INTERIM REPORT 1 JULY – 30 SEPTEMBERG 2015,  NICOCCINO HOLDING AB (publ)

THIRD QUARTER SUMMARY 1 JULY – 30 SEPTEMBER 2015

  · Net sales for the third quarter amounted to 123 TSEK (17).
  · Net income amounted to –7,3 MSEK (-5,1) or –0,53 SEK per share (-0,46).
  · Cash flow from operating activities amounted to -5,3 MSEK (-4,5) or -0,38
SEK per share (-0,4).
  · Nicoccino Holding's liquid assets were valued at 44,6 MSEK (20,3) by the end
of the quarter.
  · Based on a statement from the Czech authorities, the Company can now sell
Nicoccino™ as a consumer product in the Czech Republic. This announcement
generates clarity around the classification of Nicoccino™ in the EU, paving the
way for sales in other EU countries.
  · Nicoccino is partnering with WHSmith Travel to launch NicoccinoTM in major
UK airports and railway stations. Initially the Company’s unique nicotine
product will be available to travellers in 150 selected stores across the UK.
The sales activities will start during the fourth quarter.
  · During the third quarter the Company carried out organizational changes by
appointing a new Chairman of the Board, Jonas Nordquist along with a new CEO,
Johan Cram – both of whom have a Swedish Match background. A new CFO, Anders
Stensson, also joined the Company in September.

EVENTS AFTER THE END OF THE REPORTING PERIOD

  · Building on its recent listing with WHSmith Travel, Nicoccino is once again
partnering with WHSmith to launch NicoccinoTM in 250 of their prime-site High
Street outlets throughout Great Britain. Sales started in the middle of the
fourth quarter.
Comments from CEO

Sales and distribution

The sales within the period has not been satisfactory. There are essentially
three channels that Nicoccino has been active in; pharmacy, casino and e
-commerce.

The sales in pharmacy have been lower than expected with a repurchase rate of
approx. 8 %. Casino sales have not shown any greater numbers due to the low
amount of distribution points. Online sales has a relatively large number of
consumers but the repurchase rate from sampling activities has been low.

The main reason for the weak sales is the limited awareness level and visibility
that Nicoccino™ has towards consumers. Our challenge is to reach out to
consumers in an unproven market to get them to understand the benefits of a new
type of product and a new behaviour.

Several of our previous marketing activities have not had the desired outcome.
On the positive side we have learned a lot from our experiences that we can
apply to upcoming activities.

In November, Nicoccino™ was test-launched in some of WHSmith’s stores in the UK
(total 400 outlets). It is too early to draw any conclusions from the test and
the planned marketing activities have not started as yet.

Production and product development

The agreement with our American producer was terminated (at their request) with
the possibility for re-negotiation in May. We will therefore transfer the
production to our German manufacturer with whom we have cooperated since 2014.
We are also in discussion with other producers to ensure efficient production
going forward.

It is difficult to achieve full cost efficiency due to the low production
volumes, which leads to a high consumer price.

We will continue to focus on developing a product portfolio that consists of
several tastes and strengths.

The products strength seems to be one of the deciding factors for how Nicoccino™
is received.

Regulatory

The EU directive that will be transposed into the law of the EU member states by
May 2016 mainly affects e-cigarettes. Within the new Tobacco Product Directive e
-cigarettes will be defined as a consumer product (though with significant
limitations).

Our strategy is to get Nicoccino™ approved as a consumer product following EU
GPSD (General Products Safety Directive). The first positive statement came from
the Czech authorities that now places Nicoccino™ within this category. We are
now focusing on an additional 3-5 EU countries where we believe the chances for
GPSD authorization are good. With this in mind, we will not proceed with
developing a licensed OTC product.

In the US, the FDA (Food and Drug Administration) is working on an update of the
regulatory framework for nicotine containing products. We are monitoring this
development and will evaluate what category will provide Nicoccino™ with
marketing advantages in this market.

Asia is slightly behind the EU and US in regards to updating their regulatory
framework for nicotine containing products. In some markets, such as Malaysia,
South Korea and Japan, the authorities have initiated the work. There is an
ongoing discussion in Australia and New Zealand on how to simplify the access of
smokers to lower risk, alternative nicotine containing products, such as
NicoccinoTM.

Future opportunities

For the test launch of WHSmith we have combined our strengths for the best
possible outcome. It should, however, be clear that considerable resources are
required to break into the UK market.

In addition, we have been probing the international scene with the purpose to
locate suitable partners with a global reach. Several potential partners have
been identified and we will follow up on these over the coming year.

Johan Cram,

CEO, Nicoccino Holding AB

About Nicoccino and our product

ABOUT THE COMPANY

Nicoccino produces and markets an innovative and patented, tobacco-free nicotine
consumer product.

The product has the same name as the company - NicoccinoTM– and is manufactured
through partners. Nicoccino is currently sold in the UK, Germany, Czech
Republic, Poland and through our online platform (purenicoccino.com)

Nicoccino has its head quarter located in Täby outside of Stockholm and a sales
office in London. The company's shares have been listed on Nasdaq Stockholm
First North since June 2014 and can be found under the abbreviation NICO.

Remium Nordic AB is Nicoccino Holding's Certified Adviser.

For further information, please visit: www.nicoccino.se

ABOUT THE PRODUCT

Nicoccino’s patented, innovative and discrete nicotine strip instantly provides
the user with nicotine without the detrimental side effects of smoking.

NicoccinoTMis a consumer product, the purpose of which is to offer smokers an
attractive alternative for when they can’t, or don’t want to smoke.

Once the strip is placed under the lip and onto the gum, it delivers a quick and
potent nicotine effect. Within a couple of minutes the nicotine has been
expended and the product has been dissolved without leaving any residue in your
mouth.

NicoccinoTMis formulated in Sweden and is the result of over ten years of
research and development.

The product itself is a wafer thin and alginate based film about the size of
half a stamp. Each Nicoccino film contains 1 mg of nicotine. The product
contains medically classified nicotine and alginate, extracted from brown
seaweed, as well as natural flavourings and aromas. All additional substances
are medically approved.