi, A et al. Adjuvant Local Antibiotic Hydroxyapatite Bio-Composite in the

management of open Gustilo Anderson IIIB fractures. Journal of Orthopaedics,

2020; 18: 261-266

HEALTH ECONOMICS

… and leads more quickly to improved quality of life.

22 BONESUPPORT 2021 ANNUAL REPORT

SUSTAINABILITY

BONESUPPORT operates with in medical technology, a highly

regulated environment that places high demands on products,

organization, and operations. Sales are made globally, partly directly

through own established subsidiaries, and partly indirectly through

collaborations with distributors.

DEVELOPMENT IN 2021

In 2021, BONESUPPORT has continued with its sys-

tematic sustainability work. We work cross-func-

tionally, and all employees have the opportunity

to contribute. Our ambition remains high to fur-

ther strengthen and integrate sustainability issues

into all our work, so that the environment, sustai-

nability and governance continue to be an inte-

gral part of our way of working.

In 2021 we have, among other things, developed

and implemented a global travel policy that takes

sustainability into account from several perspecti-

ves - the people, the environment as well as costs.

GOVERNANCE AND RESPONSIBILITY

The Board of Directors has overall responsibility

for the group and is therefore ultimately respon-

sible for the company's sustainability work. The

Board of Directors has adopted policy do-

cuments and guidelines regarding environmen-

tal issues, anti-corruption, and respect for human

rights, as well as a code of conduct that applies to

all employees within the group.

The CEO is responsible for implementing the

Board's decisions and within the management

team Kristina Ingvar, Executive Vice President

Quality Management & Regulatory Aairs, is re-

sponsible for sustainability work. There is also a

working group on sustainability issues within the

group.

BONESUPPORT CODE OF CONDUCT

BONESUPPORT's Code of Conduct describes the

basis for how employees should act in contacts

with external stakeholders such as customers,

partners, hospital employees, and also internally

in relation to colleagues. All employees must an-

nually take note of the Code of Conduct and con-

rm that they have understood its content. The

Code of Conduct is evaluated on an ongoing ba-

sis and adopted annually by BONESUPPORT’s

Board of Directors.

There is a whistleblowing function that employ-

ees can use to report suspected violations of the

Code of Conduct. In order to guarantee indepen-

dence and anonymity, BONESUPPORT has cho-

sen for all reporting and investigation through

the whistleblowing function to be handled by an

external party.

QUALITY

BONESUPPORT works with medical technology,

where good quality is a prerequisite for safe and

ecient products and therefore works long-term

with quality issues:

We comply with international standards for

medical devices

We carry out inspections of contract

manufacturers and other subcontractors on a

regular basis

We are regularly inspected by accredited

bodies that certify the activities

Our quality system is certied according to

ISO 13485

OUR VIEW OF ANTIBIOTIC USE

Antimicrobial Resistance (AMR) is an increasing th-

reat to global public health and collaboration is im-

portant in order to counteract this. BONESUPPORT

is committed to the responsible use of antibiotics

and supports antibiotic stewardship.

OUR VIEW OF ANIMAL TESTING

As part of research and development in the med-

ical device industry, it is sometimes necessary to

carry out experiments on animals, as this is re-

quested by the responsible authorities. Strict

ethical deliberations are made before animal tes-

ting is initiated or funded by BONESUPPORT.

Alternative methods, such as mathematical mo-

delling or in vitro biological systems, are used if-

possible. If animal studies are deemed necessary,

BONESUPPORT strives to involve as few animals

as possible. The protocol is designed to be as

gentle as possible for the animals and, in accor-

dance with the legislation, the study protocol is

always approved by an ethics committee.

BONESUPPORT takes animal welfare very seriously.

BONESUPPORT 2021 ANNUAL REPORT 23

SUSTAINABILITY

ENVIRONMENT

BONESUPPORT works actively to reduce the group's environ-

mental impact. This applies to everything from small eorts in

daily work, such as waste sorting, to long-term work with manu-

facturing and transport. In 2021, the company's work on the di-

gitization of paper-based systems has continued, which also

contributes to reduced paper consumption.

From an environmental perspective, the products in the

CERAMENT platform have many advantages. The main compo-

nent of the products is ceramic powder, which is produced in

processes that do not cause harmful environmental impacts,

such as pollution or hazardous waste. The powder is then mix-

ed with a water-based liquid, which does not contain organic

solvents. This means that the product is also safe for the health-

care professional who handles it. Our development laboratory

in Lund is regularly checked by the environmental administra-

tion in Lund municipality with regards to the handling of che-

micals and waste.

The production of BONESUPPORT's products is undertaken

through contract manufacturers and supplier control is a high

priority area. Suppliers are carefully selected, and high demands

are placed on their compliance with current regulations. Where

possible, priority is given to suppliers who carry out active en-

vironmental work. BONESUPPORT's main contract manufactu-

rer is certied according to the international standard ISO 14001.

All materials and components are carefully controlled by

BONESUPPORT. Production takes place in cleanrooms, a strictly

controlled environment without pollution.

In 2021, strategic work was initiated to carry out a review of the

entire production chain including transport. The purpose of this

is to identify the areas with the greatest environmental impact,

in order to be able to target future improvement measures

where they are most needed. However, due to the pandemic

and the global impact on supply chains that has arisen, this

work has had to be postponed and will thus continue in 2022.

24 BONESUPPORT 2021 ANNUAL REPORT

AGENDA 2030 AND THE 17

SUSTAINABLE DEVELOPMENT GOALS

Agenda 2030 consists of 17 Sustainable

Development Goals (SDGs) aimed at eradica-

ting poverty, halting climate change and crea-

ting peaceful and safe societies. BONESUPPORT

has identied the following sustainability goals

as the most essential to the business and whe-

re BONESUPPORT has the greatest opportunity

to inuence:

ESG dimension (UN’s

global sustainable

development goals) Category Target 2022 Result 2021

Existing goals:

Social (3, 12) Product/patient safety

Zero-vision product

recalls No product recalls

Social (3) Company culture

Team development work

carried out in at least ve

teams 5

Social (3) Employee turnover 6% +/- 2% 8%

Social (3) Puls survey

Employe Engagement

Score < 7.8

Implemented globally

in 2022

Environmental (12) Environment

> 5 A-suppliers certied

according to ISO 14001

6 suppliers certied

according to ISO 14001

Governance (12) Code of conduct

Zero-vision regarding

the occurrence of cor-

ruption, bribery or fraud

or related investigations

No instance of corrup-

tion, bribery or fraud or

related investigations

New goals:

Social/Environmental

(12) Digitization

>1 additional document

category digitized New goal

BONESUPPORT 2021 ANNUAL REPORT 25

SUSTAINABILITY

EMPLOYEES

BONESUPPORT has for four years worked with in-

dividual goals for all employees. Each of us is me-

asured both on nancial and qualitative measu-

res. The latter are based on the company's overall

strategic goals, which are broken down for each

function and individual in collaboration between

functions to coordinate our workday and ensure

that we all work in the same direction. This

well-structured and consistent work contributes

to our performance culture.

During the autumn of 2021, we have carried out

self-assessments of our culture in the teams.

These have shown that our culture has become

stronger since we initiated the work. The passion

and the commitment that exists for our company

and our products are very strong. This is shown in

very high results regarding areas such as le-

adership, engagement, culture and eNPS in the

pulse surveys we started with during the year in

Lund.

During the pandemic years, our culture proved

to be so strong that all functions and countries

participated in voluntary temporary wage cuts to

keep costs down at a time when sales were hea-

vily aected by the pandemic. We believe that

our culture was also strengthened by this.

Our employee turnover has remained low even

during the past year. Since we have a need to dri-

ve improvements, a balanced sta turnover is

preferable to create dynamic. The employee

turnover this year was 8 percent, which was

slightly higher than in 2020.

The fact that the market conditions changed in

2021 was obvious to us in the search for compe-

tence. Own recruitment had to be largely replaced

by recruitment with the help of partners. With the

help of a scalable and well-functioning process,

we have managed to keep both the cost and the

average time for a recruitment at a reasonable le-

vel. In our recruitment processes, we strive for the

best skills at both individual and group level and

strive for diversity in all respects. Diversity has

many aspects: age, gender, ethnicity, culture and

personality. With a focus on this, we also create

value and diversity at the company level.

GOALS 2022

A main focus of BONESUPPORT is patient and

product safety. The goal for 2022 is a

zero-vision for product recalls.

Since the production of BONESUPPORT's

products takes place through contract

manufacturers, it is important that critical

suppliers/contract manufacturers conduct

active environmental work. One goal for 2022

is that at least ve of BONESUPPORT's most

important suppliers/contract manufacturers,

so-called A suppliers, shall be certied

according to the international environmental

standard ISO 14001 or another comparable

standard.

Impacted by the pandemic, we, like other

companies, have developed our ability to

work virtually instead of physically, with the

aim of maintaining and developing both

people and productivity. The ongoing

digitization will continue, with the goal for

2022 to digitize at least one additional

document category.

Continued focus on further developing our

culture and structure. The work includes,

among other things, continuing a team

development concept initiated in 2021,

which includes, among other things, cultural

self-assessment. Five teams have started

team development work according to the

concept, and the goal for 2022 is to start up

this team development work in several parts

of the organization, with the ambition to

reach at least ve more teams in 2022.

Our target for 2021 for sta turnover was six

percent plus/minus two percentage points.

We landed at eight percent, which is within

the target (previous year 4.5 percent). For

2022, our target will remain at six percent

plus/minus two percentage points.

In 2022, the goal is to implement the model

for employee survey that has been tested

regionally in 2021, on a global basis. The aim

is also to reach an average during the year

regarding Employe Engagement Score of at

least 7.8 percent.

1. eNPS is a method that measures how willing employees are to recommend their workplace to others

26 BONESUPPORT 2021 ANNUAL REPORT

NET SALES 2017-2021, SEKm

100

150

200

250

20212020201920182017

OPERATING PROFIT/LOSS 2017-2021, SEKm

-200

-150

-100

-50

20212020201920182017

NET SALES SEGMENT NA

2017-2021, SEKm

120

150

20212020201920182017

REVENUE GROWTH 2017-2021, %

-50

100

150

20212020201920182017

GROSS MARGIN 2017-2021, %

100

20212020201920182017

NET SALES SEGMENT EUROW

2017-2021, SEKm

100

20212020201920182017

Operations in overview

DIRECTORS’ REPORT AND

FINANCIAL STATEMENTS 2021

28 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

DIRECTORS’ REPORT

GROUP

GENERAL INFORMATION

BONESUPPORT HOLDING AB (publ), org.no. 556802-2171, registered in

Lund, is the parent company of BONESUPPORT AB. BONESUPPORT is a

rapidly growing orthobiologics company in the commercial phase that

primarily targets the major orthopedic markets in the U.S. and Europe.

BONESUPPORT was founded in 1999 and has its registered oce in Lund

with wholly owned subsidiaries in the U.S., United Kingdom, Germany,

Sweden, Denmark, Switzerland, Spain, Italy and the Netherlands.

BONESUPPORT develops and commercializes innovative injectable

bio-ceramic bone graft substitutes that remodel to the patient’s host

bone and have the ability to release drugs. BONESUPPORT’s bone

graft substitutes are based on the proprietary technology platform

CERAMENT. To date, three primary commercial products have been

developed:

- CERAMENT®|BVF (BONE VOID FILLER) injectable ceramic bone graft

substitute that remodels to host bone.

- CERAMENT®|G injectable ceramic bone graft substitute that re-

models to host bone and elutes Gentamicin during the critical rst

30 days of bone healing. CERAMENT G constitutes a unique addition

to the treatment and prevention of bone infection.

- CERAMENT®V injectable ceramic bone graft substitute that re-

models to host bone and elutes Vancomycin during the critical rst

30 days of bone healing. CERAMENT V constitutes a unique addition

to the treatment and prevention of bone infection.

All three products are marketed in several markets in Europe and the rest

of the world, but in the U.S. so far only CERAMENT BVF has been given

U.S. Food and Drug Administration (FDA) approval for use. The work to

get a market approval for CERAMENT G in the US is ongoing but nal

notication is impacted by delays within the FDA.

BONESUPPORT’s strategy focuses primarily on continuing to increase

sales of current products in existing and new markets, as well as gene-

rating additional clinical data through studies and health economic data

(HEOR data) to highlight the benets of CERAMENT.

BONESUPPORT has all the necessary skills to take a medical device from

the research and development stage through sales to the end customers.

Most of the production is outsourced to third parties. BONESUPPORT con-

trols the product ow from supplier to customer.

The products are based on an innovative technology backed by a patent

portfolio of approximately 100 registered and/or pending patents.

BONESUPPORT has fteen years of documented experience of safety

and ecacy and estimates, based on sales data, that more than 70,000

treatments have been performed with its products worldwide. There is

great market potential in trauma, chronic osteomyelitis, revision arthro-

plasty, bone tumors and foot infections due to diabetes. The company’s

research focuses on continuing to further develop and rene the current

technology and to extend it to additional indications through the release

of other drugs.

MULTI-YEAR OVERVIEW - GROUP

* Average full-time equivalent.

For denitions and calculations of alternative performance measures

see page 77.

SIGNIFICANT EVENTS IN 2021

- In February 2021, the company announced that the U.S. Food and

Drug Administration (FDA) had informed BONESUPPORT that the

company’s De Novo application for CERAMENT G for bone infection

requires additional information and clarication. The requested

supplements were submitted in September to the FDA. At the end

of February 2022, the FDA announced that nal notication of the De

Novo application is delayed, as a lagging eect of the pandemic and

high workload within the agency.

- In April, the company was awarded a GPO-contract with Premier.

Premier is a leading healthcare and purchasing network with over

4,100 U.S. aliated hospitals.

- In July, the company received “breakthrough device designation” for

CERAMENT G for the indication trauma.

- The company announced in September that the results of the

company’s Investigational Device Exemption (IDE) study FORTIFY

were non-conclusive. The primary safety parameter for CERAMENT G

was met.

- In December, Michael Wrang Mortensen joined the company in the

newly established role as Executive Vice President (EVP) Research &

Development (R&D) and Operations.

DIRECTORS’ REPORT

2021 2020 2019 2018 2017

Net sales, SEKm 212.9 180.9 155.5 96.6 129.3

Net sales growth, % 17.7 16.3 60.9 -25.3 23.6

Gross prot, SEKm 189.7 161.6 135.9 81.5 112.4

Gross margin, % 89.1 89.4 87.4 84.3 87.0

Operating result, SEKm -80.7 -98.6 -158.1 -174.4 -99.3

Net loss, SEKm -85.5 -101.4 -161.1 -176.4 -128.9

Equity, SEKm 265.7 398.9 124.3 278.5 450.8

Net debt, SEKm -185.0 -343.3 -81.7 -261.5 -434.7

Operating cash ow, SEKm -83.4 -100.3 -163.8 -171.6 -107.5

Cash at year end, SEKm 206.5 353.7 92.1 261.5 533.4

Earnings per share before and after

dilution, SEK -1.34 -1.72 -3.10 -3.46 -3.24

Average number of employees* 92 86 78 72 57

Net sales per employee, SEKt 2 314 2 103 1 993 1 342 2 268

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 29

DIRECTORS’ REPORT

REVENUES

Revenue is generated through three channels:

- A combination of our own sales company and distributors in the U.S.

- Direct sales in key markets in Europe with own sales organization

- Sales through distributors in all other markets

During 2021, the focus has been on continued commercial develop-

ment, establishment of hybrid structure in Spain and Italy as well as

adaptation to prevailing circumstances as a result of the pandemic.

During the year, there has been ongoing evaluation of contracted dist-

ributors in order to optimize the market presence of CERAMENT and to

ensure both geographical coverage and for various indications.

Net sales amounted to SEK 212.9 million (180.9), an increase of 18 percent

(23 percent at constant exchange rates). The NA segment increased by

22 percent (31 percent at constant exchange rates) to SEK 121.7 million

(99.7) and the EUROW segment increased by 12 percent (13 percent in

constant exchange rates) to SEK 91.2 million (81.1).

SALES AND MARKETING

In the U.S., CERAMENT BVF is distributed through BONESUPPORT’s dist-

ributor network, which at year-end amounted to more than 40 distri-

butors supported by our commercial platform, of our directly employed

and specially trained U.S. sales and marketing organization. At year end,

the U.S. commercial organization had 21 (22) employees.

In Europe, BONESUPPORT currently has direct sales with 31 (29) sales

representatives in the U.K., Germany, Switzerland, Sweden, Denmark

and the Benelux countries. BONESUPPORT sells via distributors in Fin-

land, France, Ireland, Italy, Croatia, Norway, Poland, Spain and Austria.

BONESUPPORT also sells through distributors in a small number of

selected countries outside North America and Europe. The company

has established a hybrid model in Italy and Spain, with qualied local

sta from BONESUPPORT working side by side with the local distri-

butors’ sales representatives.

RESEARCH AND DEVELOPMENT

BONESUPPORT’s clinical development program focuses on further deve-

loping CERAMENT’s properties, broadening clinical application areas, and

utilizing CERAMENT’s unique drug-releasing properties via the develop-

ment of combination products which promote bone healing.

A number of combinations with CERAMENT have already been studied to

supply osteoinductive properties, i.e. the capability to actively stimulate

bone healing. Among other research activities, the company has con-

ducted research in the form of preclinical candidates which combined

CERAMENT with bisphosphonates, bone-joint proteins (BMP), bone mar-

row aspirates (BMA) and demineralized bone matrix (DBM). Prioritized

product candidates for own development are CERAMENT combined with

bisphosphonate and CERAMENT combined with DBM, while CERAMENT

combined with BMP is a candidate for potential partner development.

Bisphosphonate is a well-established substance in treatment

of osteoporosis and is used to inhibit the activity of osteoclasts, which

results in improved bone healing and bone density. Demineralized bone

matrix is based on allograft reduced on minerals. The material has been

shown to be widely used in conditions and situations where the patient

has weak natural bone regeneration. Preclinical research has shown that

the addition of zoledronic acid to CERAMENT may increase bone volume

and improve the anchoring of screw implants. Further preclinical research

has shown that the combination CERAMENT, zoledronic acid and bone

morphogenic protein-2 (BMP-2) can also be used in the reconstruction of

large segment defects instead of bone grafting.

One of the three cornerstones of BONESUPPORT’s strategy is to provide

compelling scientic and clinical evidence that validates the many bene-

ts of CERAMENT. There is already an extensive database of more than

240 research publications and abstracts of preclinical and clinical studies

with CERAMENT.

CERTiFy was a randomized controlled trial conducted at 20 trauma

centers in Germany, involving a total of 135 patients. The clinical trial,

conducted on tibial plateau fractures, shows that CERAMENT BVF can

replace autograft as a treatment standard. The trial conrmed that

CERAMENT remodels to bone. In addition, treatment with CERAMENT

BVF led to signicantly lower patient-perceived postoperative pain and

signicantly reduced loss of blood. The study, published in The Journal

of Bone & Joint Surgery in December 2019, is an important tool for dri-

ving change in the standard of care, which means that more and more

clinicians, in consultation with the patient, are choosing CERAMENT

over autograft

BONESUPPORT supports the SOLARIO trial (Short or Long Antibiotic

Regimens in Orthopaedics) to investigate whether synthetic bone graft

substitute containing antibiotics can lead to shorter treatment times

compared to systemic antibiotic treatment, thereby reducing the risk of

antibiotic resistance, side eects and additional costs. The trial is led by

Oxford University Hospitals NHS Foundation Trust in collaboration with

EBJIS - The European Bone and Joint Infection Society. The SOLARIO

trial is a randomized controlled open-label European multicenter trial

that is estimated to recruit 500 patients. The rst patient was recruited

in February 2019 and the trial is expected to end in the rst quarter of

2023. If the trial shows a positive outcome, it will certainly contribute to

a paradigm shift in the treatment of bone infections.

The French CRIOAc healthcare network has initiated CONVICTION, a ran-

domized controlled trial to evaluate the eectiveness of CERAMENT G in the

treatment of chronic osteomyelitis. The French Ministry of Social Aairs

and Health has made the decision to nance the trial with a research

grant from BONESUPPORT partially nancing the cost of the products

used in the trial. The trial will evaluate the eectiveness of CERAMENT G

in the treatment of osteomyelitis. The trial is a national multicenter trial

and will be conducted by clinicians included in the CRIOAc Network.

A positive outcome from the trial would open up signicant commer-

cial potentials in the French market and it would be possible to obtain

improved compensation status.

HEALTH ECONOMICS

One of the largest challenges when introducing new and innovative

treatment is to ensure that healthcare systems around the world under-

stand the value of the treatment and includes it in the care oered to the

1. Hofmann et al. Autologous Iliac Bone Graft Compared with Biphasic Hydroxyapatite and Calcium Sulfate Cement for the Treatment of Bone Defects in Tibial Plateau Fractures, The Journal of Bone and

Joint Surgery: February 5, 2020 - Volume 102 - Issue 3 - p 179-193

2.CRIOAc (Regional Referral Center for Bone and Joint Infection,) is a healthcare network in France that is implemented via a nationwide health ministry program to improve outcomes in the management of

bone and joint infection.

30 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

DIRECTORS’ REPORT

patient. BONESUPPORT undertakes a variety of activities to ensure that

the company’s products are included in the remuneration systems where

our products are marketed.

One of the obvious health economic benets that comes from the clinical

benets CERAMENT oers is a reduced utilization of healthcare resour-

ces. A reduced number of re-infections as a result of treatment with

CERAMENT G and CERAMENT V in a one-step procedure naturally leads

to fewer return visits and fewer surgeries and, as a consequence, fewer

hospital stays. Improved clinical outcomes also have a positive impact on

society as a whole - such as reduced sick leave, reduced need for rehabi-

litation and care. The signicance of health benets and the calculation

models for evaluating the cost-eectiveness of health benets dier

between dierent healthcare systems. Our teams therefore work closely

with local expertise to increase our ability to include the CERAMENT plat-

form more quickly in replacement systems in new markets.

One of the major projects that has been started is a cost and benet

analysis of what a change of treatment regime to a one-step procedure

with CERAMENT G could mean for the American healthcare system. The

modeling, which is based on available clinical data and cost data from

CMS, Centers for Medicare & Medicaid Services, takes place in collabora-

tion with national expertise in health economics and clinical orthopedics.

The Nueld Orthopaedic Center (NOC) has shown that they have been

able to reduce the degree of re-infection in osteomyelitis patients by 56

percent compared to their previous standard of treatment. In an analysis

involving approximately 25,000 patients who underwent surgical treat-

ment for osteomyelitis in 2013-2017, the patient group treated at NOC after

the introduction of CERAMENT G or CERAMENT V in a one-step procedure

was compared with patients cared for at other hospitals in England. The

results presented in The Journal of Bone and Joint Infection¹ showed that

CERAMENT G or CERAMENT V in a one-step procedure contributed to

signicantly improved patient outcomes. The hospital stay, in connection

with osteomyelitis surgery and the following two years, were on average

16 days shorter for the group that received CERAMENT G and CERAMENT

V at NOC. In addition, patients at NOC had a signicantly lower risk of

amputation (6.47 percent) compared to the Rest of England control group

(12.71 percent). With the addition of CERAMENT G or CERAMENT V in the

treatment of osteomyelitis, the total saving in the number of days of care

associated with surgery and subsequent care, could amount to approxima-

tely GBP 44 million annually, calculated on 6,250 treated patients per year.

Another area where CERAMENT G and CERAMENT V could help reduce

healthcare costs is in the treatment of open tibial fractures. Open tibial

fractures represent about 15 percent of all tibial fractures and have a high

incidence of infection, with no bone healing as a result. Bone infections

often lead to great suering for the patient and very high healthcare

costs. In a Belgian study by Hoekstra et al² of 358 patients, the cost of

tibial fractures was studied. The study showed that healthcare costs for

patients aected by a deep infection were on average ve times hig-

her than for those who did not get an infection, resulting in the cost of

treatment increasing from EUR 9,500 to EUR 48,700. There are a number

of studies that show that CERAMENT contributes to cost-eective care

by reducing the number of deep infections. One of these is a study by

Aljawadi et al³ on 80 patients with severe open tibial fractures treated

with CERAMENT G in a one-step procedure. In the study, one patient (1.3

percent) suered from a deep infection compared with historical referen-

ces of up to 52 percent incidence of infection. This shows that one-step

treatment with antibiotic-eluting CERAMENT for open tibial fractures can

eectively reduce the incidence of cost-driving infections.

STAFF AND ORGANIZATION

The average number of employees in 2021 was 92 (86) for the group.

Of these, 55 percent (55) worked within in Sales and marketing and 24

percent (24) within Research and development.

EXPENSES AND RESULTS

Gross prot

As a result, mainly of the increased net sales in North America, an increa-

sed gross prot of SEK 189.7 million (161.6) was reported, corresponding

to a gross margin of 89.1 percent (89.4).

Operating expenses

As in the previous year, the year was marked by the COVID-19 pande-

mic and the dampening eect it had on sales but also through certain

reduction of the cost base, although not in line with the large savings

reported for 2020.

Sales and marketing costs excluding sales commissions to distributors

in the U.S. increased to SEK 139.3 million (123.8). The increase is partly

due to the large cost reductions that aected the previous year and a

gradually increasing level of activity in 2021, during periods of reduced

pandemic measures, and partly due to the establishment of a hybrid

structure in southern Europe. Sales commissions to distributors in the

United States increased in line with sales growth by SEK 7.0 million to

SEK 38.6 million (31.6). Research and development costs decreased to

SEK 53.0 million (57.9), the decrease is mainly explained by the fact that

the FORTIFY study was completed during the second half year. Adminis-

trative expenses decreased to SEK 44.1 million (45.5) and include costs

within the framework of active incentive programs with SEK 5.6 million

(8.7). Of the total operating expenses, depreciation amounted to SEK

6,5 million (6.9).

Operating prot/loss

Operating prot/loss amounted to SEK -80.7 million (-98.6). The increase

in sales contributed positively with improved gross prot while operating

costs increased as a result of higher sales commissions and investments

in the hybrid model in southern Europe, but is also related to the cost

reductions which aected the previous year as a result of the COVID-19

pandemic.

Net nancial items

Net nancial items amounted to SEK -1.2 million (-0.4), of which all regar-

ded interest expenses.

Loss for the year

For the reasons described above, the loss for the year amounted to SEK

-85.5 million (-101.4).

INVESTMENTS

Investments amounted to SEK 0.8 million (2.3) for capitalized deve-

lopment expenses during the year, and SEK 2.6 million (0.3) for

equipment and tools.

1. Ferguson, J et al. A retrospective cohort study comparing clinical outcomes and health care resource utilisation in patients undergoing surgery for osteomyelitis in England: a case for reorganising

orthopaedic infection services, J. Bone Joint Infect., 6, 151–163.

2.Hoekstra et al. Economics of open tibial fractures: the pivotal role of length-of-stay and infection. Health Econ Rev 2017; 7:32.

3. Aljawadi, A et al. Adjuvant Local Antibiotic Hydroxyapatite Bio-Composite in the management of open Gustilo Anderson IIIB fractures. Journal of Orthopaedics, 2020; 18: 261-266.

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 31

DIRECTORS’ REPORT

FINANCIAL POSITION AND CASH FLOW

Cash and cash equivalents amounted to SEK 206.5 million (353.7) at year-

end, a decrease of SEK 147.3 million since the beginning of the year. The

change mainly consists of cash ow from operating activities amoun-

ting to SEK -82.4 million (-100.3) mainly attributable to the operating

loss, and by a share swap agreement of SEK -62.3 million. During the

third quarter of 2021, BONESUPPORT, in accordance with a resolution

from the annual general meeting 2021, exercised its authorization to

enter into a share swap agreement to secure the commitments in the

group’s incentive programs that the annual general meeting had deci-

ded to implement. A total of 786,000 shares were hedged during the

third quarter at an average value of SEK 79.30 per share, a total value of

SEK 62.3 million.

At the end of the year, equity amounted to SEK 265.7 million (398.9), of

which SEK 40.9 million (40.6) were share capital.

QUALITY SYSTEMS AND PRODUCT APPROVAL

BONESUPPORT’s quality system complies with the Medical Device

Directive 93/42/EEC, ISO 13485 ”Medical Device-Quality management

system-Requirements for regulatory purposes”, the FDA’s Quality Sys-

tem Requirements and other national regulations. Implementation

of the new EU regulatory framework Regulation on Medical Devices

2017/745 is going according to plan.

The company’s products are class III products in Europe, undergoing

extensive design verication/validation before being assessed and app-

roved for CE marking by the testing body, the British Standards Institute.

ENVIRONMENT

The company’s operations are not subject to authorization under the

Environmental Code. During the year, the company continued to work

with the work environment.

OPERATIONAL AND FINANCIAL RISKS

During 2018, we conducted a signicant strategic review of operations.

There are many potential application areas for the CERAMENT platform.

In our strategy, we have chosen to focus on those areas where there

is strong clinical evidence of CERAMENT’s therapeutic benets, i.e.

trauma, revision arthroplasty, osteomyelitis, foot and ankle surgery and

bone tumors. By concentrating our resources on these indications, we

address a market of approximately 720,000 surgical procedures per year.

Our strategy is based on three pillars:

- Innovation

- Leading clinical and health economics evidence

- Eective commercial platform

BONESUPPORT’s main operating, as well as nancial risks are in market

development and the time it takes to create acceptance for the pro-

ducts and thereby generate revenue.

There is currency exposure, primarily to USD, GBP and EUR. Since the

revenues are mainly generated in these currencies, a weak SEK has a

positive eect.

BONESUPPORT’s results have been aected, and will continue to be

aected in the future, by several factors wholly or partly outside the

company’s control. In addition to the above, the following is a descrip-

tion of the main factors that BONESUPPORT believes have aected the

results of the business and which can be expected to continue to aect

the company’s results.

- Risks related to the regulatory environment for medical devices and

combination products, such as the high costs of complying with

applicable regulatory frameworks, in particular as regards the requi-

rements arising from the EU Directive on medical devices, and corre-

sponding national and regional medical devices legislation, and the

eects of amended regulations as well as the consequences resulting

from failure to comply with the applicable regulatory framework.

- Risks related to the conduct and outcome of clinical trials, such

as time-consuming and costly clinical trials and may be delayed,

become more expensive or be discontinued as a result of a number

of factors including lack of authorization for the conduct of studies,

lack of patient recruitment, undesirable side eects or lack of required

clinical ecacy.

- Risks related to a lack of market acceptance from healthcare provi-

ders, patients and healthcare payers, for example based on perceived

advantages over competing treatments, the presence and extent of

side eects and costs of treatment compared to competing treat-

ments, and risks related to a lack of availability of adequate reimbur-

sement systems that may lead to a reluctance to use the company’s

products.

- Risks that BONESUPPORT does not achieve sucient revenue or cash

ow to nance its operations in the future or is unable to obtain the

necessary funding where necessary.

- Risks related to manufacturing, supply and warehousing, such as the

company’s suppliers and manufacturers not fullling their commit-

ments or having their operations curtailed as a result of government

intervention, which would risk entailing time-consuming and costly

processes for the company to replace/nd new suppliers.

- Risks related to competition and that the company has a limited pro-

duct portfolio based on a technology platform such that competing

products may prove to be better or achieve greater market accep-

tance or that the company’s product candidates do not show su-

cient potential for further development, which could lead to failure

to obtain market approval.

- Risks related to key employees and qualied personnel, such as the

company’s dependence on its senior executives and other key per-

sonnel and if the company loses key employees, or fails to recruit

the necessary personnel, may lead to delays or interruptions in the

continued business and product development.

- Risks related to intellectual property rights such as the company’s

patent protection not being sucient to adequately protect its ope-

rations, that the company infringes the intellectual property rights of

third parties or that the company becomes involved in intellectual

property disputes.

- Risks related to potential product liability claims and insurance issues

such that the company faces signicant liability risks if its products or

product candidates should cause patients to suer side eects invol-

ving illness, bodily injury or death, and that the company’s insurance

coverage cannot be maintained or provide adequate protection.

- Risks related to a continued and persistent COVID-19 pandemic and

the impact on healthcare systems, our operations and our sta.

A more detailed description of risks is given in Note 2. Regarding the

group’s internal control and risk management system in connection

with the preparation of consolidated accounts, please refer to the Cor-

porate Governance Report.

32 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

DIRECTORS’ REPORT

LEGAL DISPUTES

BONESUPPORT has no ongoing or known potential legal disputes

within the group.

LONG TERM STRATEGIC ACTIVITIES

BONESUPPORT’s strategy can be broken down into the following main

activities:

- Produce compelling clinical and health economic data.

- Commercial focus on selected markets and indications.

- Regulatory market approval for CERAMENT G in the U.S.

- Develop new products that meet market needs in the short,

medium and long term.

BONESUPPORT will develop further compelling clinical and health eco-

nomic data to strengthen its position in the markets for trauma, revision

arthroplasty, chronic osteomyelitis and foot infections due to diabetes.

A number of combinations with CERAMENT have been studied to

supply osteoinductive properties, i.e. the capability to actively stimulate

bone healing. Among other research activity, the company has condu-

cted research using preclinical candidates which combined CERAMENT

with bisphosphonates, bone-joint proteins (BMP), bone marrow aspi-

rates (BMA) and demineralized bone matrix (DBM). Priority product

candidates for own development are CERAMENT with bisphosphonate

and CERAMENT with DBM, while CERAMENT with BMP is a candidate for

potential partner development.

OUTLOOK

The strengthened commercial platform, both in the U.S. and in Europe,

the results of our clinical trials and the launch of new products mean

that we expect a strong sales increase after the COVID-19 pandemic and

an annual sales growth of around 40 per cent.

THE BOARD OF DIRECTORS AND ITS WORK

Håkan Björklund, Björn Odlander, Lars Lidgren, Tone Kvåle, Lennart

Johansson and Simon Cartmell were re-elected at the Annual General

Meeting in May 2021. Lennart Johansson was re-elected Chairman of

the Board.

The work of the Board of Directors is governed by rules of procedure

that are revised and adopted by the Board at least once a year. The

Rules of Procedure mainly contain provisions for the work of the Board

of Directors, as well as instructions for the division of duties between

the Board of Directors and the CEO, as well as instructions for nancial

reporting. The Swedish Code of Corporate Governance applies. More

details are given in the Corporate Governance Report.

CORPORATE GOVERNANCE

The company has chosen to issue the Corporate Governance Report

separately to the Annual Report. The Corporate Governance Report can

be found on page 69.

THE BOARD OF DIRECTOR’S PROPOSALS FOR PRINCIPLES

OF REMUNERATION TO SENIOR EXECUTIVES

Pursuant to the Swedish Companies Act, the Annual General Meeting

shall decide on guidelines for remuneration of the CEO and other senior

executives. At the Annual General Meeting on May 2021, guidelines

were adopted with primarily the content below. The guidelines that

were adopted 2021 apply until further notice.

These guidelines cover the persons who are members of BONESUPPORT

HOLDING AB’s (”BONESUPPORT”) group management. Group manage-

ment currently consists of nine positions. The guidelines also include

any remuneration to Board members for work in addition to board fees.

The guidelines shall be applied to the remuneration agreed, and

changes made to already agreed remuneration, after the guidelines

have been adopted by the Annual General Meeting 2021. The guideli-

nes do not cover remuneration resolved by the General Meeting, such

as fees to Board members or share-related incentive programs.

The company’s starting point is that remuneration shall be at a market

and competitive level and shall consist of the following components:

xed salary, variable cash remuneration, pension benets and other

benets. The level of remuneration for each individual executive shall

be based on factors such as duties, expertise, experience, position and

performance. In addition, the Annual General Meeting may – and inde-

pendently of these guidelines – resolve on, for example, share and share

price-related remuneration.

In the case of employment relationships governed by rules other than

Swedish regulations, appropriate adjustments may be made, in respect

of pension benets and other benets, to comply with such mandatory

rules or established local practice, taking into account, as far as possible,

the overall purpose of these guidelines.

The CEO and other senior executives shall be oered a xed annual

salary. The xed salary shall be determined taking into account the

senior executive’s expertise, area of responsibility and performance.

The xed salary should be reassessed annually.

In addition to xed salary, the CEO and other senior executives may,

by separate agreement, receive variable cash remuneration. Variable

cash remuneration covered by these guidelines shall aim to promote

BONESUPPORT’s business strategy and long-term interests, including

its sustainability.

Compliance with criteria for the payment of variable cash remuneration

shall be measured over a period of one year. The annual variable cash

remuneration may not exceed 75 percent of the xed annual salary for

the CEO and not more than 40 percent of the xed annual salary of other

senior executives, the individual highest level being determined, inter

alia, in the light of his or her position. The variable cash remuneration

shall not be pensionable, subject to mandatory collective agreement

provisions.

The variable cash remuneration shall be linked to one or more predeter-

mined and measurable criteria that may be nancial, such as net sales

and operating prot, or non-nancial, such as qualitative targets. The

variable cash remuneration shall be less than 40 percent dependent on

non-nancial criteria. Clearly and measurably linking the remuneration

of senior executives to BONESUPPORT’s nancial and operational deve-

lopment, promotes the implementation of the company’s business

strategy, long term interests and sustainability.

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 33

DIRECTORS’ REPORT

Once the measurement period for compliance with the criteria for the

payment of variable cash remuneration has been completed, the extent

to which the criteria have been met shall be assessed. The Remunera-

tion Committee is responsible for such assessment. Compliance with

nancial criteria shall be determined based on the latest nancial infor-

mation published by the company. The Board of Directors shall have

the possibility to recover, in whole or in part, variable remuneration paid

on the basis of information that has subsequently been found to be

incorrect.

Pension benets, including health insurance, shall be dened contri-

bution to the extent that the executive is not covered by a dened

benet pension in accordance with mandatory collective agreement

provisions. Premiums for dened contribution pensions, including

health insurance, may amount to a maximum of 40 percent of the xed

annual salary.

Other benets may include life insurance, medical insurance and car

benet. Senior executives shall be employed until further notice or for

a certain period of time. In the event of termination by BONESUPPORT,

the notice period may not exceed 12 months. Severance pay, in addi-

tion to salary and other remuneration during the notice period, may

not exceed an amount equal to twelve times the monthly salary. In the

event of resignation by the senior executive, the notice period may not

exceed six months.

In addition, compensation may be paid for any commitment to restrict

competition in order to compensate for any loss of income. Such remu-

neration shall be paid only to the extent that the former senior executive

is not entitled to severance pay. The remuneration shall be based on the

xed salary at the time of termination and shall amount to a maximum

of 60 percent of the xed salary at the time of termination, subject to

mandatory collective agreement provisions, and shall be paid for the

duration of the anti-competition undertakings, which shall not exceed

12 months after termination of employment.

To the extent that the Board Member performs work on behalf of the

company, in addition to the work of the Board of Directors, a market-ba-

sed consulting fee for such work may be paid to a Board Member or to

a company controlled by a Board Member, provided that the services

contribute to the implementation of BONESUPPORT’s business strategy

and the safeguarding of BONESUPPORT’s long term interests, including

its sustainability.

The Board of Directors has set up a Remuneration Committee. The

Remuneration Committee’s tasks include preparing the Board’s resolu-

tion on proposals for guidelines for remuneration to senior executives.

The Board of Directors shall prepare proposals for new guidelines at

least every four years and shall submit the proposal for resolution at

the Annual General Meeting. The guidelines shall remain in force until

new guidelines have been adopted by the Annual General Meeting. The

Remuneration Committee shall also monitor and evaluate programs

for variable remuneration to company management, the application

of guidelines for remuneration to senior executives and the current

remuneration structures and levels in the company. The members of

the Remuneration Committee are independent in relation to the com-

pany and company management. The CEO or other members of the

executive management may not be present at the Board’s discussion of

and decisions on remuneration-related matters, to the extent that they

are aected by the issues.

The Board of Directors may decide to temporarily deviate from the

guidelines in whole or in part, if in an individual case there are special

reasons for this and a deviation is necessary to satisfy the company’s

long-term interests, including its sustainability, or to ensure the com-

pany’s nancial viability. As stated above, it is part of the Remuneration

Committee’s task to prepare the Board’s decisions on remuneration iss-

ues, which includes decisions to deviate from the guidelines.

In addition to the commitments to pay ongoing remuneration such

as salary, pension and other benets, there is no previously resolved

remuneration to any senior executive that has not become due for pay-

ment. For further information on remuneration to senior executives,

see Note 11.

34 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

DIRECTORS’ REPORT

PARENT COMPANY

REVENUES, LOSS AND FINANCIAL POSITION

The parent company BONESUPPORT HOLDING AB (publ) owns and

administers the shares in BONESUPPORT AB, which in turn owns the

shares in the other group companies. BONESUPPORT HOLDING AB does

not undertake any operational activities. BONESUPPORT HOLDING AB

was registered on March 15, 2010 in connection with the restructuring

of the Group.

In 2021, management fees were charged within the group. In the parent

company, SEK 43.6 million (39.4) has been recognized as net sales and

SEK 49.5 million (47.5) as administrative costs. The parent company’s

operating expenses amount to SEK 51.1 million (46.2).

During the year, unconditional shareholder contributions of SEK 125.0

million were made to BONESUPPORT AB, compared to SEK 105.0 mil-

lion the previous year. The prot/loss for the year amounted to SEK -3.1

million (-3.1).

Equity has increased to SEK 1,268.3 million (1,265.2). Cash and bank

balances amounted to SEK 181.3 million (338.1) at the end of the year.

FINANCIAL RISKS

The parent company’s nancial risks are essentially the same as the group’s.

OWNERSHIP AT DECEMBER 31, 2021

The largest shareholders at the end of the year were Avanza Pension 11.0%,

HealthCap V LP 10.1%, Swedbank Robur Fonder 6.3%, Stiftelsen Industri-

fonden 5.8%, Third Swedish National Pension Fund 5.6%, State Street Bank

and Trust 4.9%, and Fourth Swedish National Pension Fund 4.8%.

THE SHARE

The company has ordinary shares and class C-shares. The quotient book

value of the shares is SEK 0.625 per share. As of December 31, 2021, the

total number of ordinary shares amounted to 64,164,672 (63,764,222)

divided among 7,453 shareholders (5,977), and the total number of class

C-shares amounted to 1,290,000 (1,235,000). The ordinary shares entitle to

one vote each and the C-shares entitle to one tenth of a vote each.

According to the Articles of Incorporation, the number of shares shall

be not less than 29,000,000 (29,000,000) and not more than 116,000,000

(116,000,000).

Own shares

BONESUPPORT HOLDING AB holds all class C-shares.

Pursuant to authorization from the Annual General Meeting on May 22,

2018, the Board of Directors of BONESUPPORT HOLDING AB resolved to

issue 505,000 class C-shares and then immediately repurchase them. The

shares were issued and repurchased in accordance with the Performance

Share Program Employees 2018/2021 and the performance share pro-

gram Board of Directors 2018 adopted by the Annual General Meeting on

May 22, 2018. SEK 315,625 was paid for the class C-shares in 2019.

Pursuant to authorization from the Annual General Meeting on May 14,

2019, the Board of Directors of BONESUPPORT HOLDING AB resolved

to issue 730,000 class C-shares and then immediately repurchase them.

The shares were issued and repurchased in accordance with the Per-

formance Share Program Employees 2019/2022 adopted by the Annual

General Meeting on May 19, 2019. SEK 456,250 was paid for the class

C-shares during the year.

Pursuant to authorization from the Annual General Meeting on May 19,

2020, the Board of Directors of BONESUPPORT HOLDING AB resolved

to issue 55,000 class C-shares and then immediately repurchase them.

The shares were issued and repurchased in accordance with the Perfor-

mance Share Program Employees 2020/2023 adopted by the Annual

General Meeting on May 19, 2020. SEK 34,675 was paid for the class

C-shares during the year.

The share of the class C-shares in the share capital amounts to two (two)

percent.

THE BOARD OF DIRECTORS’ PROPOSAL

FOR APPROPRIATION

The Board of Directors proposes that the share premium reserve,

accumulated losses and loss for the year be carried forward.

Appropriation parent company, SEK

Unrestricted equity in the parent company

Share premium reserve 1 563 670 389

Accumulated losses -333 110 703

Net loss for the year -3 141 005

Total unrestricted equity in

the parent company 1 227 418 682

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 35

FINANCIAL INFORMATION

CONSOLIDATED INCOME STATEMENT

SEKt Note 2021 2020

Net sales 4 212 885 180 860

Cost of sales 4, 6, 7 -23 182 -19 256

Gross prot 4 189 703 161 604

Selling expenses 6, 7, 10, 11, 21 -139 274 -123 818

Sales commissions 4, 6 -38 571 -31 598

Research and development expenses 6, 7, 10, 11 -53 009 -57 898

Administrative expenses 6, 7, 8, 10, 11, 12 -44 122 -45 492

Other operating income 13 11 308 12 188

Other operating expenses 6, 14 -6 704 -13 547

Operating prot/loss 4 -80 669 -98 561

Loss from nancial items

Interest income 0 5

Interest expenses -1 168 -445

Net nancial items 4 -1 168 -440

Prot/loss before income tax 4 -81 837 -99 001

Income tax 16 -3 694 -2 411

Net prot/loss for the year -85 531 -101 412

Attributable to:

Equity holders of the parent -85 531 -101 412

Earnings per share calculated on earnings attributable to equity holders of the parent

Earnings per share before and after dilution, SEK 23 -1.34 -1.72

36 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

FINANCIAL INFORMATION

CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

SEKt 2021 2020

Loss for the year -85 531 -101 412

Other comprehensive income

Other comprehensive income to be reclassied to prot or loss in subsequent periods:

Exchange dierences on translation of foreign operations 1 023 -834

Other comprehensive income of the year 1 023 -834

Total comprehensive income of the year -84 508 -102 246

Attributable to:

Equity holders of the parent -84 508 -102 246

Total comprehensive income of the year -84 508 -102 246

Other comprehensive income of the year refers in its entirety to exchange dierences with no tax eects

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 37

FINANCIAL INFORMATION

CONSOLIDATED BALANCE SHEET

SEKt Note December 31, 2021 December 31, 2020

ASSETS

Non-current assets

Intangible assets 18

Capitalized development expenses 5 968 6 115

Patents 2 397 2 725

Total intangible assets 8 365 8 840

Tangible assets

Right of use assets 26 22 504 11 840

Equipment and tools 19 4 574 3 163

Total tangible assets 27 078 15 003

Total non-current assets 35 443 23 843

Current assets

Inventories 17

Raw materials and consumables 34 234 30 951

Finished goods and goods for resale 17 528 14 604

Total inventories 51 762 45 555

Current receivables

Trade receivables 21, 25 38 413 32 108

Other operating receivables 21, 25 6 126 5 317

Prepaid expenses 22 3 219 3 359

Deferred income 22 2 492 1 299

Total current receivables 50 250 42 083

Cash and cash equivalents 25, 27 206 464 353 737

Total current assets 308 476 441 375

TOTAL ASSETS 343 919 465 218

38 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

FINANCIAL INFORMATION

CONSOLIDATED BALANCE SHEET

SEKt Note December 31, 2021 December 31, 2020

EQUITY AND LIABILITIES

Equity attributable to equity holders of the parent

Share capital 23 40 909 40 625

Other paid-in capital 1 563 670 1 557 639

Translation reserve 129 -894

Fund for development expenses 5 490 5 352

Accumulated losses including loss for the year -1 344 494 -1 203 823

Total equity 265 704 398 899

Non-current liabilities

Leasing debt 25, 26 16 152 5 622

Provisions 24 363 329

Total non-current liabilities 16 515 5 951

Current liabilities

Leasing debt 25, 26 5 270 4 858

Trade payables 25 18 719 12 680

Income tax payable 1 903 4 985

Other operating liabilities 5 625 6 974

Accrued expenses 22, 25 30 183 30 871

Total current liabilities 61 700 60 368

Total liabilities 78 215 66 319

TOTAL EQUITY AND LIABILITIES 343 919 465 218

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 39

FINANCIAL INFORMATION

CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

SEKt Share capital

Paid but not

registered

share issue

Other paid-in

capital

Translation

reserve

Fund for

development

expenses

Accumulated

losses inclu-

ding net loss

for the year Total equity

As at January 1, 2020 32 826 100 1 191 775 -60 3 552 -1 103 884 124 309

Comprehensive income

Net loss for the year -101 412 -101 412

Other comprehensive income

Exchange dierences on translation of foreign

operations -834 -834

Total comprehensive income 0 0 0 -834 0 -101 412 -102 246

Transactions with equity holders

Change in fund for development expenses 1 800 -1 800 0

New share issue, employee stock option programs 780 -100 10 569 11 249

Directed share issue 6 563 371 437 378 000

Transaction costs, directed share issue -16 142 -16 142

New share issue and repurchase of own C-shares 456 -456 0

Share-based payment transactions 3 729 3 729

Total transactions with equity holders 7 799 -100 365 864 0 1 800 1 473 376 836

As at January 1, 2021 40 625 0 1 557 639 -894 5 352 -1 203 823 398 899

Comprehensive income

Net loss for the year -85 531 -85 531

Other comprehensive income

Exchange dierences on translation of foreign

operations 1 023 1 023

Total comprehensive income 0 0 0 1 023 0 -85 531 -84 508

Transactions with equity holders

Share swap -62 333 -62 333

Change in fund for development expenses 138 -138 0

New share issue, employee stock options and

warrants 250 6 031 6 281

New share issue and repurchase of own C-shares 34 -34 0

Share-based payment transactions 7 365 7 365

Total transactions with equity holders 284 0 6 031 0 138 -55 140 -48 687

As at December 31, 2021 40 909 0 1 563 670 129 5 490 -1 344 494 265 704

For treatment of the share swap, see Note 23.

40 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

FINANCIAL INFORMATION

CONSOLIDATED STATEMENT OF

CASH FLOWS

SEKt Note 2021 2020

Operating activities

Operating loss -80 669 -98 561

Non-cash adjustments 28 6 757 20 781

Interests received 0 5

Interests paid -1 168 -6

Income tax paid -3 761 -4 970

Net cash ows from operating activities before changes in working capital -78 841 -82 751

Changes in working capital

Increase (-) in inventories -117 -13 202

Increase (-) in operating receivables -5 421 -2 916

Increase (+)/decrease (-) in operating liabilities 958 -1 406

Net cash ows from operating activities -83 421 -100 275

Investing activities

Investments in intangible assets 18 -808 -2 312

Investments in equipment and tools 19 -2 608 -346

Net cash ows from investing activities -3 416 -2 658

Financing activities

Share swap -62 333 0

New share issue, employee stock options and warrants 6 281 11 248

Directed share issue 0 378 000

Transaction costs, directed share issue 0 -16 142

Repayments of leasing debt 26 -5 509 -7 768

Net cash ows from nancing activities -61 561 365 338

Net cash ows -148 398 262 405

Cash and cash equivalents as at beginning of the year 25 353 737 92 065

Net foreign exchange dierence 1 125 -733

Cash and cash equivalents as at end of the year 25 206 464 353 737

For treatment of the share swap, see Note 23.

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 41

FINANCIAL INFORMATION

PARENT COMPANY INCOME

STATEMENT

SEKt Note 2021 2020

Net sales 5 43 646 39 371

Administrative expenses 5, 8, 10, 11 -49 542 -47 462

Other operating income 13 121 1 642

Other operating expenses 14 -1 659 -331

Operating loss -7 434 -6 780

Result from nancial items

Other interest income and similar income 15 5 565 4 624

Other interest expenses and similar expenses 15 -1 272 -966

Net nancial items 4 293 3 658

Result before taxes -3 141 -3 122

Income tax 16 0 0

Loss for the year -3 141 -3 122

Parent company loss for the year equals comprehensive income

42 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

FINANCIAL INFORMATION

PARENT COMPANY BALANCE SHEET

SEKt Note December 31, 2021 December 31, 2020

ASSETS

Non-current assets

Non-current nancial assets

Participations in group companies 20, 25 956 652 831 652

Receivables on group companies 25 172 020 132 427

Total non-current nancial assets 1 128 672 964 079

Total non-current assets 1 128 672 964 079

Current assets

Current receivables

Other receivables 21 47 0

Prepaid expenses 22 660 633

Total current receivables 707 633

Cash 25 181 275 338 114

Total current assets 181 982 338 747

TOTAL ASSETS 1 310 654 1 302 826

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 43

FINANCIAL INFORMATION

PARENT COMPANY BALANCE SHEET

SEKt Note December 31, 2021 December 31, 2020

EQUITY AND LIABILITIES

Equity

Restricted equity

Share capital 23 40 909 40 625

Total restricted equity 40 909 40 625

Unrestricted equity

Share premium reserve

1 563 670 1 557 639

Accumulated losses -333 110 -329 954

Loss for the year -3 141 -3 122

Total unrestricted equity 1 227 419 1 224 563

Total equity 1 268 328 1 265 188

Non-current liabilities

Liabilities to group companies 35 043 27 411

Total non-current liabilities 35 043 27 411

Current liabilities

Trade payables 25 141 550

Other liabilities 810 2 598

Accrued expenses 22, 25 6 332 7 079

Total current liabilities 7 283 10 227

TOTAL EQUITY AND LIABILITIES 1 310 654 1 302 826

44 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

FINANCIAL INFORMATION

PARENT COMPANY STATEMENT

OF CHANGES IN EQUITY

SEKt Share capital

Paid but not

registered

share issue

premium

reserve

Accumulated

losses Total equity

As at January 1, 2020 32 826 100 1 191 775 -329 499 895 202

Comprehensive income

Loss for the year -3 122 -3 122

Total comprehensive income 0 0 0 -3 122 -3 122

Transactions with equity holders

New share issue, employee stock option programs 780 -100 10 569 11 249

Directed share issue 6 563 371 437 378 000

Transaction costs, directed share issue -16 142 -16 142

New share issue and repurchase of own C-shares 456 -456 0

Total transactions with equity holders 7 799 -100 365 864 -456 373 108

As at January 1, 2021 40 625 0 1 557 639 -333 077 1 265 188

Comprehensive income

Loss for the year -3 141 -3 141

Total comprehensive income 0 0 0 -3 141 -3 141

Transactions with equity holders

New share issue, employee stock option programs and warrants 250 6 031 6 281

New share issue and repurchase of own C-shares 34 -34 0

Total transactions with equity holders 284 0 6 031 -34 6 281

As at December 31, 2021 40 909 0 1 563 670 -336 251 1 268 328

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 45

FINANCIAL INFORMATION

PARENT COMPANY STATEMENT

OF CASH FLOWS

SEKt Note 2021 2020

Operating activities

Operating loss -7 434 -6 780

Interest received 5 566 4 624

Interests paid -1 273 -966

Net cash ows from operating activities before changes in working capital -3 141 -3 122

Changes in working capital

Increase (-)/decrease (+) in operating receivables -74 21 677

Iincrease (+)/decrease (-) in operating liabilities 4 688 -12 257

Net cash ows from operating activities 1 473 6 298

Investing activities

Shareholders' contribution -125 000 -105 000

Net cash ows from investing activities -125 000 -105 000

Financing activities

New share issue, employee stock options and warrants 6 281 11 248

Directed share issue 0 378 000

Transaction costs, directed new share issue 0 -16 142

Change in balances towards group companies -39 593 -9 839

Net cash ows from nancing activities -33 312 363 267

Net cash ow -156 839 264 565

Cash as at beginning of the year 25 338 114 73 549

Cash as at end of the year 25 181 275 338 114

46 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

NOTES

NOTE 1

GENERAL INFORMATION, ACCOUNTING POLICIES

GENERAL INFORMATION

BONESUPPORT operates within orthopedic products and develops and

commercializes innovative injectable bio-ceramic bone graft substitu-

tes that remodel to the patient’s host bone and have the ability to release

drugs. BONESUPPORT’s marketed synthetic bone graft substitutes are

CERAMENT BVF, CERAMENT G and CERAMENT V, all of which are based

on the innovative and patented CERAMENT technology platform.

BONESUPPORT HOLDING AB (publ) is a limited liability company with

its registered oce in Lund, Sweden. The address of the head oce is

Scheelevägen 19, SE-223 70 Lund, Sweden.

The Board of Directors approved these consolidated accounts on March

16, 2022 and they will be presented before the Annual General Meeting

for adoption on May 19, 2022.

THE GROUP’S ACCOUNTING PRINCIPLES

The main accounting principles applied at the time of the prepared

consolidated accounts are set out below. These principles have been

applied consistently for all the years presented unless otherwise stated.

The consolidated accounts are prepared in accordance with Interna-

tional Financial Reporting Standards (IFRS) issued by the International

Financial Accounting Standards Board (IASB) as adopted by the EU. Fur-

thermore, the consolidated accounts are prepared in accordance with

the Annual Accounts Act and the Swedish Financial Reporting Board’s

recommendation RFR 1 Supplementary accounting regulations for Groups.

The consolidated accounts are based on historical acquisition values

and prepared on a going concern basis.

The company’s functional currency is SEK and all amounts are in SEK

thousand unless otherwise stated.

Implementation of new accounting principles

The accounting policies applied include new and changed standards man-

datory for the rst time for scal years beginning January 1, 2021 None of

these have had a material impact on the group’s nancial statements.

New or amended IFRS standards eective from 2022 or later have not been

applied in the preparation of these nancial statements. The assessment is

that these will not have a material impact on the group’s nancial results

and nancial position.

ESTIMATES, ASSUMPTIONS AND ASSESSMENTS

When preparing the company’s nancial statements, a number of

assessments and estimates, as well as assumptions, have been made

that aect the application of accounting policies and the reported

amounts in the income statements and balance sheets. Actual outco-

mes may dier from these estimates and assessments. Estimates and

assessments are continuously evaluated and based on historical expe-

rience and other factors, including expectations of future events.

The areas of the consolidated accounts containing a signicant degree

of estimates, assumptions or assessments are described in Note 3.

Current assets and current liabilities are expected to be recovered or

paid within one year. Other balance sheet items are expected to be

recovered or paid later.

BASIS FOR CONSOLIDATION

The consolidated accounts cover the parent company and its subsidia-

ries. The nancial statements of the parent company and the subsidia-

ries included in the consolidated accounts relate to the same period and

are prepared in accordance with the accounting principles applicable

to the group. All intra-group balances, revenues, costs, gains or losses

arising in transactions between the companies covered in the consoli-

dated accounts are eliminated in full.

SUBSIDIARIES

Subsidiaries are companies in which the parent holds, directly or indirectly,

more than half of the voting rights or otherwise has a controlling interest.

A subsidiary is included in the consolidated accounts from the date of

acquisition, which is the date on which the parent company acquired con-

trolling interest, and is included in the consolidated accounts until the date

on which that controlling interest ceases.

Subsidiaries are recognized according to the acquisition method. The pur-

chase price for the acquisition of a business consists of the fair value of trans-

ferred assets, liabilities and issued shares. The purchase price also includes

the fair value of all assets or liabilities that are a consequence of the agreed

contingent purchase price. Identiable acquired assets and assumed liabi-

lities are initially measured at fair value on the date of acquisition.

TRANSLATION OF FOREIGN SUBSIDIARIES’ FINANCIAL

STATEMENTS

Items on the balance sheets of subsidiaries are valued in the relevant

functional currency, which is the same as the country’s local currency.

The group’s nancial statements are presented in SEK, which is the

parent company’s functional currency. The income statements and

balance sheets of the foreign subsidiaries are translated into SEK. The

balance sheets are translated at the exchange rates on the balance

sheet date. The prot and loss accounts are translated using the average

rates for the year. The exchange dierences on translation do not aect

prot or loss for the year but are recognized in other comprehensive

income in the consolidated accounts and accumulated. The following

exchange rates have been used for translations:

USD EUR CHF GBP DKK

Closing day rate December 31, 2021 9.044 10.245 9.894 12.211 1.378

Average rate 2021 8.582 10.145 9.385 11.802 1.364

Closing day rate December 31, 2020 8.214 10.074 9.288 11.139 1.353

Average rate 2020 9.204 10.487 9.798 11.798 1.407

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 47

NOTES

CASH FLOW STATEMENT

The cash ow statement has been prepared according to the indirect

method. The reported cash ow covers only transactions involving

inward or outward payment.

REVENUE RECOGNITION

The group’s revenues are mainly generated through one revenue stream,

the sales of CERAMENT products. Sales revenue is recognized when the

performance obligation is fullled, i.e. when control of an item is trans-

ferred to the buyer. For our customers, the delivery terms of Ex Works

BONESUPPORT’s warehouse are applied, which means that the control

passes to the buyer when the goods leave the warehouse. Some custo-

mers, however, keep consignment stocks. In these cases, the income is

recognized when withdrawals from consignment stocks are made.

Revenue is generated through three channels:

- A combination of own sales company and distributors in the U.S.

- Direct sales in six countries in Europe

- Sales through distributors in all other markets

Sales in the U.S. and in countries with direct sales are made to end custo-

mers. For sales in the U.S., the assessment has been made that contrac-

ted distributors constitute agents and the end customer is BONESUP-

PORT’s customer. Distributors receive commission on generated sales

to end customers as compensation for their service as agents. This is

recognized as a sales commission when the income is reported as the

depreciation period for these would otherwise have been for a shorter

period than one year, based on the practical exception in IFRS 15.94.

BONESUPPORT has its own inventory in the U.S. from which delivery

takes place directly to the end customer, and the distributors never get

control over the goods.

For distributor markets outside the U.S., sales are made to the distributor.

Delivery to these distributors takes place from BONESUPPORT’s ware-

house in Lund. Control of the goods passes to the distributor as soon

as they leave BONESUPPORT’s inventory and the revenue is recognized

at the same time.

The sales agreements do not contain any right of return, this applies to

both distributors and end customers. Guarantee costs in accordance

with IAS 37 exist but amount to immaterial amounts, which is why

no provision is made. For warehousing distributors, no return of pro-

ducts may take place without prior permission from BONESUPPORT.

BONESUPPORT has an agreed opportunity but no obligation to take

back products and in recent years has in principle not used that oppor-

tunity. BONESUPPORT therefore makes the assessment that there is no

need to provision for returns.

In general, 30 dayd payment terms are applied to the company’s direct

markets. For sales to distributors, market-adjusted terms of up to 90

days are applied.

INTANGIBLE ASSETS

Capitalized development expenses and patents:

Expenditure on the development of new products is recognized as an

intangible xed asset once it has received regulatory approval from

licensing authorities and if such high-collateral expenditure will bring

economic benets to the enterprise. Capitalized development expen-

ses are recognized as intangible assets and amortization is made from

the time the product is ready to use. The amortization period is the

useful life, but never longer than ten years. Development expenditure

that does not meet these criteria is written o.

Externally acquired patents are activated and reported as patents.

All intangible assets are assessed annually for any impairment requi-

rement.

LEASING

For leases where BONESUPPORT is the lessee, IFRS 16 Leases is applied.

The company has no leases where it is the lessor.

At the beginning of a contract, it is assessed whether it is a lease that

should be recognized as leasing. All leases in which the company is a

lessee are recognized as leases.

The lease liability is initially valued at the present value of future lease

payments, discounted at the group’s marginal loan rate. Lease pay-

ments included in the valuation of lease liabilities include xed fees

less any deduction for benets associated with the contract; variable

lease payments that depend on an index or price; amounts expected to

be paid by the lessee under residual value guarantees; the exercise price

of an option to purchase if the lessee is reasonably certain to exercise

such an option; and penalties payable in the event of termination of

the contract, if the lease period reects that the lessee will exercise an

opportunity to terminate the lease.

The lease liability is presented on its own rows in the balance sheet, with

a breakdown according to maturity. The lease liability is recognized in

subsequent periods by increasing the liability to reect the eect of

interest and decreasing it to reect the eect of lease payments made.

The lease liability is revalued with a corresponding adjustment of the

right-of-use asset in accordance with the rules set out in IFRS 16.

The right-of-use asset is initially recognized at the value of the lease liabi-

lity, with additions for lease payments made at the start date of the agre-

ement and initial direct expenses. The right-of-use asset is recognized

in subsequent periods at cost, less depreciation and any impairment

losses. The same principles apply to impairment of the right-of- use

asset as those described in the Equipment and Tools section.

The right-of-use asset is depreciated over the estimated useful life or, if

shorter, over the agreed lease term. If a contract transfers or is likely to

transfer ownership at the end of the lease term, the right-of-use asset

is depreciated over the estimated useful life. Depreciation starts at the

initial date of the lease. The right-of-use asset is presented on its own

row in the balance sheet.

EQUIPMENT AND TOOLS

Equipment and tools are recognized at cost less accumulated depreci-

ation and any impairment losses. The cost includes expenses directly

attributable to the acquisition of the asset. Additional expenses are

added to the reported value of the asset or recognized as a separate

asset, as applicable. Depreciation according to plan is based on the

depreciable amount, which consists of the cost less its residual value,

which is distributed over the expected useful life. Equipment and tools

are depreciated over ve years.

Gains and losses on disposal are determined by comparing the pro-

ceeds of sales obtained with the carrying amount. The dierence is

reported in the income statement as other operating income/expenses.

48 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

NOTES

IMPAIRMENT OF NON-FINANCIAL ASSETS

Assets that are written down are assessed for impairment whenever

events or changes in conditions indicate that the carrying amount may

not be recoverable. An impairment loss is made at the amount by which

the carrying amount of the asset exceeds its recoverable amount. The

recoverable amount is the higher of an asset’s fair value reduced by the

selling costs and the value in use. When assessing impairment require-

ments, assets are grouped at the lowest levels where there are separa-

tely identiable cash ows (cash-generating units).

FINANCIAL INSTRUMENTS

A nancial asset or liability is included in the balance sheet when the

group becomes a party in a contractual relationship. Financial assets

are removed from the balance sheet when the right to receive cash

ows from the instrument has expired and the group has transferred

all risks and benets associated with ownership. Financial liabilities are

removed from the balance sheet once the obligation in the contract

has been fullled.

CLASSIFICATION OF FINANCIAL ASSETS

Financial assets:

All assets are held to receive ongoing payments. These are initially

valued at fair value including transaction costs and then at amortized

cost in accordance with the eective interest method. Gains and losses

attributable to nancial assets are reported in the income statement.

Interest rate eects arising from the application of the eective inte-

rest method are also reported in the income statement. BONESUPPORT

recognizes the following interest-bearing assets in the balance sheet:

- Trade receivables

- Other receivables

- Cash and cash equivalents

Impairment of nancial assets:

For interest bearing nancial assets, a credit risk reserve is recognized

and this is based on the future expected losses of the individual assets.

For trade receivables, the credit risk reserve is calculated based on the

asset’s expected loss over its total life. For cash and cash equivalents,

the write-down that could be considered is immaterial.

INVENTORIES

Inventories are reported at the lowest of the acquisition cost and the net

realizable value. The acquisition cost is determined using the rst in, rst

out (FIFO) method. The cost of nished goods consists of raw materials,

direct salaries and other direct costs. Borrowing costs are not included.

The net realizable value is the sales price less estimated costs that are

necessary to achieve a sale. The sales price is the price that the company

would normally receive when selling in the operating activities.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash and bank balances.

FOREIGN CURRENCY

Transactions in foreign currency are reported at the exchange rate

on the transaction date. Monetary assets and liabilities denominated

in foreign currency are converted at the exchange rate of the balance

sheet date and exchange gains and losses are reported in prot or loss

as other operating income/expenses.

SHARE CAPITAL

Transaction costs directly attributable to the issue of new shares are

recognized, net of tax, in equity as a deduction after the issue proceeds..

SHARE SWAP AGREEMENT

During the third quarter of 2021, BONESUPPORT, in accordance with a

resolution from the annual general meeting in May of that year, exercised

its authorization to enter into a share swap agreement to secure the com-

mitments in the group’s incentive programs LTI 2021. A total of 786,000

shares were hedged during the third quarter at an average value of SEK

79.30 per share, a total value of SEK 62,333 thousand. The swap agreement

has been treated in line with acquisition of own shares and has therefor

been recognized at acquisition cost in unrestricted equity.

EMPLOYEE BENEFITS

Pensions:

The group only has dened contribution pension plans. The dened

contribution pension plans mainly cover retirement pension, disability

pension and family pension. The premiums are paid on an ongoing basis

during the year by each group company to separate legal entities, such as

insurance companies. The amount of the premium is based on the salary

level. Pension costs for the year are included in the income statement.

Share-based remuneration:

The group has outstanding employee stock options, which are regula-

ted by equity instruments. For detailed descriptions of the programs,

please refer to Note 12. Share-based remuneration (employee stock

options) is valued based on the market value of the employee stock

options at the time the options were assigned. The value of the com-

pensation is not revalued after the assignment date. The total cost is

distributed over the vesting period, which is the period during which all

the specied vesting conditions are to be met. The cost is recognized as

a personnel cost and credited in equity. At each closing date, the group

reassesses how many shares are expected to be earned. Any deviations

from the initial assessments that resulted from the review are reported

in the income statement and the corresponding adjustments are made

in equity.

When the options are exercised, the company issues new shares. Pay-

ments received are credited to the share capital (quota value) and other

contributed capital when the options are exercised.

Social costs attributable to equity-related instruments as described

above are expensed according to the periods during which the servi-

ces are performed. The cost is calculated based on the same valuation

model used when the employee stock options were assigned. The liabi-

lity for social security contributions incurred is revalued at each closing

date on the basis of a new calculation of the contributions that may be

paid when the instruments are redeemed. This means that the basis

for calculating the social security debt is a new market valuation of the

options made at each closing date.

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 49

NOTES

DEFERRED TAX

Deferred tax is recognized on temporary dierences. Deferred tax is

calculated using a tax rate that has been decided or announced at the

balance sheet date and is expected to apply when the deferred tax asset

concerned is realized or the deferred tax liability is settled. Deferred tax

assets relating to tax decits are reported to the extent that they are

likely to be oset against future taxable surpluses.

OPERATING SEGMENTS

The group manages and monitors operations in two operating seg-

ments: North America (NA) and Europe & Rest of the World (EUROW).

Information about operating segment sales and prot or loss is repor-

ted in Note 4. Neither assets nor liabilities are followed-up at segment

level as management and follow-up of these are done by management

and the Board at group level.

THE PARENT COMPANY’S ACCOUNTING POLICIES

The parent company prepares its annual report in accordance with

the Annual Accounts Act and the Swedish Financial Reporting Board’s

recommendation RFR 2 Accounting for Legal Entities. RFR 2 sets out that

the parent company’s annual report for the legal entity shall apply all EU

approved IFRS and statements, as far as possible within the framework

of the Annual Accounts Act, and taking into account the connections

between accounting and taxation. The recommendation species the

exceptions and additions to be made compared to IFRS accounting.

The following dierences exist between the group’s and the parent

company’s accounting policies:

- Shares in group companies are recognized in the parent company

according to the cost method.

- Shares in group companies and receivables on group companies

are impairment tested annually, or in case of indication of a decline

in value, based on a cash ow forecast over the next ve years. For

further information see Notes 3 and 20.

- The parent company does not apply IFRS 9 and IFRS 16. The parent

company recognizes nancial instruments at accrued acquisition

value. There are currently no leases in the parent company.

- The parent company complies with the Presentation form of the

Annual Accounts Act for the income statement and balance sheet,

which means, among other things, a dierent set-up for equity.

NOTE 2

FINANCIAL RISK MANAGEMENT

Through its operations, the group is exposed to various types of nan-

cial risks such as market, liquidity and credit risk. Market risk consists

mainly of currency risk. BONESUPPORT has an overall nancial policy for

both the parent company and the group, which regulates the division

of responsibilities in nancial matters between the Board of Directors,

the CEO, CFO and other group companies. The Board’s Audit Commit-

tee is tasked with monitoring the design of the nancial policy and, if

necessary, proposing changes to the Board. The nancial policy is cha-

racterized by a low level of risk. There have been no changes in nancial

policy or risk management compared to 2020. The strategy includes

continuously identifying and managing risks.

MARKET RISK

Market risk is the risk that the fair value of or future cash ows from a

nancial instrument vary due to changes in market prices. Market risks

are divided into three types; currency risk, interest rate risk and other

price risk. The market risk that primarily aects the group is currency risk.

Currency risk

Currency risk refers to the risk that fair value or future cash ows uctu-

ate as a result of changes in exchange rates. The exposure to currency

risk mainly stems from foreign currency payment ows (transaction

exposure) and from the translation of foreign subsidiaries’ income sta-

tements and balance sheets into SEK (translation exposure). The group’s

operations are international and exposed to currency risk, mainly from

USD, EUR and GBP.

Approximately 57 percent (58) of BONESUPPORT AB sales are invoiced in

USD, approximately 17 percent (18) in EUR and approximately 18 percent

(17) in GBP. This is only partly oset by the fact that purchases are also

made mainly in EUR. If, all else being equal, USD strengthens or weakens

by 5 percent against the Swedish SEK, the group’s prot after tax will be

aected by +/- approximately SEK 1.0 million (0.2) based on 2021 tran-

sactions, a corresponding strengthening/weakening in EUR gives an

impact of +/- 0.2 MSEK (0.3) and for GBP an impact of +/- 0.8 MSEK (0.6).

The foreign subsidiaries invoice and collect costs in their respective local

currencies; USD, EUR, GBP, CHF and DKK. The translation risk means that

the value of the group’s net investments in foreign currency may be

adversely aected by changes in exchange rates when the net assets

are consolidated in SEK at the balance sheet date.

The currency risk is mainly attributable to the exposure of outstanding

accounts receivable at the end of the reporting period, see Note 21 for

distribution by currency. Since the total outstanding accounts receiva-

ble consists mostly of USD (about 57 percent), and subsequently of EUR

(about 19 percent) and GBP (about 16 percent), currency uctuations

may aect future cash ows. If, all else being equal, USD strengthens

or weakens by 5 percent against the Swedish krona, the group’s equity

and prot after tax will be aected by +/- SEK 1.1 million (0.9) based on

outstanding accounts receivable as of December 31, 2021. The corre-

sponding eect for EUR amounts to +/- 0.4 MSEK (0.3) and for GBP to

+/- 0.3 MSEK (0.2).

The group does not currently use forward contracts or other instru-

ments to reduce currency risk.

The sensitivity analysis in the table below shows the impact on the group

of changes in SEK against the largest currencies. The gures are based on

2021 results and nancial position. The impact of the transaction risk is

measured in the net prot/loss for the year and the impact of the tran-

slation risk is measured in equity including net prot/loss for the year.

+ means a weakening of SEK

- means a strengthening of SEK

SEKm +/- 5% USD +/- 5% EUR +/- 5% GBP

Transaction risk +/- 1.0 +/- 0.2 +/- 0.8

Translation risk +/- 0.2 +/- 0.1 +/- 0.2

50 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

NOTES

Interest rate risk

Interest rate risk refers to the risk that fair value or future cash ows

uctuate as a result of changes in market interest rates.

As of December 31, 2021, a general increase or decrease in interest rates

will not have any impact on the group’s results as there are no bank loans

in the group. The eect on the group’s leases is considered marginal.

Price risk

Price risk refers to the risk that fair value or future cash ows uctuate as

a result of changes in prices.

The group’s sales prices are based on the clinical and health economic

benets validated by a large number of clinical studies and therefore

present a low risk of major price movements. The sensitivity to the pur-

chase prices of input goods is mainly managed through long contract

times and high stock security.

CREDIT AND COUNTERPARTY RISK

Credit risk refers to the risk that the counterparty in a transaction causes

the group a loss by not fullling its contractual obligations. The group’s

exposure to credit risk is mainly attributable to accounts receivable.

A simplied model is used to calculate credit losses on the group’s

accounts receivable. Expected credit losses are calculated based on past

events, current conditions and projections of future economic conditions.

The group’s customers consist primarily of hospitals, clinics and distri-

butors with a high credit rating. Accounts receivable are spread across a

large number of customers and no single customer accounts for a sub-

stantial part of the total accounts receivable. Accounts receivable are

spread geographically. The group considers that the concentration risks

are limited. Reversal of estimated customer losses in 2021 amounted to

SEK 0 thousand (833) and new reserves were made with SEK 22 thousand

(69). See also Note 21 for more information about accounts receivable.

The credit risk in cash and cash equivalents is deemed intangible

because the counterparties are banks with high credit ratings awar-

ded by international credit rating agencies. As of December 31, 2021,

cash and cash equivalents amount to SEK 206,464 thousand (353,737),

of which 90 percent (96) in SEK, 6 percent (1) in USD, 3 percent (1) in GBP

and 1 percent (1) in EUR.

The group’s maximum exposure to credit risk is assessed by carrying

amounts of all nancial assets, see Note 25.

LIQUIDITY AND FINANCING RISK

Liquidity risk refers to the risk that the group will have problems meeting

payment commitments for nancial liabilities. Financing risk refers to

the risk that the group will not be able to raise sucient funding at a

reasonable cost.

Liquidity risk is low because the group’s nancial liabilities at the end of

2021 are short term and consist of accounts payable and accrued costs.

Payment for the vast majority is due within three months.

The nancing risk is assessed based on multi-year liquidity planning,

and is about whether the future cash ows are sucient to run planned

operations. In the event that there is a risk that they are not sucient, the

company will balance costs against future revenues in good time and/

or seek alternative nancing via borrowings or similar.

NOTE 3

ESTIMATES, ASSUMPTIONS AND ASSESSMENTS

When preparing the company’s nancial statements, a number of

assessments and estimates, as well as assumptions, have been made

that aect the application of accounting policies and the reported

amounts in the income statements and balance sheets. Actual out-

comes may dier from these estimates and assessments. Estimates

and assessments are continuously evaluated and based on historical

experience and other factors, including expectations of future events.

The estimates, assumptions and assessments are described in more

detail below.

VALUATION OF TAX LOSS CARRY-FORWARDS

The possibilities for activating deferred tax assets for tax loss carry-for-

wards are examined annually. Deferred tax assets are included only to the

extent that there are compelling reasons why they can be oset against

future taxable surpluses. For more information on this, see Note 16.

VALUATION OF SHARES IN GROUP COMPANIES

The parent company tests annually or more frequently whether there is

an indication of a decline in value and whether there is any impairment

requirement for shares in group companies. Recoverable amounts for

the shares in group companies have been determined by calculating

the value in use, which requires that comprehensive estimates and ass-

umptions must be made. Discounted forecast future cash ows over the

next four years have been calculated in these assumptions, taking into

account a discount rate of 8.4 percent after tax (10.54 percent before

tax). The calculation of discount rates has taken risk-free interest rates,

market risk premium and company-specic capital structure and the

current tax rate into consideration. Cash ow after the four-year period

(the test covers 20 years) is calculated on the basis of an initial forecast

growth rate of 47 percent, with a gradual de-escalation corresponding

to 10 percent per year. The calculated value in use has since been com-

pared with the carrying amount and this comparison shows that there

is no need for impairment. A sensitivity analysis where dierent discount

rates were simulated has been carried out. An increase in the discount

rate by ve percentage points would not entail any impairment requi-

rement. The result of the test shows a surplus and therefore there is no

impairment requirement for shares in group companies.

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 51

NOTES

2021 2020

Prot and loss items NA EUROW Other Total NA EUROW Other Total

Net sales 121 657 91 228 0 212 885 99 727 81 133 0 180 860

of which CERAMENT BVF 119 428 12 453 0 131 881 97 451 12 808 0 110 259

of which CERAMENT G and CERAMENT V 0 78 775 0 78 775 0 68 313 0 68 313

of which other 2 229 0 0 2 229 2 275 12 0 2 288

Cost of sales -7 882 -15 300 0 -23 182 -6 070 -13 186 0 -19 256

Gross prot 113 775 75 928 0 189 703 93 657 67 947 0 161 604

Selling commissions -38 571 0 0 -38 571 -31 598 0 0 -31 598

Other operating costs¹ -72 491 -63 328 0 -135 819 -78 880 -54 785 0 -133 665

Contribution 2 713 12 600 0 15 313 -16 821 13 162 0 -3 659

Other operating items² 0 0 -95 982 -95 982 0 0 -94 902 -94 902

Operating result 2 713 12 600 -95 982 -80 669 -16 821 13 162 -94 902 -98 561

Net nancial items 0 0 -1 168 -1 168 0 0 -440 -440

Loss before income tax 2 713 12 600 -97 150 -81 837 -16 821 13 162 -95 342 -99 001

NOTE 4

OPERATING SEGMENTS

GROUP 2021 2020

Cost for inventory items -22 249 -14 791

Personnel costs -140 020 -141 226

Depreciation and amortization of tangible and

intangible assets -8 276 -8 465

Sales commissions -38 571 -31 598

Other expenses -95 746 -95 529

Total -304 862 -291 609

Other expenses mainly concern external services, advertising & public relations,

travel expenses and exchange rate losses. Exchange rate losses amount to SEK

6,697 thousand (15,513).

NOTE 6

EXPENSES BY TYPE

NOTE 5

INTRAGROUP PURCHASES AND SALES

Intra-group purchases and sales amounted to SEK 347,838 thousand (321,455).

The parent company rendered services to group companies of SEK 43,646

thousand (39,371) and purchased services from group companies of SEK 36,625

thousand (30,470).

All intra-group dealings, income, expenses, gains or losses, which arise in

transactions between group companies are eliminated in total.

BONESUPPORT manages and monitors operations in the North America (NA)

and Europe & Rest of the World (EUROW) segments. The sales function follows

the segments, where each segment is managed by a responsible business

manager, including members of group management. Other functions are

organized mainly group-wide, although it is a minor development unit that

operates in the United States. The costs included in other operating items are

mainly costs for group functions that cannot be directly allocated to any of

the two operating segments. Costs for the option programs are not allocated

by segment, as the cost of these programs depends partly on external factors

such as valuation of the company. Therefore, a breakdown by segment could

lead to a non-fair allocation if an external factor aects with dierent impact per

segment. The contribution per segment is calculated as net sales minus directly

attributable operating costs (see denition above) for the segments.

Markets that delivered more than 10 percent of net sales during 2021 were United

States with SEK 121.9 million (99.7) and United Kingdom with SEK 38.1 million

(28.4). Net sales in Sweden amounted to SEK 7.9 million (7.9). No (0) customer

represented more than 10 percent of net sales.

The amounts in the table above are eliminated for group transactions. Inter

company sales from EUROW to NA amounted to SEK 91.6 million (79.3).

The group’s non-current assets are primarily based in Sweden.

1. Other operating costs comprise selling expenses and research & development costs directly attributable to a segment

2. Other operating items comprise administrative expenses, other operating income and expenses and selling expenses and research & development expenses not

directly attributable to a segment

52 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

NOTES

GROUP 2021 2020

Capitalized development expenses 955 823

Patents 328 329

Right of use assets 5 786 5 970

Equipment and tools 1 207 1 343

Total 8 276 8 465

Amortization and depreciation is included in cost of sales with SEK 1,740

NOTE 7

DEPRECIATION AND AMORTIZATION OF TANGIBLE

AND INTANGIBLE ASSETS

NOTE 9

PERSONNEL AVERAGE NUMBER

2021

Men Women Total

PARENT COMPANY:

Sweden 1 0 1

SUBSIDIARIES:

Sweden 12 28 40

Germany 5 7 12

USA 15 6 21

The Netherlands 2 1 3

Switzerland 1 0 1

United Kingdom 9 3 12

Italy 1 0 1

Denmark 0 1 1

Total subsidiaries 45 46 91

Total Group 46 46 92

GROUP PARENT COMPANY

2021 2020 2021 2020

Audit fees related to the

assignment 1 983 1 942 1 198 1403

Audit related fees 62 25 62 25

Total 2 045 1 967 1 260 1 428

Other auditors

Moore Kingston Smith

Audit fees related to the

assignment 236 228 0 0

Other assignments 12 58 0 0

Total 248 286 0 0

Frank Hirth UK

Audit fees related to the

assignment 0 121 0 0

Other assignments 0 675 0 0

Total 0 796 0 0

NOTE 8

COMPENSATION TO AUDITORS

The above are reported fees and compensation to auditors expensed during

the year. Compensation for consultations is reported in cases where the same

audit rm holds the audit assignment in the individual company. Audit fees

related to the assignment refer to the statutory audit of the annual report and

the administration of the Board of Directors and the managing director. Audit

related fees refer to the audit of management or nancial information to be

performed in accordance with statutes, articles of association, or agreements

not included in the audit assignment, which shall be concluded in a report,

certicate or other document intended for others than the client. Other fees are

consultations that cannot be attributed to any of the other categories.

2020

Men Women Total

PARENT COMPANY:

Sweden 1 0 1

SUBSIDIARIES:

Sweden 12 23 35

Germany 6 7 13

USA 16 6 22

The Netherlands 2 0 2

Switzerland 2 0 2

United Kingdom 7 3 10

Denmark 0 1 1

Total subsidiaries 45 40 85

Total Group 46 40 86

The number of employees in the tables above represents average full-time

equivalents. At the end of the nancial year, the Board of Directors was

composed of 4 (4) men and 1 (1) woman. The management comprised 6 (6)

men and 3 (3) women.

2021 2020

GROUP

Board &

CEO

Other

employees

Board &

CEO

Other

employees

Salary and other

compensation

Parent company 5 548 0 6 915 0

Subsidiaries 0 98 813 0 93 955

Total 5 548 98 813 6 915 93 955

NOTE 10

SALARY, OTHER COMPENSATION AND SOCIAL

SECURITY

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 53

NOTES

NOT E 11

COMPENSATION TO SENIOR EXECUTIVES AND RELATED PARTY TRANSACTIONS

Compensation to Chairman of the Board, Board of Directors and Senior Executives, Group

2021 2020

Salaries, fees Social security

Share-based

compensation Salaries, fees Social security

Share-based

compensation

Lennart Johansson¹ Chairman of the Board 400 -53 550 409 526 28

Håkan Björklund Director 157 49 0 195 61 0

Lars Lidgren Director 135 14 0 146 15 0

Björn Odlander Director 157 49 0 170 54 0

Tone Kvåle¹ Director 247 -13 27 268 214 28

Simon Cartmell Director until November 19, 2020 0 0 0 211 -118 -84

Emil Billbäck¹ CEO 4 228 840 1 127 5 700 4 206 1 137

Other senior executives¹ 8 (8) persons 14 901 3 842 1 161 12 359 4 131 1 155

Compensation to the Board of Directors in the table above, excluding the share-

based compensations, are fees that have been paid during 2021. In Note 10, fees

expensed regarding 2021 are reported. Accrued board fees amount to SEK 906

thousand (683). The guidelines for remuneration to senior executives adopted at

the Annual General Meeting 2021 are described in the Director’s report and the

Corporate Governance Report.

Bonus to the CEO is included in salaries and fees and amounts to SEK 965

thousand (2,527) and to other senior executives to SEK 1,650 thousand (1,121).

For the current CEO and other senior executives, the company pays pension

premiums, with the exception of one manager, who administers this himself.

The payments are made according to a scheme where 7 percent is calculated

on salaries up to 7.5 of the current price base, 24 percent on price base between

The amounts in the table do not include share-based remuneration. These

are included in Note 11. Social security costs include social security costs on

employee stock option benets.

Social security all employees 2021 2020

Parent company 1 321 2 365

(of which pension cost) (267) (253)

Subsidiaries 22 038 21 975

(of which pension cost) (7 062) (6 035)

Total 23 359 24 340

(of which pension cost) (7 329) (6 288)

NOTE 10, CONT’D

SALARY, OTHER COMPENSATION AND SOCIAL SECURITY

Compensation to the CEO is decided by the Board of Directors on a proposal from the

remuneration committee. The guidelines that were adopted 2021 and that described on

page 69, apply until further notice.

Senior executives during the year consisted of the CEO and an additional 8 (8) persons.

On December 31, 2021 the number of senior executives was 9 (9) including the CEO.

For the group management, market conditions apply to salaries and other employment

benets, which are approved by the remuneration committee.

Most employees have individual, variable bonus systems with measurable goals.

Follow-up and evaluation is done quarterly or yearly.

The CEO’s agreement can be terminated by either party with a notice period

of 6 (6) months. In case of termination on the part of the company, a severance

pay of 12 (12) months salary (and benets and average bonus for the last three

years will be paid). Other senior executives’ contracts have notice periods of up

to 6 (6) months.

7.5-20 and 16 percent on price base between 20-30. The pension schemes are

dierent since the senior executives, excluding the CEO, are based in 4 (4)

dierent countries. Pension premiums relating to the CEO were paid at SEK 267

thousand (253) and premiums to other senior executives were paid at SEK 1,531

thousand (1,080). Members of the Board have not received any pension.

During 2018, BONESUPPORT signed a consultancy agreement with the

previous Board Director Simon Cartmell’s company Route 2 Advisors Ltd. SEK 61

thousand (407) has been paid during the year. The agreement was terminated

during the rst quarter of 2021.

BONESUPPORT has reimbursed board member Björn Odlander for travel expenses

of SEK 0 thousand (9) through the company Odlander, Fredrikson & Co AB.

1. The social security for these persons includes change in the liability for social security contributions for active incentive programs.

54 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

NOTES

NOTE 12

EMPLOYEE STOCK OPTION PROGRAMS AND

PERFORMANCE SHARE PROGRAMS

VALUATION - PERFORMANCE SHARE

PROGRAM EMPLOYEES 2021/2023 Jul 12, 2021

Dividend -

Expected volatility 40%

Interest rate -0.28%

Valuation of the share (SEK) 71.74

Valuation model Black & Scholes/Monte Carlo

VALUATION - PERFORMANCE SHARE

PROGRAM BOARD 2021/2023 Jul 12, 2021

Dividend -

Expected volatility 40%

Interest rate -0.26%

Valuation of the share (SEK) 71.74

Valuation model Black & Scholes/Monte Carlo

VALUATION - PERFORMANCE SHARE

PROGRAM EMPLOYEES 2020/2023 Dec 16, 2020

Dividend -

Expected volatility 35% - 40%

Interest rate -0.23% - -0.39%

Valuation of the share (SEK) 39. 61

Valuation model Black & Scholes/Monte Carlo

VALUATION - PERFORMANCE SHARE

PROGRAM EMPLOYEES 2019/2022 Dec 10, 2019

Dividend -

Expected volatility 35%

Interest rate -0.32% - -0.57%

Valuation of the share (SEK) 27.10

Valuation model Black & Scholes/Monte Carlo

VALUATION - PERFORMANCE SHARE

PROGRAM EMPLOYEES 2018/2021 Nov 7, 2018

Dividend -

Expected volatility 35%

Interest rate -0.21%

Valuation of the share (SEK) 10.17

Valuation model Black & Scholes/Monte Carlo

VALUATION - PERFORMANCE SHARE

PROGRAM BOARD 2018/2021 Jun 20, 2018

Dividend -

Expected volatility 35%

Interest rate -0.21%

Valuation of the share (SEK) 10.17

Valuation model Black & Scholes/Monte Carlo

At the year end, there are three dierent employee stock option programs and

six performance share programs.

Employee stock option programs

Of the three employee stock option programs, two run over ten years and

expire 2022 and 2025 and one program runs over eight years and expires

2024. Each stock option gives the holder the right to acquire 0.2 ordinary

share in BONESUPPORT when exercising the option. This at a price of 0.125

SEK, equivalent to 0.625 SEK per share, in the rst two programs and 5.30 SEK,

equivalent to 26.50 SEK per share, in the third program. The employee stock

options are vested according to a schedule in each program. A condition for

allotment of options is employment or a contractual relationship with the

company at each vesting date. Of the allocated 25.7 million options, 21.6 million

(21.6) options were fully vested before the end of the year.

Performance share programs

There are four programs for newly recruited employees and two programs for two

Directors. The programs run as follows with the below end dates:

- The program for employees decided at the annual general meeting in 2018

runs until 31 December 2021;

- The program for two board members decided at the annual general meeting

in 2018 runs until 31 December 2021;

- The program for employees decided at the annual general meeting in 2019

runs until 31 December 2022;

- The program for employees decided at the annual general meeting in 2020

runs until 31 December 2023;

- The program for employees decided at the annual general meeting in 2021

runs until 31 December 2023; and

- The program for two board members decided at the annual general meeting

in 2021 runs until the date of the annual general meeting in 2024.

In each program for employees decided at the annual general meetings in

2018, 2019 and 2020, each savings share gives the opportunity to be allotted

to the employees a maximum of two, three or four performance shares with-

out payment depending on share price development and the company’s

development in terms of sales and EBITDA during the duration of the program.

In the program for two board members decided at the annual general meeting

in 2018, each savings share gives the opportunity to be allotted a maximum of

two performance shares without payment depending on share price develop-

ment. The performance shares were issued in the form of class C-shares with a

subscription price and quota value of SEK 0.625 per share.

In the program for employees decided at the annual general meeting in 2021,

each savings share gives the opportunity to be allotted a maximum of six

performance shares without payment depending on share price development

and the company’s development in terms of sales and EBITDA during the

duration of the program.

In the program for two board members decided at the annual general meeting

in 2021, each savings share gives the opportunity to be allotted a maximum

of three performance shares without payment depending on share price

development.

The annual general meeting in May 2021 authorized the board to enter a share

swap-agreement with a third party bank to full the company’s commitments

under the incentive programs LTI 2021 and LTI 2021 Board and to secure social

security charges for these programs. The mandate wasexercisedduring the

third quarter.

Employee stock options and performance shares are valued at fair value at the

date of allocation. The total cost is distributed over the vesting period. At the

end of the vesting period, a reduction in sta turnover is assumed, which entails

an increased cost. The cost is accounted for as personnel cost and is credited

to equity. The social security cost is revalued at fair value. When the options are

exercised, the company issues new shares. Payments received on behalf of the

shares issued are credited to equity.

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 55

NOTES

VALUATION - EMPLOYEE STOCK OPTION

PROGRAM 2012/2022 Jan 1, 2012

Dividend -

Expected volatility 40%

Interest rate 0%

Subscription price (SEK) - recalculated after share

consolidation 5:1 0.625

Valuation model Black & Scholes

VALUATION - EMPLOYEE STOCK OPTION

PROGRAM 2016/2024 Nov 9, 2016

Dividend -

Expected volatility 50%

Interest rate 0%

Subscription price (SEK) - recalculated after share

consolidation 5:1 26.50

Valuation model Black & Scholes

CHANGES DURING THE YEAR (NUMBER) -

PERFORMANCE SHARE PROGRAMS 2021 2020

Outstanding at January 1 1 195 000 1 225 000

Granted during the year 606 000 110 000

Cancelled during the year -10 000 -140 000

Outstanding at December 31 1 791 000 1 195 000

Exercisable at December 31 227 134 0

CHANGES DURING THE YEAR (NUMBER) -

EMPLOYEE STOCK OPTION PROGRAM

2016/2024 2021 2020

Outstanding at January 1 499 062 2 210 112

Adjustment during the year 50 000 0

Cancelled during the year 0 -169 167

Exercised during the year -96 771 -1 541 883

Outstanding at December 31 452 291 499 062

Exercisable at December 31 452 291 456 353

CHANGES DURING THE YEAR (NUMBER) -

EMPLOYEE STOCK OPTION PROGRAM

2012/2022 2021 2020

Outstanding at January 1 981 125 2 766 908

Cancelled during the year 0 -25 000

Exercised during the year -100 000 -1 760 783

Outstanding at December 31 881 125 981 125

Exercisable at December 31 881 125 981 125

Weighted average exercise price for the options that were exercised during the

year was SEK 2.67 (0.63) per share.

The expected maturity of the options is based on current expectations and is not

necessarily an indication of future actual exercising. The valuation of the share

is based on the latest issue price and is xed. The total cost will change as social

security is calculated on the fair value and a new fair value calculation is made

quarterly. Volatility, at end of period 40 percent (40), is a conservative valuation

of market risk and is based on peer group data due to the share being traded a

limited period of time.

During 2021, the cost of employee stock option plans, excluding social security

contributions, was recognized as operating expense amounting to SEK 7,365

thousand (3,729). For information about the part that regards Board Members and

the management team, see Note 11. The social security contributions amounted

to a reduced expense of SEK 1,810 thousand, compared to an expense of SEK

4,926 thousand previous year. Liability for social security contributions amounts to

SEK 6,290 thousand (8,100).

GROUP PARENT COMPANY

2021 2020 2021 2020

Exchange rate gains 10 253 10 616 121 1 642

Government refunds

relating to COVID-19 348 558 0 0

Other 707 1 014 0 0

Total 11 308 12 188 121 1 642

NOTE 13

OTHER OPERATING INCOME

GROUP PARENT COMPANY

2021 2020 2021 2020

Exchange rate losses 6 697 13 544 1 659 331

Other 7 3 0 0

Total 6 704 13 547 1 659 331

NOTE 14

OTHER OPERATING EXPENSES

NOTE 15

FINANCIAL ITEMS

PARENT COMPANY 2021 2020

Interest income, group 5 565 4 624

Interest expenses, group -1 272 -966

Net nancial items 4 293 3 658

NOTE 16

INCOME TAX

GROUP

The following components are included in the tax

expense of the year: 2021 2020

Current tax on loss for the year -3 636 -2 630

Adjustment of taxes attributable to previous years -58 219

Current tax expense -3 694 -2 411

Deferred tax related to changes in temporary

dierences 0 0

Reported tax -3 694 -2 411

Reconciliation between reported tax and tax expense

based on applicable tax rate: 2021 2020

Loss before income tax -81 837 -99 000

Tax according to the applicable tax rate 20.6% (21.4) 16 858 21 186

Dierence between Swedish and foreign tax rates -721 -540

Non tax-deductible items -5 771 -918

Non taxable income 0 232

Costs that are to be deducted but which are not

included in the reported result 0 3 454

Current tax attributable to prior years -58 219

Loss carry forward for which no deferred tax asset has

been recognized -14 002 -26 044

Tax expense for the year -3 694 -2 411

56 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

NOTES

Changes in inventory are classied as cost of sales and amount to a negative

cost of SEK 176 thousand (negative cost of 2,200).

Impairment write-down of inventory to net realizable value due to products

with short durability or other impairment risk, amounts to SEK 15 thousand (0).

This is done as the net sale value is lower than the acquisition value.

NOTE 17

INVENTORIES

GROUP Dec 31, 2021 Dec 31, 2020

Opening accumulated acquisition value 6 949 6 824

Investments for the year 2 608 346

Translation dierence 163 -221

Closing accumulated acquisition value 9 720 6 949

Opening accumulated depreciation -3 786 -2 624

Depreciation for the year -1 207 -1 343

Translation dierence -153 181

Closing accumulated depreciation -5 146 -3 786

Closing book value 4 574 3 163

NOTE 19

EQUIPMENT AND TOOLS

PARENT COMPANY Dec 31, 2021 Dec 31, 2020

Opening accumulated acqusition value 1 129 438 1 024 438

Shareholders' contribution 125 000 105 000

Closing accumulated acquisition value 1 254 438 1 129 438

Opening accumulated write-down -297 786 -297 786

Closing accumulated write-down -297 786 -297 786

Closing book value 956 652 831 652

NOTE 20

PARTICIPATIONS IN GROUP COMPANIES

GROUP

Capitalized development expenses: Dec 31, 2021 Dec 31, 2020

Opening accumulated acquisition value 15 087 13 561

Disposals for the year 0 -787

Investments for the year 808 2 313

Closing accumulated acquisition value 15 896 15 087

Opening accumulated amortization -8 972 -8 936

Disposals for the year 0 787

Amortization for the year -955 -823

Closing accumulated amortization -9 927 -8 972

Closing book value 5 968 6 115

NOTE 18

INTANGIBLE ASSETS

Patents: Dec 31, 2021 Dec 31, 2020

Opening accumulated acquisition value 3 283 3 283

Investments for the year 0 0

Closing accumulated acquisition value 3 283 3 283

Opening accumulated amortization -558 -229

Amortization for the year -328 -329

Closing accumulated amortization -886 -558

Closing book value 2 397 2 725

PARENT COMPANY

Reported tax expense: 2021 2020

Tax expense of the year 0 0

Reconciliation between reported tax and tax expense

based on applicable tax rate: 2021 2020

Loss before income tax -3 141 -3 122

Tax according to the applicable tax rate 20.6% (21.4) 647 668

Non tax-deductible items -6 -2

Costs that are to be deducted but which are not

included in the reported result 0 3 454

Loss carry forward for which no deferred tax asset has

been recognized -641 -4 120

Tax expense for the year 0 0

The parent company's prevailing tax rate is 20.6 percent (21.4).

Reported tax expense relate to foreign subsidiaries, mainly the U.S. company

that reports positive result before tax. Tax eect from non-deductible costs

primarily relates to intercompany prot in inventory and costs for employee

stock option programs. No tax is reported in the comprehensive income or

directly against equity.

The group’s total loss carry forwards as per December 31, 2021 amount to

approximately SEK 1,081 million (1,013) whereof SEK 117 million (114) refers

to the parent company. The tax loss carry forwards have no xed maturity.

Deferred tax assets attributable to the loss carry forward has been valued at

zero as it is currently not possible to assess when tax losses carry forwards can

be utilized. Despite of the positive development at the present, the probability

of the company recognizing prots during the near future is small. When the

outlook for this is dierent, the company will consider if there are compelling

reasons to recognize a deferred tax asset.

NOTE 16, CONT’D

INCOME TAX

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 57

NOTES

Share of

equity %

Number of

Book value

Dec 31, 2021

Book value

Dec 31, 2020

Corporate

reg. no.

Registered

oce

BONESUPPORT AB 100 1 000 956 652 831 652 556800-9939 Lund

SUBSIDIARIES OF BONESUPPORT AB:

Share of

equity %

Number of

Book value

Dec 31, 2021

Book value

Dec 31, 2020

Corporate

reg. no.

Registered

oce

BONESUPPORT Inc. 100 100 69 69 98-0539754 Delaware

BONESUPPORT GmbH 100 1 000 0 0 HRB 80228 Frankfurt

BONESUPPORT BV 100 18 000 183 183 34377023 Amsterdam

BONESUPPORT Switzerland GmbH 100 20 000 171 171 CHE-474.771.411 Zürich

BONESUPPORT UK Ltd 100 1 0 0 10352673 London

BONESUPPORT ApS 100 500 69 69 40081135 Kongens Lyngby

BONESUPPORT, S.L.U. 100 3 500 36 36 B67244988 Barcelona

BONESUPPORT SRL 100 10 000 102 0 11708750960 Milano

BONESUPPORT Incentive AB 100 100 000 840 840 556739-7780 Lund

NOTE 21

TRADE RECEIVABLES AND OTHER RECEIVABLES

GROUP PARENT COMPANY

Dec 31, 2021 Dec 31, 2020 Dec 31, 2021 Dec 31, 2020

Trade receivables 38 413 32 108 0 0

Other receivables 6 126 5 317 172 067 132 427

Total 44 539 37 425 172 067 132 427

Other receivables

above refer to: Dec 31, 2021 Dec 31, 2020 Dec 31, 2021 Dec 31, 2020

Receivables on

group companies 0 0 172 020 132 427

VAT receivable 2 247 2 021 0 0

Tax receivable 1 269 334 47 0

Other nancial

receivables 514 436 0 0

Other 2 097 2 526 0 0

Total 6 126 5 317 172 067 132 427

Group's trade receivables per currency: Dec 31, 2021 Dec 31, 2020

USD 21 944 17 932

EUR 7 284 5 664

GBP 6 311 4 428

DKK 1 095 1 803

SEK 964 1 205

CHF 690 1 076

CAD 125 0

Total 38 413 32 108

No provision for expected credit losses have been made for other receivables

since it is considered immaterial. Receivables on group companies are tested for

impairment together with shares in group companies.

The four largest customers represent 10 percent (13) of total trade receivables.

The single largest customer represents 4 percent (5).

GROUP

Credit risk exposure: Dec 31, 2021 Dec 31, 2020

Trade receivables not past due, gross amounts 23 663 19 176

Expected credit loss 0 0

(Expected credit loss, %) 0% 0%

Trade receivables past due, gross amounts 14 844 13 001

Expected credit loss -94 -69

(Expected credit loss, %) 1% 1%

Total trade receivables 38 413 32 108

Credit risk exposure, per credit rating: Dec 31, 2021 Dec 31, 2020

Low 38 413 32 108

Medium 0 0

High 94 69

Credit risk provision -94 -69

Total carrying amount 38 413 32 108

Principles for measurement of expected credit losses are described in Note 1.

Changes in credit risk provision: 2021 2020

As of January 1 69 930

Provision for bad debts 22 69

Reversal of previous provisions for bad debts 0 -833

Recovery of provision for bad debts 0 -97

Translation dierence 3 -1

As of December 31 94 69

NOTE 20, CONT’D

PARTICIPATIONS IN GROUP COMPANIES

The group’s customers are mainly hospitals and clinics. Credit risk is considered

low for the vast majority of customers. The group shows a history of very low

realised credit losses.

Due date for trade receivables past due but not

written o: Dec 31, 2021 Dec 31, 2020

Less than 1 month 7 653 5 521

1-3 months 3 649 4 668

More than 3 months 3 448 2 743

Total 14 750 12 932

58 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

NOTES

GROUP PARENT COMPANY

Dec 31,

2021

Dec 31,

2020

Dec 31,

2021

Dec 31,

2020

Prepaid expenses

Prepaid insurance 1 291 1 138 533 513

Other prepaid

expenses 1 928 2 221 127 120

Total 3 219 3 359 660 633

Deferred income

Deferred income 2 492 1 299 0 0

Total 2 492 1 299 0 0

Accrued expenses

Accrued social

security contributions

for employee stock

options 6 290 8 100 2 781 3 416

Accrued bonus

including social

security contributions 8 903 8 234 1 218 1 572

Accrued holiday

pay including social

security contributions 5 667 5 555 516 622

Other accrued social

security contributions 1 825 1 525 386 361

Accrued pension 1 272 1 822 65 61

Accrued board fees 906 683 906 683

Accrued audit

expenses 812 800 435 260

Accrued expenses for

received goods 578 654 0 0

Accrued consultancy

expenses 493 987 0 10

Other accrued

expenses 3 437 2 511 25 94

Total 30 183 30 871 6 332 7 079

NOTE 22

ACCRUALS AND PREPAID ITEMS

NOTE 24

PROVISIONS

The group has capitalized direct pensions that has been presented net in the

balance sheet. Payroll tax relating to the pensions has been recorded as a provision.

2021 2020

As of January 1 329 305

Re evaluation 34 24

As of December 31 363 329

NOTE 23

SHARE CAPITAL AND EARNINGS PER SHARE

Total number of shares, quotient value 0.625 SEK (0.625) 65 454 672

Number of shares December 31, 2019 52 521 342

Share issue, C-shares 730 000

Share issue, ordinary shares 10 500 000

Conversion of employee stock options 660 532

Conversion of warrants 587 348

Number of shares December 31, 2020 64 999 222

Share issue, C-shares 55 000

Conversion of employee stock options 39 354

Conversion of warrants 361 096

Number of shares December 31, 2021 65 454 672

Number of votes 64 293 672

EARNINGS PER SHARE - BEFORE DILUTION

Earnings per share before dilution is calculated using the following results and

number of shares:

2021 2020

Loss for the year, SEKt -85 531 -101 412

Weighted average number of shares, thousands 63 999 59 081

Earnings per share before dilution, SEK -1.34 -1.72

The total number of shares at the end of the year is 65,454,672 (64,999,222) of which

64,164,672 (63,764,222) are ordinary shares and 1,290,000 (1,235,000) are series

C-shares. The share capital amounts to SEK 40,909 thousand (40,625). During 2021,

39,354 (660,532) shares were issued from exercise of employee stock options.

EARNINGS PER SHARE AFTER DILUTION

BONESUPPORT has in total 266,685 (657,135) potential shares in form of

employee stock options. Of the number of potential shares as of end 2021, 0

(361,096) are warrants.

As the result is negative, dilution does not aect earnings per share.

SHARE SWAP

In accordance with a resolution from the 2021 Annual General Meeting,

BONESUPPORT’s Board of Directors in 2021 has used the authorization to enter

into a share swap agreement with a third party in order to ensure the company’s

delivery of performance shares to participants in the long-term incentive

programs decided by the AGM, and to hedge such expenses as social security

contributions, from a cash ow perspective. A total of 786,000 shares have been

hedged to an average value of SEK 79.30 per share, a total of SEK 62,333 thousand.

The share swap is an instrument in which the company pays an amount in

advance to a counterparty for the right to receive the fair value of a certain

number of its shares in cash at a given time.

The agreement has aected the group’s cash ow with an outow of SEK

62,333 thousand. The payment was made on July 22, 2021. In the group, the

transaction has been recognized in line with the acquisition of own shares

and the transaction has thus been reported at acquisition value in unrestricted

equity. As it is BONESUPPORT AB that has entered into the agreement,

BONESUPPORT Holding AB reports the amount as a non-current receivable from

subsidiaries instead of against restricted equity.

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 59

NOTES

NOTE 25

CLASSIFICATION OF FINANCIAL INSTRUMENTS

The group’s nancial assets and liabilities valued at amortized cost:

Dec 31, 2021 Dec 31, 2020

Financial assets:

Trade receivables 38 413 32 108

Other receivables 514 436

Cash and cash equivalents 206 464 353 737

Financial liabilities:

Leasing debt 21 422 10 480

Trade payables 18 719 12 680

Accrued expenses 6 349 5 636

The parent company’s nancial assets and liabilities:

Dec 31, 2021 Dec 31, 2020

Financial assets:

Participations in group companies 956 652 831 652

Receivables on group companies 172 020 132 427

Cash 181 275 338 114

Financial liabilities:

Trade payables 141 550

Accrued expenses 1 368 1 047

NOTE 26, CONT’D

LEASING

All nancial liabilities are valued at amortized cost. The fair value of nancial

assets and liabilities is estimated to be in accordance with the booked value

due to the short maturity. The parent company values all nancial assets except

participations in group companies at amortized cost. Accrued expenses are

specied in Note 22. For information on interest income on nancial assets,

see Note 15. Losses on nancial assets, recognized in the income statement as

credit losses are described in Note 21.

The right of use assets and the leasing debt and how their book values have

changed during the year is summarized below:

NOTE 26

LEASING

The group has lease agreements with Första Fastighets AB IDEON (Wihlborgs) in

Sweden and John Hancock Life Insurance Company/John Hancock Life & Health

Insurance Company in the U.S. for the lease of oce and warehouse space.

During the year, the group has extended its agreement with Första Fastighets

AB IDEON with another ve years, until the end of August 2027.

In addition to the agreements relating to premises, the group has contracts

with a number of suppliers for car leasing and a leasing contract with ATEA

regarding the rental of computers and other IT equipment. All items are used in

the company’s daily operations. The lease period for premises extends between

three and ve years, for cars between three and four years and for computers

and other IT equipment for three years.

The terms of the agreement are market-based and none of the contracts require

the group to maintain any nancial key gures.

No leasing contracts last longer than ve years.

GROUP - RIGHT

OF USE ASSETS Buildings Cars Equipment Total

Acquisition value

Opening accumulated

acquisition value

January 1, 2020 12 571 3 202 306 16 079

New leasing objects 3 753 2 150 1 522 7 425

Terminated agreements -119 -99 0 -218

Closing accumulated

acquisition value

December 31, 2020 16 205 5 253 1 828 23 286

Opening accumulated

acquisition value

January 1, 2021 16 205 5 253 1 828 23 286

Re evaluation of agreement 13 847 -258 10 13 599

New leasing objects 0 585 485 1 070

Terminated agreements -6 841 -2 050 -22 -8 913

Translation dierence 825 58 0 883

Closing accumulated

acquisition value

December 31, 2021 24 036 3 588 2 301 29 925

Depreciation for the

year

Opening accumulated

depreciation value

January 1, 2020 -4 339 -1 253 -102 -5 694

Terminated agreements 119 99 0 218

Depreciation for the year -3 879 -1 726 -365 -5 970

Closing accumulated

depreciation

December 31, 2020 -8 099 -2 880 -467 -11 446

Opening accumulated

depreciation value

January 1, 2021 -8 099 -2 880 -467 -11 4 46

Terminated agreements 6 842 1 921 22 8 785

Depreciation for the year -3 905 -1 268 -613 -5 786

Translation dierence 834 196 -4 1 026

Closing accumulated

depreciation

December 31, 2021 -4 328 -2 031 -1 062 -7 421

Closing book value

December 31, 2020 8 106 2 373 1 361 11 840

Closing book value

December 31, 2021 19 708 1 557 1 239 22 504

60 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

NOTES

NOTE 28

ITEMS NOT INCLUDED IN THE CASH FLOW

GROUP - ITEMS NOT INCLUDED

IN CASH FLOW 2021 2020

Depreciation regarding right of use assets 5 786 5 970

Other depreciation and amortization 2 490 2 495

Costs for employee incentive programs 7 365 3 729

Unrealized exchange rate dierences -8 293 8 531

Write-down on trade receivables 74 32

Other -665 24

Total 6 757 20 781

NOTE 29

EVENTS AFTER THE CLOSING DAY

NOTE 26, CONT’D

LEASING

NOTE 27

PLEDGED SECURITIES AND CONTINGENT

LIABILITIES

PLEDGED SECURITIES

The U.S. subsidiary BONESUPPORT Inc. has provided a guarantee for its rented

facilities of USD 56 thousand (56), corresponding to SEK 506 thousand (460).

The parent company guarantees a corresponding amount.

BONESUPPORT AB has capital-invested direct pensions amounting to SEK 979

thousand (979). The parent company has pledged collateral amounting to the

corresponding amount.

At the end of 2021 and 2020, the group and the parent company had no other

contingent liabilities.

The war in Ukraine has created unrest and insecurity in the world. The business

impact is dicult to predict, but higher shipping costs and higher prices for

input goods are likely eects under prevailing market conditions.

NOTE 30

PROPOSAL FOR APPROPRIATION 

PARENT COMPANY

SEK

Unrestricted equity in the

parent company Dec 31, 2021 Dec 31, 2020

Share premium reserve 1 563 670 389 1 557 639 419

Retained earnings -333 110 703 -329 954 292

Net loss for the year -3 141 005 -3 122 036

Total 1 227 418 682 1 224 563 092

The Board of Directors propose that the share premium reserve, retained

earnings and net loss for the year should be carried forward. The proposal will

be presented at the Annual General Meeting on May 19, 2022.

The amounts with which leasing has been reported in the income statement

are as follows:

GROUP 2021 2020

Depreciation right of use assets 5 786 5 970

Interest expense for leasing debt 1 038 437

Total 6 824 6 407

The parent company is not engaged in any lease contracts.

Leasing is included in the group’s total cash ow with SEK 1,038 thousand

(437) regarding interest payments and SEK 6,546 thousand (5,509) regarding

repayment of borrowings.

GROUP - LEASING DEBT 2021 2020

Opening balance 10 480 0

Re evaluation of agreement 13 847 0

Debt for new leasing objects 835 7 426

Disposal -130 0

Repayment of debt -5 509 -7 768

Interest expense 1 038 437

Translation dierence 861 0

Closing balance 21 422 10 480

of which non-current leasing debt 16 152 5 622

of which current leasing debt 5 270 4 858

When calculating the liability of remaining payments, an interest rate of 6 percent

(6) has been applied as discount rate. As the group has no external loans, the

marginal borrowing rate has been based on discussions with the group’s main

bank. After discussing with the external lenders, a reasonable borrowing rate for

a real estate loan has been evaluated. A development company carries a high risk

premium why 6 percent has been considered reasonable.

The group’s leasing debts have the following, undiscounted maturities:

GROUP - LEASING DEBT PER MATURITY

Dec 31,

2021

Dec 31,

2020

Within one year 6 686 6 321

Between one and two years 6 213 4 947

Between two and three years 4 315 2 340

Between three and four years 3 262 1 053

Between four and ve years 3 250 0

Between ve and six years 2 437 0

Sum 26 163 14 661

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 61

THE BOARD’S ASSURANCE

Lund April 13, 2022

Lennart Johansson

Chairman of the Board

Håkan Björklund

Board member

Tone Kvåle

Board member

Lars Lidgren

Board membert

Björn Odlander

Board member

Emil Billbäck

CEO

Our audit report was delivered on April 13, 2022

Ernst & Young AB

Ola Larsmon

Authorized Public Accountant

The Board of Directors and the CEO assure that the consolidated

accounts have been prepared in accordance with international accoun-

ting standards IFRS as adopted by the EU and give a true and fair view of

the group’s position and results. The Annual report has been prepared

in accordance with generally accepted accounting standards and gives

a true and fair view of the parent company’s position and results.

The Annual report of the group and the parent company gives a true

and fair view of the development and the group’s and the parent com-

pany’s operations, position and results, and describes signicant risks

and uncertainties facing the parent company and the companies that

are part of the group.

THE BOARD’S ASSURANCE

62 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

AUDITOR’S REPORT

REPORT ON THE ANNUAL ACCOUNTS AND CONSOLIDATED ACCOUNTS

Opinions

We have audited the annual accounts and consolidated accounts

of BONESUPPORT HOLDING AB (publ) for the year 2021. The annual

accounts and consolidated accounts of the company are included on

pages 27-61 in this document.

In our opinion, the annual accounts have been prepared in accordance

with the Annual Accounts Act and present fairly, in all material respects,

the nancial position of the parent company as of 31 December 2021

and its nancial performance and cash ow for the year then ended in

accordance with the Annual Accounts Act. The consolidated accounts

have been prepared in accordance with the Annual Accounts Act and

present fairly, in all material respects, the nancial position of the group

as of 31 December 2021 and their nancial performance and cash

ow for the year then ended in accordance with International Finan-

cial Reporting Standards (IFRS), as adopted by the EU, and the Annual

Accounts Act. The statutory administration report is consistent with the

other parts of the annual accounts and consolidated accounts.

We therefore recommend that the general meeting of shareholders

adopts the income statement and balance sheet for the parent com-

pany and the group.

Our opinions in this report on the annual accounts and consolidated

accounts are consistent with the content of the additional report that

has been submitted to the parent company’s audit committee in accor-

dance with the Audit Regulation (537/2014) Article 11.

Basis for Opinions

We conducted our audit in accordance with International Standards on

Auditing (ISA) and generally accepted auditing standards in Sweden.

Our responsibilities under those standards are further described in the

Auditor’s Responsibilities section. We are independent of the parent

company and the group in accordance with professional ethics for

accountants in Sweden and have otherwise fullled our ethical respon-

sibilities in accordance with these requirements. This includes that,

based on the best of our knowledge and belief, no prohibited services

referred to in the Audit Regulation (537/2014) Article 5.1 have been pro-

vided to the audited company or, where applicable, its parent company

or its controlled companies within the EU.

We believe that the audit evidence we have obtained is sucient and

appropriate to provide a basis for our opinions.

KEY AUDIT MATTERS

Key audit matters of the audit are those matters that, in our professional

judgment, were of most signicance in our audit of the annual accounts

and consolidated accounts of the current period. These matters were

addressed in the context of our audit of, and in forming our opinion

thereon, the annual accounts and consolidated accounts as a whole,

but we do not provide a separate opinion on these matters. For each

matter below, our description of how our audit addressed the matter is

provided in that context.

We have fullled the responsibilities described in the Auditor’s respon-

sibilities for the audit of the nancial statements section of our report,

including in relation to these matters. Accordingly, our audit included

the performance of procedures designed to respond to our assessment

of the risks of material misstatement of the nancial statements. The

results of our audit procedures, including the procedures performed to

address the matters below, provide the basis for our audit opinion on

the accompanying nancial statements.

AUDITOR’S REPORT

TO THE GENERAL MEETING OF THE SHAREHOLDERS OF BONESUPORT HOLDING AB

PUBL, CORPORATE IDENTITY NUMBER 5568022171

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 63

AUDITOR’S REPORT

Revenue recognition

Other Information than the annual accounts and consolidated

accounts

This document also contains other information than the annual accounts

and consolidated accounts and is found on pages 1-26, 67 and 72-76.

The remuneration report for the nancial year 2020, which will be issued

after the date of this auditor’s report, also constitutes other information.

The Board of Directors and the Managing Director are responsible for

this other information.

Our opinion on the annual accounts and consolidated accounts does

not cover this other information and we do not express any form of

assurance conclusion regarding this other information.

In connection with our audit of the annual accounts and consolidated

accounts, our responsibility is to read the information identied above

and consider whether the information is materially inconsistent with

the annual accounts and consolidated accounts. In this procedure we

also take into account our knowledge otherwise obtained in the audit

and assess whether the information otherwise appears to be materially

misstated.

If we, based on the work performed concerning this information, con-

clude that there is a material misstatement of this other information, we

are required to report that fact. We have nothing to report in this regard.

Description

Net sales for 2021 amounts to KSEK 212.885 in the consolidated

income statement. The revenue recognition principles are descri-

bed in Note 1. Revenues are reported based on the compensation

expected to be received by the group in exchange for transfer of

promised goods or services to a customer, exclusive of any amounts

collected on behalf of third parties (such as sales taxes), at the point

at which the control over the good has transferred to the custo-

mer. The revenues arise primarily from one revenue stream, sales

of goods, via three channels with dierent sales conditions; sales

in the United States with a combination of sales entity and distri-

butors, direct sales in six countries/regions in Europe and sales via

distributors on all other markets. We have thus considered revenue

recognition to represent a key audit matter.

A description of the principles for revenue recognition is included in

Note 1 and information on operating segments in Note 4.

How our audit addressed this key audit matter

We have evaluated the company’s revenue recognition process

through our audit. Amongst other we have tested the company’s

recorded revenue transactions, audited credit notes and accounts

receivable, performed data analytics and performed analytical

review procedures. Moreover, we have analyzed sales compared to

the prior year and movements in the recorded revenues compared

to expectations, audited customer agreements, conducted sample

tests on accruals at nancial statement closing and conducted tests

of incoming payments.

We have audited disclosures in the annual report.

Shares in subsidiaries

Description

The carrying amount of shares in subsidiaries per 31 December 2021

amounts to KSEK 956.652 in the parent company’s balance sheet,

which corresponds to 73% of total assets in the parent company.

The company annually and at indication of impairment that repor-

ted values do not exceed the estimated recoverable amount. The

recoverable amount is determined by a present value calculation

of future cash ows. Future cash ows are based on management’s

forecasts and include a number of assumptions, including earnings,

growth, investment needs and discount rates.

Changes in assumptions have a major impact on the calculation of

the recoverable amount and the assumptions applied by the com-

pany may therefore be of major importance for the assessment of

impairment. We have therefore considered the reporting of shares

in subsidiaries as a key audit matter.

A description of the impairment test is included in the section on

assessments, estimates and assumptions in Note 3 and information

about shares in subsidiaries is included in Note 20.

How our audit addressed this key audit matter

In our audit we have evaluated and tested the company’s process

for establishing impairment tests, amongst other by evaluating

accuracy in previous forecasts and assumptions. We have also made

comparisons with other companies to evaluate the fairness of future

cash ows and growth assumptions, and with the help of our valua-

tion specialists evaluated the applied discount rate and assumptions

about long-term growth. Moreover, we have examined the model

and method for carrying out impairment test.

We have audited disclosures in the annual report.

64 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

AUDITOR’S REPORT

When we read the remuneration report, if we conclude that there is

a material misstatement therein, we are required to communicate the

matter with the Board of Directors and require a correction.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors and the Managing Director are responsible for

the preparation of the annual accounts and consolidated accounts

and that they give a fair presentation in accordance with the Annual

Accounts Act and, concerning the consolidated accounts, in accor-

dance with IFRS as adopted by the EU. The Board of Directors and the

Managing Director are also responsible for such internal control as they

determine is necessary to enable the preparation of annual accounts

and consolidated accounts that are free from material misstatement,

whether due to fraud or error.

In preparing the annual accounts and consolidated accounts, The Board

of Directors and the Managing Director are responsible for the assess-

ment of the company’s and the group’s ability to continue as a going

concern. They disclose, as applicable, matters related to going concern

and using the going concern basis of accounting. The going concern

basis of accounting is however not applied if the Board of Directors

and the Managing Director intends to liquidate the company, to cease

operations, or has no realistic alternative but to do so.

The Audit Committee shall, without prejudice to the Board of Director’s

responsibilities and tasks in general, among other things oversee the

company’s nancial reporting process.

Auditor’s responsibility

Our objectives are to obtain reasonable assurance about whether the

annual accounts and consolidated accounts as a whole are free from

material misstatement, whether due to fraud or error, and to issue an

auditor’s report that includes our opinions. Reasonable assurance is a

high level of assurance, but is not a guarantee that an audit conducted

in accordance with ISAs and generally accepted auditing standards in

Sweden will always detect a material misstatement when it exists. Miss-

tatements can arise from fraud or error and are considered material if,

individually or in the aggregate, they could reasonably be expected to

inuence the economic decisions of users taken on the basis of these

annual accounts and consolidated accounts.

As part of an audit in accordance with ISAs, we exercise professional

judgment and maintain professional skepticism throughout the audit.

We also:

- Identify and assess the risks of material misstatement of the annual

accounts and consolidated accounts, whether due to fraud or error,

design and perform audit procedures responsive to those risks, and

obtain audit evidence that is sucient and appropriate to provide a

basis for our opinions. The risk of not detecting a material missta-

tement resulting from fraud is higher than for one resulting from

error, as fraud may involve collusion, forgery, intentional omissions,

misrepresentations, or the override of internal control.

- Obtain an understanding of the company’s internal control relevant

to our audit in order to design audit procedures that are appropri-

ate in the circumstances, but not for the purpose of expressing an

opinion on the eectiveness of the company’s internal control.

- Evaluate the appropriateness of accounting policies used and the

reasonableness of accounting estimates and related disclosures

made by the Board of Directors and the Managing Director.

- Conclude on the appropriateness of the Board of Directors’ and the

Managing Director’s use of the going concern basis of accounting

in preparing the annual accounts and consolidated accounts. We

also draw a conclusion, based on the audit evidence obtained, as

to whether any material uncertainty exists related to events or con-

ditions that may cast signicant doubt on the company’s and the

group’s ability to continue as a going concern. If we conclude that a

material uncertainty exists, we are required to draw attention in our

auditor’s report to the related disclosures in the annual accounts

and consolidated accounts or, if such disclosures are inadequate,

to modify our opinion about the annual accounts and consolida-

ted accounts. Our conclusions are based on the audit evidence

obtained up to the date of our auditor’s report. However, future

events or conditions may cause a company and a group to cease to

continue as a going concern.

- Evaluate the overall presentation, structure and content of the

annual accounts and consolidated accounts, including the disclo-

sures, and whether the annual accounts and consolidated accounts

represent the underlying transactions and events in a manner that

achieves fair presentation.

- Obtain sucient and appropriate audit evidence regarding the

nancial information of the entities or business activities within the

group to express an opinion on the consolidated accounts. We are

responsible for the direction, supervision and performance of the

group audit. We remain solely responsible for our opinions.

We must inform the Board of Directors of, among other matters, the

planned scope and timing of the audit. We must also inform of signi-

cant audit ndings during our audit, including any signicant decien-

cies in internal control that we identied.

We must also provide the Board of Directors with a statement that

we have complied with relevant ethical requirements regarding inde-

pendence, and to communicate with them all relationships and other

matters that may reasonably be thought to bear on our independence,

and where applicable, actions taken to eliminate threats or related safe-

guards applied.

From the matters communicated with the Board of Directors, we deter-

mine those matters that were of most signicance in the audit of the

annual accounts and consolidated accounts, including the most impor-

tant assessed risks for material misstatement, and are therefore the key

audit matters. We describe these matters in the auditor’s report unless

law or regulation precludes disclosure about the matter.

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 65

AUDITOR’S REPORT

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

Report on the audit of the administration and the proposed

appropriations of the company’s prot or loss

Opinions

In addition to our audit of the annual accounts and consolidated

accounts, we have also audited the administration of the Board of

Directors and the Managing Director of BONESUPPORT HOLDING AB

(publ) for the year 2021 and the proposed appropriations of the com-

pany’s prot or loss.

We recommend to the general meeting of shareholders that the prot

be appropriated (loss be dealt with) in accordance with the proposal in

the statutory administration report and that the members of the Board

of Directors and the Managing Director be discharged from liability for

the nancial year.

Basis for opinions

We conducted the audit in accordance with generally accepted audi-

ting standards in Sweden. Our responsibilities under those standards

are further described in the Auditor’s Responsibilities section. We are

independent of the parent company and the group in accordance with

professional ethics for accountants in Sweden and have otherwise ful-

lled our ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sucient and

appropriate to provide a basis for our opinions.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors is responsible for the proposal for appropriations

of the company’s prot or loss. At the proposal of a dividend, this inclu-

des an assessment of whether the dividend is justiable considering the

requirements which the company’s and the group’s type of operations,

size and risks place on the size of the parent company’s and the group’s

equity, consolidation requirements, liquidity and position in general.

The Board of Directors is responsible for the company’s organization

and the administration of the company’s aairs. This includes among

other things continuous assessment of the company’s and the group’s

nancial situation and ensuring that the company’s organization is

designed so that the accounting, management of assets and the com-

pany’s nancial aairs otherwise are controlled in a reassuring manner.

The Managing Director shall manage the ongoing administration accor-

ding to the Board of Directors’ guidelines and instructions and among

other matters take measures that are necessary to fulll the company’s

accounting in accordance with law and handle the management of

assets in a reassuring manner.

Auditor’s responsibility

Our objective concerning the audit of the administration, and thereby

our opinion about discharge from liability, is to obtain audit evidence to

assess with a reasonable degree of assurance whether any member of

the Board of Directors or the Managing Director in any material respect:

- has undertaken any action or been guilty of any omission which

can give rise to liability to the company, or

- in any other way has acted in contravention of the Companies Act,

the Annual Accounts Act or the Articles of Association.

Our objective concerning the audit of the proposed appropriations of

the company’s prot or loss, and thereby our opinion about this, is to

assess with reasonable degree of assurance whether the proposal is in

accordance with the Companies Act.

Reasonable assurance is a high level of assurance, but is not a guarantee

that an audit conducted in accordance with generally accepted audi-

ting standards in Sweden will always detect actions or omissions that

can give rise to liability to the company, or that the proposed appro-

priations of the company’s prot or loss are not in accordance with the

Companies Act.

As part of an audit in accordance with generally accepted auditing

standards in Sweden, we exercise professional judgment and maintain

professional skepticism throughout the audit. The examination of the

administration and the proposed appropriations of the company’s pro-

t or loss is based primarily on the audit of the accounts. Additional audit

procedures performed are based on our professional judgment with

starting point in risk and materiality. This means that we focus the exami-

nation on such actions, areas and relationships that are material for the

operations and where deviations and violations would have particular

importance for the company’s situation. We examine and test decisions

undertaken, support for decisions, actions taken and other circumstan-

ces that are relevant to our opinion concerning discharge from liability.

As a basis for our opinion on the Board of Directors’ proposed app-

ropriations of the company’s prot or loss we examined whether the

proposal is in accordance with the Companies Act.

The auditor’s examination of the ESEF report

Opinion

In addition to our audit of the annual accounts and consolidated

accounts, we have also examined that the Board of Directors and the

Managing Director have prepared the annual accounts and consolida-

ted accounts in a format that enables uniform electronic reporting (the

Esef report) pursuant to Chapter 16, Section 4(a) of the Swedish Secu-

rities Market Act (2007:528) for BONESUPPORT HOLDING AB (publ) for

the nancial year 2021.

Our examination and our opinion relate only to the statutory require-

ments.

In our opinion, the ESEF report #[checksum] has been prepared in a for-

mat that, in all material respects, enables uniform electronic reporting.

Basis for opinion

We have performed the examination in accordance with FAR’s recom-

mendation RevR 18 Examination of the ESEF report. Our responsibility

66 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

AUDITOR’S REPORT

under this recommendation is described in more detail in the Auditors’

responsibility section. We are independent of BONESUPPORT HOL-

DING AB (publ) in accordance with professional ethics for accountants

in Sweden and have otherwise fullled our ethical responsibilities in

accordance with these requirements.

We believe that the evidence we have obtained is sucient and appro-

priate to provide a basis for our opinion.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors and the Managing Director are responsible for

the preparation of the Esef report in accordance with Chapter 16, Sec-

tion 4(a) of the Swedish Securities Market Act (2007:528), and for such

internal control that the Board of Directors and the Managing Director

determine is necessary to prepare the Esef report without material miss-

tatements, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to obtain reasonable assurance whether the Esef

report is in all material respects prepared in a format that meets the

requirements of Chapter 16, Section 4(a) of the Swedish Securities Mar-

ket Act (2007:528), based on the procedures performed.

RevR 18 requires us to plan and execute procedures to achieve reaso-

nable assurance that the Esef report is prepared in a format that meets

these requirements.

Reasonable assurance is a high level of assurance, but it is not a guaran-

tee that an engagement carried out according to RevR 18 and generally

accepted auditing standards in Sweden will always detect a material

misstatement when it exists. Misstatements can arise from fraud or error

and are considered material if, individually or in aggregate, they could

reasonably be expected to inuence the economic decisions of users

taken on the basis of the Esef report.

The audit rm applies ISQC 1 Quality Control for Firms that Perform

Audits and Reviews of Financial Statements, and other Assurance and

Related Services Engagements and accordingly maintains a compre-

hensive system of quality control, including documented policies and

procedures regarding compliance with professional ethical require-

ments, professional standards and legal and regulatory requirements.

The examination involves obtaining evidence, through various proce-

dures, that the Esef report has been prepared in a format that enables

uniform electronic reporting of the annual and consolidated accounts.

The procedures selected depend on the auditor’s judgment, including

the assessment of the risks of material misstatement in the report,

whether due to fraud or error. In carrying out this risk assessment, and

in order to design audit procedures that are appropriate in the circum-

stances, the auditor considers those elements of internal control that are

relevant to the preparation of the Esef report by the Board of Directors

and the Managing Director, but not for the purpose of expressing an

opinion on the eectiveness of those internal controls. The examination

also includes an evaluation of the appropriateness and reasonableness

of assumptions made by the Board of Directors and the Managing

Director.

The procedures mainly include a technical validation of the Esef report,

i.e. if the le containing the Esef report meets the technical specication

set out in the Commission’s Delegated Regulation (EU) 2019/815 and a

reconciliation of the Esef report with the audited annual accounts and

consolidated accounts.

Furthermore, the procedures also include an assessment of whether the

Esef report has been marked with iXBRL which enables a fair and com-

plete machine-readable version of the consolidated statement of nan-

cial performance, nancial position, changes in equity and cash ow.

Ernst & Young AB, Box 7850, 103 99 Stockholm, was appointed auditor

of BONESUPPORT HOLDING AB (publ) by the general meeting of the

shareholders on the 20 of May 2021 and has been the company’s auditor

since the 22 April 2010.

Malmö 13 April 2022

Ernst & Young AB

Ola Larsmon

Authorized Public Accountant

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 67

BONESUPPORT’S SHARE

BONESUPPORT CLOSING PRICE VS INDEX

BONESUPPORT has been listed on Nasdaq Stockholm since 21 June 2017 and from the beginning of 2021

on the Mid Cap segment. The company has ordinary shares (Class A shares) and class C-shares. During 2021,

the number of shareholders increased by 1,477 to 7,454 (5,977). The highest share price in 2021 was SEK

86.80 and the lowest was SEK 34.90. The closing price on December 31, 2021 was SEK 44.00.

SHARE CAPITAL AND NUMBER OF SHARES

On December 31, 2021, the share capital amounted to SEK 40,909

thousand divided into 65,454,672 shares with an implied book value

per share of SEK 0.625.

SHARE TURNOVER

In 2021, 95,628,67 shares were traded, representing an average turnover

of SEK 20.8 million per trading day.

OWNERSHIP

At the end of 2021, BONESUPPORT had 7,454 (5,977) shareholders, with

Swedish shareholders representing 71.55 percent of capital and 71.03

percent of votes.

DIVIDEND AND DIVIDEND POLICY

BONESUPPORT has so far not paid any dividends. Any future dividends

and the size thereof will be determined on the basis of the company’s

long term growth, earnings development and capital requirements,

taking into account current targets and strategies.

Avanza 11.0%

HealthCap V LP 10.1%

Swedbank Robur Fonder 6.3%

Stiftelsen Industrifonden 5.8%

Tredje AP-fonden 5.6%

State Street Bank and Trust 4.9%

Fjärde AP-Fonden 4.8%

Övriga aktieägare 51.5%

SHAREHOLDERS DECEMBER 31 2021

Övriga aktieägare

Lundbeck

4AP

Tellacq

3AP

Robur

Industrifonden

HealthCap

DEVELOPMENT NUMBER OF SHARES 2021

Date Event No. of shares

December 31, 2020 Opening balance 64 999 222

January-December 2021 Conversion of options to shares 39 354

February 2021 Issue of C-shares 55 000

April 2021 Conversion of warrants to shares 361 096

December 31, 2021 Closing balance 65 454 672

Bonesupport OMX Stockholm PI Share turnover per wee

Källa: Web Financial Group

Jan FebMar AprMay Jun Jul AugSep OctNov DecNo.SEK

000 000

100

110

120

130

100

110

120

130

68 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

CORPORATE GOVERNANCE REPORT

BONESUPPORT HOLDING AB (publ) (”BONESUPPORT”) is a Swedish

public limited company with its registered oce in Lund, Sweden. The

company’s shares are listed on Nasdaq Stockholm and are traded under

the ticker symbol BONEX. BONESUPPORT’s corporate governance is

based on the applicable statutes, regulations, rules and recommenda-

tions for stock-exchange listed companies, such as the Swedish Corpo-

rate Governance Code (the ”Code”), Nasdaq Stockholm’s Rule Book for

Issuers, BONESUPPORT’s Articles of Incorporation, and company-spe-

cic rules and guidelines. For more information, refer to the compa-

ny’s website www.bonesupport.com. During the 2021 nancial year,

BONESUPPORT has applied the Code without any deviations.

SHAREHOLDERS MEETING

The Annual General Meeting, or, where applicable, an extraordinary

meeting of shareholders, is the ultimate decision-making body of

BONESUPPORT, in which all shareholders are entitled to participate.

The AGM makes decisions on principle matters, for instance concerning

amendments to the Articles of Incorporation, the election of Members

of the Board of Directors and the auditor, adoption of the prot & loss

statement and balance sheet, discharge from liability for Members of

the Board of Directors and the Chief Executive Ocer (CEO), disposition of

prots or losses, principles for the appointment of members of the Nomi-

nation Committee, and guidelines for remuneration of senior executives.

At the Annual General Meeting on May 20, 2021, 54 shareholders were

represented, corresponding to holdings of 50 percent of the total

number of shares and voting rights in the company. Advokat Hans

Petersson, a lawyer, was elected as Chair of the AGM. At the Annual

General Meeting 2021, resolutions were passed on, among other things,

the determination of fees for the Board of Directors and the auditors,

re-election of Håkan Björklund, Björn Odlander, Lars Lidgren, Tone Kvåle

and Lennart Johansson as ordinary members, instructions and rules of

procedure for the Nomination Committee, adoption of remuneration

policy for senior executives, introduction of long term incentive pro-

grams for employees, introduction of long term incentive programs for

certain Board Members, and amendment of the Articles of Incorpora-

tion. Lennart Johansson was elected Chairman of the Board. Ernst &

Young AB were reappointed as auditor with authorized public accoun-

tant Ola Larsmon as the auditor in charge.

The Annual General Meeting 2022 will be held on Thursday, May 19,

2022. For further information concerning the Annual General Meeting,

please visit BONESUPPORT’s website. All shareholders have the right to

participate and vote for all their shares at the Annual General Meeting.

For information concerning shares and voting rights, see the Directors’

Report, page 34 in the Annual Report.

NOMINATION COMMITTEE

According to the Code, the company is to have a Nomination Commit-

tee, the duties of which shall include the preparation and drafting of

proposals regarding the election of Members of the Board, the Chair-

man of the Board, the Chair at the shareholders meetings and the audi-

tor(s). The Nomination Committee shall also propose directors’ fees for

Members of the Board and fees for the auditor(s). At the 2021 Annual

General Meeting, it was resolved to adopt an Instruction and Rules of

Procedure for the Nomination Committee, under which the Nomination

Committee is to consist of four members representing the three largest

shareholders as per the end of September, together with the Chairman

of the Board. For information concerning ownership, see page 71 in

the Annual Report or the company’s website www.bonesupport.com.

In accordance with the adopted Instructions, a Nomination Commit-

tee has been constituted in preparation of the 2022 Annual General

Meeting consisting of Staan Lindstrand (Chair) representing Health-

Cap V LP, Caroline Sjösten representing Swedbank Robur Fonder, and

Jonas Brambeck representing Stiftelsen Industrifonden, along with

the Chairman of the Board, Lennart Johansson. The composition of

the Nomination Committee for the 2022 Annual General Meeting was

publicly notied via a press release for the interim report for January –

September on November 4, 2021.

During 2021, the Nomination Committee held six meetings and had

ongoing contact between the meetings. The Nomination Committee

has complied with the Instructions adopted at the Annual General

Meeting on May 20, 2021.

In its work, the Nomination Committee has in its work applied Rule 4.1

of the Code as a diversity policy, whereby the Nomination Committee

has taken into account that the Board of Directors, with regard to the

company’s business activities, stage of development and circumstan-

ces in general, shall be characterized by diversity and breadth with res-

pect to members’ qualications, skills and expertise, experience and

background, and that an even gender balance shall be strived for. The

Nomination Committee’s ambition is that the gender balance will be

equalized over time.

EXTERNAL AUDIT

The company’s auditor is appointed by the Annual General Meeting for

the period until the end of the next following Annual General Meeting.

The auditor examines the Annual Report with accompanying nancial

statements, as well as the management by the Board of Directors and

the CEO. Following each nancial year, the auditor shall submit an auditor’s

report to the Annual General Meeting. Each year, the company’s auditor

reports his/her observations from the audit to the Board of Directors.

At the 2021 Annual General Meeting, Ernst & Young AB was re-appoin-

ted as the company’s auditor with authorized public accountant Ola

Larsmon as auditor in charge. It was also resolved at the Annual General

Meeting that the fees to the auditor should be paid in accordance with

the normal billing standards and on receipt of approved invoices. More

information regarding the auditor’s fees can be found in Note 8 in the

Annual Report.

THE BOARD OF DIRECTORS

After the Annual General Meeting, the Board of Directors is the com-

pany’s highest decision-making body. The Board of Directors is respon-

CORPORATE GOVERNANCE REPORT 2021

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 69

CORPORATE GOVERNANCE REPORT

sible for the company’s organization and the management of the

company’s aairs, for example by establishing targets and strategies,

securing procedures and systems for monitoring the established tar-

gets, continuously assessing the company’s nancial position and

evaluating the operational management. Furthermore, it is the Board

of Directors’ has the responsibility to ensure that true and correct infor-

mation is provided to the company’s stakeholders, that the company

complies with laws and regulations, and that the company develops

and implements internal policies and ethical guidelines. The Board of

Directors also appoints the company’s CEO and determines his/her

salary and other remuneration, based on the guidelines adopted by

the Shareholders Meeting.

The Board Members elected by the Annual General Meeting are elec-

ted annually at the Annual General Meeting for the term until the next

Annual General Meeting is held. According to the company’s Articles of

Incorporation, the Board of Directors is to consist of a minimum of three

and a maximum of eight members without alternates. According to the

Code, the majority of the Board Members elected by the Annual Gene-

ral Meeting must be independent of the company and its management.

Furthermore, at least two of the Board Members who are independent

in relation to the company and its management must also be indepen-

dent in relation to major shareholders. Major shareholders are sharehol-

ders who directly or indirectly control 10 percent or more of the total

shares and voting rights in the company. In determining whether or not

a Board Member is independent, an overall assessment is to be made of

all the circumstances which may call into question the independence of

the Board Member vis-à-vis the company, its management, or the major

shareholders. A Member of the Board who is employed or a Member of a

Board of Directors of a company that is a major shareholder is not consi-

dered to be independent. There are no further provisions in the Artic-

les of Incorporation concerning the appointment and resignation of

Members of the Board or amendments to the Articles of Incorporation.

All Board Members elected by the Annual General Meeting, except

Björn Odlander, are independent of the major shareholders, and all

Board Members elected by the Annual General Meeting are indepen-

dent of the company and its management. Björn Odlander is indepen-

dent in relation to the company and its management, but not in relation

to major shareholders as he is a partner of HealthCap. As indicated, the

Board of Directors is of the view that the company fulls the Code’s

requirement in regard to independence. The Board of Directors’ mem-

bers, own and closely related parties’ holdings and the year in which

they were elected are presented on the page 73 of the Annual Report.

The Board of Directors follows a written Rules of Procedure, which is

reviewed annually and adopted at the statutory Board of Directors

meeting. The Rules of Procedure govern, among other things, the Board

of Directors’ working methods, duties, responsibilities, decision-making

within the company, the Board of Directors’ meeting agenda, the duties

and responsibilities of the Chairman of the Board, and the allocation

of responsibilities and duties between the Board of Directors and the

CEO. The Instruction regarding nancial reporting and the Instruction

to the CEO are also adopted in connection with the statutory Board of

Directors meeting.

The work of the Board of Directors is also carried out on the basis of an

annual plan, which fullls the Board of Directors’ need for information.

In addition to meetings of the Board of Directors, the Chairman of the

Board of Directors and the CEO have an ongoing dialogue concerning

the management of the company.

The Board of Directors meets according to a pre-determined annual

schedule and shall, in addition to the statutory Board of Directors

meeting, hold at least six ordinary Board of Directors meetings between

each Annual General Meeting. In addition to these meetings, extraordi-

nary meetings may be arranged to deal with matters that cannot wait

until any of the regular meetings. The work of the Board of Directors

during the year has followed the framework described above. Thirteen

meetings were held in 2021. See the table below for the attendance record.

Board Member Meetings

Lennart Johansson 13/13

Håkan Björklund 13/13

Björn Odlander 13/13

Lars Lidgren 12/13

Tone Kvåle 13/13

The work of the Board of Directors is evaluated annually with the pur-

pose of further developing the Board of Directors’ working methods

and eciency. The Chairman of the Board is responsible for the evalua-

tion, and for presenting it to the Nomination Committee. The purpose

of the evaluation is to obtain an idea of the Board Members’ views on

how the work of the Board of Directors is conducted and what mea-

sures could be taken to streamline the work of the Board of Directors,

and whether the Board of Directors is well balanced in terms of skills

and expertise. The evaluation is an important basis for the Nomination

Committee in preparation for the Annual General Meeting.

The Chairman of the Board conducted an evaluation with all Members

of the Board in 2021. The results of the evaluation have been reported to

and discussed by the Board of Directors and the Nomination Committee.

Remuneration to the Board of Directors

The directors’ fees to be paid to the Members of the Board elected

by the Annual General Meeting are decided by the Annual General

Meeting. In the preparation of the 2022 Annual General Meeting, the

Nomination Committee will make proposals in regard to the directors’

fees. At the Annual General Meeting held on May 19, 2021, it was resol-

ved that a directors fee of SEK 375,000 would be paid to the Chairman

of the Board and SEK 200,000 would be paid to each of the other Mem-

bers of the Board who are not employed by the company. In addition,

it was decided that remuneration for work related to the committee

is to be paid in the amount of SEK 125,000 to the Chair of the Audit

Committee, and SEK 70,000 to each of the other members of the Audit

Committee, and in the amount of SEK 50,000 to the Chair of the Remu-

neration Committee and SEK 25,000 to each of the other members of

the Remuneration Committee. For the 2021 nancial year, remuneration

was paid to the Members of the Board of Directors as set out in the

table below. All amounts are stated in SEK thousands. From the Annual

General Meeting held on May 19, 2020 to September 30, 2020, all Board

Members voluntarily waived 10 percent of their fees, and from January

11, 2021 to March 31, 2021, all Board Members voluntarily waived 10 per-

cent of their fees. The voluntary waivers took place in the same way as

the company’s management during the periods when the pandemic

created great uncertainty and impact on operations.

70 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

CORPORATE GOVERNANCE REPORT

Name Task

Remuneration

decided by the

Annual General

Meeting

Paid

remuneration

(i)

Lennart Johansson

Chairman of the Board,

member of the Audit

Committee, Chair of the

Remuneration Committee 420 378

Håkan Björklund

Member of the Board,

member of the

Remuneration Committee 200 180

Tone Kvåle

Member of the Board, Chair

of the Audit Committee 275 247

Björn Odlander

Member of the Board,

member of the

Remuneration Committee 175 157

Lars Lidgren Member of the Board 150 135

(i) Utbetalt belopp efter frivilligt avstående

Audit Committee

The primary task and responsibility of the Audit Committee is to moni-

tor the company’s nancial position, to monitor the eectiveness of

the company’s internal controls, internal audit and risk management, to

be informed about the audit of the Annual Report and accompanying

nancial statements/consolidated accounts, and to review and moni-

tor the auditor’s impartiality and independence. The Audit Committee

shall also assist the Nomination Committee in proposals for decisions

concerning the election and remuneration of the auditor. The Audit

Committee is comprised of Tone Kvåle (Chair) and Lennart Johansson.

The work of the Audit Committee during the year has followed the

framework described above. During the 2021 nancial year, the Audit

Committee held six meetings and discussed matters concerning the

company’s control system, review of quarterly reports, assessment of

the auditor’s work, and evaluation of risk management. See the table

below for the attendance record.

Board Member Meetings

Tone Kvåle 6/6

Lennart Johansson 6/6

Remuneration Committee

The task and responsibility of the Remuneration Committee are pri-

marily to prepare matters regarding remuneration and other terms of

employment for the CEO and members of senior management. The

Remuneration Committee shall also monitor and evaluate ongoing

and completed programs for variable remuneration of senior executi-

ves during the year, and monitor and evaluate the implementation of

the guidelines for remuneration to senior executives which the Annual

General Meeting has adopted. The Remuneration Committee is compri-

sed of Lennart Johansson (Chair), Håkan Björklund and Björn Odlander.

During the 2021 nancial year, the Remuneration Committee held four

meetings and dealt with matters regarding the CEO’s and other group

management’s bonus results for 2020, bonus criteria and salary audit for

2021, plus the implementation of a performance-based share savings pro-

gram for employees for 2021. See the table below for the attendance record.

Board Member Meetings

Lennart Johansson 4/4

Håkan Björklund 4/4

Björn Odlander 4/4

CEO AND OTHER MEMBERS OF SENIOR MANAGEMENT

The CEO is subordinate to the Board of Directors in the role, the CEO has

as the primary task and responsibility to manage the company’s ongoing

management and day-to-day business operations of the company. The

Board of Directors’ Rules of Procedure and Instruction for the CEO sti-

pulate which matters and issues the company’s Board of Directors is to

decide on and which decisions fall within the area of responsibilities of

the CEO. The CEO is also responsible for preparing reports and the requi-

site basis for decision-making in preparation of the Board of Directors

meetings and presents the materials at the Board of Directors meetings.

BONESUPPORT has a management team of nine, including the CEO. For

further information about the CEO and other senior executives, please

refer to pages 72-73 in the Annual Report.

Remuneration to senior executives

Remuneration to senior executives consists of a base salary, variable

remuneration, pension benets, share-based incentive programs and

other benets.

Salary and other remuneration for the nancial year 2021 were paid to the

CEO and other senior executives in accordance with the table below. All

amounts are stated in SEK thousands.

SEK THOUSAND Salary

Social

security

costs

Share-based

remuneration

CEO 4 228 840 1 127

Other senior executives 14 901 3 842 1 161

Guidelines for remuneration to senior executives

Pursuant to the Swedish Companies Act, the Annual General Meeting

shall decide on guidelines for remuneration of the CEO and other senior

executives. At the Annual General Meeting on May 19, 2021, guidelines

were adopted with primarily the following content:

The company’s starting point is that the company is to oer remuneration

at market levels, and which facilitate the ability to recruit and retain senior

executives, and that the terms and conditions must be competitive with

consideration of the market practice in the country where the senior exe-

cutive is employed. Remuneration to senior executives may consist of xed

salary, variable cash remuneration, pension benets and other benets.

The base salary shall be determined taking skills and expertise, area of

responsibility and performance into account. The variable cash remu-

neration shall be based on one or more predetermined and measurable

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 71

CORPORATE GOVERNANCE REPORT

criteria that may be nancial, such as net sales and operating prot,

or non-nancial, such as qualitative targets. The variable remunera-

tion shall be capped and for the CEO may not exceed 75 percent of

the annual base salary, and for other senior executives 40 percent of

the annual base salary, whereby the maximum individual level is to be

determined based on factors relating to the position held by the spe-

cic individual etc.

In addition to what is required by law and collective bargaining agre-

ements or other contracts, the CEO and other senior executives may be

entitled to arrange pension solutions on an individual basis. Refraining

from receiving a salary and variable remuneration can be used for incre-

ased pension contributions, provided that the total cost to the company

is unchanged over time.

In addition, the Annual General Meeting may – and independently

of these guidelines – make a resolution regarding, for example, share

and share price-related remuneration. The senior executives may be

granted other customary benets, such as a company car, occupational

healthcare services, etc.

In the event of termination of a position as a senior executive by the

company, the notice period may not exceed twelve months. Severance

pay, in addition to salary and other remuneration during the notice

period, may not exceed an amount equal to twelve times the monthly

salary. In addition, compensation may be paid for any commitment to

restrict competition in order to compensate for any loss of income. Such

remuneration shall be paid only to the extent that the former senior

executive is not entitled to severance pay. The remuneration shall be

based on the xed salary at the time of termination and shall amount to

a maximum of 60 percent of the xed salary at the time of termination,

subject to mandatory collective agreement provisions, and shall be paid

for the duration of the anti-competition undertakings, which shall not

exceed 12 months after termination of employment.

The Board of Directors shall be entitled to deviate from these guidelines

in individual cases, if there are special reasons for doing so.

INTERNAL CONTROL

The Board of Directors’ responsibility for the internal control is gover-

ned by the Swedish Companies Act, the Swedish Annual Reports Act

– which requires that information concerning the primary elements of

BONESUPPORT’s internal control and risk management systems related

to the nancial reporting each year is to be included in the Corporate

Governance Report – as well as the Code. The Board of Directors is to

ensure, inter alia, that BONESUPPORT has sucient internal control and

formalized procedures that ensure compliance with established prin-

ciples for nancial reporting and internal control, and that there are

eective systems for follow-up and control of the company’s business

operations and the risks associated with the company and its business

operations.

The overall purpose of internal control is to ensure, to a reasonable

extent, that the company’s operating strategies and targets are moni-

tored and that the shareholders’ investment is protected. Furthermore,

internal control is to ensure that external nancial reporting is, to a

reasonable extent, reliable and prepared in accordance with generally

accepted accounting principles, compliance with applicable laws and

regulations, and that requirements imposed on stock-exchange listed

companies are complied with. The internal control primarily consists of

the following ve components: control environment, risk assessment,

control activities, information and communication and monitoring.

There is no unit in the company for internal auditing. The Board of

Directors evaluates the need for this unit annually and has made the

assessment that, considering the size of the company, there is not su-

cient need to introduce a formal internal audit unit.

1. Control environment

The Board of Directors has overall responsibility for internal control in

relation to the nancial reporting. In order to establish and maintain a

functioning control environment, the Board of Directors has adopted a

number of policies and regulatory documents that govern the nancial

reporting. These consist primarily of the Board of Directors’ Rules of Pro-

cedure, Instruction for the CEO, and Instruction for nancial reporting.

BONESUPPORT has also adopted a special authorization policy. In addi-

tion, the company has a nancial manual that contains the principles,

guidelines and process descriptions for bookkeeping, accounting and

nancial reporting. The company has also summarized its procedures

for internal control in a separate internal control policy. Finally, the Board

of Directors has established an audit committee whose primary task is

to monitor the company’s nancial position, monitor the eectiveness

of the company’s internal control, internal audit and risk management,

keep itself informed about the audit of the Annual Report with accompa-

nying nancial statements including consolidated nancial statements,

and review and monitor the auditor’s impartiality and independence.

The responsibility for the day-to-day work with nancial control has

been delegated to the company’s CEO, who in turn has delegated this

responsibility to the company’s Chief Financial Ocer (CFO), who has

overall responsibility for maintaining sound internal control over the

nancial reporting environment. The CEO regularly reports to the Board

of Directors in accordance with the established instruction for the CEO

and the instruction for nancial reporting.

2. Risk assessment

The risk assessment includes identifying risks that may arise if the basic

requirements for nancial reporting in the company are not fullled. In a

special risk assessment document, BONESUPPORT’s management team

has identied and evaluated the risks that arise in the company’s busi-

ness operations and assessed how these risks can be properly mana-

ged. Within the Board of Directors, the Audit Committee has primary

responsibility for continuously assessing the company’s risk situation,

after which the Board of Directors also conducts an annual review of

the risk situation. During the year, senior management has reviewed the

risks related to strategies, compliance, and nancial and operational iss-

ues. Afterwards, these risks were assessed according to probability and

eect, where risks with either a high degree of probability or potential

impact have been prioritized. This has subsequently been presented to

the Audit Committee before being reviewed by the Board of Directors.

72 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

CORPORATE GOVERNANCE REPORT

The company has assigned each risk factor to at least one person in

Group management for them to lead the eorts in developing and exe-

cuting plans for courses of action.

3. Control activities

In order to prevent, detect and correct mistakes and deviations, a fra-

mework for control in terms of policies, processes and procedures has

been established within BONESUPPORT in relation to control objecti-

ves. The control activities help to ensure that the requisite measures

are taken to identify and address risks consistent with achieving the

company’s objectives. Examples of control activities at an overall level

are that BONESUPPORT has a clear governance structure and division

of responsibilities with a number of forums and activities which conti-

nuously monitor the business operations. Well-dened business proces-

ses, separation of duties, and appropriate delegation of authority are also

activities that promote good corporate governance and internal control.

Key processes identied to have potential signicant risks are mapped

out in detail in a separate process description in the nancial hand-

book and key process steps are dened in order to ensure that there is

sucient segregation of responsibilities and that the sucient control

mechanisms are in place.

4. Information and communication

BONESUPPORT has information and communication established for the

intention to promote the accuracy of nancial reporting, and to facilitate

reporting and feedback from the business operations to the Board of

Directors and senior management, for example by making corporate gover-

nance documents such as internal policies, guidelines and Instructions

regarding the nancial reporting known and accessible to the employees

aected. The Board of Directors has also adopted an information policy that

regulates the company’s external disclosure.

5. Monitoring

The compliance with and eectiveness of the internal controls are con-

tinually monitored. The CFO is responsible for ensuring that appropriate

processes for monitoring are in place, and the CEO ensures that the

Board of Directors continuously receives reports on the developments

concerning of the company’s business activities, including the deve-

lopments with the company’s prots or losses and nancial position, as

well as information on signicant events, such as research results and

important contracts. The CEO also makes a report concerning these

matters at each Board of Directors meeting. The company’s compliance

with relevant policies and guidelines shall be evaluated annually and a

report is to be made to the Audit Committee annually by the CFO. A

summary of identied proposals for improvements shall then be pre-

sented to the Board of Directors.

Lund, April 13, 2022

THE BOARD OF DIRECTORS OF BONESUPPORT HOLDING AB

AUDITOR’S REPORT ON THE CORPORATE GOVERNANCE STATEMENT

TO THE GENERAL MEETING OF THE SHAREHOLDERS OF BONESUPPORT HOLDING AB PUBL, CORPORATE IDENTITY NUMBER 5568022171

Engagement and responsibility

It is the Board of Directors who is responsible for the corporate gover-

nance statement for the year 2021 on pages 68-71 and that it has been

prepared in accordance with the Annual Accounts Act.

The scope of the audit

Our examination has been conducted in accordance with FAR’s stan-

dard RevR 16 The auditor’s examination of the corporate governance

statement. This means that our examination of the corporate gover-

nance statement is dierent and substantially less in scope than an audit

conducted in accordance with International Standards on Auditing and

generally accepted auditing standards in Sweden. We believe that the

examination has provided us with sucient basis for our opinions.

Opinions

A corporate governance statement has been prepared. Disclosures in

accordance with chapter 6 section 6 the second paragraph points 2-6

the Annual Accounts Act and chapter 7 section 31 the second paragraph

the same law are consistent with the annual accounts and the consolida-

ted accounts and are in accordance with the Annual Accounts Act.

Malmö April 13, 2022

Ernst & Young AB

Ola Larsmon

Authorized Public Accountant

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 73

THE BOARD OF DIRECTORS

LENNART JOHANSSON

Chairman

Born: 1955

Elected: 2017

Education: MBA from Handelshögskolan, Stockholm

(1980)

Experience: Lennart Johansson has been Senior

Advisor for Patricia Industries AB since 2015 and was

previously Managing Director (Business Development,

Operational and Financial Investments) at Investor AB

(2006-2015). Prior to that, he was a partner and CEO of

Emerging Technologies ET AB and b-business part-

ners. Today he is a Board Member of Chalmers Ventu-

res Ab, Hi3G Access AB, Atlas Antibodies AB and GoCo

Development AB.

Shareholding: 70,000 shares (own holding)

BJÖRN ODLANDER

Member of the Board

Born: 1958

Elected: 2010

Education: Medical degree from Karolinska Institutet

Experience: Doctor of Medicine in Biochemistry at

Karolinska Institutet in Stockholm. Founder and part-

ner of HealthCap. Björn Odlander sits on the Board

of Directors of Oncorena AB and the KK Foundation,

among others.

Shareholding: –

HÅKAN BJÖRKLUND

Member of the Board

Born: 1956

Elected: 2016

Education: Ph.D. in Neuroscience from Karolinska

Institutet

Experience: Dr. Håkan Björklund is a partner in Tellacq

AB, a private investment company. He was elected to

the Board of Directors of BONESUPPORT in December

2016 in connection with the funding of USD 37 million

(SEK 315 million), led by Tellacq. Håkan Björklund has a

long and successful career in the healthcare industry,

including as CEO of Nycomed. During his time there,

Nycomed grew from being a small Scandinavian

company to becoming a global business, which was

bought by Takeda in 2011. He is currently Chairman of

the Board of Swedish Orphan Biovitrum AB.

Shareholding: Owns 25 percent of the shares in

Tellacq AB, which holds 1,180,976 shares.

TONE KVÅLE

Member of the Board

Born: 1969

Elected: 2016

Education: Diploma in Finance & Administration from

UiT Arctic University of Norway, Harstad. She has com-

pleted the education and examination for the Advan-

ced Program in Corporate Finance at the Norwegian

School of Management, NHH

Experiencet: Tone Kvåle has more than 25 years of

experience in the biotech industry. She has been CFO

of Herantis Pharma Plc, Finland, since October 2020.

Prior to Herantis Pharma, she was CFO of Nordic Nano-

vector for 7 years and has also has CFO roles at NorDiag,

Kavli Holding and Dynal Biotech (Norway). She has held

senior positions at Invitrogen/Life Technologies, USA,

now ThermoFisher.

Shareholding: 17,000 shares (own holding).

LARS LIDGREN

Founder and Member of the Board

Born: 1943

Elected: 2010

Education: M.D., Ph.D. and Professor of Orthopedics

at Lund University

Experience: Doctor of Medicine and Professor of

Orthopedics at Lund University Hospital. Lars Lid-

gren leads a research group in regenerative medicine

at Lund University. The unit is a member of the ISOC

group, an association of world-leading orthopedic

hospitals. He is an honorary member of several major

scientic societies and initiated the global project

”Bone and Joint Decade” 2000-2010. Lars Lidgren has

founded the companies Scandimed (Biomet), AMeC,

Safeture and Moroxite in Sweden. He is a Board Mem-

ber of the listed companies Orthocell in Australia and

Agilit Holding in Sweden.

Shareholding: 400,150 shares (own holding and

through companies).

74 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

GROUP MANAGEMENT

EMIL BILLBÄCK

Chief Executive Ocer

Born: 1970

Employed since: 2018

Education: B.Sc. in Business Administration from Karl-

stad University

Experience: Emil Billbäck joined BONESUPPORT as

Chief Executive Ocer in March 2018. He has more

than 25 years of experience in life science. He has had

operational roles at BSN Medical, Astra Zeneca and

Beiersdorf. Today he is a Board Member in Atos and

Doctrin. Emil Billbäck has lived and worked in the

United States and in Germany.

Shareholding: 362,000 shares (own holding).

MICHAEL DIEFENBECK

EVP Medical & Clinical Aairs Chief Medical Ocer

Born: 1974

Employed since: 2017

Education: M.D. from Ludwig-Maximilians-University

Munich, Germany. Ph.D. from Friedrich-Schiller-Univer-

sity, Jena, Germany

Experience: Michael Diefenbeck is a certied ort-

hopedic and trauma surgeon with 15 years of clinical

experience. He founded Scientic Consulting in Ort-

hopedic Surgery in 2014 and has subsequently worked

on several projects with BONESUPPORT as an inde-

pendent medical advisor. He has 16 years of clinical

experience from various hospitals in Germany and is

the author of 27 published research articles in the eld.

Shareholding: 102,400 shares (own holding).

HÅKAN JOHANSSON

Chief Financial Ocer

Born: 1963

Employed since: 2018

Education: B.Sc. in Business Administration & Finance

from Mid Sweden University

Erfarenhet: Håkan Johansson joined BONESUPPORT

as Chief Financial Ocer in November 2018. He has

more than 20 years of experience as CFO and other

senior management roles from several industries in

the public and private sectors. Prior to BONESUPPORT,

Håkan Johansson was CFO for Northern Europe at

Thunstall Healthcare Group (2012-2018), a global com-

pany in security technology and system solutions for

healthcare. He has previously worked at toy manu-

facturer BRIO AB (publ) and Arctic Paper Group.

Shareholding: 33,000 shares (own holding).

MICHAEL WRANG MORTENSEN

EVP R&D and Operations

Born: 1975

Employed since: 2021

Education: M.Sc. in Engineering from Technical Uni-

versity of Denmark, a Ph.D. in Chemistry from Univer-

sity of Copenhagen and an executive MBA from the

AVT Business School in Denmark

Experience: Michael Wrang Mortensen joined

BONESUPPORT in December 2021 as Executive Vice

President with the overall responsibility for R&D and

Operations. Michael has 15 years of experience from

the Medical Device and Healthcare industry with

solid leadership and management experience within

Innovation, Product Realization, Commercial Develop-

ment and Operations. Prior to joining BONESUPPORT,

Michael Wrang Mortensen was Director for Develop-

ment and Supply at Nanovi A/S. Before this Michael

held various management positions at Ferrosan Med-

ical Devices A/S innovating and developing combina-

tion products in partnership with large global players

such as Ethicon Biosurgery Inc, Johnson and Johnson.

Shareholding: 7,700 shares (own holding).

ANNELIE AAVA VIKNER

EVP Marketing & Communications

Born: 1971

Employed since: 2018

Education: Bachelors degree in Chemistry from Lin-

köping University and further education in leadership

from Glasgow Caledonian University

Experience: A nnelie Aav a Vikner join ed BONE SUPPOR T

as Executive Vice President (EVP) Marketing & Commu-

nications in March 2019. She has more than 20 years

of experience in medical devices and pharmaceuti-

cals. Prior to joining BONESUPPORT, she worked in

several leading regional marketing services, within

Medtronic, one of the world’s leading medical device

companies (2002-2019). Her most recent role before

BONESUPPORT was as Senior Strategy & Marketing

Manager, RTG, ABGI&NORDICS (Restorative Therapy

Group, Austria, Switzerland, Benelux, Greece, Israel and

the Nordic region).

Shareholding: 15,000 shares (own holding).

HELENA L BRANDT

Head of Human Resources

Born: 1965

Employed since: 2017

Education: M.Sc. in International Economics from

Lund University

Experience: Helena L Brandt has more than 20 years

of experience in HR and of managerial positions from

a wide range of industries. She has held global HR roles

at Astra Zeneca, Sony and Tetra Pak.

Shareholding: 20,000 shares (own holding).

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 75

GROUP MANAGEMENT

FERGUS MACLEOD

GM & EVP Commercial Operations EUROW

Born: 1970

Employed since: 2019

Education: HND Business & Finance, University of

Bedfordshire, Executive Leadership Program, Center

for Creative Leadership

Experience: Fergus MacLeod joined BONESUPPORT

as General Manager & Executive Vice President Com-

mercial Operations EUROW in November 2019. He has

more than 20 years experience from international sales

leadership positions in the orthobiology and medical

equipment sectors with companies such as Johnson

Matthey, RTI Surgical and Stryker.

Shareholding: 20,000 shares (own holding).

KRISTINA INGVAR

EVP Quality Management & Regulatory Aairs

Born: 1972

Employed since: 2019

Education: Bachelor of Science in Medicine and Certi-

ed Market Economist

Experience: Kristina Ingvar joined BONESUPPORT

in February 2020 as Executive Vice President Quality

Management & Regulatory Aairs. Kristina Ingvar

has a medical degree from Lund University. Prior to

BONESUPPORT, she worked at Novo Nordisk, where

her most recent role has been Global Program Vice

President, Regulatory Aairs. During her 20 year career,

Kristina Ingvar has had various product, project and

person-related responsibilities in regulatory, quality,

safety and medical areas. She has worked closely with

R&D and manufacturing.

Shareholding: 20,300 shares (own holding)

MICHAEL ROTH

EVP Commercial Operations for North America

Born: 1963

Employed since: 2020

Education: BA degree in international development

from Clark University

Experience: Michael Roth started at BONESUPPORT

as General Manager and Executive Vice President

Commercial Operations for North America in June

2020. Michael Roth has over 25 years of experience

with senior positions in both large and small com-

panies active in orthopedics, with both direct and

distributor-led sales. His most recent role was as Vice

President of Sales and Marketing for Surgical Planning

Associates (HipXpert). He has also served as Vice Pre-

sident of Sales for the Eastern Region at both Wright

Medical and Microport Orthopaedics.

Shareholding: 20,000 shares (own holding)

76 BONESUPPORT HOLDING AB ANNUAL REPORT 2021

DEFINITIONS - ALTERNATIVE PERFORMANCE MEASURES

BONESUPPORT uses Alternative Performance Measures (APM) to enhance understandability of the information

in the nancial reports, both for external analysis and comparison and internal performance assessment.

DEFINITIONS  ALTERNATIVE

PERFORMANCE MEASURES

Contribution

Net sales minus by the cost of goods sold and directly attributable sel-

ling expenses and research and development expenses. A measure of

result showing the performance of segments and their contribution to

cover other group costs.

Interest bearing liabilities

Borrowings from banks, nancial institutions and lease liabilities, short

and long term. Shows the debt level of the group and forms the base

for interest expenses.

Net debt

Interest bearing debt minus cash and cash equivalents. Shows the

group’s net debt and is used to measure the leverage level of the group

and future funding needs.

Alternative Performance Measures are key gures are not dened in

nancial reports prepared in accordance with IFRS. The following key

gures are used:

Net sales growth

The dierence in net sales between two years in relation to net sales for

the earlier year. Shows the operations’ sales performance.

Net sales growth in constant exchange rates, CER

The dierence in net sales between two years in relation to net sales for

the earlier year. The net sales for the current year is re¬calculated using the

earlier year’s exchange rates. Shows the operations’ sales performance.

Gross prot

Net sales minus cost of goods sold. Shows the prot to cover other costs

and prot margin.

Gross margin

Net sales reduced by the cost of goods sold, divided by net sales. Shows

results in relation to net sales and the margin for covering other costs

and prot margin.

SEKm 2021 2020

Net sales 212.9 180.9

Sales growth, % 17.7 16.3

Cost of sales -23.2 -19.3

Gross prot 189.7 161.6

Gross margin, % 89.1 89.4

Directly attributable selling expenses -159.8 -142.0

Selling expenses, not directly attributable -18.0 -13.4

Selling expenses including commissions -177.8 -155.4

Directly attributable research & development expenses -14.6 -23.3

Research & development expenses, not directly attributable -38.4 -34.6

Research & development expenses -53.0 -57.9

Contribution 15.3 -3.7

Dec 31

SEKm 2021 2020

Non-current borrowings 16.2 5.6

Current borrowings 5.3 4.9

Interest bearing debt 21.5 10.5

Cash and cash equivalents 206.5 353.7

Net debt -185.0 -343.3

SEKm CER

Net sales 2021 calculated with

average rates for 2020 Net sales 2020

NA 31% 130.5 99.7

EUROW 13% 92.0 81.1

Sum 23% 222.5 180.9

BONESUPPORT HOLDING AB ANNUAL REPORT 2021 77

GLOSSARY

Allograft. The transplant of an organ or

tissue from one individual to another of the

same species, with a dierent genotype

Autograft. A bone graft harvested from

the patient’s own skeleton, usually from the

liliac crests.

Bisphosphonate. A group of medicines

that inhibit bone breakdown

Bone graft substitute. Synthetic material

used as bone grafts instead of biological

bone tissue

BMA. Bone Marrow Aspirate

BMP. Bone Morphogenetic Protein

Class C-shares. Performance shares within

the Performance share programs issued in

the form of Class C-shares

CERAMENT BVF. CERAMENT BONE VOID

FILLER

CERAMENT G. CERAMENT with gentamicin

CERAMENT V. CERAMENT with vancomycin

CERTiFy. A prospective, randomized,

controlled clinical trial with 137 patients

in 20 leading trauma centers in Germany,

aimed to compare treatment using

CERAMENT BVF with autologous bone

graft (autograft) transplantation

Clinical study. Study on humans of e.g. a

medical device or a pharmaceutical product

CONVICTION. A randomized, controlled

trial to evaluate the ecacy of CERAMENT

G in the treatment of osteomyelitis (chronic

bone infection)

CRIOAc. A healthcare network in France

implemented that is implemented through

a nationwide health ministry program to

improve outcomes in the management of

bone and joint infections

DBM. Demineralized Bone Matrix. A bone

substitute biomaterial

FDA. U.S. Food and Drug Administration

FORTIFY. A prospective, randomized,

multicenter-controlled test of CERAMENT

G that evaluates the ability of CERAMENT G

to improve treatment outcomes in patients

with open shin fractures

GPO. (Group Purchasing Organisation). An

entity with the purpose to realize savings

and eciencies by aggregating purchasing

volumes

Haematoma. A localized collection of

blood outside the blood vessels

HEOR. Health Economics and Outcomes

Research. Scientic discipline that quanties

the economic and clinical outcomes of

medical technology

ICUR. Incremental Cost-Utility Ratio

Micro-CT. Micro Tomography, uses X-ray

scanning to recreate a 3D-model without

destroying the object

Osteoinduction. At bone graft material

or growth factor can stimulate the

dierentiation of osteoblasts, forming new

bone tissues

Osteomyelitis. A bacterial infection

aecting bones

PMA. Premarketing Approval is the FDA

process to review Class III medical devices

SOLARIO. A randomized, unblinded,

European multicenter study with the aim

of investigating if synthetic bone graft

substitutes containing antibiotics can lead

to shorter treatment times compared to

systemic antibiotics

Tibia plateau fracture. Fracture of the

upper part of the tibia

Toxicity. The degree to which a substance

(a toxin or poison) can harm humans or

animals

HEADQUARTERS

BONESUPPORT HOLDING AB

Scheelevägen 19

223 70 Lund, Sweden

+46 46 286 53 70

www.bonesupport.com

info@bonesupport.com