Emotra () : 556612-1579 Year-end report January 1 – December 31, 2021

Emotra AB (publ)

Year-end report

January - December, 2021

Emotra AB (publ)

556612-1579

Year-end report

January 1 - December 31, 2021

The Board of Directors and President of Emotra AB herewith present the year-end report for the financial year 2021.

Summary of the parent company for the period October to December 20211

• Net sales for the period were 0 kSEK (0)
• The operating loss was -1,475 kSEK (-1,957)
• The loss per share after dilution was -0.02 SEK (-0.05)

Summary of the parent company for the period January - December, 2021

• Net sales for the period were 0 kSEK (0)
• The operating loss was -6,933 kSEK (-5,397)
• The loss per share after dilution was -0.1 SEK (-0.15)
• At the end of the period, liquid assets amounted to 2,406 kSEK (4,302)

Significant events in the fourth quarter

• An extraordinary shareholder meeting was held on 8 October 2021. At this meeting: o A resolution was passed to acquire NeuraMetrix Inc. through a new issue of
  replacement shares;
  o A new board of directors was appointed; and
  o A resolution to change the Company's name to NeuraMetrix AB was passed.
• The acquisition of NeuraMetrix Inc. was completed in November 2021 through a merger.
• Daniel Rudeklint was employed as the CFO.
• The TO2 subscription warrant program saw an execution rate in excess of 90%.
• Our dispute with a previous supplier in Italy was settled out of court in a positive manner.

Significant events after closing of books

• A paper about our clinical multi-center study EUDOR-A, which confirmed the study's hypothesis, was published in Frontiers in Psychiatry.
• Two members of the board announced their resignations.
• Our re-listing process with Spotlight has been halted.

Due to the fact that the group was established on 30 December 2021, the financial portions of this report will only comprise Emotra AB

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Emotra AB (publ)

Year-end report

January - December, 2021

Comments from our President

We can add another exciting year to the Company's history, where our acquisition of NeuraMetrix Inc. was the highlight. As we stated when the deal was announced, the background and justification for this new constellation is that it will provide a greater opportunity for Emotra to create value for its shareholders. The acquisition is expected to generate synergies, since the two companies' goals, markets, customers, geographical focus, and the problems their respective technologies solve complement each other perfectly. The acquisition was carried out through a new issue of replacement shares, which was approved at an extraordinary shareholder meeting.

During the autumn, the process to merge NeuraMetrix Inc. with the newly-formed American company NeuraMetrix USA Inc. was carried out. As a result of this merger, NeuraMetrix USA Inc. has taken over NeuraMetrix Inc.'s intellectual property and obligations. NeuraMetrix USA Inc. is a wholly- owned subsidiary of Emotra AB, whereby a group structure has been established. Other effects of this acquisition are changes in our board of directors and a re-listing process at Spotlight Stock Market, which is standard procedure in this type of transaction.

During this period, NeuraMetrix has continued to work present and future customers in the USA, marketing its technology toward both pharmaceutical companies and academia. One focus area is to generate data about new indication areas for the technology, but also to compare with current methods of evaluating and following up neurodegenerative diseases.

In January, we published new data which showed that hyporeactive patients are nearly five times as likely to suffer a depression relapse. After a long wait, a paper with the findings from our clinical multi-center study EUDOR-A has been published in Frontiers in Psychiatry. Our findings are in line with the data that Emotra has previously disclosed in press releases and semi-annual reports.

The Company has received a cash injection during the year through a rights issue and two subsequent warrant issues. The rights issue comprised commitments and issue warranties that amounted to about 9.5 MSEK. The subscription rate was 176 per cent. The rights issue program was concluded on 14 December and the subscription rate was 91 per cent.

Lately, we have been working with the task of integrating the companies' organisations after the acquisition and the mandatory re-listing process. On 18 February, Spotlight notified the Company that they had halted their listing review. The Company rejects their reasoning for this action and our opinion is that Spotlight's behaviour is both regrettable and incomprehensible. Now that the listing process has been halted, the board of directors will begin the task of finding another exchange to list the Company's shares on. These activities will be carried out in parallel with our continued product development and business development efforts to plan and build up the resources in our new constellation, which will be called NeuraMetrix AB. The name change will be completed once the listing process at Spotlight has been completed. Daniel Rudeklint was employed during the last quarter as our CFO. The Company gained staff resources through NeuraMetrix Inc. and our efforts to further expand our organisation, both in Sweden and internationally, are ongoing.

We look forward to continuing to establish our future corporate structure and organisation and to continued growth in our indication areas.

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Emotra AB (publ)

Year-end report

January - December, 2021

Stockholm, 29 February 2022

Daniel Poté, President

NeuraMetrix Typing Cadence

New possibilities and greater market potential

The acquisition of NeuraMetrix Typing Cadence allows us to address a major challenge for diseases such as Parkinson's, Alzheimer's, depression, anxiety, bipolar disorder and schizophrenia. The currently used evaluation methods are time-consuming and are neither precise nor reliable. Furthermore, the sector lacks resources such as correctly trained personnel, which often leads to patients who are suffering from neurological disorders having to meet up to 3 different health care workers per year.

This makes it very difficult to make a correct early diagnosis, adapt the patient's treatment to his/her individual circumstances and follow the patient's progress. There is a lack of quantitative and objective methods that in a cost-effective manner can provide the kind of data that is needed.

The Typing Cadence (TC) product

This technology measures our strongest habit - how we type on a keyboard. This habit is hard-coded in our brains and when the brain is afflicted by disease, this breaks the hard-coding and the behaviour starts to vary more and more. However, this process is very slow and occurs in increments, which makes it difficult to detect and assess. Measurement is performed in milliseconds, which enables the detection of subtle changes, for example to identify neurodegenerative illnesses far earlier than currently used methods allow. NeuraMetrix TC has several applications:

• Discovering very small changes in a person's cognitive and motor functions;
• Detect patient events such as depressions or multiple sclerosis attacks;
• Continuous measurement of disease progression and treatment effects.

The product is non-invasive, independent of language, culture and level of education, and does not require tests, sensors, or the presence of a physician. The system is a completely software-based digital biomarker that provides continuous real-time data about cognitive and motor functions. The data can easily be extracted for analysis to identify specific events, monitor medication, and track long-term trends. The below example is of a patient that is undergoing standard treatment for Parkinson's disease. It shows how medication keeps the patient's values normal for certain periods and is then increasingly inconsequential during other periods.

Higher inconsequence -

Medication has little or no effect

Lower inconsequence with normal values - Medication is effective

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Emotra AB (publ)

Year-end report

January - December, 2021

The system is marketed to pharmaceutical companies, clinics, and researchers. The technology is protected by a number of pending or granted patents, which allows the Company to use its technology in several neurological and psychiatric indication areas.

Our vision is that NeuraMetrix TC will become the leading tool for measuring and monitoring neurological health in CNS diseases, psychiatric disorders, and neurological damage. Eventually, we see NeuraMetrix TC being used to proactively measure neurological health in order to detect early signs of change.

EDOR®

The method

EDOR, which stands for "Electro Dermal Orienting Reactivity", is a method that contributes biological data by identifying hyporeactive patients. Hyporeactivity is a biological marker that enables a more all-round evaluation, independent of clinical scales or the patient's age and gender. EDOR tests the patient's response to repeated stimuli, whereby patients who cease to react very quickly or who don't react at all are identified as hyporeactive. Hyporeactive, depressed patients have been shown to be more prone to suicide attempts, suicide, and run a five times greater risk of depression relapse.

An EDOR product system comprises three parts: headphones, the EDOR-Box, and a computer. The headphones, which are connected to the EDOR box, are calibrated to consistently play a neutral audio signal. The EDOR box generates the headphone signals and registers the patient's reaction. The file with the patient's response data is then analysed to determine whether he/she is hyporeactive.

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Emotra AB (publ)

Year-end report

January - December, 2021

The company

At an extraordinary shareholder meeting held on 8 October 2021, a resolution was passed to

• acquire NeuraMetrix Inc. through the issue of replacement shares
  On 31 October 2021 Emotra reached an agreement with the shareholders of NeuraMetrix
  Inc. to acquire all outstanding shares in NeuraMetrix, Inc. ("NeuraMetrix"). The purchase price, which is equivalent to 94 MSEK, will be paid through newly issued shares in Emotra. The extraordinary shareholder meeting on 8 October approved the acquisition of all shares NeuraMetrix Inc.
• Appointment of board members
  Roy Andersson, Anders Blom, Martin Schalling, and Julia Viklund were voted in as new board members to replace Lars-Håkan Thorell, Jan Pilebjer, and Anna Sjörs Dahlman. Claes Holmberg remains as the Chairman of the board and Ingela Hallberg was confirmed as a regular member of the board.
• Change of name
  The extraordinary shareholder meeting decided that Emotra AB will change its name to NeuraMetrix AB, and that this name change shall take place when all processes have been completed.

The acquisition of NeuraMetrix was completed in November 2021 through a merger

During the autumn, the process to merge NeuraMetrix Inc. with the newly-formed US company NeuraMetrix USA Inc. was ongoing. The merger was completed on 23 November. As a result of this merger, NeuraMetrix USA Inc. took over all of NeuraMetrix Inc.'s rights and obligations. NeuraMetrix USA Inc. is a wholly-owned subsidiary of Emotra AB.

Daniel Rudeklint was employed as the CFO

We moved the CFO function in-house through the employment of Daniel Rudeklint. Daniel brings experience of auditing and internal auditing in a global environment, having previously worked as an authorised public accountant at EY Sweden AB (previously Ernst & Young Sweden AB). Daniel comes to us from Sida, the Swedish International Development Cooperation Agency, where he was responsible for reviewing and improving the authority's processes.

The TO2 subscription warrant program saw an execution rate in excess of 90%

The execution rate for warrants in the TO2 series was about 91 per cent. This conversion provided Emotra with a cash injection of approximately 3.8 MSEK before issue expenses. A total of 14,450,376 warrants were executed, resulting in the issue of the same number of shares.

Our dispute with a previous supplier in Italy was settled out of court in a positive manner

On 25 November, the Company announced that a dispute with an Italian supplier that has been ongoing since 2017 has finally been resolved through a settlement. The supplier has withdrawn all payment claims against Emotra AB and each party has agreed to pay their own legal costs. This

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