Qlife carries out a rights issue of units of approximately SEK 49.5 million

Today, the board of directors in Qlife Holding AB (“Qlife” or the “Company”) has, subject to approval by the extraordinary general meeting on 16 January 2024, resolved to carry out an issue of 215,187,249 units, consisting of shares and warrants series TO 4 and TO 5, with preferential rights for the Company’s existing shareholders (the “Rights Issue”). Provided that the Rights Issue is fully subscribed, the Company will receive initial proceeds of approximately SEK 49.5 million before the deduction of issue costs. The Rights Issue is covered by guarantee commitments of SEK 30.1 million, corresponding to approximately 61 percent of the Rights Issue.

In order to secure the Company’s financing needs until the completion of the Rights Issue, the Company has secured a bridge financing amounting to SEK 5.0 million. In connection with the Rights Issue, the Company has undertaken to, in whole or in part, repay the convertibles issued by the Company in August 2023. Due to the Rights Issue, the board of directors has decided to bring forward the publication of the year-end report for the financial year 2023 to 5 February 2024. Notice to the extraordinary general meeting will be published in a separate press release.

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES OF AMERICA, AUSTRALIA, BELARUS, CANADA, HONG KONG, JAPAN, NEW ZEALAND, RUSSIA, SINGAPORE, SOUTH AFRICA, SOUTH KOREA, SWITZERLAND OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, DISTRIBUTION OR PUBLICATION WOULD BE UNLAWFUL OR REQUIRE REGISTRATION OR ANY OTHER MEASURE

Summary of the Rights Issue

The Rights Issue is proposed to be carried out on the following main terms:

• Existing shareholders will receive one (1) unit right for each share held on the record date on 8 February 2024. Three (3) unit rights entitle the holder to subscribe for one (1) unit in the Company. Each unit consists of twenty-three (23) new shares, eight (8) warrants series TO 4, and eight (8) warrants series TO 5.

• The Rights Issue comprises a maximum of 215,187,249 units, corresponding to a maximum of 4,949,306,727 shares and 3,442,995,984 warrants series TO 4 and TO 5. Upon full subscription in the Rights Issue, Qlife will initially receive approximately SEK 49.5 million before deduction of issue costs. In the event that all warrants series TO 4 and TO 5 issued in the Rights Issue are exercised for subscription of shares, the Company will receive an additional approximately SEK 73.2 million before deduction of issue costs.

• One (1) warrant series TO 4 entitles the holder to subscribe for one (1) new share in the Company during the period 7 – 21 June 2024 at an exercise price of SEK 0.02 per share, and one (1) warrant series TO 5 entitles the holder to subscribe for one (1) new share in the Company during the period 21 November – 5 December 2024 at an exercise price of SEK 0.0225 per share.

• The last day of trading in Qlife’s share including the right to receive unit rights in the Rights Issue is 6 February 2024. The shares are traded excluding the right to receive unit rights in the Rights issue from 7 February 2024.

• The subscription price in the Rights Issue is SEK 0.23 per unit, corresponding to SEK 0.01 per share. The warrants are issued free of charge.

• The subscription period in the Rights Issue runs between 12 – 26 February 2024.

• Warrants series TO 4 and TO 5 are expected to be admitted to trading on Nasdaq First North Growth Market in close connection with the registration of the Rights Issue with the Swedish Companies Registration Office and the conversion of BTU to ordinary shares and warrants.

• The Rights Issue is covered guarantee commitments up to approximately 61 percent. The guarantee commitments consist partly of a so-called top guarantee and partly of a so-called bottom guarantee.

• In order to secure the Company’s liquidity needs until the Rights Issue has been completed, the Company has raised a bridge loan of SEK 5.0 million from Formue Nord Markedsneutral A/S.

• The complete terms and conditions for the Rights Issue, including additional information about the Company, will be made available in an EU growth prospectus that is expected to be published around 7 February 2024 (the “Prospectus”).

Background and reason

Qlife has developed and patented the Egoo Health test platform, which integrates several technologies that potentially can test for a wide range of biomarkers and viruses – protein-based and molecular. The technology is intended to be easy to use, cost-effective, and suitable for use in people’s homes or decentralized testing sites. Qlife is focused on the Hospital-at-Home market, a B2B market that represents a global trend where healthcare facilities worldwide actively explore opportunities to provide medical care to patients at home instead of in hospitals. The primary challenge in enabling home patient care lies in accessing high-quality clinical blood data without the need for hospitalization or visits by medical personnel. Not all patients can be cared for at home, but a significant proportion of stable patients can benefit from this approach. A prerequisite is the consistent collection of important clinical biomarker data that can be continuously monitored by healthcare professionals.

In December 2023, Qlife entered into a collaboration agreement with Hipro Biotechnology to introduce Egoo Health to the Chinese market. The collaboration agreement entails that Hipro Biotechnology will be responsible for the application process for approval from authorities, distribution, and sales of Egoo Health in China. This expanded venture now requires Qlife to raise additional capital.

Use of proceeds

Upon full subscription in the Rights Issue, the Company will receive initial gross proceeds of approximately SEK 49.5 million which, after deduction of issue costs, are intended to be used with (i) up to approximately SEK 5.0 million for repayment of the bridge loan to Formue Nord Markedsneutral A/S by set-off or cash payment; and with (ii) at least 5.0 million, up to approximately SEK 8.5 million, for repayment of the convertibles issued by the Company in August 2023 by set-off or cash payment, after which the remaining amount is intended to be used for the following purposes stated in order of priority with an estimated distribution of the issue proceeds stated as a percentage.

• Approximately 45 percent will be used for production readiness & market entry.

• Approximately 30 percent will be used for regulatory approvals.

• Approximately 25 percent will be used for general administration.

In the event that all warrants series TO 4 and TO 5 issued in the Rights Issue are exercised for subscription of shares, the Company will receive additional gross proceeds of approximately SEK 73.2 million which, after deduction of issue costs, are intended to be used for the following areas of use, in order of prior:

• Approximately 45 percent will be used for production readiness & market entry.

• Approximately 30 percent will be used for regulatory approvals.

• Approximately 25 percent will be used for general administration.

Terms and conditions of the Rights Issue

The board of directors of the Company has resolved, subject to a subsequent approval at an extraordinary general meeting in the Company on 16 January 2024, to carry out the Rights Issue. The Rights Issue comprises a maximum of 215,187,249 units, corresponding to a maximum of 4,949,306,727 shares and 3,442,995,984 warrants series TO 4 and TO 5. Upon full subscription in the Rights Issue, Qlife will initially receive approximately SEK 49.5 million before deduction of issue costs. In the event that all warrants series TO 4 and TO 5 issued in the Rights Issue are exercised for subscription of shares, the Company will receive approximately SEK 73.2 million before deduction of issue costs.

Anyone who, on the record date 8 February 2024, is listed in the share register maintained by Euroclear Sweden AB, has preferential rights to subscribe for units in the Rights Issue in relation to previous holdings of shares. One (1) existing share in Qlife entitles to one (1) unit right. Three (3) unit rights entitle the holder to subscribe for one (1) unit in the Company. Each unit consists of twenty-three (23) new shares, eight (8) warrants series TO 4, and eight (8) warrants series TO 5. The subscription price in the Rights Issue is SEK 0.23 per unit, corresponding to SEK 0.01 per share. The warrants are issued free of charge.

If not all units are subscribed for by exercise of unit rights, allotment of the remaining units shall be made within the highest amount of the issue: firstly, to those who have subscribed for units by exercise of unit rights (regardless of whether they were shareholders on the record date or not) and who have applied for subscription of units without exercise of unit rights and if allotment to these cannot be made in full, allotment shall be made pro rata in relation to the number of unit rights that each and every one of those, who have applied for subscription of units without exercise of unit rights, have exercised for subscription of units; secondly, to those who have applied for subscription of units without exercise of unit rights and if allotment to these cannot be made in full, allotment shall be made pro rata in relation to the number of units the subscriber in total has applied for subscription of units; and thirdly, to those who have provided underwriting commitments regarding subscription of units, in proportion to such underwriting commitments. To the extent that allotment in any section above cannot be done pro rata, allotment shall be determined by drawing of lots.

Trading in unit rights will take place on Nasdaq First North Growth Market during the period 12 – 21 February 2024 and trading in BTU (paid subscribed unit) will take place on Nasdaq First North Growth Market from 12 February 2024 until the Rights Issue is registered with the Swedish Companies Registration Office.

Warrants series TO 4 and TO 5
One (1) warrant series TO 4 entitles the holder to subscribe for one (1) new share in the Company during the period 7 – 21 June 2024 at an exercise price of SEK 0.02 per share, and one (1) warrant series TO 5 entitles the holder to subscribe for one (1) new share in the Company during the period 21 November – 5 December 2024 at an exercise price of SEK 0.0225 per share.

The warrants are expected to be admitted to trading on Nasdaq First North Growth Market in close connection with the registration of the Rights Issue with the Swedish Companies Registration Office.

Extraordinary general meeting
The board of directors’ resolution on the Rights Issue is conditional on subsequent approval at the extraordinary general meeting on 16 January 2024. Notice to the extraordinary general meeting will be published in a separate press release.

Guarantee commitments

A guarantee syndicate has provided guarantee commitments, subject to customary conditions. The guarantee commitments consist of a bottom guarantee of approximately SEK 24.7 million, which corresponds to approximately 50 percent of the Rights Issue, and a top guarantee of SEK 5.4 million, which corresponds to approximately 11 percent of the Rights Issue. In the aggregate, the guarantee commitments amount to SEK approximately 30.1 million, corresponding to approximately 61 percent of the Rights Issue.

A guarantee fee of sixteen (16) percent of the guaranteed and allotted amount as regards bottom guarantors, and twenty-one (21) percent as regards top guarantors, will be paid.

The guarantee commitments are not secured through bank guarantees, restricted funds, pledged assets or similar arrangements.

The guarantor Formue Nord Markedsneutral A/S has provided a guarantee commitment of SEK 5.0 million, which means that it may exceed ten percent of the votes in Qlife if the Rights Issue is only subscribed up to the level covered by guarantee commitments. To the extent the guarantor’s fulfilment of such guarantee entails that the investment must be approved by the Inspectorate of Strategic Products (Sw. Inspektionen för strategiska produkter) in accordance with the Swedish Screening of Foreign Direct Investments Act (Sw. lagen (2023:560) om granskning av utländska direktinvesteringar), such part of the guarantee is conditional upon notification that the application of the transaction has been taken without action or that approval has been obtained from the Inspectorate of Strategic Products.

Change of share capital and number of shares and dilution
The board of directors intends to propose to the extraordinary general meeting on 16 January 2024 that the share capital shall be reduced in two instalments, and that a bonus issue shall be made. As a result of these reductions and the bonus issue, the share capital is reduced from 51,644,939.92 to 3,227,808.745, and the quota value per share is initially reduced from SEK 0.08 to SEK 0.005.

Upon full subscription in the Rights Issue, the number of shares in the Company will increase by 4,949,306,727 shares, from 645,561,749 to 5,594,868,476, and the share capital will increase by SEK 24,746,533.635, from SEK 3,227,808.745 to SEK 27,974,342.380 (based on the new quota value SEK 0.005). For existing shareholders who do not participate in the Rights Issue, this means, at full subscription, a dilution effect of approximately 88.5 percent of the votes and capital in the Company.

If all warrants series TO 4 are fully exercised for subscription of new shares in the Company, the number of shares will increase by an additional 1,721,497,992, from 5,594,868,476 to a total of 7,316,366,468 and the share capital will increase by an additional SEK 8,607,489.960, from SEK 27,974,342.380 to SEK 36,581,832.340 (based on the new quota value SEK 0.005). This corresponds to a dilution effect from warrants series TO 4 of an additional maximum of approximately 23.5 percent.

If all warrants series TO 5 are fully exercised for subscription of new shares in the Company, the number of shares will increase by an additional 1,721,497,992, from 7,316,366,468 to a total of 9,037,864,460 and the share capital will increase by an additional SEK 8,607,489.960, from SEK 36,581,832.340 to SEK 45,189,322.300 (based on the new quota value SEK 0.005). This corresponds to a dilution effect from warrants series TO 5 of an additional maximum of approximately 19.0 percent.

The total dilution effect in the event that both the Rights Issue and warrants series TO 4 and TO 5 are subscribed for, and exercised, in full, amounts to approximately 92.9 percent.

Bridge financing

In order to secure the Company’s liquidity needs until the Rights Issue has been completed, the Company has raised a bridge loan of SEK 5.0 million from Formue Nord Markedsneutral A/S. The bridge loan will be disbursed in two tranches of SEK 2.5 million each, with the first being disbursed in December 2023 and the second being disbursed in January 2024.

As compensation for the loan, a commitment fee of 6 percent will be subtracted from the disbursed amount of the first tranche, and an interest rate of 1.75 percent per commenced 30-day period from the disbursement of the respective tranche, will be paid. The loan shall be repaid in connection with the Rights Issue, either in cash or by set-off, if Formue Nord Markedsneutral A/S is allotted units in the Rights Issue.

Convertibles

After negotiations with the holders of convertibles issued by the Company in August 2023, the Company has undertaken to, in whole or in part, repay the convertibles in connection with the Rights Issue, instead of repayment in full in connection with the maturity in July 2024. In order to facilitate premature payment, the terms and conditions of the convertibles will be amended by the Company’s board of directors.

Following the registration of the Rights Issue, the Company shall repay an aggregate amount of SEK 5.0 million of the convertibles to the convertible holders. To the extent the aggregate initial net proceeds received by the Company from the Rights Issue exceeds SEK 19 million (after deduction of issue costs and the SEK 5.0 million initial repayment), the Company shall use the exceeding amount to repay the remaining convertibles, up to the maximum of the convertibles, amounting to approximately SEK 8.5 million.

To the extent there are any outstanding convertibles following repayment in connection with the Rights Issue, the remaining amount shall be paid in accordance with the provisions in the terms and conditions of the convertibles.

Bringing forward of the year-end report for the financial year 2023

Due to the Rights Issue, the board of directors has decided to bring forward the publication of the year-end report for the financial year 2023 to 5 February 2024 instead of 28 February 2024 as previously communicated.

Preliminary timeline for the Rights Issue

Advisors

Eminova Partners Corporate Finance AB and Gemstone Capital A/S act as financial advisers, and Eminova Fondkommission AB has been appointed as issuing agent, in connection with the Rights Issue. Setterwalls Advokatbyrå AB is legal advisor to Qlife.

This is information that Qlife Holding AB is obliged to disclose under the EU Market Abuse Regulation 596/2014. The information was provided by the contact person below for publication on 2023-12-12 22:10 CET.

For more information please contact:

Thomas Warthoe, CEO
tw@egoo.health
+45 21 63 35 34

Qlife is a Swedish company based in Helsingborg, which develops and markets an innovative medical technology platform, Egoo.Health (”Egoo”), with the goal of giving people access to clinical biomarker data when testing at home. The company is listed on the Nasdaq First North Growth Market (ticker: QLIFE). G&W Fondkommission is the Company’s Certified Adviser. For additional information, please visit www.qlife.com.

Important information

The information in this press release does not contain or constitute an offer to acquire, subscribe or otherwise trade in shares, warrants or other securities in Qlife. No action has been taken and measures will not be taken to permit a public offering in any jurisdictions other than Sweden. Any invitation to the persons concerned to subscribe for units in Qlife will only be made through the Prospectus that Qlife estimates to publish on 7 February 2024 on Qlife’s website www.qlifeholding.com. The upcoming approval of the Prospectus by the Swedish Financial Supervisory Authority shall not be regarded as an approval of the shares, warrants or any other securities. This release is however not a prospectus in accordance with the definition in the Prospectus Regulation (EU) 2017/1129 (“Prospectus Regulation”) and this announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in shares, warrants or other securities in Qlife. In order for investors to fully understand the potential risks and benefits associated with a decision to participate in the Rights Issue, any investment decision should only be made based on the information in the Prospectus. Thus, investors are encouraged to review the Prospectus in its entirety. In accordance with article 2 k of the Prospectus Regulation this press release constitutes an advertisement.

The information in this press release may not be released, distributed or published, directly or indirectly, in or into the United States of America, Australia, Belarus, Canada, Hong Kong, Japan, New Zealand, Russia, Singapore, South Africa, South Korea, Switzerland or any other jurisdiction in which such action would be unlawful or would require registration or any other measures than those required by Swedish law. Actions in violation of these restrictions may constitute a violation of applicable securities laws. No shares, warrants or other securities in Qlife have been registered, and no shares, warrants or other securities will be registered, under the United States Securities Act of 1933, as amended (the “Securities Act”) or the securities legislation of any state or other jurisdiction in the United States of America and no shares or other securities may be offered, sold or otherwise transferred, directly or indirectly, in or into the United States of America, except under an available exemption from, or in a transaction not subject to, the registration requirements under the Securities Act and in compliance with the securities legislation in the relevant state or any other jurisdiction of the United States of America.

Within the European Economic Area (“EEA”), no public offering of shares, warrants or other securities (“Securities”) is made in other countries than Sweden. In other member states of the EU, such an offering of Securities may only be made in accordance with the Prospectus Regulation. In other member states of the EEA which have implemented the Prospectus Regulation in its national legislation, any offer of Securities may only be made in accordance with an applicable exemption in the Prospectus Regulation and/or in accordance with an applicable exemption under a relevant national implementation measure. In other member states of the EEA which have not implemented the Prospectus Regulation in its national legislation, any offer of Securities may only be made in accordance with an applicable exemption under national law.

In the United Kingdom, this document and any other materials in relation to the securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this document relates is available only to, and will be engaged in only with, “qualified investors” (within the meaning of the United Kingdom version of the EU Prospectus Regulation (2017/1129/ EU) which is part of United Kingdom law by virtue of the European Union (Withdrawal) Act 2018) who are (i) persons having professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); (ii) high net worth entities etc. falling within Article 49(2)(a) to (d) of the Order; or (iii) such other persons to whom such investment or investment activity may lawfully be made available under the Order (all such persons together being referred to as “relevant persons”). In the United Kingdom, any investment or investment activity to which this communication relates is available only to, and will be engaged in only with, relevant persons. Persons who are not relevant persons should not take any action on the basis of this press release and should not act or rely on it.

This press release may contain forward-looking statements which reflect the Company’s current view on future events and financial and operational development. Words such as “intend”, “expect”, “anticipate”, “may”, “believe”, “plan”, “estimate” and other expressions which imply indications or predictions of future development or trends, and which are not based on historical facts, are intended to identify forward-looking statements. Forward-looking statements inherently involve both known and unknown risks and uncertainties as they depend on future events and circumstances. Forward-looking statements do not guarantee future results or development and the actual outcome could differ materially from the forward-looking statements.