CS MEDICA a/s

Revolutionizing Alternative Medicine

Annual Report 23/24

CS MEDICA in brief

CS MEDICA is a Danish MedTech company founded in 2011 that develops and currently sells 10+ CBD-infused medical device products and cosmetics

for autoimmune and stress-related disorders.

Structure & Brands Revenue Split

Product Overview

Geographical Presence

Solutions available in our CANNASEN

brand or in White-Label solu-

Sales FY23/24e

mDKK 8.1

(vs mDKK 1 LY)

(vs mDKK 15 BU)

Order Pipeline FY23/24

mDKK 49 (mDKK 14.5 LY)

Operating Profit -mDKK 12.5 (-17.9 LY)

Sales, Marketing & Admin cost

mDKK 4.5 ( 8.9 LY)

Net Profit 23/24 -mDKK 9.65 (vs -14.5 LY)

CS MEDICA A/S | Annual Report 2022/2023 2

Table of Contents

Letter from Chair & CEO 4

INTRODUCTION

Introducing CS MEDICA 6

Business Performance 7

Financial Highlights – 5 years IRFS 8

BUSINESS

Company Structure 10

Competitive Quality & Positioning 11

Business Model & Strategy 12

Product Landscape & Pipeline 13

Research & Development 21

Regulatory Strategies 23

Patents & Other Intellectual Property Rights 24

Trademark 25

Commercial Growth & Performance 26

Segmentation & Markets 27

Supply Chain & Operations 29

CORPORATE GOVERNANCE

Board of Directors 31

Executive management 33

Corporate Responsibility 34

DIRECTOR’S REPORT

Risk Management 38

Strategic Outlook 41

Sustainability 42

FINANCIAL STATEMENTS

Income statements 47

Statement of financial position 48

Statement of changes in equity 49

Cashflow statement 50

NOTES

Notes 52

ACCOUNTING POLICIES

Accounting policies 64

Segment information 69

STATEMENT & REPORTS

Statement by Management on the annual report 70

Auditor’s report 72

COMPANY INFORMATION

More information 74

Financial calendar 75

PARENT COMPANY

Income statement 76

Statement of Financial Position 77

Statement of changes in equity 78

Notes 79

Accounting policies 81

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CS MEDICA A/S | Annual Report 2023/2024 3

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Lone Henriksen

CEO & Founder

Flemming Heegaard

Chairman, Board of Directors

INTRODUCTION

Letter from Chair & CEO

We pursue short-term sales that allow faster invoicing

and focus on white-label, cosmetic, distributors, and

e-commerce segments. Simultaneously, we are building

a sustainable long-term sales pipeline, mainly focusing on

pharma segments with longer sales cycles but significant

potential for robust growth and strong partnerships.

We appreciate all ongoing support and trust as we navi-

gate these complex times and strive for sustainable growth

and operational excellence.

Warm regards

This fiscal year has been both challenging and rewarding

for CS MEDICA. We achieved a revenue of mDKK 8.1, a

growth from mDKK 1 in the previous year, though below

our anticipated mDKK 15. This growth was driven by leads

from our yearly CPHI fair and strategic adjustments in our

operations, including notable cost reductions and minimal

marketing expenditure. Importantly, we managed to grow

our top line while reducing our operating loss, marking

an effective win in our growth performance.

While focusing on reaching a capital-light business model

positioned at the intersection of the pharmaceutical and

cosmetics industries, CS MEDICA offers clinically validated

products with fewer side effects at competitive prices. Its

hybrid product formulations—blending advanced R&D,

clinical evidence, regulatory compliance, and the natural

benefits of CBD—differentiate the company from com-

petitors.

Key milestones this year included securing new patents

and product registrations, successfully passing the BSI

audits for the MDR transition, readying to receive the

ISO 13485 certification, and achieving confirmation of

the reclassification of our products. These regulatory

successes strengthen our market position and expand

our capabilities within the medical device sector and the

cannabis market.

In response to cash flow challenges, we shifted our focus

toward white-label sales, emphasizing markets and cus-

tomer segments with faster decision-making processes

and market access, primarily in Europe. This move aims

to stabilize our cash flow and ensure more predictable

revenue streams.

While we were delayed in pursuing an M&A track for ver-

tical integration of the value chain, our focus remains on

sustaining our business organically and reducing activi-

ties that do not generate immediate revenue. Hence, we

adopted a two-tier strategy to balance our sales efforts.

CS MEDICA A/S | Annual Report 2023/2024 4

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INTRODUCTION

CS MEDICA A/S | Annual Report 2023/2024 5

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As we continue to research,

develop, manufacture,

commercialize and build

brands, we aim to revolutionize

the medical and cannabis

industries, with science and

nature in our hearts

7 to 12

employees and

freelancers

4+2

approved production sites in

3 countries (Germany, Italy &

Poland) ) with 1 in India and 1

in USA under evaluation.

>500.000

tried our products

the first year

2+4

treatments reg. under

MDR and 4 in MDR

transition with BSI

research centers in

3 countries (Denmark,

Germany & India)

13+

products in pipeline

8+3

8 clinical studies & 3

academic trials

performed

countries with

registered trademark

4+7

4 patents + 7 patent

pending

regulatory

registration

treatments on

international

markets

700K

units shipped

INTRODUCTION

Introducing CS MEDICA Group

CS MEDICA is a Danish MedTech pioneer, founded in 2011,

that specializes in developing and distributing CBD-infused

treatments for autoimmune and stress-related conditions

such as arthritis, psoriasis, and pain management. Oper-

ating with a capital-light business model, the company

strategically focuses on research and development (R&D)

while outsourcing production to trusted European partners.

Positioned uniquely at the intersection of the pharmaceu-

tical and cosmetics industries, CS MEDICA offers clinically

validated products with fewer side effects at competitive

prices. Its hybrid product formulations—blending advanced

R&D, clinical evidence, regulatory compliance, and the

natural benefits of CBD—differentiate the company from

competitors.

CS MEDICA successfully launched its first products in

2021, navigating stringent regulatory demands under the

EU Medical Device Regulation (MDR) and other global

standards. With strength in regulatory excellence, CS MED-

ICA stands out by offering products approved as medical

devices under MDR, with certifications extending to major

markets, including the US FDA and UK MHRA. These

approvals ensure safety, efficacy, and consumer trust.

Today, the company operates as a capital-lean organiza-

tion, prioritizing resilience and adaptability.

Leveraging the proven antioxidative and anti-inflammatory

properties of cannabidiol (CBD), CS MEDICA has devel-

oped a diverse portfolio of over 10 innovative products,

including gels, creams, and sprays. These address a range

of conditions—pain relief, sleep disorders, allergies, hair

loss, skin and wound care—while delivering fewer side

effects and often superior efficacy compared to traditional

pharmaceuticals.

CS MEDICA has expanded beyond its European base

in response to the rising global demand for non-phar-

macological treatments. The company’s products are

now approved and marketed in the EU, UK, Switzerland,

Israel, India, Australia, Malaysia, Azerbaijan, Georgia, and

the USA. Further growth is underway, with registration

efforts in 22 additional countries, leveraging pharmacies

as primary sales channels for its medical-grade products.

A pivotal milestone in 2021 saw CS MEDICA launch an

IPO on the Swedish Spotlight exchange, followed by its

listing on XETRA and German Growth Stock markets in

July 2024. These steps bolstered the company’s inter-

national visibility and investor access. However, as CS

MEDICA was delisted from Spotlight on January 9, 2025,

it will focus on its short-term performance and ensure

long-term resilience, paving the way for a future relisting

or IPO in a new market.

CS MEDICA A/S | Annual Report 2023/2024 6

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INTRODUCTION

Business Performance

Global demand for alternative treatments is surging, with

the alternative medicine market projected to grow at an

impressive 15.7% CAGR through 2031. CS MEDICA is

strategically positioned to capitalize on this trend, particu-

larly in high-potential, non-European markets like the US,

MENA, and APAC. These regions present significant growth

opportunities, provided regulatory challenges are addressed

and social acceptance increases.

Annual Sales Performance Overview

During a challenging fiscal year, CS MEDICA achieved

net sales of mDKK 8.1, showing substantial growth from

mDKK 1.1 the previous year but falling short of our mDKK

15 target. This performance underscores our capability to

efficiently convert leads from our annual trade fair and a

lean order pipeline.

Our strategic shift this year focused on consolidating our

market presence in Europe and targeting segments with

quicker decision-making processes through white-label

and direct sales. This approach not only stabilized cash

flow but also ensured more predictable revenue streams

amid financial pressures. The shortfall in reaching our target

primarily stemmed from delays in finalizing a critical deal and

challenges in scaling our production capabilities.

We successfully expanded our reach, delivering products

to 17 countries, with the EU comprising 79.5% of our sales.

White-label products played a crucial role, making up 73.6%

of our sales, while the pain relief category dominated our

product line, accounting for 81% of total sales.

Looking forward, we are dedicated to refining our produc-

tion processes and implementing our 2-tier sales strategy.

This strategy focuses on generating immediate revenue

from short-term sales tracks to support the longer lead

times required for closing deals in high-potential pharma

segments. These initiatives are expected to drive robust

growth and enhance our long-term financial stability.

CS MEDICA A/S | Annual Report 2023/2024 7

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INTRODUCTION

Financial Highlights – 5 years IRFS

Performance Highlights

The fiscal year 2023/2024 demonstrated CS MEDICA’s resilience and growth

potential. Following the delisting from the Spotlight Stock Market in January

2025, the company secured the reactivation of the DKK 60 million investment

agreement with their Chinese Partner at a share price of DKK 7.14, strength-

ening its financial position. Regulatory progress under MDR, with all products

now classified as Class IIa, reduces risks and supports a DKK 49 million order

pipeline, paving the way for sustainable growth and global opportunities.

• Revenue Growth: Revenue reached mDKK 8.1, a significant increase

from mDKK 1.1 in the previous year. Production delays pushed part of the

revenue goal of mDKK 15 2023/2024 into the next fiscal year, keeping the

mDKK 49 pipeline intact.

• Gross Profit: Achieved mDKK 2.9 with a 35% margin. Adjusted for stock

write-downs and free sample distribution, the underlying gross margin

exceeded 40%, the goal set for 2023/2024.

• Net Profit and Operating Loss: Net profit improved to -mDKK 9.65 from

-mDKK 14.5 last year, while operating loss decreased by 30%, reflecting

tighter financial management.

• Cash and Cash Equivalents: Ended the year at mDKK -0.8, with subse-

quent credit repayment ensuring a stronger liquidity position.

• Funding to Support Growth and Scaling Initiatives: A DKK 60 million

investment agreement with the company’s Chinese partner has been

reactivated at a share price of DKK 7.14. To date, mDKK 1.15 of the first

tranche of mDKK 2, has been received, with the remainder expected soon.

The second tranche of mDKK 28 is contingent on fast-track regulatory

approval expected in 3–6 months, and the final tranche of mDKK 30 is

planned within 12 months following tranche 2.

2023/2024 2022/2023 2021/2022 2020/2021 2019/2020

DKK DKK DKK DKK DKK

Net sales 8.075.306 1.067.275 10.583.029 3.179.557 2.110.729

Gross profit 2.848.847 913.546 4.620.636 1.676.176 682.654

Operating profit 12.484.963- 17.898.645- 13.334.133- 176.047- 450.398

Depreciation and amoritsation 2.115.764- 2.076.080- 2.075.780- 1.367.452- 384.516-

Net financials 1.525.886- 568.148- 828.456- 231.738- 143.253-

Profit before taxes 14.469.990- 18.466.793- 14.162.592- 407.786- 77.371-

Net profit 9.650.907- 14.512.764- 10.802.971- 647.629 54.579-

Credit bank /Cash and cash equivalents 795.371- 415.014- 2.933.783 9.996.085 296.884

Addition R&D costs 3.354.373 2.188.336 2.813.316 4.162.220 1.732.137

Cash flow 380.357- 3.348.797- 7.062.301- 9.699.200 691.217

Total Assets 36.380.082 25.855.057 27.905.519 27.411.163 5.436.210

Equity 6.015.953 10.413.779 24.926.543 24.147.367 87.241

Financial Ratios

Gross margin 35% 86% 44% 53% 32%

Operating margin -155% -1677% -126% -6% 21%

Addition R&D cost in % of sale 42% 205% 27% 131% 82%

Net profit margin -120% -1360% -102% 20% -3%

Equity ratio 17% 40% 89% 88% 2%

Share performance

Basic earnings per share 0,56- 1,18- 0,88- 0,06 0,68-

Total number of shares 17.125.827 12.322.635 12.322.635 10.902.000 80.000

Share Price 5,94 3,98 10,9 6,2

CS MEDICA A/S | Annual Report 2023/2024 8

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BUSINESS

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BUSINESS

Company Structure

GALAXA PHARMA, CANNORDIC, CANNORDIC India, and Rong Shi MEDICA:

•

CS MEDICA A/S is the parent company with supporting functions as marketing,

administration, patent & trademark registrations etc.

• CANNORDIC A/S (100% stake) focuses on R&D, clinical trials, and technical files linked

to production and compliance, manufacturing & supply and sales

•

GALAXA PHARMA A/S (100% stake) focuses on e-commerce, distributing

pharmaceutical and prescription-based products, and enhancing distribution efficiency.

•

CANNORDIC India Ltd. (99% stake) helps distribute in a cost-effective way

CS MEDICA’s products in the APAC region.

•

Rong Shi MEDICA Ltd. (49% stake) is an equity investment/joint venture

envisioned/planned as a manufacturing and distribution hub for the Asian markets but is

currently on hold due to funding delays.

CS MEDICA has three subsidiaries and one equity investment.

CS MEDICA A/S | Annual Report 2023/2024 10

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BUSINESS

Competitive Quality & Positioning

Competitive Quality:

• Unique Market Position: CS MEDICA operates at the intersection of

the pharma and cosmetics markets, offering CBD-infused products

with proven efficacy and fewer side effects.

• Competitive Pricing: Its products are both affordable and accessible

(non-prescription) compared to similar offerings from pharmaceutical

and cosmetic competitors.

• Clinical Trials & MDR: Registered as medical devices, CS MEDICA’s

products with CBD meet strict regulatory standards, benefiting from

pharmacy over-the-counter distribution and creating high competi-

tive barriers to market entry.

Unique market positioning:

CS MEDICA is positioned at the intersection of the pharmaceutical and

the cosmetic/CBD market. While pharmaceutical products deliver clinically

proven efficacy, they are often accompanied by side effects that many cus-

tomers seek to reduce or avoid entirely. Contrarily, cosmetic products typically

communicate minimal to no side effects but are limited to aesthetic benefits.

According to McKinsey, approximately 50% of US and UK consumers

prioritize clinical effectiveness when purchasing OTC products, such as

topical treatments and medications. At the same time, 20% emphasize the

importance of natural and clean ingredients, reflecting a balanced demand

for efficacy and safety in alternative health solutions.

The strength of CS MEDICA’s market positioning lies in its innovative and

compliant product range—gels, sprays, and patches—that seamlessly

combines the growing self-care trend with the benefits of natural ingredients

from cosmetics. These products offer fewer side effects while delivering

pharma-grade efficacy, supported by clinical trials.

Clinical Trials and Medical Device Status: Key Barriers to Entry:

Under the stringent Medical Device Regulation (MDR), providing clinical

data is a prerequisite for accessing critical distribution channels such as

pharmacies. CS MEDICA’s products are registered and approved as med-

ical devices (MD) unlike many competitors within the categories with CBD.

This designation allows the company to leverage pharmacies as a vital sales

channel, offering consumers trusted and effective solutions.

Given the extensive, costly, and rigorous process of conducting clinical trials

and obtaining MD registration, achieving this status represents a significant

entry barrier. As a result, CS MEDICA’s products are uniquely positioned to

address conditions such as arthritis, pain, skin and sleep disorders, and hair

loss. They provide the natural benefits of CBD and target the root causes

of these ailments, delivering comprehensive relief.

Among its competitors, CS MEDICA stands out as one of the few com-

panies to:

1. Offer registered medical device products with CBD.

2. Able to provide proven safe claims in communication.

Bridge the gap between the cosmetic and pharmaceutical sectors with

its product offerings.

CS MEDICA A/S | Annual Report 2023/2024 11

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Driving Innovation in the Medical and Self-Care

Landscape

As a forward-thinking MedTech company, CS MEDICA is reshaping the

field of alternative medicin treatments. Its business model is built on four

core pillars: Research & Development (R&D), Marketing as a Service,

the CANNASEN

product line, and white-label solutions. This integrated

approach positions CS MEDICA at the forefront of delivering safe, effective,

and science-backed CBD-infused medical devices. By addressing a diverse

range of health challenges, the company is advancing the global shift toward

innovative, natural therapies and empowering the self-care movement.

1. Research & Development (R&D)

At its core, CS MEDICA identifies as an R&D-driven MedTech company,

dedicated to addressing the limitations of current pharmacological and non-

pharmacological treatments. By maintaining all R&D activities in-house, the

company adopts a “bottom-up” strategic approach. This method focuses on

analyzing emerging health challenges and developing targeted solutions, in

contrast to competitors who often follow a “top-down” approach by creating

non-specific products, such as generic CBD oils, which offer minimal proven

efficacy or safety. CS MEDICA’s extensive R&D efforts span its entire product

portfolio, including white-label and private-label offerings, ensuring that

every solution is backed by proven safety and efficacy. This commitment

to research and innovation underpins the company’s ability to deliver

superior, science-backed treatments tailored to specific medical needs.

2. CANNASEN

CS MEDICA’s flagship brand, CANNASEN

, is projected to achieve an

annual growth rate of 93%, with revenues increasing from DKK 1.7 mil-

lion in 2023/24. Rising awareness and investment in the brand with part-

ners will primarily drive this growth, improve order conversion rates, and

increase digital presence across key markets. The sales-to-order con-

version rate is expected to improve significantly, increasing from 8% in

2024 to approximately 17% by 2027/28e. This improvement will be fueled

by enhanced production efficiency, faster local approvals, and stream

lined shipping processes, benefiting from greater operational scale.

CS MEDICA is to capitalize on its expanding international footprint and

previously granted market approvals, driving long-term growth and market

penetration.

3. White-Label Business

Thanks to its favorable payment structure, CS MEDICA’s white-label seg-

ment is expected to drive the majority of the company’s growth at least

until 2025/26e, when the business is projected to achieve EBITDA break-

even and generate sufficient cash flow to reinvest in the development of

the CANNASEN

brand. The white-label segment is forecasted to grow at

52% annually, rising from DKK 6.4 million in 2023/24. This growth will be

fueled primarily by increasing order intake and improving conversion rates.

CS MEDICA has recently shifted its strategic focus toward the white-label

business, accelerating growth in this area. Like the CANNASEN

brand,

global expansion will drive white-label growth. A growth reflects the increas-

ing recognition of CBD-infused solutions among pharmacies and other

retailers who aim to provide customers with innovative and effective health

products.

The sales-to-order intake conversion rate is projected to rise from 8% in

2023/24 to around 25% by 2027/28e, driven by improved production and

shipping lead times as the company scales its operations. In 2024, the private/

white-label segment accounted for more than two-thirds of the total order

intake, underscoring this business model’s demand for and strategic viability.

4. Marketing-as-a-Service (MaaS) with a BtBtC Strategy

CS MEDICA offers comprehensive support to its B2B customers and

new partners, guiding them through the complex regulatory environment

and the often misunderstood CBD marketplace, which is burdened by a

“gray market” of misinformation and mistrust. With few, if any, compet-

itors combining CBD with Medical Device compliance, CS MEDICA’s

Marketing-as-a-Service (MaaS) provides a unique edge. MaaS delivers

market insights, marketing support, and educational tools to help distrib-

utors and their customers understand the safety, efficacy, and regulatory

compliance of CBD-infused medical devices.

BUSINESS

Business Model & Strategy

CS MEDICA A/S | Annual Report 2023/2024 12

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BUSINESS

Product Landscape & Pipeline

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BUSINESS

Product Landscape - PAIN

Pain & Arthritis gel:

Product promise: Pain & Arthritis Gel is a topical gel

formula, which helps to reduce pain and swelling in joints.

The gel offers a cooling effect, which alleviates the ‘hot’

or warm feeling and pain in the joints.

Key claims: Relieves pain and joint swelling. Cooling effect.

Pain Patch:

Product promise: Pain Patch is applied externally to the

painful joint or muscle, providing two main effects. Firstly, it

creates a cooling sensation on the treated area of the skin.

Secondly, the pain patch offers longerlasting pain relief by

stimulating the nerves and muscles beneath it, thus improv-

ing blood flow to themuscles.

Key claims: Relieves pain. Provides a longlasting pain

relief. For muscle, neck, back & shoulder pain, sprains,

sports injuries, and arthritis.

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BUSINESS

Product Landscape - SKIN

Wound gel:

Product promise: Wound Gel is a moisturizing and cooling

gel designed to promote optimal wound healing. The gel

forms a protective layer that keeps the skin moisturized and

promotes the healing process of wounds, abrasions, cuts,

scrapes, sunburns, and minor burns.

Key claims: Covers minor abrasions, burns and sunburns

with a protective film. Accelerates wound healing time.

Cooling effect.

Psoriasis gel:

Product promise: Psoriasis Gel is a topical supportive

treatment for dry, reddened, and scaly skin affected by

psoriasis. It contains Dead Sea salt, which reduces redness

and dryness. The gel has a cooling effect and helps hydrate

the skin, preventing the formation of new scales.

Key claims: To treat and relieve symptoms of psoriasis. For

dry, reddened, or irritated skin. Moisturizes and Hydrates.

CS MEDICA A/S | Annual Report 2023/2024 15

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BUSINESS

Product Landscape - SKIN / NIGHT

Nasal Night Spray:

Product promise: Nasal Night Spray is an intranasal spray

for bedtime usage. It facilitates nighttime breathing, which

makes falling asleep easier and improves sleep quality.

Key claims: Moisturizes the nasal mucosa. Facilitates

easier breathing, which improves sleep quality.

PSO & Atopic Skin Relief Lotion:

Product promise: Psoriasis Skin Relief Lotion is to help in

the daily care of atopic and psoriatic skin. The lotion offers

an effect of nourishment/ regenerated skin and soothes

skin irritations, dryness, and redness. In addition, it helps

eliminate skin itching and makes scales less visible.

Key claims: Moisturizes dry skin. Improves skin appear-

ance and condition. Eliminates skin itching. Makes scales

less visible. Soothes skin redness and irritation.

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BUSINESS

Product Landscape - PROTECT

Nasal Protect gel:

Product promise: Nasal Protect Gel is an isotonic, salty,

water-based, moisturizing gel for the nose, providing

longlasting protection against allergens and allergic reac-

tions. In addition, it moisturizes the nasal mucosa and

protects against nasal irritation.

Key claims: Protects from viruses and allergens, such as

pollen, dust, and pollution. Moisturizes and helps prevent

dryness.

Infect Protect Lozenges:

Product promise: Infect Protect are throat lozenges with

a unique complex of active ingredients consisting of gum

arabic, sea buckthorn leaf extract and hyaluronic acid that

physically support the natural barrier function of the mouth

and throat against infectious viruses and bacteria. This is

done by covering the mucous membrane of the mouth

and throat with a protective film.

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BUSINESS

Product Landscape - HAIR

Anti-Hair Loss Serum:

Product promise: Anti-Hair Loss Serum is a cosmetic

treatment for reducing hair loss, helping hair density by

up to 36% and thickness by up to 14% after one month.

Key claims: Reactivates hair follicles to stimulate growth.

Improves hair and scalp condition. For all hair types, men

and women, with natural cannabidiol (CBD).

Option for Make-to-Order

Anti-Hair Shampoo & Mask:

Product promise: Strengthens weak and brittle hair as

well as prevent hair loss caused by hormonal and genetic

changes, fatigue, stress, unbalanced diet or external fac-

tors. The shampoo is developed to visibly improve hair

condition, reduce brittleness, and give it vitality and shine.

The ingredient allantoinin helps soothe irritations and calms

sensitive scalp.

Shampoo – Key claims: Prevents follicle ageing and hair

fall. Promotes hair growth and strength. Improves the con-

dition of hair and scalp. For fuller, healthier, and denser hair.

Mask – Key claims: Prevents follicle ageing and hair fall.

Promotes hair growth and strength. Nourish and soothe

the hair and scalp. For fuller, healthier, and denser hair.

CS MEDICA A/S | Annual Report 2023/2024 18

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BUSINESS

Product Landscape - VET

VET-Pain & Arthritis gel:

Product promise: Can alternatively be used for joint pain

related to conditions other than arthritis such as for muscle

soreness and sprains. Topical treatment for body areas

affected by Arthritis. Cooling effect on hot and swollen

joins. Pain relief. Reduces the painful conditions that occur

in Rheumatoid Arthritis.

VET-Pain Patch:

Product promise: Long-lasting pain relief due to con-

tinuous, consistent delivery of the ingredients. Reduces

swelling, bruising, and stiffness and improves movement.

Lower risk of drug interactions in comparison to oral anal-

gesics – topical method of application. Up To 24 Hour

Pain Relief.

VET-Wound gel:

Product promise: Suitable for minor abrasions and

burns - useful as Muck Gel for Horses and Hotspot Gel

for Dogs. Forms a protective layer, which protects the

wound from external factors and keeps it moist. Contains

moisture-retaining components. Has antibacterial, antiviral

and antifungal properties to protect against infection.

Accelerates wound healing time and maintains optimal

conditions for proper healing.

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BUSINESS

Our Pipeline

We have 9 launched products, 11 active in pipeline, plus 7 modified and 3 medicine

and a range of upcoming Dermaceuticals at idea stage.

The VET portfolio and the Hair Care Shampoo & Mask have been presented to the industry and is

already available as a Make-to-Order manufacturing strategy.

We have several dermaceutical products at the idea stage, as we want to extend the SKIN category

and receive several requests for line extensions. However, we hold development until further funding.

Treatment Registration

Medical Devise

Medical Device Veterinary

Arthritis Gel*

Psoriasis Gel*

Pain Patch*

Pain Patch Hot

Wound Gel*

Protective Intranasal Gel*

Insominia Nasal Gel*

Infect Protect Lozenges

Hotspot Gel - Dogs*

LAUNCHED

Disease Indication

Development Stage

I: Concept & Feasibility - II: Research & Development - III: Clinical Development - IV: Regulatory Approval & Market Launch

* Patent Pending

Mud Fever Gel - Horses*

Pain Patch - Horses*

Pain Gel - Dogs & Horses*

Hair regrowth*

Anti-Hair loss Shampoo

Anti-Hair loss Mask

PSOR+ Atopic Skin Relief

Sport Gel 1000*

Sport CBD Patch*

Sport Spray + Mg*

Psoriasis Shampoo

Inhalator -

CBD

Inhalator -

CBD + THC

Inhalator -

CBD + other Cannabinoids

Cosmeceuticals

Medicine

I II III IV

LAUNCHED

Q2 2025

Q4 2023

Q4 2024

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BUSINESS

Research & Development

R&D is essential to deliver on our purpose

of creating world-changing products for a

better every day. CS MEDICA combines

research, technology, and nature within

healthcare to revolutionize with innovative

treatments and technology within the can-

nabis and medical industries.

R&D and high product effectiveness

CS MEDICA follows a unique R&D approach by ana-

lyzing specific illnesses and - based on the gathered

knowledge - developing a treatment that tackles these

ailments in the safest and most effective way with the

right amount and dosage of CBD. Thus, it differs from

other companies that simply sell products containing

CBD without any proof of efficacy or safety

High degree of product effectiveness

In its research, bioavailability plays a crucial role in terms

of how CBD-infused products can alleviate and heal

illnesses. Simply put, when CBD is bioactive, the body

can recognize, absorb and use it, producing effects by

interacting with the endocannabinoid system, which

helps regulate mood, pain, and inflammation. Without

bioactivity, CBD would pass through the body without

any noticeable effect.

Studies have shown that the highest bioactivity is given

when the product is applied topically as a gel or cream.

For example, some of CS MEDICA’s competitor products

(e.g. Canzon’s CBD oil for pain relief) are oil-based pain

and sleep appliances that must be taken orally and are

not as effective in absorption as compared to topical

(6-19% vs. 45%) or even nasal (6-19% vs. 34-46%)

application due to the potential danger of increased

risk of side effects.

During the past two years, CS MEDIA researched

different CBD isolate/crystal manufacturers in Europe,

the USA, and China, focusing on their bioactivity. This

has been done through various pilot and lab tests. As

a result, the company can now offer treatments with

clinically proven effectiveness, often recognized as the

best in their category, particularly true for CS MEDICA’s

pain & arthritis gel and pain patch.

Our R&D strategy

• Deliver a pipeline of innovative medical devices

with cannabidiol to help bring change and relief to

patients’ lives worldwide with the therapeutic values

of cannabinoids.

• Source the best ingredients and partnerships for

safe, efficient, and accessible results for those that

need a better every day

• Advance our capabilities to position us for long-term

R&D and trusted CBD leadership

While a considerable amount of our R&D is internal,

we strive for know-how and innovative technologies

developed by others to integrate into our discovery and

development processes or products. We collaborate with

universities, companies, and other partners, allowing us

to share knowledge, and optimize operations.

Behind the science

The endocannabinoid system (ECS) is a biological

system composed of endocannabinoids, which are

endogenous lipid-based retrograde neurotransmitters

that bind to cannabinoid receptors (CBRs), and cannab-

inoid receptor proteins that are expressed throughout

the vertebrate central nervous system (including the

brain) and peripheral nervous system. Endocannabinoids

have important effects on immune functions as well.

They modulate T- and B-lymphocytes proliferation and

apoptosis, macrophage-mediated killing of

sensitized cells, inflammatory cytokine produc-

tion, immune cell activation by inflammatory stimuli,

chemotaxis, and inflammatory cell migration.

The endocannabinoid system remains under

preliminary research but may be involved in regulating

physiological and cognitive processes, including fertility,

pregnancy, pre-and postnatal development, various

activity of immune system, appetite, pain-sensation,

mood, and memory, and in mediating the pharmaco-

logical effects of cannabis. The ECS plays an important

role in multiple aspects of neural functions, including the

control of movement and motor coordination, learning

and memory, emotion and motivation, addictive-like

behaviour, and pain modulation, among others.

Two primary cannabinoid receptors have been iden-

tified: CB1, first cloned (or isolated) in 1990; and CB2,

cloned in 1993.

Link: NIH article

Link: Endocannabinoid_system

To ensure we deliver value

to society, R&D continuously

pursues even higher levels

of innovation across more

therapy areas and technology

platforms and with more

patients and partners.

CS MEDICA A/S | Annual Report 2023/2024 21

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Our DNA

We have researched the bioavailability of the Phyto

cannabinoids in the human body together with drug delivery

systems to deliver cannabinoids to the human body with high

efficacy. We found the oral delivery of the Phyto cannabinoids

was highly ineffective, as the bioavailability was only 6% and

the orally delivered Phyto cannabinoids went through the liver,

where it reduces the enzyme degrading process of medicine,

meaning the medicine has a higher efficacy in the body.

Whereas the delivery of Phyto cannabinoids through the skin

or the nasal passage has a bioavailability of 45% and does

not enter the lever, as it does not enter the bloodstream.

CBD reach the receptors of pain, psoriasis, hair, inflammation

(wounds) and arthritis through the skin. Many of the receptors

are present in the skin. CBD applied topically or nasal targets

the localized area/problem, dispersing across the skin reaching

muscles and cells - very little CBD enters the bloodstream and

thereby does not reach the liver.

Why Natural CBD

In our research and development, we also found that several

factors impact the efficacy/bioactivity of the extracted Phyto

cannabinoids – why some Phyto cannabinoids extracted from

Cannabis Sativa L. plant have no effect/no bioactivity in the

human body, as the extracted Phyto cannabinoids must be

recognizable by the human body to be utilized. An external

journal

describe that synthetic CBD have no effect /no bioac-

tivity in the human body, as the human body do not recognize

the synthetic CBD as an alternative to the body’s own produced

endocannabinoid (AEA, 2-AG) – like the human body cannot re-

cognize and utilize synthetic insulin, as the body do not recognize

the synthetic insulin as the human insulin the body produces

itself. If the body do not recognize the insulin – the insulin will

not be able to interact with the insulin receptor and open the

glucose channel in the cell.

Unique Findings

Since 2016, we have been using and refining these technologies and explo-

ring the endocannabinoid system and the more than 140 currently known

Phyto cannabinoids (from cannabis) to provide solutions for conditions in

which those compounds offer treatment possibilities.

• Patent Application Pending Study for Bioavailability

• Optimal delivery system with high Bioavailability (Topical & Nasal)

• Pilot Study identifying bioactive CBD

•

Discovery of factors that impacts the Natural CBD’s bioactivity in the body

• Unique technology as the foundation for all formulas

Nasal 34-46%

Effect: 10 min.

Oral 6-19%

Effect: 1,5-3 h

Inhalation 56%

Effect: 30 sec

Topical 45%

Effect: 1,5 h

Bioavailability

BIOAVAILABILITY ~

45%

Does not enter the

bloodstream. The

bioavailability is higher

as the liver’s first pass

effect is avoided,

therefore there is no

medicinal interaction.

BIOAVAILABILITY ~

34-46%

Enters the

bloodstream.

The bioavailability is

higher as the liver’s

first pass effect is

avoided, therefore

there is no medicinal

interaction.

BIOAVAILABILITY ~

6-19%

Enters the

bloodstream.

The bioavailability is

lower due to the first

pass effect in the liver,

therefore there is no

medicinal interaction.

TOPICAL/

TRANSDERMAL

CBD

NASAL

CBD

ORAL

CBD

CS MEDICA A/S | Annual Report 2023/2024 22

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Regulatory Approvals and Market Position

CS MEDICA’s strong regulatory presence across key

markets such as the EU, UK, US, and Israel provides a

significant competitive advantage in the medical device

industry. By complying with international standards like

ISO 13485 and ISO 14971, the company emphasizes

its commitment to safety and quality. Its adherence to

stringent frameworks like the US FDA and EU MDR

bolsters its credibility and distinguishes it from com-

petitors.

Key regulatory milestones include:

• EU - MDR compliant: Two MDR-compliant prod-

ucts in Europe, which are the first of their kind under

the new EU Medical Devices Regulation (MDR)

according toRule 21.

•

EU - Class IIa Classification: Three sub-

stance-based medical products with CBD have

been classified under MDR, Rule 21.

•

EU - Certification through BSI: Certification of

the products via BSI, the notified body under MDR,

confirms that CS MEDICA meets stringent regula-

tory requirements.

•

FDA: Eight FDA-compliant products in the USA,

which are the first of their kind in this category.

•

TGA: The first TGA-compliant products in Australia

- the first of their kind in this category.

•

CDSCO: The first FDA-compliant products in India

- the first of their kind in this category.

•

IMOH: The first IMOH-compliant products in Israel

- the first of their kind in this category.

• Malaysia – The first three products compliant for

sales - the first of their kind in this category.

Additionally, CS MEDICA’s over-the-counter medical

devices, available without a prescription in the EU, under-

score its unique market position and broaden its acces-

sibility across regions.

Regulatory environment:

Although THC (tetrahydrocannabinol) is the psychoac-

tive component of cannabis in many countries, includ-

ing China, CBD (cannabidiol) is still stigmatized and

classified as an illegal substance. Despite CBD’s lack

of psychoactive effects, it faces legal challenges and

regulatory scrutiny in China, complicating market entry.

This stigma adds to the complexity for companies like

CS MEDICA, which specialize in CBD-infused products,

making it crucial to navigate the country’s strict regulatory

landscape carefully.

CS MEDICA is currently undergoing the process of regis-

tering its products under Chinese legislation, with clinical

trials taking place in the pilot zone area of “Hainan.” This

region offers a unique regulatory environment, and the

company’s prospects for entering the market appear

promising. China’s massive market, combined with its

role as a gateway to the broader APEC region, positions it

as a strategic target. Favorable consumer behavior, such

as a willingness to adopt new technologies and wellness

products, presents an opportunity for CS MEDICA to

achieve a first-mover advantage. Once local approval is

granted, the company could establish a strong foothold

in China and the wider Asia region, where competition

remains limited.

However, China’s regulatory complexities mean that

the market is not yet factored into the company’s short-

term growth projections. In contrast, Japan’s allowance

of CBD products with 0% THC presents a promising

opportunity, especially as CS MEDICA has achieved a

one-pass-per-billion test confirming no trace of THC.

Along with India and Malaysia, where CS MEDICA has

already secured product registrations, Japan offers a

more favorable regulatory environment for immediate

expansion, presenting new revenue opportunities while

China’s legal landscape evolves.

BUSINESS

Regulatory Strategies

CS MEDICA A/S | Annual Report 2023/2024 23

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BUSINESS

Patents and Other Intellectual Property Rights

Currently, we have the following patents:

Patent no.: DK 181405 – Nasal Protect Gel

Patent no.: DK 181329 – Nasal Night Spray

Patent no.: DK 181458 – Wound Gel

Patent no: EP 4009944l - Psoriasis Gel

Patents for revenue drivers strengthen business value.

All of CS MEDICA’s main products are patented or in the

patent registration process. It goes without saying that

patenting its unique formulas will help ensure its com-

petitive advantage. For example, for CS MEDICA’s main

products and revenue drivers i.e. arthritis gel, psoriasis

gel, wound gel, pain patch, and protective nasal gel,

the company has already applied for patents in 2019

and ending in 2022, which, if granted, will empower the

company to ensure exclusivity to its formula.

Worth highlighting, this year, the company was already

granted patents on its Anti-Hair Loss serum in Denmark

and its Psoriasis Gel in EU. Also, the company is pre-

paredto launch final tests for bioactive CBD. Once com-

pleted, the patent application is expected to be initiated.

CS MEDICA A/S | Annual Report 2023/2024 24

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Trademarks

The Company protects its IPR by the mentioned patents and global trademarks registration in

class 03, 05, and 10 – covering the following territories;

Country Status Reneval Application

Australia Registered 12/11/ 2021

Canada Registered 20/01/ 2020

EU Registered 24/10/ 2028 24/10/ 2018

Hong Kong Registered 10/11/ 2031 11/11/ 2021

Indien Registered 20/01/ 2020

Indo nesia Registered 20/01/ 2020

International Protocol Registered 19/ 11/2028 19/ 11/2018

Malaysia Registered 20/01/ 2020

New Zealand Registered 12/11/ 2021

Norway Registered 19/11/ 2018

Sout h Korea Registered 20/01/ 2020

Switzerland Registered 19/11/2018

Tur key Registered 12/11/ 2021

United Kingdom Registered 24/ 10/2028 24/ 10/2018

USA Registered 20/01/ 2020

Vietnam Registered 20/01/ 2020

Japan Under processing 20/01/ 2020

Thailand Under processing 20/01/2020

CS MEDICA A/S | Annual Report 2023/2024 25

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BUSINESS

Commercial Growth & Performance

Growth

The alternative medicine market is expected to grow

at a 15.7% CAGR (2021–2031e), driven by increas-

ing consumer demand for non-pharmacological

treatments, such as CBD-infused solutions. As a

key player in this market, CS MEDICA is projected to

achieve a 61% sales CAGR through 2027/28e, driven

by expanding international market penetration and

growing demand for its medical devices.

CS MEDICA is uniquely positioned to capitalize on this

expanding market, supported by recent consumer

trends and the increasing prevalence of autoimmune

and stress-related disorders. Its product portfolio

addresses these conditions across diverse markets,

leveraging cultural differences to drive growth.

Rising Demand for Alternative Medicine

Over the last few years, health-conscious consumers

have increasingly shifted from pharmaceutical products

to alternative medicines, which offer similar efficacy,

fewer side effects, and lower costs. For example, while

the global market for complementary and alternative

medicine was valued at $102 billion in 2021, it is pro-

jected by Allied Market Research to grow at 15.7%

annually, reaching €438 billion by 2031. This shift high-

lights not only the growing acceptance of alternative

treatments but also their strong demand.

CS MEDICA’s product portfolio is ideally positioned to

benefit from this trend. Its CBD-infused gels, sprays,

creams, and patches offer the efficacy of traditional

pharmaceuticals while delivering the additional benefits

of fewer side effects and natural ingredients.

Market Expansion and Cultural Adaptation

Another key growth driver lies in expanding into non-Eu-

ropean markets, particularly APEC and MENA, where

regulatory requirements are stricter due to CBD bans.

CS MEDICA’s THC-free product portfolio (less than

one-pass-per-billion) meets these stringent standards,

ensuring market entry compliance.

However, CS MEDICA is also deeply engaged in

expanding its presence in the EU and the US, markets

that hold significant potential due to their established

healthcare infrastructures and growing consumer inter-

est in CBD-infused solutions. In Europe, CS MEDICA

benefits from its MDR compliance, which allows its

products to be marketed as medical devices, giving the

company a competitive edge in pharmacy distribution

channels. Meanwhile, in the US, the increasing accept-

ance of CBD products and regulatory advancements

are paving the way for CS MEDICA’s products to tap

into a highly lucrative market.

Top-Line Growth

CS MEDICA is poised to deliver sales growth, supported

by its strategic business model and market dynamics.

The company operates with a CANNASEN

branded

portfolio and white-label model with the purpose to drive

revenue with shorter lead time from order to invoice,

contingent on the successful approval and registration

of its CBD-infused products across relevant markets,

particularly in APEC, MENA, the EU, and the US.

Distribution Channels

CS MEDICA employs a multi-channel sales approach,

including direct (B2C) sales through its CANNASEN

web

shop, retail partnerships, wholesale distribution, and agent

channels that act as intermediaries. Recently, the company

has shifted toward a B2B2C model due to focusing on

less capital-intensive operations.

I.e. in Denmark, CS MEDICA outsourced sales activities to

OneMed, leveraging its established logistics, purchasing

power, and distribution network. This partnership ena-

bles CS MEDICA to reduce overheads and operational

expenses, allowing the company to concentrate on product

development, marketing support and core operations while

benefiting from OneMed’s cost-efficiency and market reach.

CS MEDICA A/S | Annual Report 2023/2024 26

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Diseases and ageing population

Moving beyond traditional demographic segmentation based on

age or gender, CS MEDICA focuses on behaviors, symptoms, and

needs and prioritizes real needs in categories such as skin disorders,

musculoskeletal disorders, respiratory disorders, and dermaceuticals

and can thus reach a broader audience globally.

People are becoming older and with that chronic diseases are an

increasing trend as well with people suffering from pain and seeking

treatment. CS MEDICA is addressing a multi-billion-dollar market

which is projected to grow by 4-9% CAGR within the upcoming years

to a respectable size (> $ 500bn by 2028e), implying a long runway of

growth ahead for the company. Addressing ailments such as psoriasis,

wounds, arthritis, pain, sleep disorders, virus & bacterial infections,

hair loss, and skin disorders, CS MEDICA is positioned to capitalize

on these developments.

Segment strategy

CS MEDICA’s “bottom-up” business

approach is also reflected in its cus-

tomer segmentation, which is divided

into four key groups: demographic,

behavioral, psychographic, and clus-

ter. Unlike conventional segmentation

strategies that often focus solely on

demographic factors such as age

or gender, CS MEDICA goes a step

further by emphasizing behavioral

factors, real consumption moments,

and specific symptoms. This strategy

enables the company to make its

products and communication more

targeted, effective, and relevant to

various health challenges.

Although CS MEDICA’s products are not tailored to a single demo-

graphic group, the company recognizes that autoimmune and stress-re-

lated disorders are more prevalent among older individuals. As global

populations age, CS MEDICA is well-positioned to address age-related

conditions such as arthritis, leveraging this demographic trend to drive

future growth.

BUSINESS

Segmentation & Markets

Growing demand for alternative medicine positively affects CS MED-

ICA’s business. In the last years, more and more health-focused

consumers tend to shift from pharmaceutical medicines towards

alternative medicine and treatments with the same efficacy, fewer side

effects, and lower cost than traditional medicines. For example, while

the market for complementary and alternative medicine amounted to

$ 102bn globally in 2021, Allied Market Research estimates that it will

grow by 15.7% annually to reach € 438bn by 2031, showcasing not only

the increased acceptance or tolerance of alternative medicines, but

also the strong demand for it. This looks set to benefit CS MEDICA’s

current product portfolio which is built on alternative medicine through

its CBD-infused gels, sprays, creams, and patches which are mostly

applied topically or nasally, all the while offering the same efficacy that

customersare used to from traditional pharmaceuticals.

CS MEDICA A/S | Annual Report 2023/2024 27

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BUSINESS

Marketing & Compliance as a Service

Central to MaaS is CS MEDICA’s Knowledge Hub, which includes a content

portal featuring practical playbooks, regulatory guidance, and data-driven insights.

Data and case studies are shared with customers to optimize product launches and

enhance communication strategies. This resource empowers partners to confidently

promote CBD medical devices while adhering to regional compliance standards.

Through its targeted BtBtC (Business-to-Business-to-Consumer) strategy, CS

MEDICA ensures that end customers receive accurate information, fostering trust

and driving product adoption. Additionally, as one of the few companies integrating

CBD into Medical Device compliance, CS MEDICA leverages its extensive data and

real-world case studies to enhance partners’ market entry strategies and stream-

line regulatory approvals. By addressing both regulatory challenges and educa

tional gaps, CS MEDICA’s MaaS framework strengthens its partners’ success and

enhances the company’s leadership position in the CBD MedTech industry. This

integrated approach drives sales, builds brand credibility, and secures long-term

growth in a rapidly evolving market.

FEEL

INVEST

LOOK THINK ACT COMMIT

Market gap analysis

Competitive landscape

Consumer insights

Keyword analysis

Regulatory tracks

Out of product…

Recommended…

Looking for alternative…

Seen ads/Influencer…

Seen instore

Open-minded…

Receptive for relevant…

Communication…

Passiv but with preferences…

Evaluation and benchmarking

Actively searching for

details, brands, trials and

recommendations

Purchase/choice…

Brand vs Store…

Promotion

Viability

Service

Experience…

Positive/expectations

delivered…

Recommendations/Loyal…

CS MEDICA A/S | Annual Report 2023/2024 28

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BUSINESS

Supply Chain & Operations

Reflect: Over the past year, CS MEDICA has streamlined its operational and

financial structure, creating a leaner, capital-light, more agile organization. Our

optimized business model has reduced costs, mitigated risks, and enhanced

scalability, allowing us to seize market opportunities despite lack of funding

to scale fully. Strategic investments in compliance, clinical trials, and process

improvements have yielded tangible results, solidifying our position as a trusted

partner in the global alternative medicine space.

Revise: We have shifted to a flexible B2B2C model, strengthening partnerships

with local market players while accelerating white-label business growth. This

strategic pivot leveraged our core strengths in R&D, compliance, and market

insights to enable faster market entry and expansion. Through securing new

patents, local registrations, and distribution agreements, we have strengthened

our competitive edge and improved our performance, enabling us to navigate

the years’ disruptions and challenges.

3. Reframe: We have prioritized scalability and operational efficiency by refining

our go-to-market processes and enhancing partnerships with CMOs. We have

additionally chosen to harmonize our packaging process.

Reinvigorate: The team has demonstrated resilience in overcoming supply chain

constraints and production delays, maintaining high morale and operational

efficiency. By implementing vertical integration and harmonizing processes, we

have created a more responsive organization. Our compliance with the MDR

transition has further strengthened our ability to meet market demands and

maintain a streamlined, efficient operation.

Manufacturing and distribution strategy

CS MEDICA has recently reshaped its strategy and now focuses more on its white

label business approach. This decision is based on the payment structure of white

label, rendering extensive funding requirements prior to production obsolete:

CS MEDICA receives a prepayment for all MOQ compared to when producing

its CANNASEN

brand products. Furthermore, all products/treatments can only

be produced after registration and local approval, which usually takes six to

twelve months, depending on the jurisdiction concerned. While the company has

achieved local approval to sell its products as medical devices in all of Europe, it

still awaits local approval in numerous international countries.

The company follows a made-to-order (MTO) production, rendering unnecessary the

piling up of inventory. It usually takes four months to produce (target: two months),

partnering with manufacturing companies in Germany and Italy. The order-delivery-

invoice lead times range from five to 13 months, depending on whether the customer

is based inside or outside of Europe and on whether CS MEDICA produces for its

own CANNASEN

brand or its partners (private/white label). This is because the

company is required to gain local approval to sell its products as medical devices

in any given jurisdiction, which can take up to 6 months. Additional time is needed

for packaging and shipping.

Enhanced Operational Strategy and “4R” Framework Progress

CS MEDICA A/S | Annual Report 2023/2024 29

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GOVERNANCE

CS MEDICA A/S | Annual Report 2023/2024 30

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CORPORATE GOVERNANCE

Board of Directors

Flemming Heegaard (1954)

– Chairman of the Board

Flemming is Chairman of CS MED-

ICA and a seasoned attorney with

particular focus on corporate law,

M&A, and tax advisory services. He

appeared in DK Court of Appeals

and Supreme court and offers val-

uable comprehensive legal counsel.

Other assignments include practic-

ing in his own law firm and being a

board member in other commercial

companies.

Gitte Henriksen (1967)

– Founder & Member of the

Board

Gitte Henriksen holds an M.Sc. in

Business Administration and

Finance. Gitte has experience as

an auditor from KPMG with more

than 20 years of experience in

business development within “Big

4” companies including busi-

ness divestiture, acquisition, and

retention. She is a chairman of a

board at Wirefree service (Orange

Denmark). In addition, Gitte has

valuable experience in strategy

development, implementation and

execution as well as a stakeholder-

and project management.

Jesper Herold Halle (1974)

– Member of the Board

Jesper is a board member of CS

MEDICA. He holds a BA in interna-

tional businessand has 25+ years

expertise in Asia and the Middle

East, fostering major digitalplatform

collaborations. He is a former Com-

mercial Consul for the Danish Minis-

tryof Foreign Affairs in China. Other

assignments includes being part-

ner at Case Rose | Inter Search an

executive and leadership consulting

firm, Partner at Board Network– The

Danish Professional Directors Asso-

ciation, and leading the advisory firm

Herold Halle 1945 ApS.

Ib Madsen (1978)

– Member of the Board

Ib is a board member of CS MED-

ICA. He is a seasoned CEO with a

strong focus on business develop-

ment across diverse industries. His

expertise includes business devel-

opment, capital raising, and strategic

sparring, underpinned by a com-

mercial mindset and go-to-market

strategy. Other assignments include

being relationship

Anders Permin (1963)

– Member of the Board

Anders Permin holds a Ph.D. in Vet-

erinary Microbiology and an MMBA

in Business Administration. Permin

is also the CEO and founder of Uni-

brains.dk, helping companies with

life science documentation, market

analysis, and IT solutions. Previously,

he worked as Deputy Director at the

National Food Institute of the Tech-

nical University of Denmark.

CS MEDICA A/S | Annual Report 2023/2024 31

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CORPORATE GOVERNANCE

Board composition

Once a year, the Board of Directors conducts a self-evaluation. The Board remains focused

on the going concern and risk management to provide long-term value creation by fostering a

combination of competencies.

CS MEDICA A/S | Annual Report 2023/2024 32

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CORPORATE GOVERNANCE

Executive Management

Lone Henriksen (1970) – CEO,

-CSO and Founder

B.Sc. in Biochemistry and a B.Sc.

in Business and Strategic Market-

ing. She has more than 20 years of

experience in the pharmaceutical

industry. Lone has valuable experi-

ence with sourcing and securing GMP

and GDP in the value chain; R&D in

ingredients, health food, cosmetics,

and pharmaceuticals; as well as a

quality and project management. In

her previous work, she was, amongst

others, behind the global cooperation

between Brenntag and Astra Zeneca.

Gitte Henriksen (1967) – CFO,

-Founder and Board member

M.Sc. in Business Administration and

Finance. Gitte has experience as an

auditor from KPMG with more than

20 years of experience in business

development within “Big 4” companies

including business divestiture, acquisi-

tion, and retention. She is a chairman

of a board at Wirefree service (Orange

Denmark). In addition, Gitte has valu-

able experience in strategy develop-

ment, implementation and execution

as well as a stakeholder- and project

management.

Heidi Ahlefeldt-Laurvig (1973)

–COO, CMO

MBA from Henley Business School.

She is an external examiner (censor)

at CBS, a Jury Board member at the

Ecommerce Awards at Danish Cham-

ber of Commerce, and holds 2 board

positions. Heidi has experience in

growth, transformations, internation-

alization, branding, and digitalization.

For 20+ years, she has worked with

different industries and reframed busi-

ness models and strategies.

Mikkel Raahauge Nielsen (1985)

-CCO

M.Sc. in International Business. Mik-

kel has 10+ years of experience in

the pharmaceutical industry in var-

ious positions. The focus has been

on sales and strategy since 2014 and

the latest position included the com-

mercial responsibility for 900+ phar-

maceuticals in Scandinavia.

Suzan Al-shuweli (1984)

-CQO & PRRC

Master in Biotechnology, chemical

and biotechnological engineering.

Expertise in Quality and Regulatory

Affairs for medical devices. Certi-

fied in Good Manufacturing Prac-

tice (GMP) for medicinal products.

PRRC - MDR

Kamlesh Vora,

-MD Cannordic India

Master in Organic Chemistry.

Has 25yrs of Sales and Business

Development experience in Indian and

Asia Pacific Pharma market. Business

Management in India & Asia Pacific

for Pharma, Animal Nutrion & Health

, Food and Agro. Factory Audits for

developing sustainable sourcing from

Asia to ROW, for API’s & Ingredients.

CS MEDICA A/S | Annual Report 2023/2024 33

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CORPORATE GOVERNANCE

Corporate Responsibility

We commit to improving people’s lives by bringing change

and relief to patients worldwide with the therapeutic values

of cannabinoids.

Patients, being two or four-legged users, that struggle with pain, autoimmune

diseases, and stress-related disorders, and seek efficient, safe alternatives

to traditional healthcare treatments. In this pursuit, sustainability is essen-

tial and a part of our DNA and long-term business success. We work with

natural ingredients as science and aim to ensure we meet our customers,

community, and planet’s needs.

We strengthen our efforts, education and share best practices to influence

our value chain and industry. Strong partnerships, data insights, and tech-

nology, together with our R&D, help us innovate and evolve further. Current

external factors challenge the supply chain and new opportunities, ensuring

we keep agile and adaptive for better decisions and partnerships.

Strong partnerships, data

insights, and technology,

together with our R&D, help us

innovate and evolve further

CS MEDICA A/S | Annual Report 2023/2024 34

Table of Contents

DIRECTOR’S REPORT

CS MEDICA A/S | Annual Report 2023/2024 35

Table of Contents

See all CS MEDICA news click here

DIRECTOR’S REPORT

The financial year 2023/2024

CS MEDICA A/S | Annual Report 2023/2024 36

HIGHLIGHTS AFTER THE FISCAL YEAR

• Jan10,2025,CS MEDICA Achieves Fourth European Patent with

Psoriasis Gel.

• Dec192024,Spotlight Stock Market’s announcement regarding the

delisting of the company’s shares.

• Dec19,2024,Anti-Hair Loss Serum Approved for Sales as MENA Market

Expands, Complementary Products Await Final Approval.

• Nov22,2024,Update on the Share Distribution of CANNORDIC Shares

• Nov22,2024,Permanent regulation could pave the way for better access

and understanding of CBD’s benefits and the diversity of products, as

seen in more mature global markets.

• Nov12,2024,CS MEDICA A/S: Update on the Strategic Rationale Behind

CANNORDIC IPO and Aim for Capital Increase

• Nov11,2024,CANNORDIC, the subsidiary of CS MEDICA, secures an

exclusive deal with Deutsch-Pharm in Ukraine, signaling a sales potential

of DKK 750.000.

• Nov04,2024,CS MEDICA Valued at 17,16 DKK (€2.30 ) per Share Ahead

of German IPO, Highlighting Unique Regulatory Position and Growth

Potential

• Oct29,2024,CS MEDICA Achieves Key Milestone in MDR Compliance

with Finalized Classification, Solidifying Unique Market Position for Medical

Devices

• Oct21,2024,CS MEDICA A/S Update from CEO: Progress on CAN-

NORDIC IPO, Share Distribution & Upcoming Market Analysis

• Oct02,2024,CS MEDICA A/S Secures Sales Approval in Azerbaijan &

Georgia, Valued at 1.17 mDKK

• Oct02,2024,CS MEDICA A/S Share Capital Increase Registered with

the Danish Companies Registration Office

HIGHLIGHTS DURING THE FISCAL YEAR

• Sep30,2024,CS MEDICA’s Subsidiary Signs Agreement to Target the

German Market, Leveraging Expertise of Nimbus Health, a Dr. Reddy’s

Laboratories company.

• Sep18,2024,CS MEDICA A/S Announces Strategic Partnership with

Scan MedPartners to Expand Reach into the US Market

• Sep17,2024,CS MEDICA Announces Approval of CANNASEN

Pain

Patch in Malaysia and Trademark Registration in Thailand

• Sep16,2024,Technical News 6/24 – Information regarding the introduc-

tion of CCP solution at Spotlight Stock Market

• Sep02,2024,CANNORDIC India Ltd., a CS MEDICA Subsidiary, Signs

Letter of Intent with the Pharmaceutical Company Zuventus Healthcare

to Launch CANNASEN

in India

• Aug21,2024,CS MEDICA Achieves MDR Classification, Setting New

Standards in Substance-Based Medical Devices

• Aug20,2024,CS MEDICA Pioneers CBD-Infused Medical Devices in

Jordan with Confirmed Classification

• Aug19,2024,CS MEDICA Q3 2023/2024: Growth Through Strategic

Regulatory and Market Adaptations

• Aug16,2024,CS MEDICA Q3 2023/2024 Results: Strong Revenue

Growth of 400% Despite Production Delays

• Aug07,2024,CS MEDICA’s CANNORDIC Names Pharma Avanti asPre-

ferred Partner in Brazil

Table of Contents

See all CS MEDICA news click here

• Aug02,2024,CS MEDICA’s Subsidiary, CANNORDIC, Signs Distributor

Partnership with PHARMALINK

• Jul26,2024,CS MEDICA Leverages Strategic Partnerships for CAN-

NASEN

Brand Launch in APAC and MENA

• Jul24,2024,CS MEDICA Receives “Intention To Grant” for European

Patent Application Concerning CANNASEN

Psoriasis Gel, Reinforcing

Leadership in CBD-infused Dermatological Innovations

• Jul19,2024,CS MEDICA A/S Secures Repurchase Orders from Key

European Partners

• Jul15,2024,CS MEDICA Announces Strategic Partnerships to Enhance

Funding

• Jul01,2024,CS MEDICA Stock Now Also Traded on XETRA

• Jun17,2024,CS MEDICA Group Completes Product Registration of

CANNASEN

CBD-Infused Medical Devices in Israel.

• Jun12,2024,CS MEDICA Announces Strategic Partnership with OneMed

• Jun11,2024,Strategic Expansion through Innovation and Collaboration.

• May28,2024,CS MEDICA receives 2 MDKK to support its short-term

financial obligations.

• Apr30,2024,CS MEDICA A/S Enters New Partnership with Award-Win-

ning OTC Company Holding a Strong Position in the Chronic Pain Segment

in Germany.

• Apr25,2024,CS MEDICA A/S: CEO, Lone Henriksen, buys shares in

the Company.

• Apr22,2024,CS MEDICA Advances Global Reach with 180˚ Drug Store

Alliance, Powered by Pull Market Strategy.

• Apr04,2024,CS MEDICA A/S Breaks Through Asian Market Barrier

with Approval of Protective Nasal Gel in Malaysia.

• Feb20,2024,CS MEDICA A/S Partners with New Distributor To Launch

Cannasen

Into Jordan.

• Feb02,2024,CS MEDICA A/S Achieves New Milestone With Patent On

Their Wound Care Treatment.

• Jan26,2024,CS MEDICA Breaks New Ground In Australia With Regis-

tration Of CANNASEN

Pain Patch And Launch Of Its Cosmetic Products.

• Jan23,2024,DANSKE BANK Extends CS MEDICA’s Credit Line.

• Dec27,2023,CS MEDICA A/S Announces FDA Authorization For Com-

mercialization For Eight Products In The U.S. Market.

• Oct31,2023,CS MEDICA A/S Achieves Milestone With Patent On Nasal

Protect Gel.

• Oct26,2023,CS MEDICA: CANNASEN

Is Now A Registered Brand In

Australia.

• Oct12,2023,CS MEDICA Announces Indian State’s FDA Approval For

Two Cosmetic Products.

• Oct10,2023,Danske Bank Backs CS MEDICA With Dkk 1,2 Million

Credit Line

• Oct09,2023,CS MEDICA Named Finalist In The 2023 European Lifestars

Awards For Post-Ipo Raise Of The Year

DIRECTOR’S REPORT

CS MEDICA A/S | Annual Report 2023/2024 37

Table of Contents

We apply a dual-lensed

approach in our risk

management by considering

operational and strategic risks.

DIRECTOR’S REPORT

Risk Management

With uncertain times and challenges, we are

confident that we will emerge resilient with

the reframed strategic approach, unique

treatments, dedicated team and a financial

injection.

e try to predict and adapt to our environment

where it fits to secure a more robust business. It

may include external factors, such as geopolitical bal-

ance changes, patient or technological advances, and

internal factors, such as R&D findings, business oper-

ations, or financial capacity. By stringent and system-

atic risk management, we identify potential challenges

and take steps to migrate, eliminate, or re-engineer any

obstacles to protect our value creation.

We apply a dual-lensed approach in our risk manage-

ment, considering operational and strategic risks. We

identify and address both operational risks and strategic

risks that could reduce our ability to achieve our growth

strategy in the long term.

Operational risks, such as supply chain disruptions, IT

failures, local regulatory compliance issues, or lack of

financial capacity to grow or run a business optimally,

can affect the business’s day-to-day operations. A busi-

ness can maintain continuity and avoid costly disruptions

by identifying and mitigating these risks.

Strategic risks can affect the overall direction and suc-

cess of the business over the long term. These can

include market shifts, technological changes, changes in

consumer preferences, or regulatory changes impacting

our R&D. It can also include a lack of expected funding

or delayed cash flow, slowing business performance.

However, a business can anticipate and adapt to change

and develop strategies to stay resilient and ahead.

Addressing risks in our strategic planning

The Executive Management and the Board of Directors

annually analyze our risk profile by evaluating any risks

that could impact our organization. The identified risks

are analyzed in terms of likelihood and impact to prior-

itize the risks needing attention. With this knowledge, a

risk management plan is outlined to address each risk,

including strategies for mitigating, transferring, accept-

ing, or avoiding the risks. The risk management plan is

implemented and measured in an action plan, which is

reviewed and monitored continuously to ensure that it

is effective and up to date.

Access and affordability

Access to affordable care and the burden of chronic

disease is still on the rise and an essential foundation

for our purpose. Ensuring access and affordability is

a risk and responsibility we share with everyone in

the healthcare sector. We recognize that we cannot

defeat chronic diseases alone, but to reduce risk, we

can accelerate our actions to find solutions in collabo-

ration with relevant stakeholders.

Innovation and competition

We are a MedTech company with innovation in our

DNA. To remain competitive and reduce innovation

risk, we invest significantly in internal and exter-

nal pipeline capabilities to ensure patients receive

improved treatments.

Being a first mover indicates we are subject to educa-

tional needs in market understanding and regulatory

territory. We may also experience delays due to compe-

tition in the medical and cannabis industries challenging

our registrations, positioning, and marketing.

Digital disruption

New digital technologies, such as AI, bring new

competitive treatments into the life science industry,

but at the same time, open up the opportunity to deliver

more value to our stakeholders and help patients live

a life without the limitations of their disease.Digital

health solutions bring new risks, especially related

to data regulation and privacy, as well as potential

quality risks. We endeavor to monitor and mitigate

these risks in close cooperation with relevant partners.

Cannabis disruption

An increasing trend in legislation and clinical findings in

a disrupted cannabis market can bring new competitors

into the industry but, at the same time, provide the

possibility of delivering more value to our stakeholders

in the form of new combination products and forms

of delivery. As one of the first to have CE-registred

products with CBD and approved to sell MDD/ MDR,

we constantly analyze the risk-benefit in this area.

Production capacity and supply chain risks

Fluctuations in demand, resource shortages, trade

disputes, quality assurance, and local production

requirements can pressure global supply chains.

Furthermore, our ongoing expansion of production

capacity is complex and associated with long delivery

times. Planning and managing our supply chain and

production is critical to mitigating this risk.

One of the strategies to de-risk is vertical integration

or stocking up, hence investing in materials with

economics-of-scale. Yet, this leads to a financial capacity

risk management.

CS MEDICA A/S | Annual Report 2023/2024 38

Table of Contents

Financial capacity risks

Scale-up business demands investments, just as

MedTechs need financial capacity to research,

develop, perform clinical trials, and secure IPRs besides

manufacturing and marketing the finished products.

To migrate risk for funding, we continually evaluate

multiple solutions to de-risk dependency on Chinese

partners.

Operational risk management process

We are exposed to risks throughout our value chain in

the short to medium term. Some risks are inherent in the

MedTech industry, such as delays or failures of potential

ingredients, packaging, or approvals at a late stage in

the R&D pipeline. Other external, macro-related risks,

such as supply disruptions and competitive threats, and

similar factors familiar to any manufacturing company

with global production.

To maintain product quality, patient safety, and business

ethics, the management and the board review a

‘heat map’ of our most significant operational risks

every six months. This map is based on insights from

management teams across the organization and

includes risks that could cause substantial disruption

to the business over a three-year horizon.

Key operational risks

An aggregated illustration of our key operational risks

is outlined below, with associated descriptions on the

following page.

1. Clinical Pipeline Risks

2. Product Supply, Quality, and Safety Risk

3. Commercialization Risks

4. IT Security Risks

5. Financial Risks

Legal, Patents, and Compliance Risks

Uncertainty in recognition and measurement

It is important to note that this annual report

acknowledges the presence of uncertainties in

recognition and measurement and emphasizes the

reliance of future operations on a capital injection of 30

MDKK, with 15 MDKK to be secured by March 2024

and the remaining 15 MDKK during 2024. Additionally,

achieving a net sales target of 15 MDKK in 2024 is

paramount for the company’s future operations.

Significant uncertainty regarding continued

operations

In the valuation of assets, attention must be drawn to

the inherent uncertainties related to future net sales,

which affect the recognition and measurement of rights,

development projects, and deferred tax assets. It is the

High

Impact

Low Likelihood High

board’s and our opinion that the net sales goal of 2024 is

achievable with a financial injection for supply chain, and

we are confident that future operations and valuation

are adequate, and that these assets are appropriately

valued relative to anticipated future cash flows.

DIRECTOR’S REPORT

CS MEDICA A/S | Annual Report 2023/2024 39

Table of Contents

Risk area Description Impact Mitigating actions

Clinical Pipeline Risks Findings in clinical activities, regulatory processes or

misunderstanding of commercial potential leading to

delays or failure of products in the pipeline

– Patients would not benefit from innovative treatments

– Could have an adverse impact on sales, profits and market

position

– Pre-clinical and clinical activities to demonstrate safety and efficacy

– Consultations with regulators to review pre-clinical and clinical findings and obtain

guidance on development path

Product Supply, Quality

and Safety Risks

Disruption of product supply or quality failures may

compromise the availability of products, ultimately

impacting the health of patients and a lost commercial

opportunity

– Product shortages could have potential implications for

patients

– Could put patients’ health and lives at risk and jeopardize

reputation and license to operate if regulatory compliance

is not ensured

– Could have an adverse impact on sales, profits and market

position

– Establishing global production with multiple facilities and safety stock to reduce supply risk

– Regular quality audits of internal units and suppliers and Regular quality audits of internal

units and suppliers and documented ISO 13485 compliance

– Identification and correction of root causes when issues are identified. If necessary,

products are recalled

Commercialization Risks Market dynamics and geopolitical, macroeconomic or

healthcare crises (e.g., pandemics) leading to reduced

payer ability and willingness to pay

– Market dynamics could impact price levels and patient

access

– Could have an adverse impact on sales, profits and market

position

– Innovation of novel products, clinical trial data and real-world evidence demonstrate added

value of new products

– Payer negotiations to ensure improved patients’ access

– Increased and new access and affordability initiatives

IT Security Risks Disruption to IT systems, such as cyber-attacks or

infrastructure failure resulting in business disruption or

breach of data confidentiality

– Could limit our ability to produce and safeguard product

quality

– Could compromise patients’ or other individuals’ privacy

– Could limit our ability to maintain operations or limit future

business opportunities if proprietary information is lost

– Could have an adverse impact on sales, profits and market

position

– Company-wide information security awareness activities

– Continuity plans for non-availability of IT systems

– Company-wide internal audit of IT security controls

– Detection and protection mechanisms in IT systems and business processes

Financial Risks – Delays in clinical trials and/or controlled studies, or

product developments, will result in cash flow being

generated later than expected.

– There is a risk that our targets regarding the market

penetration and sales will not be achieved within the

timeframe determined.

– Could lead to significant adjustments in funding needs.

– Development, manufacturing, market penetration, etc. are

temporarily halted causing business operations at a slower

pace than desired,

– Delays in commercialization and revenue.

– Could have an adverse impact on sales, profits and market

position in general

– Spreading our investments across a variety of different assets and industries.

– Minimizing risk by regularly reviewing and assessing potential risks faced by the

organization.

– Establish policies and procedures to mitigate financial risks, such as setting limits on the

amount of capital that can be invested in a single asset.

Legal, Patents and

Compliance Risks

Breach of legislation, industry codes or company policies.

Competitors asserting patents against CS MEDICA or

challenging patents critical for protection of commercial

product and pipeline candidates

– Potential exposure to investigations, criminal and civil

sanctions and other penalties

– Could compromise our reputation and the rights and

integrity of individuals involved

– Unexpected loss of exclusivity for or injunctions against

existing and pipeline products could have an adverse

impact on future sales

– Could have an adverse impact on sales, profits and market

position

– Legal review of key activities

– Business Ethics Code of Conduct integrated in our business, Compliance hotline in place

and Internal Audit of compliance with business ethics standards

– Internal controls to minimise vulnerability to patent infringement and invalidity actions

DIRECTOR’S REPORT

CS MEDICA A/S | Annual Report 2023/2024 40

Table of Contents

DIRECTOR’S REPORT

Strategic Outlook

LookingAhead:2024/2025FinancialYear

For the upcoming financial year, we aim for accelerated growth and greater oper-

ational efficiency. Our focus is clear: revenue through optimization of operations,

strengthened distribution, and regulatory milestones.

We operate at the intersection of the pharmaceutical and cosmetics industries,

developing clinically tested, regulatorily approved over-the-counter products

with natural CBD under the EU’s Medical Device Regulation (MDR). Unlike most

cannabis companies that work with prescription medical cannabis, we produce

medical devices—such as gels, lotions, creams, and patches—via Contract

Manufacturing Organizations (CMOs), based on our technical files and Intellectual

Property Rights (IPR).

Key initiatives for the year include sharpening our geographical focus on the EU

and US, markets where we already have product approvals, thus eliminating lead

times for registration. We are also consolidating our CMOs in Europe from four

to three and standardizing packaging to reduce costs.

StrategicPrioritiesfor2024/2025:

• Securing revenue with as short lead time from order to invoice as possible.

• Stabilizing funding to support our expansion and operational goals.

• Completing product registrations in markets with high growth potential.

• Launching innovative products and advancing clinical trials.

Despite our progress in improving operations and controlling costs, we remain

cautious about liquidity risks and scalability constraints. Nonetheless, our com-

mitment to regulatory excellence and stakeholder value positions CS MEDICA

for sustained growth and success in the evolving global MedTech landscape.

Strategic Outlook for CS MEDICA:

Our comprehensive vision spans various treatment areas and markets, setting

the stage for our future growth and operational targets. This past year, we man-

aged to grow our top line while reducing operational costs and losses. By further

optimizing based on our learnings and securing additional funding to boost sales,

enhancing sales potential remains our highest priority

CS MEDICA A/S | Annual Report 2023/2024 41

Table of Contents

DIRECTOR’S REPORT

Sustainability

Creating an environmental, social, and governance (ESG)

report for a company our size involves several steps and

sections. We have been prioritizing social responsibility and

governance more this year, kickstarting plans for the envi-

ronmental impact for 2025 as the new directives CSDDD

and CSRD become a reality, increasingly influencing the

value chain.

EnvironmentalImpact

Sustainable Practices: In collaboration with our four CMOs and other

suppliers, we will outline measures to reduce environmental impact, such as

energy-efficient operations, sustainable materials in product manufacturing,

and waste reduction strategies. Expected for 2025- depending on funding

for digitalization as data is essential for a green transition.

Carbon Footprint: Contributing to sustainability goals can lead to cost sav-

ings, innovation, and enhanced brand reputation in the long term. Hence,

we are to define the company’s carbon footprint and plans or efforts to

reduce it. Conducting a Carbon Audit to measure the current carbon

footprint assessing emissions from all operations, including manufacturing

processes, energy use in offices and labs, transportation of goods, and

employee travel, is relatively comprehensive. Conducting a Life Cycle

Assessment, evaluating the environmental impact of products through-

out their life cycle from raw material extraction, manufacturing, and use to

disposal or recycling, will need a data track we currently have to prepare.

Expected for 2025 - depending on funding for the right partners to define

measurements and data infrastructure.

Compliance: This year, we have audited our four CMOs to ensure envi-

ronmental laws and regulations compliance. Our CQO & PRRC Manager

has expertise in quality and regulatory affairs for medical devices and is

certified in good manufacturing practices (GMP) for medicinal products.

She ensures that all employees, suppliers, and partners are trained in

our SOP processes covering the entire value chain. Additionally, we

signed with a leading Notified Body, BSI Group, for the transition to the

new Medical Device Regulations.

SocialResponsibility

Employee Well-being: We have implemented policies and programs

for employee diversity, inclusion, and empowerment.

Community Engagement: We have taken the initiative to educate

consumers and partners on alternative solutions for healthcare improve-

ments, CBD, and insights. Building a community is in scope for 2024.

Customer Care: Our purpose is to help fight pain, autoimmune, and

stress-related symptoms with treatments that have fewer side effects,

cleaner ingredients, and high bioavailability. These treatments have been

proven effective through clinical trials and are safe as they are under MDR

legislation. We communicate compliantly with ethical marketing and use

patient reviews as storytelling for proof of concept.

Governance

Corporate Governance: As a listed company, we operate within a

governance structure, including board composition and roles.

Ethical Practices: We work on data privacy policies and processes, and we

are defining further policies on anti-corruption, fair competition, etc., for 2025.

Risk Management: This annual report outlines the principles of Key Risks

and Risk Management. When we have elaborated on E-plans for 2025, we

will define detailed ESG-related risks.

Performance Metrics and Goals: We aim to define measurable ESG

targets and capture performance data, demonstrating progress and future

goals for 2025.

CS MEDICA A/S | Annual Report 2023/2024 42

Table of Contents

FINANCIAL STATEMENTS

CS MEDICA A/S | Annual Report 2023/2024 43

Table of Contents

Delisting of CS MEDICA

After the financial year 2023/2024, CS MEDICA faced

a significant development with the delisting from the

Spotlight Stock Market in Sweden. The shift was driven

by factors including the high costs of maintaining a listing,

share price performance, and lack of liquidity. These

challenges prompted a shift towards alternative funding

strategies that align with our long-term growth goals.

The delisting does not reflect a loss in the company’s

intrinsic value. CS MEDICA remains resilient, bolstered

by the recent DKK 60 million investment agreement with

China, structured in three phases at a share price of DKK

7.14. This funding strengthens our financial foundation

and positions us to scale operations.

Sales Prognosis and Future Growth

CS MEDICA operates as a MedTech company with

inherent complexities. In November 2020, we listed our

“substance medical device” products under the legacy

Medical Device Directive (MDD), now transitioning to

the more stringent Medical Device Regulation (MDR) by

2028. Comparable to U.S. FDA standards, MDR requires

previously MDD-approved products to meet new com-

pliance standards to remain marketable beyond 2028.

While MDD approval enabled sales across the EU and

free sales certificates in 150 countries, larger pharma-

ceutical companies hesitated to engage with us due to

concerns over securing MDR approval, posing risks of

product withdrawal after the transition.

We have now completed the second review by our

Notified Body, BSI, with all products classified as Class

IIa under MDR. This significantly reduces regulatory

risk, strengthens our position as a trusted partner for

pharmaceutical companies, and opens up opportunities

for collaborations, larger orders, or IPR sales.

Our order pipeline currently stands at 49 million DKK,

with orders in production or registration, and our MDR

certification enhances our marketability and supports

our commitment to quality and safety. This paves the

way for global opportunities and sustainable growth.

Prepared for Growth with a Robust Supply Chain

and Production Readiness

To ensure reliable growth, we’ve partnered with multiple

approved Contract Manufacturing Organizations (CMOs)

to ensure resilience across all production categories.

Our current CMOs include:

•

Substance Medical Devices: 3 ISO 13485-certified

CMOs in Germany and Poland

•

Cosmetic Semi-Solid Products: 2 approved CMOs

in Poland and India

•

Medical Device Patches: 1 ISO 13485-certified

CMO in Italy, with an additional one under approval

This multi-sourcing strategy mitigates supply chain risks,

even in unforeseen circumstances like force majeure,

ensuring production and delivery consistency.

We’ve also passed our Stage 2 audit with BSI, bringing

us closer to ISO 13485 certification, which enhances

our ability to oversee medical device production and

increases flexibility for scaling up.

Securing Funding to Drive Growth

We’ve finalized a new Investment Agreement, replacing

RongShi’s company in Inner Mongolia with Unitech

International (HK) Limited, Hong Kong. The DKK 60

million agreement is structured in three phases at a share

rice of DKK 7.14. The first tranche, DKK 2 million, has

partly been received with the remaining expected to be

finalized shortly. The second tranche, DKK 28 million, will

be disbursed once the first product receives fast-track

registration approval in Hainan. The third tranche, DKK

30 million, will be finalized 12 months after tranche 2.

The application for Hainan’s fast-track registration is

progressing, with approval anticipated within approx-

imately 3 months, unlocking tranche 2 funding. This

will provide the liquidity necessary to scale production

and operations, driving growth and expansion into the

Chinese market. For further details on financing and the

financial position, please refer to the Financial review,

Financing and financial position section.

CS MEDICA will continue to keep all stakeholders

informed through its current news platform on Cision

News. We encourage all stakeholders to sign up for the

newsletter at cs-medica.com to receive the latest news

releases directly in their email inbox.

STATEMENT FROM THE CFO - GITTE LUND HENRIKSEN

CONSOLIDATED STATEMENTS

Financial statements & review

CS MEDICA A/S | Annual Report 2023/2024 44

Table of Contents

Financiel review

CS MEDICA remains dedicated to its initial objectives

and goals. Despite challenging financial conditions in

2023/2024, the company successfully pursued its goal of

business expansion by investing in scaling the business,

entering new markets, launching new products, and

continuing its IPR rights at a global level, while fulfilling

the necessary legal requirements for transitioning from

MDD to MDR.

Income Statement

Net Sales

Year-to-date revenue reached mDKK 8.1, significantly

higher than mDKK 1.1 in the prior year. Despite converting

part of our order pipeline, delays in production and in

finalizing a deal within the year mean we fall short of

meeting the budgeted target of mDKK 15. The pipeline

and deal remain active but have been postponed to

the next fiscal year. With an active order pipeline of

mDKK 49 and anticipated funding from our Chinese

investment agreement, we are aiming for a revenue of

mDKK 33.8 for the financial year 2024/2025, setting a

strong foundation for future growth.

Gross Profit

For the year-to-date period, gross profit amounts to

DKK 2.8 million, equivalent to 35%. While gross profit

was slightly below the initial target of 40%, the impact

of stock write-downs and free samples contributed to

a 10% adjustment. Excluding these factors, the gross

profit surpasses the projected 40%, showcasing

positive progress and strong underlying performance.

Sales and Distribution Costs

Sales and Distribution Costs in 2023/2024 amounted to

DKK 4.9 million, representing a reduction of 12% com-

pared to DKK 5.6 million last year. This supports our

strategic objective to optimize operations and improve

cost-efficiency as we scale our revenue base.

Staff Costs

Staff costs increased to DKK 8.7 million, compared to

DKK 8.1 million last year. The rise is primarily due to

expanded resources in compliance and supply chain

management, necessary to meet MDR (Medical Device

Regulation) requirements. This investment ensures that

our operations remain aligned with regulatory stand-

ards and supports our continued focus on quality and

compliance.

Administration Costs

The administration costs totaled DKK 2.1 million, a 10%

reduction from DKK 2.3 million in the prior year.

Administration costs were effectively controlled despite

the increased activity and operational demands. This

reduction is the result of a concerted effort to streamline

administrative processes and implement cost-saving

initiatives. These measures allowed the company to

allocate more resources toward growth and operational

expansion while keeping administrative expenses under

control.

Depreciation and Amortization

Year-to-date depreciation and amortization amounted to

DKK 2.1 million. Depreciation and amortization expenses

remained stable compared to the previous year, with

minor increases linked to investments in intangible

assets, particularly those related to MDR.

Financial Items

Financial expenses totaled DKK 1.5 million, compared

to DKK 1.0 million for the same period last year. The

increase in financial expenses is primarily due to pro-

longed credit facilities together with bridge loans secured

to support. This short-term financing helped the com-

pany navigate cash flow requirements but resulted in

higher interest expenses. The company expects these

costs to decrease as more stable funding arrangements

are secured in the future.

Effective Tax Rate

The effective tax rate remained 0% due to the company’s

tax loss carryforward and current tax position. During

2023/2024, the company recognized tax income DKK

4.8 million, related to the activation of tax assets. This

activation reflects adjustments made to the company’s

deferred tax assets, anticipating future profitability.

Income from Equity Investments in Group Enter

prises

CS MEDICA has recognized a loss of DKK 0.5 from its

Joint Venture (JV), as the JV has not yet started its oper-

ation. The JV has not managed to finalize its financial

statements. Consequently, the quarterly figures for Q3

and Q4 have not been incorporated.

Net Profit/Loss

Year-to-date, the net loss was reduced to DKK -9.6

million, compared to DKK -14.5 million in the prior year,

representing a 34% improvement.

The improvement in net loss is primarily attributed to

higher revenue, reduced operating loss, and success-

ful cost optimization measures. The company’s focus

on consolidating operations helped improve the overall

financial performance, setting the stage for profitability

in future periods.

Cash flow and capital allocation

Cash flow from operating activities: in 2023/2024

showed an outflow of DKK 4.4 million, compared to an

outflow of DKK 8,3 million in 2022/2023. This change

was driven primarily by increased Net sales and fluctu-

ations in working capital.

Cash flow from investment activities: was mainly

influenced by continued capital expenditure in Devel-

opment projects & IPR rights, which totaled DKK 3.4

million (compared to DKK 2.9 million in the previous

year). These investments are largely focused on prod-

uct development, including the costs associated with

transitioning to the new Medical Device Regulations

(MDR) and investments in securing intellectual property

such as patents.

Cash Flow from Financing Activities: Cash flow from

financing activities was positive, with an inflow of DKK 7.3

million, compared to DKK 7,2 million in 2022/2023. The

CS MEDICA A/S | Annual Report 2023/2024 45

Table of Contents

inflow was driven by the company’s capital-raising and

debt-conversion efforts, contributing to strengthening

its balance sheet.

Total Cash Flow and Cash Position: The total cash

flow was a net outflow of DKK 0.4 million, compared

to a net outflow of DKK 3.3 million in the previous year.

This positive shift in cash flow reflects the company’s

increased Net Sales and its strategic efforts to reduce

operational costs and streamline its activities. Although

the company continued to face challenges, the reduced

cash outflow indicates a more efficient use of resources

and a cautious approach to expenditures.

At the end of 2023/2024, cash and credit stood at

DKK -0.8 million, compared to DKK -0.4 million at the

beginning of the year. The credit has since been repaid,

ensuring a stronger financial position moving forward.

Equity Statement

Contributed Capital: In 2023/2024, contributed cap-

ital increased significantly by DKK 312,207, bringing

the total to DKK 1,113,179, up from DKK 800,971 at the

beginning of the year. This increase is due to capital

raised during the EGM (Extraordinary General Meeting),

where new shares were issued to cover capital injections

or debt-conversions. This capital raise contributes to

strengthening the company’s equity base.

Reserve for Development Costs: The Reserve for

Development Costs increased by DKK 1.5 million, reach-

ing DKK 9.5 million by the end of 2023/2024, compared

to DKK 7.9 million at the beginning of the year. This

increase aligns with ongoing investments in development

projects, reflecting a reserve corresponding to 78% of

the investment for the period, as mandated by regulatory

frameworks governing development cost capitalization

and reporting under IAS 38.

The reserve’s growth compared to the same period last

year highlights CS MEDICA’s sustained commitment to

innovation and development activities.

Retained Earnings: Retained earnings accumulated

are negative with DKK 4.5 million, due to accumulated

losses over the year. This loss is typical in the growth

stages of a company, especially with significant capital

expenditures or investments in R&D and other growth

activities.

Total Equity: At the end of 2023/2024, total equity

stood at DKK 6.0 million, down from DKK 10.4 million in

2022/2023. The decrease is primarily due to a net loss

of DKK 9.6 million, which affected retained earnings.

However, the increase in contributed capital and share

premium reflects the positive financial impact of the

capital raise, helping to offset some losses and maintain

a solid equity base.

In summary, while the EGM capital increases positively

influenced the company’s equity structure, the Net loss

of the year resulted in a net decrease in total equity for

the year.

Financing and financial position

At the end of 2023/2024, credit bank/cash and cash

equivalents amounted to a credit of DKK -0,8 million,

reflecting an increase in credit compared to DKK -0.4

million in 2022/2023. This change highlights the com-

pany’s need for additional funding but also focuses on

navigating its liquidity amid strategic growth efforts and

capital conversion of new shares.

Short-Term Funding: In 2023/2024, CS MEDICA

secured short-term funding and minor direct issues

with investors in Germany and Sweden, enabling the

company to sustain operations and address immediate

financial needs. These efforts demonstrate the compa-

ny’s agility in managing liquidity challenges while aligning

with CS MEDICA’s broader strategic objectives.

Long-term Funding: Long-term funding has been

secured through our long-awaited Chinese investment

agreement under revised terms. The agreement outlines

a total planned investment of mDKK 60 across three

closings, with a share price of DKK 7.14 per share:

• Closing 1 (mDKK 2): The first portion, amounting

to DKK 1.15 million, has been received. With the

remaining DKK 0.85 million expected within the

next few weeks.

•

Closing 2 (mDKK 28): Triggered by the approval of

one product under the Hainan fast-track pathway,

expected within 3–6 months.

• Closing 3 (mDKK 30): Scheduled for 12 months

after Closing 2.

These milestones will significantly strengthen our finan-

cial position, providing a solid foundation for growth

and scaling operations. Our Compliance department

is actively working to meet the necessary regulatory

requirements following closing 2.

CS MEDICA A/S | Annual Report 2023/2024 46

Table of Contents

CONSOLIDATED STATEMENTS

Income statements

1. Oct ober 2023 -

30. September

2024

1. Oct ober 2022 -

30. September

2023

Not e DKK DKK

Income Statement

Net Sales

8.075.306 1.067.275

Costs of goods sold -5.226.459 -153.729

Gross Profit 2.848.847 913.546

Other operating income

0 164.948

Sales and distribution cost -2.065.411 -4.615.345

Administrative costs -2.448.333 -4.268.109

Staff costs

-8.704.302 -8.017.606

Depreciation and amoritsation

-2.115.764 -2.076.080

Oper ati ng profi t -12.484.963 -17.898.645

Income from equity investments in group

enterprises

-459.141 0

Financial costs net

-1.525.882 -568.148

Profit or loss before tax -14.469.986 -18.466.794

Tax on net profit or loss for the year

4.819.083 3.954.029

Net pr ofit or l oss for the year -9.650.903 -14.512.765

1. Oct ober 2023 -

30. September

2024

1. Oct ober 2022 -

30. September

2023

Not e DKK DKK

Comprehensive income

Net profit or loss for the year -9.650.903 -14.512.765

Other comprehensive income:

Cost Diret Issue & IPO -6.311.725 0

Total compr ehensi ve i ncome for the year

-15.962.628 -14.512.765

Attr ibutable to:

Shareholders of CS MEDICA A/S

Earnings per share, basic (DKK) 12 -0,85 0,12

Earnings per share, diluted (DKK) 12 -0,78 0,12

CS MEDICA A/S | Annual Report 2023/2024 47

Table of Contents

CONSOLIDATED STATEMENTS

Statement of financial position

30.Sept ember

2024

30.Sept ember

2023

30.Sept ember

2022

Not e DKK DKK DKK

Balance Sheet

Assets

Development projects & IPR rights

12.109.494 10.152.837 8.346.148

Rights

2.756.230 3.474.277 4.431.174

Equity investments in group enterprises 4.113.010 0 0

Deferred tax assets

12.278.731 7.459.648 226.543

Deposits

57.000 106.688 82.187

Total non-cur r ent assets 31.314.465 21.193.451 13.086.052

Current assets

I nventor i es

Work in progress 0 0 64.428

Manufactered goods and goods for resale

963.245 2.710.031 1.164.684

Trade receivables

3.859.610 2.451.646 1.635.557

Receivables from group enterprises 0 0 0

Other receivables 225.051 -85.057 1.464.357

Cash on hand and demand deposits 17.710 -415.014 9.996.085

Total current assets 5.065.617 4.661.606 14.325.111

Total assets 36.380.082 25.855.057 27.411.163

30.Sept ember

2024

30.Sept ember

2023

30.Sept ember

2022

Not e DKK DKK DKK

Equity and liabilities

Share Capital

1.113.179 800.971 708.630

Reserve for net revaluation according to the equity

method

0 0 1.387.251

Reserve for development costs 9.445.405 7.919.213 5.763.914

Retained earnings -4.542.631 1.693.595 16.287.572

Other Capital reserves

0 0 0

Total equi ty 6.015.953 10.413.779 24.147.367

Provisions

4.802.000 0 329.900

Subordinate loan capital 8.093.332 8.098.428 0

Interest bearing liabilities

537.449 489.060 1.314.112

Total non-cur r ent l i abi l i ties 13.432.781 8.587.488 1.644.012

Credit bank 813.081 0 0

Interest bearing liabilities

3.747.000 192.019 404.695

Trade payables 8.900.911 5.108.285 504.157

Other payables 3.470.356 1.553.486 710.932

Total current liabilities 16.931.348 6.853.790 1.619.784

Total liabilities 36.380.082 25.855.057 27.411.163

CS MEDICA A/S | Annual Report 2023/2024 48

Table of Contents

Statement of changes in equity

1. October 2023 -

30. September

2024

1. October 2022 -

30. September

2023

DKK DKK

Balance at 1. October 2023 800.971 800.971

Change 312.207 0

Contributed capital, at 30. September 2024 1.113.179 800.971

Balance at 1. October 2023 0 0

Change 0 0

Reserve for net revaluation, at 30. September

2024

0 0

Balance at 1. October 2023 7.919.213 7.435.878

Change 1.526.192 483.335

Reserve for development costs, at 30.

September 2024

9.445.405 7.919.213

Balance at 1. October 2023 1.693.595 16.689.694

Share premium 11.252.599 0

Reserve for net revaluation according to the equity

method

0 0

Deferred tax 0 0

IPO cost -6.311.725 0

Reserve for development costs -1.526.196 -483.334

Retained earnings for the period -9.650.903 -14.512.765

Retained earnings, at 30. September 2024 -4.542.631 1.693.596

Total Equity, at 30. September 2024 6.015.953 10.413.780

CS MEDICA A/S | Annual Report 2023/2024 49

Table of Contents

Cashflow statement

1. October 2023 -

30. September

2024

1. October 2022 -

30. September

2023

Not e DKK DKK

Cash Flow statement

Profit/loss before tax -9.650.904 -14.512.762

Financial expenses, reversed 1.525.883 568.146

Depreciation, reversed 2.115.764 2.076.080

Changes in working capital

1.657.804 3.539.666

Cash flows from operating activities -4.351.453 -8.328.871

Investing in Development projects -3.354.373 -2.188.336

Cash flow from investment activities -3.354.373 -2.188.336

Share capital 312.207 0

Share premium 11.252.599 0

Financial expenses paid -1.525.886 -568.148

Cost IPO and capital raising -6.311.725 0

Loan internal parties -5.096 8.098.428

Credit institutions 48.390 -105.865

Credit institutions - short 3.554.981 -256.006

Cash flow from financing activities 7.325.469 7.168.410

Total cashflows end of per i od -380.357 -3.348.797

Cash, beginning of period -415.014 2.933.783

Cash, end of per i od -795.371 -415.014

CS MEDICA A/S | Annual Report 2023/2024 50

Table of Contents

NOTES

1. Going concern

1. Net Sales

2. Other Operating Income

3. Staff Costs

4. Depreciation and amoritsation

5. Other financial costs, Net

6. Tax for the year

7. Development projects

8. Deposits

9. Manufactered goods and goods for resale

10. Trade receivables

11. Change in working capital

12. Share capital and earnings per share

13. Other capital reserve

14. Interest-bearing liabilities

15. Financial Risks

16. Other provisions

17. Liabilities arising from financing activities

18. Related parties

19. Commitments and contigencies

20. Events after the reporting period

CONSOLIDATED STATEMENTS

CS MEDICA A/S | Annual Report 2023/2024 51

Table of Contents

Notes

0 Going concern

It’s important to clearly articulate the financial imperatives

critical for the company’s sustainability and progress

in 2024/2025. The company’s operational viability and

strategic objectives depend on securing additional finan-

cial support. CS MEDICA is working to obtain the DKK

30 million capital infusion as outlined in the agreement

with its Chinese investors. The first portion of tranche

one, amounting to DKK 1.15 million out of DKK 2 mil-

lion, has been received with the remaining DKK 0.85

million expected within the next few weeks. A second

tranche of DKK 28 million will be disbursed upon receiv-

ing approval under the fast-track Hainan program for one

of the products, which is currently expected within 3–6

months. Alternatively, a minimum of DKK 15 million from

other funding avenues must be secured by June 2025.

Additionally, the company’s net sales goal of DKK 33.8

million for 2024/2025 is paramount. However, recent

performance suggests challenges in meeting the sales

pipeline objectives, primarily due to an overly consoli-

dated operation and insufficient funding.

This is compounded by the need to renegotiate or refi-

nance an existing family loan and credit facility amount-

ing to DKK 11.8 million, set to mature at the beginning

of 2026.

The Management projects revenue of DKK 33.8 million

for the upcoming year, driven by an order pipeline from

2023/2024, totaling DKK 49 million, to be delivered in

2024/2025. It indicates their confidence in CS MEDICA’s

commercial strategies and market potential, but also a

focused promise of performance due to the operational

constraints.

Recognizing the risks associated with the company’s

current financial position, notably its reliance on a single

geographical funding source amidst geopolitical flux

and market volatility, the management actively works

to diversify the company’s financial inflows. This effort

encompasses exploring a range of fiscal instruments,

including bridge loans, joint ventures, and extended

investment partnerships. In parallel with these financial

strategies, CS MEDICA is also bolstering its operational

efficiency and supply chain resilience. The company’s

initiatives include transitioning to bulk production with

flexible packaging options and streamlining packaging

operations to reduce costs, MOQ levels, lead time and

increase market responsiveness.

The dual focus on financial diversification and operational

optimization indicates the company’s strategic response

to the concerns that bear upon CS MEDICA as a going

concern. By broadening the company’s financial base

and strengthening its supply chain, the company aims

to mitigate risk and capitalize on growth and stability

opportunities in a dynamic global market.

However, should CS MEDICA not be able to secure its

higher revenue and a capital injection of min. MDKK 15,

preferably the 30 MDKK from the Chinese agreement, it

could have consequences for the Company, including

its ability to grow its business further and, ultimately,-

continue operating.

Uncertaintyinrecognitionandmeasurement

In the annual report, it is important to acknowledge the

inherent uncertainties in the recognition and measure-

ment of receivables from sales, rights, development

projects, and deferred tax assets.

Notably, the activation of rights and development pro-

jects totaling DKK 14,9 million and deferred tax assets

of DKK 12,3 add complexity, primarily due to achieving

turnover targets and securing the necessary capital.

In conclusion, while acknowledging operational uncer-

tainties and delays in capital injection, the board and

management are confident that assets are appropriately

valued relative to future cash flows. The company’s con-

certed efforts to secure a diversified financial base and

enhance operational resilience aim to ensure long-term

sustainability and growth.

Upholding principles of transparency, accountability, and

innovation, the board and management are prepared

to continue navigating the complexities of the current

situation and global business environment with strategic

foresight. Thus, the Annual Report for 2023/2024 con-

firms CS MEDICA’s status as a going concern.

CS MEDICA A/S | Annual Report 2023/2024 52

Table of Contents

Notes

Employment contracts for members of the Key Man-

agement Personnel contain terms and conditions that

are common to those of their peers in similar companies

including terms of notice and non-competitive clauses.

CS MEDICA provides a pension scheme with 10% on

top of the payroll.

Warrant program

Newly employed board and management team were

offered to participate in an Incentive warrants Share

Scheme. At the employment they were offered Incen-

tive warrants, where each warrant confers the right to

subscribe for one share in the Company of a nominal

value of DKK 0.065 against payment of DKK 7.70 with

an annual increase of 10%, each year from the Date of

Grant. The increase in the exercise price shall be com-

pounded as per the expiry of each calendar year. The

vesting occurs with 1/36 per month up to 31. January

2025. Warrants which has vested can be exercised up

to 31 December 2027.

Furthermore, the Company has granted warrants to the

management teams as a replacement for their bonus

which, per request, can be chosen as a replacement for

earned bonus (pre-tax salary) in a 3-year period. During

a period of 3 weeks from the publication of the Com-

pany’s annual report for the financial year, the warrant

holder is entitled to exercise the annual Warrants that

have vested up to 31 December 2030.

Both warrants schemes follow given conditions, including

continued employment. In accordance with the provi-

sions of the warrant program the Board of Directors

will require the warrant holders to sign lock-up agree-

ments on terms equivalent to the terms of the Lock-Up

Obligation applying to the Existing Shareholders (cur-

rently 2 years).

All board members and the management team were

granted and accepted the offer.

The fair value of the shares on 30 September 2024 was

MDKK 101.727 The total value of the benefit element

for the subscription rights was MDKK 1,548. When the

warrants are vested any losses in relation to the current

market share price will be included as staff costs.

2OtherOperatingincome.

Consists mainly of employee grants and grants from the Innovation Fund and other various public funding schemes.

Segments

2023/2024 2022/2023 2023/2024 2022/2023 2023/2024 2022/2023

DKK DKK DKK DKK DKK DKK

Revenue, total 8.105.729 1.550.423 7.959.475 939.750 146.254 610.673

Revenue, externally 8.075.306 1.067.275 7.929.052 704.172 146.254 363.103

Profit before taxes -6.478.644 -10.724.353 -1.084.213 -2.148.799

Assets 19.287.474 17.597.871 1.549.604 1.554.717

Equity 10.518.688 400.328 251.706 571.522

TOTAL

CANNORDI C

(Gl obal BtB)

Galaxa Pharma

(Nor di c BtC, BtB)

2023/2024 2022/2023

DKK DKK

Staff Costs

Salaries and wages 6.930.355 6.692.684

Other cost for social security 1.773.947 1.324.921

8.704.302 8.017.606

Average number of employees 8 9

Board of Directors and Key management

Personel Remuneration 1.894.363 1.178.677

2023/2024 2022/2023

Net Sales DKK DKK

Brand Sale, CANNASEN® BtB 2.027.360 107.281

Brand Sale, CANNASEN® BtC 145.163 61.578

Private & whitelabel sale 5.902.783 895.751

COVID 19 2.665

8.075.306 1.067.275

CS MEDICA A/S | Annual Report 2023/2024 53

Table of Contents

CS MEDICA a/s - Udvikling i antal warrants

Number of war rants

Boar d of

Directors

CEO and

CFO

Employees Advisor s Total

Outstanding at 01.10.2020 - - - - -

Granted - 2020/2021 187.500 156.250 187.500 1.160.800 1.692.050

Exercised 2020/2021 - - - - -

Outstanding at 01.10.2021 187.500 156.250 187.500 1.160.800 1.692.050

Granted - Incentive warrants 0 0 1.283.806 1.283.806

Granted - TO2 (DIAZ-warrants) 0 0 0

350.000

Granted - TO3 (DIAZ-warrants) 0 0 0

250.000

Granted - 2021/2022 - - 1.283.806 600.000 1.883.806

Exercised - 2021/2022 - - - 1.416.100 1.416.100

Cancelled 2021/2022 31.250- - 734.069- 94.700- 860.019-

Outstanding at 30.09.2022 156.250 156.250 737.237 250.000 1.299.737

Granted - 2022/2023 -

Exercised - 2022/2023 -

Cancelled 2022/2023 31.250- - 188.907- 250.000- 470.157-

Outstanding at 30.09.2023 125.000 156.250 548.330 - 829.580

Granted - 2023/2024 125.000 417.384 411.500 953.884

Exercised - 2023/2024 157.795- 157.795-

Cancelled 2023/2024 62.500- - 156.770- 219.270-

Outstanding at 30.09.2024 187.500 573.634 645.264 - 1.406.398

CS MEDICA a/s - Outstanding warrants have the following charactaristics:

Warrants outstanding

Exercise

price DKK

Vesting period Exercise period

Number of warrants

at 30-09-2024:

Not e:

War r ants gr anted to the

Board of Directors

7,7 Fully vested 1.1.2024 - 31.12.2027 62.500 1

War r ants gr anted to the

Board of Directors

7,7 1.7.25 -31.1.28 1.1.2027 - 31.12.2030 125.000 1

War r ants gr anted to CEO

and CFO

7,7 Fully vested 1.1.2024 - 31.12.2027 573.634 1

Incentive war r ants granted

to em pl oyees

7,7 1.2.22 - 31.1.25 1.1.2024 - 31.12.2027 173.000 1

Incentive war r ants granted

to em pl oyees

7,7 1.7.24 - 31.1.27 1.1.2027 - 31.12.2030 50.000 1

Bonus warr ants gr anted to

employees

0,065 - 31/12 2024

During a period of 3 ( thr ee) w eeks from

the publication of the annual repor t for the

financial year s up til 2024/2025 and in

connection with an Exit

60.764 2

Bonus warr ants gr anted to

employees

0,065 - 31/12 2027 - " - 361.500 2

Total 1.406.398

Not e 1:

The exercise pr ice i s DKK 7.7 plus 10% p.a. calculated from the date of issue.

Not e 2: W arr ants can be exercised at DKK 0.065 in each of the thr ee financi al years up til 2024/2025 which is calculated based on a bonus amount

that the warrant hol der is entitled to have conver ted into a number of shares calculated by dividing the bonus am ount by the stock price at the stock

price at the end of the financial year minus DKK 0.10.

CS MEDICA A/S | Annual Report 2023/2024 54

Table of Contents

Expected volatility rate is applied based on the annualized volatility on relevant peer groups

derived from the standard deviation of daily observations over 2023/24.

The fair value of the warrants issued is measured at calculated market price at the grant date

based on the Black & Scholes option pricing model. The calculation is based on the following

assumptions at the grant date:

2023/2024 2022/2023

DKK DKK

Depr eciati on and amor itsati on

Amortisation of Rights 718.047 478.598

Amortisation of development projects 1.397.716 1.597.481

2.115.764 2.076.080

DKK DKK

Other financial costs, Net

Other financial income -8.383 -15.372

Other financial costs -1.517.499 -552.776

-1.525.882 -568.149

Warrant Programme

2023/2024

Ultimo share Price (DKK)

5,94

Expected volatillity rate (% p.a.) 50%

Risk-free interest rate (% p.a.) 0

Expected warrant life 3,2

Excercise price (DKK) 10,2

Exercise Price result-oriented (DKK) 0,1

Fair value all warrants after dilution, (DKK) 1.548.115

CS MEDICA A/S | Annual Report 2023/2024 55

Table of Contents

The board and management acknowledge deferred tax

assets tied to carried-forward losses, foreseeing their

offset against future taxable income. However, there

exists a risk that earnings may fall short of expecta-

tions, introducing uncertainty in valuation. Despite this

risk, management holds the opinion that future earn-

Development projects encompass directly associated

cost related to the development of CS MEDICA’s medical

treatments with CBD, IPR rights, MDR compliance and

the technology platforms. These ongoing projects incur

costs in various forms and are directed toward enhanc-

ing product efficacy, safety, functionalities, local regis-

trations/approvals, the adoption of the MDR reguires

and thereby bolstering CS MEDICA’s revenue streams.

The products related to these development projects are

currently available in the market and continue to evolve to

meet the new MDR requirements. They are sold globally

to business-to-business (BtB) and retail channels and

direct-to-consumer (DtC) in Denmark and on Amazon.

Through CS MEDICA’s technology platforms, distrib-

utors have access to perform post-marketing clinical

trials and product details.

The valuation of development projects depends on

future revenue and earnings from the associated pro-

jects, introducing an inherent uncertainty. Nevertheless,

board and management hold a confident expectation

that future sales will substantiate the valuation.

ings will likely be sufficient to offset taxable income in

the foreseeable future. cf. more about the assessment

under the section Critical accounting judgements and

key sources of estimation uncertainty.

2023/2024 2022/2023

DKK DKK

Tax for the year

Current tax for the year income 0 0

Changes in deferred tax 4.819.083 3.954.029

4.819.083 3.954.029

Recognised as receivable tax credit DKK DKK

Tax calculated as 22% of profit/loss before tax 3.183.397 4.062.694

Sharebarebased payments 1.388.579 0

Correction for Income from equity investments in

group enterprises excluded from joint taxation

-123.141 -95.183

Additional tax depreciation 297.643 0

Non-capitalised tax assets 94.263 0

Non-deductible expenses -21.658 -13.482

Effective tax

4.819.083 3.954.029

Effective tax rate for the year (%) -33% -21%

Deferred tax is recognized in the statement of

financial position as follows:

Deferred tax (asset) 12.278.731 7.459.648

Deferred tax (liability) 0 0

Total 12.278.731 7.459.648

Deferred tax concerns

Intangible assets -2.664.089 -2.229.225

Other fixtures and fittings, tools and equipment 9.277 2.062

Tax loss carried forward 14.933.543 9.686.811

Total 12.278.731 7.459.648

2023/2024 2022/2023

DKK DKK

Development projects

Cost beginning of period 14.743.958 12.555.622

Additions during the period 3.354.373 2.188.336

Cost end of per i od 18.098.331 14.743.958

Amortisation & write down beginning of period -4.591.121 -2.993.640

Amortisation & depreciation during the period -1.397.716 -1.597.481

Amor tisation & wr i te down end of per i od -5.988.837 -4.591.121

Car r ying amount end of per i od 12.109.494 10.152.837

CS MEDICA A/S | Annual Report 2023/2024 56

Table of Contents

Inventories have not been fully optimized and reconciled solely with the warehouse inventory

lists. However, provisions for items approaching expiry, totaling TDKK 880 for 2023/2024, have

been incorporated. Management has assessed the inventory value in relation to future sales,

ensuring accurate measurement.

Write-downs in both 2023/2024 and 2022/2023 are included for fully impaired inventory.

Management has carried out an impairment test of the

accounting values of the recognized development costs

and rights. On this basis, the project development pro-

cess in the form of incurred costs and achieved results

is assessed in relation to the approved project and

business plans for the completed development projects,

the value is maintained if sales are realized as expected

in the coming years. On this basis, it is assessed that the

recovery value exceeds the accounting value.

Rights relate to the value obtained by CS MEDICA during the share exchange between CS MEDICA’s

fully owned subsidiary CANNORDIC. The rights relate to the value generated by CANNORDIC, and

were set equally with the IPO valuation, when listed at Spotlight in september 2021.

Valuation of right hinges on future revenue and earnings generated from CANNORDIC, introducing an

inherent uncertainty. Nevertheless, board and management hold a confident expectation that future

earnings from CANNORDIC will substantiate the valuation.

2023/2024 2022/2023

DKK DKK

Rights

Cost beginning of period 4.786.984 4.786.984

Additions during the period 0 0

Cost end of period 4.786.984 4.786.984

Amortisation & write down beginning of period -1.312.707 -834.108

Amortisation & depreciation during the period -718.047 -478.598

Amor ti sati on & wri te down end of period -2.030.754 -1.312.707

Car r yi ng amount end of peri od 2.756.230 3.474.277

2023/2024 2022/2023

DKK DKK

Deposits

Cost beginning of period 106.688 0

Additions during the period 57.000 106.688

Departure during the period -106.688 0

Cost end of period 57.000 106.688

DKK DKK

9 Manufacter ed goods and goods for r esal e

Finished goods 963.245 2.710.031

Total I nventor i es (net) 963.245 2.710.031

CS MEDICA A/S | Annual Report 2023/2024 57

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As of 30. September 2024 tDKK 253 is in the currency DKK, and at 30. September 2023 tDKK 17. The remaining

trade receivables is in EUR in both financial years. The following table details the risk profile of trade receivables

based on CS MEDICA’s expected loss on trade receivables.

2023/2024 2022/2023 2022/2023

DKK DKK DKK

Trade receivables

Trade receivables 3.859.610 2.451.646 1.635.557

Total Trade receivables (net) 3.859.610 2.451.646 1.635.557

Trade receivables due Not Past due

Overdue by 0-

45 days

Overdue by

46-90 days

Overdue by >

90 days

Wri tedowns

Overdue by

30-90 days

DKK DKK DKK DKK DKK DKK

30. September 2024

691.038 1.860.342 1.308.230 0 3.859.610

30. September 2023

215.176 518.875 6.814 1.710.781 0 2.451.646

30. September 2022

1.701.023 -64.429 -1.037 0 1.635.557

YTD 2022/2023

2023/2024 2022/2023

DKK DKK

Change i n working capi tal

Change in Finished goods 1.746.786 -1.361.497

Trade + other receivables -1.718.073 4.127.045

Trade + other payables 5.709.496 4.890.691

Other provisions 0 -164.948

Deferred tax -4.819.083 -3.953.949

Loan subsidiaries 688.990 0

Deposits 49.688 2.324

1.657.804 3.539.666

Share capital and earnings per share

DKK

Issued and fully paid shares:

As of 1 October 2020, 80 shares of DKK 1.000 DKK each

80.000

6.755

Capital increase transferred from reserves, conversion to a/s 433.245

188.630

As of 1 October 2021,10.902.000 shares of DKK 0.065 each 708.630

Direct Issue, 100.000 shares at share price 8,50 DKK 6.500

Capital Increase TO1, 1,065,335 warrants

exercised, at 9,30 DKK each

69.247

Capital Increase TO2, 255,300 warrants exercised

at 10.30 DKK each

16.595

As of 30. September 2022, 12.322.635 of DKK 0,065 each 800.971

Direct Issue, 613.370 shares at an average share price of 3,07 DKK

39.867

Sharebased payments, 1.325.675 shares at an

average shareprice of 4,76 DKK

86.171

Debt Conversion, 893.8515 shares at an average

shareprice of 3,00 DKK

58.100

Warrants & Bonus following warrant program 128.070

As of 30. September 2024, 17.125.827 of DKK 0,065 each 1.113.179

As of 30 September 2024, the share capital consisted of 17.125.827 (2022/23:

12.322.635)

shares with a nominal value of DKK 0.065 each. The shares are not divided into classes

and carry no right to fixed income.

Capital increase, loan in subsidiary converted to capital and exchanged

for CS MEDICA shares

Capital increase from IPO including changing of shares to 0,065 DKK

2023/2024 2022/2023

Earnings per share DKK DKK

The calculation of earnings per share is based on

the following:

Net profitt/(loss) of the year 9.650.903- -14.512.765

Average number of ordinary shares for calulation

of earnings per share:

14.724.231 11.612.318

Earnings per share:

Earnings per share, (EPS)* 0,66- 1,25-

Number of shar es

17.125.827 12.322.635

Closing shar e pri ce

5,94 10,90

*The diluted effect of outstanding share options has not been calculated as the Earnings

per share is negative.

CS MEDICA A/S | Annual Report 2023/2024 58

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15. Financial Risks

Capital Management

CS MEDICA actively manages its capital to ensure its

ability to continue as a going concern, while also maxi-

mizing revenue growth and Annual Recurring Revenue

(ARR) through the optimization of both debt and equity

balances.

During 2023/2024, the company successfully sustained

operations through three bridge loans totaling DKK 4.5

million, which are set to be repaid in early 2025. Addi-

tionally, the founders and their family members provided

DKK 3.4 million in loans to the company, of which DKK

2.7 million has been converted into shares, strengthening

the company’s equity position. Post-financial year, the

founders further extended an additional DKK 1 million

to bridge the company until the anticipated Chinese

investment materializes. These funding efforts have been

crucial to maintaining the company’s growth trajectory

amidst liquidity challenges.

To address extended lead times between signed con-

tracts and paid invoices—due to longer-than-expected

local legislative approval processes—management

entered into an agreement with SVEA in January 2023.

This agreement allows for the sale of invoices and debtor

administration, effectively converting accounts receiv-

able into immediate cash flow. This mechanism helps

mitigate working capital constraints.

In anticipation of future liquidity needs, CS MEDICA is

now in the process of receiving the long-awaited

Chinese funding. DKK 1.15 million of the first transfer

has already been received, with the remaining DKK

0.85 million expected within few weeks to complete

the first tranche of the Investment Agreement, totaling

DKK 2 million. The second transfer of DKK 28 million is

anticipated within 3 to 6 months, following the expected

approval of one product through the Fast Track Hainan

process. This funding will significantly support the com-

pany’s liquidity. The delay in receiving these funds has

impacted cash flow, prompting management to explore

additional funding avenues. These efforts include poten-

tial collaborations with contract manufacturing organi-

zations (CMOs) and other strategic partners, aimed at

ensuring continued operational efficiency and reducing

time-to-market.

The delisting of CS MEDICA from the Spotlight Stock

Market on January 9, 2025, presents a strategic oppor-

tunity for potential new investors, who view the company

as an attractive exit opportunity through an IPO or M&A

track. This external funding is crucial for maintaining the

company’s growth trajectory and executing its market

strategy while awaiting the second tranche of the Chi-

nese investment.

Financial risk management

Due to the nature of its operations, investments, and

financing, CS MEDICA is exposed to several financial

risks. It is company policy to operate with a low risk

profile, so that currency risk, interest rate risk and credit

risk only occur in commercial relations.

The carrying amount is by management assessed as equivalent to the fair value of

the liabilities.

13. Other Capital reserve

Other capital reserve is used to recognise the value of equity-settled share-based

payments provided to employees, including key management personnel, as part of

their remuneration. Refer to Note 2 for further details of these plans.

2023/2024 2022/2023

DKK DKK

Interest-bearing liabilities

non-curr ent bor r owings

Interest bearing liabilities 10.093.332 8.098.428

10.093.332 8.098.428

Current bor r owings

Interest bearing liabilities 3.097.530 681.079

3.097.530 681.079

Total 13.190.862 8.779.507

CS MEDICA A/S | Annual Report 2023/2024 59

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The scope and nature of the financial instruments

appear from the income statement and statement of

financial position in accordance with the accounting

policies applied. Provided below is information about

factors that may influence amounts, time of payment,

or reliability of future payments, where such information

is not provided directly in the financial statements. This

note addresses only financial risks directly related to CS

MEDICA’s financial instruments.

Credit risk

Credit risk is the risk that a counterparty will not meet

its obligations towards CS MEDICA, leading to a finan-

cial loss. CS MEDICA is exposed to credit risk primarily

related to its trade and other receivables.

In general CS MEDICA obtains credit rating on all coop-

eration partners and potential distributors. Besides

minimizing the risk and protecting CS MEDICA’s financial

interest, management also safeguards that the distributor

has the financial resources to e.g. invest in marketing

and sales efforts. CS MEDICA assesses default when

the accounts receivables are due more than 90 days

and the outstanding amount is written off, when there

is a court order of bankruptcy from the counterparty.

Foreign currency risk

Foreign currency risk is the risk that the fair value or

future cash flows of an exposure will fluctuate because

of changes in foreign exchange rates.

CS MEDICA issues most of its invoices in EUR. His-

torically, DKK has been the predominant invoiced cur-

rency, hence CS MEDICA only had a DKK bank account.

In 2021/2022 CS MEDICA has also included a EUR

and SEK bank account. CS MEDICA has in all material

aspects only transactions in DKK and EUR. Going for-

ward, Management expects higher frequency of foreign

currencies in the incoming and outgoing cash flow. Con-

sequently, management will at that time establish new

bank accounts for these currencies when appropriate,

to reduce costs and lower risk.

To minimize the risk of foreign currency fluctuation on

new contracts, CS MEDICA’s price list is fixed to EUR.

Liquidity risk

CS MEDICA ensures sufficient liquidity resources by

liquidity management. To limit CS MEDICA’s counter-

party risk, deposits are only made in well-reputed banks.

On 30 September 2024, CS MEDICA’s cash and cash

equivalents amounted to tDKK -795 (2022/2023:tDKK

-415). According to management expectations the cash

reserve and expected cash flow for 2024/2025, together

with CS MEDICA’s financing efforts, are adequate to

meet the obligations of CS MEDICA as they fall due.

The table to the right summarizes the maturity profile

of CS MEDICA’s liabilities based on contractual undis-

counted payments

Interest rate risk

Interest rate risk arises in relation to interest-bearing

assets and liabilities. CS MEDICA’s interest-bearing debt

to Vaekstfonden of tDKK 537 as per 30 September 2024

is subject to a variable rate of interest based on a 3-month CIBOR plus a premium. If market interest rates increased

by one percentage point, the interest rate sensitivity as calculated based on the loan balance to credit institutions as

per end of 2023/2024 would lead to a yearly increase in interest expenses of tDKK 5.7. A corresponding decrease in

market interest rates would have the opposite impact. CS MEDICA’s interest-bearing debt, following the bridge loans,

totals DKK 3.747 million. Of this, DKK 1.747 million is subject to an interest rate of 3-6% per month. The remaining

DKK 2 million can either be converted into a direct share issuance at a price of DKK 1.5 per share or the shares can

be repurchased at a share price of DKK 3. CS MEDICA’s interest-bearing debt to founders and their family, totally

tDKK 8.098, is subject to an interest rate of 0,34% per month.

Classification of financial

assets measured at

amortized cost

Since CS MEDICA’s financial

instruments are either short-

term and/ or exposed to float-

ing interest rates, Management

has assessed that the carrying

amount is a reasonable approx-

imation of fair value.

Less t han 6

month

6-12 months 1-5 years > 5 years Total

DKK DKK DKK DKK DKK

30. September 2024

Non current Interest bearing liabilitites 0 0 10.093.332 0 10.093.332

Current Interest bearing liabilitites 3.097.530 3.097.530

Trade and other payables 0 0 0 0 0

0 3.097.530 10.093.332 0 13.190.862

30. September 2023

Non current Interest bearing liabilitites 0 0 8.098.428 0 8.098.428

Current Interest bearing liabilitites 0 681.079 0 0 681.079

Trade and other payables 0 0 0 0 0

0 681.079 8.098.428 0 8.779.507

2023/2024 2022/2023

DKK DKK

Deposits 57.000 106.688

Trade receivables 3.859.610 2.451.646

Other receivables 225.051 -85.057

Current Cash 17.710 -415.014

Total 4.159.372 2.058.263

Interest bearing loan 13.190.862 8.779.507

Trade payables 8.900.911 5.108.285

Other payables 3.470.356 1.553.486

Total 25.562.129 15.441.278

Financial assets measured at amortised cost

Financial liabilities measured at amortised cost

CS MEDICA A/S | Annual Report 2023/2024 60

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16 Other provisions

Consists of VAT due and salary-related items.

verted into a direct share issuance at tDKK 1.5 per

share or repurchased at a share price of tDKK 3,

with the buyback deadline set for February 2025.

18. Related parties

CS MEDICA A/S main shareholders is Colund Aps and

LHX Holding Aps, representing approximately 70% of the

total number of shares/votes. The remaining shares are

widely held. Both entities are considered related parties.

CS MEDICA has, via two occasions prior to the IPO been

granted loans through their subsidiary CANNORDIC A/S.

The loans amounted to totally DKK 2.8 million, given by

Finn-Ove and Nina Henriksen – parents of CEO/CSO

Lone Henriksen and CFO/CIO and Member of the Board

of Directors Gitte Lund Henriksen in the Company.

The loans were offset against units in connection with

the IPO in CS MEDICA. The agreement was not entered

at arm’s length, with no interest.

As associated companies of CS MEDICA A/S, two

100% owned subsidiaries; Galaxa Pharma a/s and

CANNORDIC a/s and two foreign owned subsidiaries:

99% owned CANNORDIC India Ltd. and 49% owned

Joint Venture, RongShi MEDICA (Hainan) Ltd. All Sub-

sidiaries are considered related parties, as well as the

Board of Directors and Executive Management of CS

MEDICA A/S.

CANNORDIC A/S, had before the IPO, an minor part of

the share capital owned by Colund Aps and LHX Holding

Aps. These shares were exchanged for shares in CS

MEDICA via tax-free share exchange before the IPO.

New shares have been issued in CS MEDICA, for the

use in the exchange, and were adopted at the general

meeting on the 16th of April 2021. The valuation of the

shares is based on the IPO valuation, corresponding to

a value of DKK 4.786.982.

Galaxa Pharma A/S represents foreign manufacturers

looking to enter the Nordic market, including CANNOR-

DIC A/S with their CANNASEN

product line. Currently,

Galaxa Pharma focuses on webshop activities, purchas-

ing products from CANNORDIC A/S under the same

pricing principles as other distributors

CS MEDICA acts as a shared service centre for Galaxa

Pharma and CANNORDIC within accounting, adminis-

tration, marketing and project management. Additionally,

CS MEDICA invoices CANNORDIC A/S for the use of its

IPR-secured products, ensuring the intellectual property

rights associated with the CANNASEN

product line are

properly licensed. This arrangement not only under-

scores the value of CS MEDICA’s proprietary technol-

ogies but also establishes a consistent revenue stream

from the licensing of its IPR to CANNORDIC A/S.As all

funding takes place in CS MEDICA and the activities are

situated in the two subsidiaries, CS MEDCIA provides

loans to its subsidiaries. The loans bear an interest rate

of 4% p.a. As of 30 September 2023, the loan to Galaxa

Pharma amounted to tDKK 1 295 and tDKK 11 623 to

CANNORDIC.

All internal transactions have been eliminated in the

consolidated accounts in accordance with the consol-

idation principles announced in the accounting policies.

There have been no related party transactions other than

the transaction described above, and normal remuner-

ation of the Board of Directors and Executive Board are

disclosed as part of note 2.

As of 30 September 2024, the company’s interest-bear-

ing liabilities include the following:

• A loan from Vækstfonden amounting to tDKK 537

(originally tDKK 1,042), established in 2015. This loan

was initially without installments until 2021 and is

being repaid in quarterly installments of tDKK 110,

with the final repayment due in 2025.

• A credit line of tDKK 813, which has subsequently

been partly redeemed.

•

A loan from the founders totaling tDKK 8,093, bear-

ing a monthly interest rate of 0.34%.

•

A bridge loan of tDKK 1,747 with a monthly interest

rate of 3-6%.

• A convertible bridge loan of tDKK 2,000, secured

by 1,333,333 shares. This loan can either be con-

2023/2024 2022/2023

DKK DKK

Liabilities arising from financing activities

Liabilities at 1 October 8.779.507 1.042.949

Loans raised 7.202.908 7.992.564

Repayments -110.000 -256.006

Conversion of debt to equity -2.681.553 0

Liabilities at 30. September 2024 13.190.862 8.779.507

CS MEDICA A/S | Annual Report 2023/2024 61

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20. Events after the reporting period

Events after the reported period have been listed in the

section Governance and Post-Period Developments.

No material events have happened after the reporting

period, besides those referred to in this section.

See all CS MEDICA news, link to Cision news here and

on CS MEDICA webpage here

19. Commitments and contingencies

Subsequent to the financial year, the company has

resolved pending legal proceedings against Laigaard

Partners A/S and Laigaard Accounting Aps. These

proceedings related to recruitment assistance provided

by Laigaard Partners and accounting services from

Laigaard Accounting. The discrepancy with Laigaard

Partners involved a failed recruitment of a Scandinavian

Sales Director, while the issue with Laigaard Accounting

arose from non-compliance with standard accounting

practices. Full provisions for the amounts due have been

accounted for in the 2023/2024 financial statements.

In January 2023 the management entered into an agree-

ment with SVEA, regarding sale of invoices and debtor

administration. With this agreement CS MEDICA convert

its accounts receivable from its customers, into imme-

diate cash. With this agreement SVEA has Pledge in

the debtors of the two subsidiaries with cross-liabilities

between the two subsidiaries and self-debts surety

with CS MEDICA and the two founders. No material

Commitments and contingencies has been reported.

CS MEDICA has entered into a convertible bridge loan

agreement with MKA Pensionsopsparing A/S amounting

to DKK 2 million. As part of the arrangement, 1,333,333

shares have been placed as security. The loan provides

two potential settlement options: either a direct share

issuance at a price of DKK 1.50 per share, serving as

repayment for the bridge loan, or the repurchase of the

shares at a price of DKK 3.00 per share. The buyback

of the shares must be executed no later than February

2025.

CS MEDICA A/S | Annual Report 2023/2024 62

Table of Contents

ACCOUNTING POLICIES

CS MEDICA A/S | Annual Report 2023/2024 63

Table of Contents

CS MEDICA’s financial statements have been prepared

in accordance with International Financial Reporting

Standards (“IFRS”) as adopted by the EU and additional

Danish disclosure requirements for the financial state-

ments of reporting class B enterprises with addition of

certain provisions for reporting class C, cf. the Danish

Executive Order on Adoption of IFRSs (“IFRS bekendt-

gørelsen “) issued in accordance with the Danish Finan-

cial Statements Act (“DFSA”).

Basis of Preparation

The financial statements are presented in Danish kroner

(DKK). The financial statements have been prepared

on a going concern basis and in accordance with the

historical cost convention, except where IFRS explicitly

requires use of other values.

For the purpose of clarity, the financial statements and

the notes to the financial statements are prepared using

the concepts of materiality and relevance. This means

that line items not considered material in terms of quan-

titative and qualitative measures or relevant to financial

statement users are aggregated and presented together

with other items in the financial statements. Similarly,

information not considered material is not presented

in the notes.

The accounting policies, except as described below,

have been applied consistently during the financial year

and for the comparative figures.

Accounting policies

Share-based payments

CS MEDICA has established shared-based incentive

program comprising equity-settled programs (war-

rants) for Key Management Personnel and other key

employees. The purpose of these programs is to ensure

common goals for Management, key employees, and

shareholders. According to Danish Financial Statements

Act there is no requirement for recognition and meas-

urement on equity-settled programs.

Following the adoption of IFRS, IFRS 2 requires that the

warrant programs should be recognized at fair value of

the equity instruments at the grant date. The fair value

excludes the effect of non-market based vesting con-

ditions. Details regarding the determination of the fair

value of equity settled share-based transactions are

set out in note 2.

There have been no share-based payments in the finan-

cial year 2022/2023, hence no regulation is incorporated.

Development cost and IPR rights, Rights

and Goodwill

Under DFSA, share premium related to the share

exchange in 2020/2021 between CS MEDICA’s and it’s

100% owned subsidiary, CANNORDIC A/S was include

as Goodwill. Following IFRS this share premium are rec-

ognized as rights in the consolidated statements. In the

Parent statements the recognitation is unchanged, rec-

ognised under Equity Investments in Group Enterprises.

The reclassification in the consolidated statement has

been incorporated in both financial years, 2020/2021

and 2021/2022. The reclassification has no impact on

the financial statement or Equity in the consolidated

Statement.

Foreign currency translation

Transactions denominated in currencies other than the

functional currency are considered transactions in for-

eign currency.

On initial recognition, transactions denominated in foreign

currencies are translated to the functional currency at the

exchange rates at the transaction date. Foreign exchange

rate adjustments arising between the transaction date

and at the date of payment are recognized in the income

statement under financial income or financial expenses.

Monetary assets and liabilities denominated in foreign

currencies are translated at the exchange rates at the

reporting date. The difference between the exchange

rates at the reporting date and at the date of transaction

or the exchange rate in the latest financial statements

is recognized in the income statement under financial

income or financial expenses.

Cash flow statement

The cash flow statement is presented using the indirect

method and shows cash flows from operating, invest-

ing and financing activities for the year as well as CS

MEDICA’s cash and cash equivalents at the beginning

and end of the financial year.

Cash flows from operating activities are calculated based

on operating profit/loss, adjusted for the cash flow effect

of non-cash operating items, working capital changes,

financial expenses paid and income tax paid.

Cash flows from investing activities comprise payments

in connection with the acquisition and sale of non-cur-

rent intangible assets, property, plant and equipment

as well as financial assets.

Cash flows from financing activities comprise payments

arising from changes in the size or composition of CS

MEDICA’s share capital and dividend paid.

The consolidated financial

statements

The consolidated income statements comprise the

parent company CS MEDICA A/S and those group

enterprises of which CS MEDICA A/S directly or indi-

rectly owns more than 50 % of the voting rights or in

other ways exercise control.

Consolidation policies

The consolidated financial statements have been pre-

pared as a summary of the parent company’s and

the group enterprises’ financial statements by add-

ing together uniform accounting records calculated

in accordance with the group’s accounting policies.

CS MEDICA A/S | Annual Report 2023/2024 64

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Investments in group enterprises are eliminated by the

proportionate share of the group enterprises’ market

value of net assets and liabilities at the acquisition date.

In the consolidated financial statements, the account-

ing records of the group enterprises are recognized by

100%. Purchases and sales of minority interests under

continuing control are recognized directly in equity as

a transaction between shareholders.

Investments in associates are measured in the state-

ment of financial position at the proportionate share of

the enterprises’ equity value is calculated in accordance

with the parent company’s accounting policies and with

proportionate elimination of unrealized intercompany

gains and losses. In the income statement, the propor

tional share of the associates’ results is recognized after

elimination of the proportional share of intercompany

gains and losses.

Income statement

Revenue

The enterprise will be applying IAS 11 and IAS 18 as its

basis of interpretation for the recognition of revenue. Net

Sales is recognized in the income statement if delivery

and passing of risk to the buyer have taken place before

the end of the year and if the income can be determined

reliably and inflow is anticipated. Recognition of revenue

is exclusive of VAT and taxes and less any discounts

relating directly to sales.

Cost of sales

Cost of goods sold comprises costs concerning pur-

chase of raw materials and consumables less discounts

and changes in inventories.

Other operating income

Other operating income comprises items of a secondary

nature as regards the principal activities of the enter-

prise, including profit from the disposal of intangible and

tangible assets.

Sales and distribution costs

Sales and distribution costs comprises of costs related

to distribution, warehousing, sales and marketing.

Administrative costs

Other external expenses include expenses relating to

CS MEDICA’s ordinary activities, including expenses

for stationery and office supplies, premises, loss

on receivables.

Staff costs

Staff costs consist of salaries and wage, including holiday

allowances, pensions, and other social security costs,

share-based payments, and benefits. Salaries, share-

based payments, and other benefits are recognized in

the year in which the associated services are rendered

by the employees. Contributions to defined contribu-

tion plans are recognized in the income statement in

the period to which they relate, and any contributions

outstanding are recognized in the statement of financial

position as other liabilities.

Staff costs are less government reimbursements.

Amortization and impairment of intangible assets

Depreciation, amortization, and write-down for impair-

ment comprise depreciation on, amortization of, and

write-down for impairment of intangible and tangible

assets, respectively.

Share-based payments

The Board of Directors, the Board of Management and

other employees have been granted warrants. The war-

rants are measured at fair value at the grant date and are

recognized as an expense in staff costs over the vesting

period. Expenses are set off against equity. The fair value

of the warrants is measured using the Black Scholes

valuation method or other generally accepted valuation

techniques. The calculation considers the terms and

conditions under which the warrants are granted. Fair

value is not subsequently remeasured. If subsequent

modifications to a warrant program increase the value

of the warrants granted, measured before and after the

modification, the increase is recognized as an expense.

If the modification occurs before the vesting period,

the increase in value is recognized as an expense over

the period for services to be received. If the modifica-

tion occurs after the vesting date, the increase in value

is recognized as an expense immediately. Considera-

tion received for warrants sold are recognized directly

in equity.

Income from equity investments in group

enterprises

After full elimination of intercompany profit or loss less

amortized consolidated goodwill, the equity investment

in the individual group enterprises is recognized in the

income statement of the parent as a proportional share

of the group enterprises’ post tax profit or loss.

Financial cost net

Financial income and expenses are recognized in the

income statement with the amounts concerning the

financial year.

Financial income comprises dividends etc received

on other investments, interest income, including

interest income on receivables from group enter-

prises, net capital or exchange gains on securities,

payables and transactions in foreign currencies,

amortization of financial assets as well as tax relief

under the Danish Tax Prepayment Scheme etc.

Financial expenses comprise interest expenses, lease

interest, net capital or ex- change losses on payables

and transactions in foreign currencies, amortization of

financial liabilities as well as tax surcharge under the

Danish Tax Prepayment Scheme etc.

Income tax and deferred tax

Tax on the profit/loss for the year comprises the year’s

current tax and changes in deferred tax. The tax expense

relating to the profit/loss for the year is recognized in

the income statement, and the tax expense relating to

items recognized in other comprehensive income and

directly in equity, respectively, is recognized in other

comprehensive income or directly in equity.

Current tax payable and receivable is recognized in the

balance sheet as the expected tax on the taxable income

for the year, adjusted for tax paid on account. The cur-

rent tax charge for the year is calculated based on the

tax rates and rules enacted at the balance sheet date.

CS MEDICA is jointly taxed with all Danish group enter-

prises. The parent acts as an administration company

in relation to the joint taxation. This means that the total

Danish income tax payable by the Danish group compa-

nies is paid to the tax authorities by the company. The

current Danish income tax is allocated among the jointly

taxed entities proportionally to their taxable income (full

CS MEDICA A/S | Annual Report 2023/2024 65

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allocation with a refund concerning tax losses).

Deferred tax is calculated using the liability method on

all temporary differences between the accounting and

taxable values of assets and liabilities.

Deferred tax assets are assessed yearly and only rec-

ognized to the extent that it is more likely than not that

they can be utilized. Deferred tax assets, including the

tax value of tax losses carried forward, are recognized as

other non-current assets and measured at the amount

at which they are expected to be realized, either by

setting off deferred tax liabilities or by setting off tax on

future earnings within the same legal entity or a jointly

taxed entity.

However, no deferred tax is recognized for amortization

of goodwill disallowed for tax purposes and temporary

differences arising at the date of acquisition that do not

result from a business combination and that do not

have any effect on profit or loss or on taxable income.

CS MEDICA recognizes deferred tax assets relating to

losses carried forward when Management finds that

these can be offset against taxable income in the fore-

seeable future. An assessment is made taking into con-

sideration the effect of restrictions in utilization in local tax

legislation. Future taxable income is assessed based on

budgets as well as Management’s expectations regard-

ing growth and operating margin in the coming years.

Balance sheet

Intangible assets

Goodwill

In connection with every acquisition, goodwill and a

non-controlling interest (minority) are recognized as fol-

lows: Goodwill relating to the entity acquired comprises

a positive difference, if any, between the total fair value

of the entity acquired and the fair value of the total net

assets for accounting purposes. The non-controlling

interest is recognized as the share of the total fair value

of the entity acquired (full goodwill).

Goodwill is recognized in intangible assets. It is not

amortized but reviewed for impairment once a year

and also if events or changes in circumstances indicate

that the carrying value may be impaired. If impairment

is established, the goodwill is written down to its lower

recoverable amount. Sold or liquidated entities are rec-

ognized up to the date of disposal. Any gain or loss

compared to the carrying amount at the date of disposal

is recognized in the income statement to the extent the

control of the subsidiary is also transferred.

Development projects, IPR rights

Development costs are recognized as costs in the acqui-

sition year. Intellectual property rights etc comprise

development projects completed and in progress with

related intellectual property rights and acquired intel-

lectual property rights. Development projects on clearly

defined and identifiable products, for which the rate of

utilization, adequate resources and a potential future

market or development opportunity in the enterprise

can be established, and where the intention is to man-

ufacture, market or apply the product in question, are

recognized as intangible assets.

Other development costs are recognized as costs in the

income statement as incurred. Following initial recog-

nition of the development expenditure as an asset, the

asset is carried at cost less any accumulated amortiza-

tion and accumulated impairment losses. Amortization

of the asset begins when development is complete, and

the asset is available for use.

Amortization is based on the straight-line method over

the estimated useful life. This corresponds to the legal

duration or the economic useful life depending on which

is shorter, and not exceeding 25 years in either case.

The amortization of intellectual property rights begins

after regulatory approval has been obtained or when

assets are put in use. The amortization periods used

are 3-25 years.

Impairment loss relating to non-current assets

The carrying amount of both intangible and tangible fixed

assets as well as equity investments in group enterprises

are subject to annual impairment tests to disclose any

indications of impairment beyond those expressed by

amortization and depreciation respectively.

Intangible assets that are subject to amortization are

reviewed for impairment whenever events or changes

in circumstances indicate that the carrying amount may

not be recoverable. Factors considered material that

could trigger an impairment test include the following:

• Development of a competing drug

• Changes in the legal framework covering patents,

rights and licenses

• Advances in medicine and/or technology that

affect the medical treatments

• Lower-than-predicted sales

• Adverse impact on reputation and/or brand names

• Changes in the economic lives of similar assets

• Relationship to other intangible assets or property,

plant and equipment

• Changes or anticipated changes in participation

rates or reimbursement policies

If the carrying amount of intangible assets exceeds the

recoverable amount based on the existence of one or

more of the above indicators of an impairment, any

impairment is measured based on discounted projected

cash flows. Impairments on intangible assets, other

than goodwill, are reviewed at each reporting date for

possible reversal.

Write-down for impairment is done to the recoverable

amount if this value is lower than the carrying amount.

The recoverable amount is the higher value of value in

use and selling price less expected selling cost. The

value in use is calculated as the present value of the

expected net cash flows from the use of the asset or

the asset group and expected net cash flows from the

sale of the asset or the asset group after the end of

their useful life.

Previously recognized impairment losses are reversed

when conditions for impairment no longer exist. Impair-

ment relating to goodwill is not reversed.

Deposits

Deposits are measured at amortized cost and represent

lease deposits, etc.

CS MEDICA A/S | Annual Report 2023/2024 66

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Inventories

Inventories are measured at cost on the basis of

weighted measured average prices. In cases when the

net realizable value is lower than the cost, the latter is

written down for impairment to this lower value. Costs

of goods for resale, raw materials, and consumables

comprise acquisition costs plus delivery costs.

Costs of manufactured goods and work in progress

comprise the cost of raw materials, consumables, direct

wages, and indirect production costs. Indirect production

costs comprise indirect materials and wages, mainte-

nance and depreciation of machinery, factory buildings,

and equipment used in the production process, and

costs for factory administration and factory manage-

ment. Borrowing expenses are not recognized in cost.

The net realizable value for inventories is recognized as

the market price less costs of completion and selling

costs. The net realizable value is determined with due

consideration of negotiability, obsolescence, and the

development of expected market prices.

Trade receivables

Trade receivables are measured at amortized cost less

allowance for lifetime expected credit losses.

For trade receivables, CS MEDICA applies a simplified

approach in calculating expected credit losses (ECLs).

Therefore, CS MEDICA does not track changes in credit

risk, but instead recognizes a loss allowance based on

lifetime ECLs at each reporting date.

Provisions for bad debts are determined based on a

general provision based on overdue accounts receiv-

ables, adjusted for forward-looking factors specific to

the debtors and the economic environment.

However, in certain cases, CS MEDICA may also con-

sider a financial asset to be in default when internal or

external information indicates that CS MEDICA is unlikely

to receive the outstanding contractual amounts in full

before considering any credit enhancements held by

CS MEDICA. Trade receivables are written off when all

possible options have been exhausted and there is no

reasonable expectation of recovery.

The cost of allowances for expected credit losses and

write-offs for trade receivables are recognized in the

income statement under administrative costs due to

exempting from applying the ECL model.

The maximum exposure to credit risk at the reporting

date is the carrying value of trade receivables in note 9.

CS MEDICA does not hold collateral as security.

Cash and cash equivalents

Cash comprises bank deposits.

Equity

Reserve for development costs

The reserve for development costs comprises recog-

nized development costs less related deferred tax lia-

bilities. The reserve cannot be used as dividends or for

covering losses. The reserve is reduced or dissolved

if the recognized development costs are amortised or

abandoned. This is done by direct transfer to the dis-

tributable reserves of the equity.

Dividend

Dividend expected to be distributed for the year is

recognized as a separate item under equity.

Provisions

Provisions are recognized when CS MEDICA has a

present obligation (legal or constructive) as a result of

a past event, it is probable that an outflow of resources

embodying economic benefits will be required to settle

the obligation and a reliable estimate can be made of

the amount of the obligation.

If the effect of the time value of money is material, pro-

visions are discounted using a cur- rent pre-tax rate

that reflects, when appropriate, the risks specific to the

liability. When discounting is used, the increase in the

provision due to the passage of time is recognized as

financial expense.

Liabilities other than provisions

Financial liabilities other than provisions related to bor-

rowings are recognized at the received proceeds less

transaction costs incurred. In subsequent periods, the

financial liabilities are recognized at amortized cost,

corresponding to the capitalized value when using the

effective interest rate. The difference between the pro-

ceeds and the nominal value is recognized in the income

statement during the term of the loan.

Mortgage loans and bank loans are thus measured at

amortized cost which, for cash loans, corresponds to

the outstanding payables. For bond loans, the amortized

cost corresponds to an outstanding payable calculated

as the underlying cash value at the date of borrowing,

adjusted by amortization of the market value on the

date of the borrowing effectuated over the repayment

period. Other liabilities concerning payables to suppliers,

group enterprises, and other payables are measured

at amortized cost which usually corresponds to the

nominal value.

Contract liabilities

Contract liabilities include prepayments from custom-

ers, which comprise amounts received from customers

prior to delivery of the goods agreed or completion

of the agreed.

Interest-bearing liabilities

Interest-bearing liabilities are measured at amortized

cost, which usually corresponds to nominal value.

Trade payables and other payables

Other payables include bonus and commission accruals,

vacation pay obligations, payroll taxes and VAT. Payables

are measured at cost.

Critical accounting judgements

and key sources of estimation

uncertainty

The preparation of CS MEDICA financial statements

requires Management to make judgments, estimates

and assumptions that affect the reported amounts of

expenses, assets, and liabilities, and the accompanying

disclosures. Significant uncertainty about these assump-

tions and estimates could result in outcomes that require

material adjustments to the carrying amount of assets or

liabilities affected in future periods. Management con-

tinuously reassesses these estimates and judgments

CS MEDICA A/S | Annual Report 2023/2024 67

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based on several factors in the given circumstances.

Valuation of development projects Development projects

(Group and Parent) consist of completed development

projects, that are amortized over 10 years. Completed

development projects are assessed for impairment

whenever there is an indication that the development

asset may be impaired. The amortization period for

completed development projects is reviewed on an

annual basis. Changes in the expected useful life or

the expected pattern of consumption of future eco-

nomic benefits embodied in the asset are accounted

for by changing the amortization period or method, as

appropriate, and are treated as changes in account-

ing estimates. The amortization expense on intangible

assets with finite lives is recognized in the income state-

ment as amortization. The carrying value of intangible

assets, DKK 14.0 million is based on Management’s

expectations of future cash flow and other assumptions

described in note xx. These assumptions are by nature

subject to significant uncertainty taking the Company’s

going concern risk and the dependence on CS MEDICA

receiving the necessary revenue to continue the planned

activities into consideration.

Management considers the following accounting esti-

mates and judgements to be significant in the prepara-

tion of the financial statements.

Manufactured goods and goods for resale

Inventory which are assessed for impairment by com-

paring cost prices (cost of raw materials, consumables

and direct labor costs) to net realization values. The esti-

mated net realization values are based on Management

estimates and assumptions over future sales volume

and prices and are by nature subject to uncertainty. In

relation to 2023/24, Management has assessed that

inventory with a carrying value of DKK 2.7 million is not

subject to any write-down. However, there is an inherent

significant uncertainty related to the valuation of prod-

ucts still unsold, as the net realization values of these

items may also depend on CS MEDICA receiving the

necessary revenue to continue the planned activities.

Valuation of receivable from group enterprises

The parent company has a receivable of DKK 1.5 million

from one customer that has been outstanding for more

than 1 year. Management has assessed that no write

down of this receivable is necessary. However, the Man-

agement acknowledge the commercial uncertainties.

Development costs and IPR rights and rights

CS MEDICA capitalizes costs for product development

projects. Initial capitalization of costs is based on man-

agement’s judgement that technological and economic

feasibility is confirmed, usually when a product develop-

ment project has reached a defined milestone accord-

ing to an established project management model. In

determining the amounts to be capitalized, management

makes assumptions regarding the expected future cash

generation of the project and the expected period of

benefits. At 30 September 2022, the carrying amount of

capitalized development costs rights was tDKK 13.514

(2021: tDKK 12.777).

Ongoing development projects and rights are tested at

least once a year for write-down needs. Development

projects are based on future expectations of the future

expectations of customer and market demand.

Development projects and rights are projects established

with a view to uncovering new products within adjacent

business areas. Based on these factors, the manage-

ment has estimated the recoverable amount of the ongo-

ing development projects in the form of expected future

net cash flows including completion costs.

Share-based payments

Estimating fair value for share-based payment trans-

actions requires determination of the most appropriate

valuation model, which depends on the terms and con-

ditions of the grant. This estimate also requires deter-

mination of the most appropriate inputs to the valuation

model including the expected life of the share option

or appreciation right, volatility and dividend yield and

making assumptions about them. The assumptions and

models used for estimating fair value for share-based

payment transactions are disclosed in note 2.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or

cash-generating unit exceeds its recoverable amount,

which is the higher of its fair value less costs of dis-

posal and its value in use. The fair value less costs of

disposal calculation is based on available data from

binding sales transactions, conducted at arm’s length,

for similar assets or observable market prices less incre-

mental costs of disposing of the asset. The value-in-use

calculation is based on a DCF model.

The cash flows are derived from the budget for the

next five years and do not future include reclassifica-

tion activities that CS MEDICA is not yet committed to

or significant future investments that will enhance the

performance of the assets of the CGU being tested.

The recoverable amount is sensitive to the discount rate

used for the DCF model as well as the expected future

cash-inflows and the growth rate used for extrapolation

purposes. These estimates are most relevant to goodwill

and other intangibles with indefinite useful lives recog-

nized by CS MEDICA.

The assumptions may be incomplete or inaccurate,

and unforeseen events or circumstances may occur,

for which reason the actual results may differ from the

estimates and judgements made.

Deferred tax (asset)

A deferred tax assets of DKK 7.5 million relating to the

negative income. Based on an evaluation of the future

income, it is Management’s assessment that CS MED-

ICA can use the previous year’s deficit in the future

profit. The recognition of the receivable is based on this

assessment. Whether the criteria are met, is subject to

an estimate, with an underlying risk and uncertainty.

Valuation of deferred tax assets as stated in note 1,

Management feels confident that the needed revenue

and payment from the Chinese investment agreement

can be achieved. However, should Management against

expectations not be able to secure the higher revenue,

the value of the company’s deferred tax assets will be

very limited.

Reference is also made to note 6.

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For management purposes and based on internal reporting information,

CS MEDICA is organized in two operating segments, hence information

reported includes operating results at a segmented level where appropriate

otherwise at a consolidated level. The costs related to the main nature of

the business are divided through the specific revenue stream.

CS MEDICA operates in two business segments:

• Galaxa Pharma A/S operates direct-to-consumer marketing, com-

mercialization, and brand building through its e-tail webshop, can-

nasen.dk.

• CANNORDIC A/S

Research and development, establishing of global business con-

tracts, supply of CBD ingredients and production of finished prod-

ucts. Global sale (BtB), to distributors, including Galaxa Pharma in the

Nordic Region.

Segment performance is evaluated based on revenue, consistent with the

consolidated financial statements. There are internal sales between the

business segments, cf. note 1. Costs have been split between business

segments according to a specific allocation. In addition, a small number

of corporate overhead costs are allocated systematically between the

segments. Other operating income and expenses have been allocated to

the two segments based on the same principle.

Segment information

CS MEDICA A/S | Annual Report 2023/2024 69

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The board of directors and the managing director have presented the annual

report of CS MEDICA A/S for the financial year 1 October 2023 - 30 Sep-

tember 2024.

The financial statements have been prepared in accordance with Interna-

tional Financial Reporting Standards as adopted by the EU and additional

requirements of the Danish Financial Statements Act.

In our opinion, the financial statements give a true and fair view of CS

MEDICA’s assets, liabilities, and financial position as at 30.09.2024 and of

the results of CS MEDICA’s activities and cash flows for the financial year

01.10.2023 – 30.09.2024.

We and the board stand by the management commentary as a fair review

of the operations and conditions outlined herein. Further discussion on the

above matters can be found in Note 0 and under each note related to the

assets involved.

The annual report is submitted for adoption at the Annual General Meeting

on 28 March 2025.

Copenhagen, 28 March 2025

Registered Executive Management

Lone Henriksen, CEO and CSO

Statement by Management on the annual report

For further information,

please contact:

Lone Henriksen, CEO

CS MEDICA A/S (publ)

Indiakaj 10

DK-2100 Copenhagen,

Denmark

Phone: +45 7070 7337

Investor relations contact:

info@cs-medica.com

Website: www.cs-medica.com

Orgnr: 33 87 16 43

Board of Directors

Flemming Heegaard

Chairman of the Board

Jesper Herold Halle

Member of the Board

Anders Permin

Member of the Board

Ib Madsen

Member of the Board

Gitte Henriksen

Member of the Board

CIO and CFO

CS MEDICA A/S | Annual Report 2023/2024 70

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AUDITOR’S REPORT

CS MEDICA A/S | Annual Report 2023/2024 71

Table of Contents

To the management of CS MEDICA A/S

Opinion

In our opinion, the consolidated financial statements

and the parent company financial statements give a true

and fair view of the financial position of the Group and

the Parent Company at 30 September 2024, and of the

results of the Group and the Company’s operations as

well as the consolidated cash flows for the financial year

1 October 2023 - 30 September 2024 in accordance

with the International Financial Reporting Standards

(IFRS) as issued by the International Accounting Stand-

ards Board and in accordance with IFRS as endorsed by

the EU and further requirements in the Danish Financial

Statements Act.

Basis for Opinion

We conducted our audit in accordance with Interna-

tional Standards on Auditing (ISAs) and the additional

requirements applicable in Denmark. Our responsibilities

under those standards and requirements are further

described in the “Auditor’s Responsibilities for the Audit

of the Consolidated Financial Statements and the Parent

Company Financial Statements” section of our report.

We are independent of the Group in accordance with the

International Ethics Standards Board for Accountants’

International Code of Ethics for Professional Accountants

(IESBA Code) and the additional ethical requirements

applicable in Denmark, and we have fulfilled our other

ethical responsibilities in accordance with these require-

ments and the IESBA Code. We believe that the audit

evidence we have obtained is sufficient and appropriate

to provide a basis for our opinion.

Significant uncertainty regarding continued

operations

It is imperative to highlight the content of note 0 and in

accounting policies under section “Critical accounting

judgements and key sources of estimation uncertainty”,

which describes the significant uncertainty associated

with revenue and the entered investment agreement. Our

conclusion remains unmodified regarding this matter.

Statement on Management’s Review

Management is responsible for Management’s Review.

Our opinion on the consolidated financial statements

and the parent company financial statements does not

cover Management’s Review, and we do not express

any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial

statements and the parent company financial statements,

our responsibility is to read Management’s Review and,

in doing so, consider whether Management’s Review

is materially inconsistent with the consolidated financial

statements and the parent company financial state-

ments, or our knowledge obtained during the audit, or

otherwise appears to be materially misstated.

Moreover, it is our responsibility to consider whether

Management’s Review provides the information required

under the Danish Financial Statements Act.

Based on the work we have performed; we conclude

that Management’s Review is in accordance with the

financial statements and has been prepared in accord-

ance with the requirements of the Danish Financial State-

ment Act. We did not identify any material misstatement

of Management’s Review.

Management’s Responsibilities for the

Consolidated Financial Statements and the

Parent Company Financial Statements

Management is responsible for the preparation of

consolidated financial statements and parent company

financial statements that give a true and fair view in

accordance with the International Financial Reporting

Standards (IFRS) as issued by the International Account-

ing Standards Board and in accordance with IFRS

as endorsed by the EU and further requirements in the

Danish Financial Statements Act, and for such internal

control as Management determines is necessary to

enable the preparation of consolidated financial state-

ment and parent company financial statements that

are free from material misstatement, whether due to

fraud or error.

In preparing the consolidated financial statements and

the parent company financial statements, Manage-

ment is responsible for assessing the Group´s and the

Parent Company’s ability to continue as a going con-

cern, disclosing, as applicable, matters related to going

concern and using the going concern basis of account-

ing in preparing the consolidated financial statements

and the parent company financial statements unless

Management either intends to liquidate the Group

or the Company or to cease operations, or has no real-

istic alternative but to do so.

Auditor’s Responsibilities for the Audit of the

Consolidated Financial Statements and the

Parent Company Financial Statements

Our objectives are to obtain reasonable assurance

about whether the consolidated financial statements

and the parent company financial statements as a whole

are free from material misstatement, whether due to

fraud or error, and to issue an auditor’s report that

includes our opinion. Reasonable assurance is

a high level of assurance but is not a guarantee that

an audit conducted in accordance with ISAs and the

additional requirements applicable in Denmark will

always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and

are considered material if, individually or in the aggre-

gate, they could reasonably be expected to influence

the economic decisions of users taken on the basis

CS MEDICA A/S | Annual Report 2023/2024 72

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Auditor’s report

of these consolidated financial statements and

the parent company financial statements.

As part of an audit conducted in accordance with

ISAs and the additional requirements applicable in Den-

mark, we exercise professional judgment and maintain

professional skepticism throughout the audit.

We also:

•

Identify and assess the risks of material misstat ment

of the consolidated financial statements and the par-

ent company financial statements, whether due to

fraud or error, design and perform audit procedures

responsive to those risks, and obtain audit evidence

that is sufficient and appropriate to provide a basis for

our opinion. The risk of not detecting a material mis-

statement 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 internal control relevant

to the audit in order to design audit procedures that

are appropriate in the circumstances, but not for

the purpose of expressing an opinion on the effec-

tiveness of the Group´s and the Company’s internal

control.

•

Evaluate the appropriateness of accounting policies

used and the reasonableness of accounting esti-

mates and related disclosures made by Management.

•

Conclude on the appropriateness of Management’s

use of the going concern basis of accounting in

preparing the consolidated financial statements and

the parent company financial statements and, based

on the audit evidence obtained, whether a material

uncertainty exists related to events or conditions that

may cast significant doubt on the Group´s and the

Company’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 consolidated finan-

cial statements and the parent company financial

statements or, if such disclosures are inadequate,

to modify our opinion. 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 the Group and the Company to cease

to continue as a going concern.

•

Evaluate the overall presentation, structure and con-

tents of the consolidated financial statements and the

parent company financial statements, including the

disclosures, and whether the consolidated financial

statements and the parent company financial state-

ments represent the underlying transactions and

events in a manner that gives a true and fair view.

•

Obtain sufficient appropriate audit evidence regard-

ing the financial information of the entities or business

activities within the Group to express an opinion

on the consolidated financial statements. We are

responsible for the direction, supervision and perfor-

mance of the group audit. We remain solely respon-

sible for our audit opinion.

We communicate with those charged with governance

regarding, among other matters, the planned scope

and timing of the audit and significant audit findings,

including any significant deficiencies in internal control

that we identify during our audit.

Copenhagen, 28 March 2025

Christensen Kjærulff

Company reg. no. 15 91 56 41

John Mikkelsen

State Authorised Public Accountant

mne26748

CS MEDICA A/S | Annual Report 2023/2024 73

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Annual Report

This Annual Report is CS MEDICA’s full statutory Annual

Report pursuant to Section 149(1) of the Danish Finan-

cial Statements Act. The statutory Annual Report will be

presented and adopted at the Annual General Meeting

on 29. February 2024 and will subsequently be submit-

ted to and be available at Cision news and the Danish

Business Authority.

The Annual Report is prepared in accordance with

the International Financial Reporting Standards and the

Danish Financial Statements Act.

References

Throughout the management review section in

this report, links are provided to online sources for

additional information. Some of the references are not

mandatory and hence not included in the audit of the

management review.

For more news from CS MEDICA, visit cs-medica.om/

investors and https://news.cision.com/?q=cs%20med-

ica.

Disclaimer

The patients, employees and relatives portrayed in this

Annual Report and ancillary reports have participated

of their own accord and solely to express their own

personal opinions on topics referred to, which do not

necessarily reflect the views and opinions of CS MEDICA.

Use of the pictures as illustrations is in no way intended

to associate the patients, employees or relatives with

the promotion of any CS MEDICA products.

More information

The company

CS MEDICA A/S

Indiakaj 10

2100 Copenhagen

Company reg. no.

33 87 16 43

Established

7 August 2011

Financial year:

1 October - 30 September

Board of directors

Jørgen Flemming Ladefoged

Karsten Adelmark

Anders Permin

Gitte Henriksen

Managing Director

Lone Henriksen

Auditors

Christensen Kjærulff

Statsautoriseret Revisionsaktieselskab

Store Kongensgade 68

1264 København K

Subsidiaries

Galaxa Pharma A/S, Copenhagen

CanNordic A/S, Copenhagen

CanNordic India Ltd.

RongShi MEDICA (Hainan) Ltd. China

Contact information

CS MEDICA A/S

Address

Indiakaj 10

DK 2100 Copenhagen

Denmark

E-mail

info@cs-medica.com

Telephone

+45 70 70 73 37

CS MEDICA A/S | Annual Report 2023/2024 74

Table of Contents

Financial calendar

Annual General Meeting 2023/2024 28 March 2025

Q1: Interim report, October– December 2024 31 March 2025

Q2: Interim report, January – March 2025 17 April 2025

Q3: Interim report, April– June 2025 17 July 2025

Q4: Year-end report, July– September 2025 30 November 2025

Annual report 2024/2025 10 January 2026

Annual General Meeting 2024/2025 27 January 2026

Interim period, between old financial year 01.10 - 30.09 and new financial year equal with calendar year.

CS MEDICA A/S | Annual Report 2023/2024 75

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PARENT

Income statement 2023/2024

1. Oct ober 2023 -

30. September

2024

1. Oct ober 2022 -

30. September

2023

Not e DKK DKK

Net Sales

1.497.241 1.210.737

Gross Profit 1.497.241 1.210.737

Sales and distribution cost -130.352 0

Administrative costs -1.480.928 -2.585.084

Staff costs

-4.897.906 -3.822.808

Depreciation and amoritsation

-923.547 -684.098

Oper ati ng profit -5.935.492 -5.881.254

Income from equity investments in group

enterprises

-6.261.191 -10.259.836

Financial costs net

-411.901 564.146

Profit or loss before tax -12.608.584 -15.576.945

Tax on net profit or loss for the year

2.957.681 1.064.180

Net pr ofi t or l oss for the year -9.650.903 -14.512.765

1. Oct ober 2023 -

30. September

2024

1. Oct ober 2022 -

30. September

2023

Not e DKK DKK

Statement of comprehensive income

Net profit -9.650.903 -14.512.765

Other comprehensive income:

Cost Diret Issue & IPO -6.311.725 0

Total comprehensive income for the year -15.962.628 -14.512.765

CS MEDICA A/S | Annual Report 2023/2024 76

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30.Sept ember

2024

30.Sept ember

2023

30.Sept ember

2022

Not e DKK DKK DKK

Balance Sheet

Assets

Development projects & IPR rights

2.985.221 1.265.935 832.292

Equity investments in group enterprises

17.639.635 9.099.093 4.867.141

Deferred tax assets

5.408.103 2.450.422 199.340

Deposits

57.000 57.000

Total non-current assets 26.089.958 12.872.449 5.898.773

Current assets

Inventories

Receivables from group enterprises 8 1.704.477 12.918.671 9.604.310

Other receivables 207.859 -134.118 50.000

Cash on hand and demand deposi ts

1.559 -265.411

5.855.832

Total current assets 1.913.894 12.519.142 15.510.142

Total assets

28.003.852 25.391.592 21.408.915

30.Sept ember

2024

30.Sept ember

2023

30.Sept ember

2022

DKK DKK DKK

Equity and liabilities

Share Capital 1.113.179 800.971 708.630

Reserve for net revaluation according to the

equity method

0 0 1.387.252

Reserve for development costs 2.328.473 987.429 689.260

Retained earnings

2.574.302 8.625.378 18.365.155

Total equi ty 6.015.954 10.413.778 21.150.297

Provisions 4.802.000 4.802.000 0

Subordinate loan capital 8.093.332 8.098.428 0

Total non-cur r ent l i abi l i ti es 12.901.453 12.900.428 0

Credit bank

808.961 0 0

Trade payables 3.327.078 1.712.395 314.796

Other payables 1.203.406 364.990 -56.178

Total current liabilities 9.086.446 2.077.385 258.618

Total liabilities

28.003.852 25.391.592 21.408.915

PARENT

Statement of Financial Position 2023/2024

CS MEDICA A/S | Annual Report 2023/2024 77

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PARENT

Statement of changes in equity

1. October 2023 -

30. September

2024

1. October 2022 -

30. September

2023

DKK DKK

Balance at 1. October 2023

800.971 800.971

Change 312.207 0

Contributed capital, at 30. September 2024

1.113.179 800.971

Balance at 1. October 2023 987.429 862.855

Change 1.341.044 124.574

Reserve for development costs, at 30.

September 2024

2.328.473 987.429

Balance at 1. October 2023 8.625.378 23.262.717

Share premium 11.252.599 0

Reserve for net revaluation according to the

equity method

0 0

Deferred tax

0 0

IPO cost -6.311.725 0

Reserve for development costs

-1.341.043 -124.574

Retained earnings for the period

-9.650.907 -14.512.765

Retained earnings, at 30. September 2024 2.574.302 8.625.378

Total Equity , at 30. September 2024 6.015.954 10.413.778

CS MEDICA A/S | Annual Report 2023/2024 78

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PARENT

Notes

2023/2024 2022/2023

DKK DKK

Staff Costs

Salaries and wages 3.165.698 2.731.173

Other cost for social security 1.732.208 1.091.636

4.897.906 3.822.808

Average number of employees 4 8

Board of Directors and Key management

Personel

Remuneration 4.897.906 3.822.808

2023/2024 2022/2023

DKK DKK

Depr eci ation and amoritsati on

Amortisation of rights 718.047 478.598

Amortisation of development projects 205.500 205.500

923.547 684.098

2023/2024 2022/2023

DKK DKK

Other financial income

Financial income 436.077 0

Other financial costs -847.977 564.146

-411.901 564.146

Revenue

CS MEDICA acts as a shared service center for Galaxa Pharma and CANNORDIC within accounting, administration,

and project management. CS MEDICA invoice the two subsidiaries quarterly for this assistance.

2023/2024 2022/2023

DKK DKK

Tax for the year

Changes in deferred tax 2.957.681 1.064.180

Recognised as receivable tax credit 2.957.681 1.064.180

Tax calculated as 22% of profit/loss before tax 2.773.888 3.426.928

Correction for Income from equity investments in

group enterprises

-1.377.462 -2.257.164

Sharebased payments 1.388.579

Non-capitalised tax assets 177.767 -105.584

Non-deductible expenses -5.091

Effective tax 2.957.681 1.064.180

Effective tax rate for the year (%) -23% 7%

Deferred tax is recognized in the statement of

financial

position as follows:

Deferred tax (asset) 5.408.103 2.450.422

Deferred tax asset

5.408.103 2.450.422

Deferred tax concerns

Intangible assets -321.195 -278.505

Tax loss carried forward 5.729.298 2.728.927

Total 5.408.103 2.450.422

CS MEDICA A/S | Annual Report 2023/2024 79

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8. Receivables from group enterprises

Interest is compounded quarterly at 4% per annum.

2023/2024 2022/2023

DKK DKK

6 Development projects

Cost beginning of period - development projects

1.676.935 1.311.725

Additions during the period

1.924.786 365.210

Cost end of per iod 3.601.721 1.676.935

Amortisation and write down beginning of period

-411.000 -205.500

Amortisation and depreciation during the period

-205.500 -205.500

Amor tisation and write down end of per i od -616.500 -411.000

Car r yi ng amount end of per i od 2.985.221 1.265.935

2023/2024 2022/2023

Equity investments in associated & group

enterprises

DKK DKK

Cost, 1 october 26.742.723 11.834.926

Addition during the year 15.500.000 14.907.797

Cost 30. September 2024 42.242.723 26.742.723

Revaluation opening balance -16.330.924 -5.592.790

Reclassification CANNORDIC india 19.780 0

Results for the year before amortisation -6.261.191 -10.738.134

Revaluation 30. September 2024 -22.572.335 -16.330.924

Amortisation of goodwill, opening balance -1.312.706 -834.108

Amortisation of the year -718.047 -478.598

Amortisation 30. September 2024 -2.030.754 -1.312.706

Carrying amount 30. September 2024 17.639.635 9.099.093

Incl uded Ri ghts net

2.756.230 3.474.277

Equity Subsidaries

Owner

ship

Galaxa Pharma ApS

100%

251.706 571.522

CANNORDIC A/ S

100%

10.518.688 400.328

CANNORDIC India Ltd

99%

0 80.815

10.770.395 1.052.665

Equi ty Joi nt Ventur e

Capital RongShi MEDICA Ltd *)

49%

4.113.010 4.572.151

Rights 2.756.230 3.474.277

17.639.635 9.099.093

Development projects covers all IPR rights of the CANNASEN

medic al products . For more information, please

refer to note 6 in the consolidated financial statements. It is Management’s assessment that the expected useful

lives of the finite - lived assets, as well as the expected future revenue streams from the assets are sufficient

to cover the value of recognized IPR rights at the reporting date, cf. note 7 under consolidated statements

Equityinvestmentsingroupenterprises

In 2023/2024, the parent company made a capital injection by converting receivables into share capital,

amounting to DKK 0.5 million in Galaxa Pharma A/S and DKK 15 million in CANNORDIC A/S.

CS MEDICA has recognized equity in its Joint Venture (JV) of tDKK 4,113, offset by a provision of tDKK 4,802

under provisions as payment of share capital, which is to be fulfilled through funding generated from the JV.

The JV has not yet commenced full operations or finalized its financial statements, resulting in the exclusion

of quarterly figures for Q3 and Q4 2023/2024. Limited activities were performed during Q3 and Q4 due to

challenges in resolving the Investment Agreement and securing the corresponding money transfer to Den-

mark. This issue has now been resolved, as described in the section Long-term Investment under Financing

and Financial Position, and the JV is set to resume its operations.

CS MEDICA A/S | Annual Report 2023/2024 80

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The Financiual Statement of the Parent Company have

been prepared in accordance with International Financial

Reporting Standards (“IFRS”) as adopted by the EU and

additional Danish disclosure requirements for the financial

statements of reporting class B enterprises with addition

of certain provisions for reporting class C, cf. the Danish

Executive Order on Adoption of IFRSs (“IFRS bekendt-

gørelsen “) issued inaccordance with the Danish Financial

Statements Act (“DFSA”).

The accounting policies are the same as for the consoli-

dated financial statements with the adjustments described

below. For a description of the accounting policies of the

Group, please refer to the consolidated financial state-

ments.

No separate statement of cash flows has been prepared

for the parent company; please refer to the statement of

cash flows for the Group.

Supplementary accounting policies for

the parent company

Equity investments in group enterprises

In the financial statements of the parent company, invest-

ments in subsidiaries and associated companies are

recorded under the equity method, using the respective

share of the net asset values in subsidiaries and associ-

ated companies. The equity method is used as a meas-

urement basis rather than a consolidation method. The

net profit of subsidiaries and associated companies less

unrealized intra-group profits and amortization of goodwill

is recorded in the income statement of the parent com-

pany. Goodwill is amortized over no more than 25 years

which reflects the useful life of the underlying assets and

activities generating the goodwill.

To the extent that net profit exceeds declared dividends

from such companies, the net revaluation of investments

in subsidiaries and associated companies is transferred

to net revaluation reserve under equity according to the

equity method. Profits in subsidiaries and associated

companies are disclosed as profit after tax.

Equity investments in group enterprises are recognized

in the statement of financial position at the proportionate

share of the enterprise’s equity value. This value is calcu-

lated in accordance with the parent’s accounting policies.

Tax

For Danish tax purposes, the parent company is assessed

jointly with its Danish subsidiaries. The Danish jointly

taxed companies are included in a Danish on-account

tax payment scheme for Danish corporate income tax.

All current taxes under the scheme are recorded in the

individual companies.

Accounting policies

CS MEDICA A/S | Annual Report 2023/2024 81

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CS MEDICA A/S | Annual Report 2023/2024 82

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