Qlife Holding AB: Qlife acquires the assets of Qlife ApS, carries out directed issues of a total of approx. MSEK 6.90 and proposal of directed issues of approx. MSEK 5.05

Qlife Holding AB (publ) ("Qlife" or the "Company") announces the acquisition of the assets of the Company's subsidiary Qlife ApS in bankruptcy, including goodwill and other intangible rights inventory, equipment, inventory and IT equipment and software, at a fixed purchase price of MDKK 3.00, with a potential earn out of MDKK 3.00 (the "Acquisition"). To finance the Acquisition and to secure the Company's long-term operations, the Company's Board of Directors (the "Board") has today decided to carry out directed issues of shares and warrants pursuant to the authority granted by the annual general meeting 2024. The investors have subscribed for all shares and warrants in the directed issues. Through the directed issues of shares and warrants, the Company will initially receive approximately MSEK 6.90 before deduction of transaction costs. Upon full exercise of the warrants, the Company will receive an additional maximum amount of approximately MSEK 4.31 before deduction of transaction costs. Furthermore, following a proposal from the major external shareholder, Jørgen Drejer, an extraordinary general meeting will address the directed issues of shares and warrants to Warthoe Af 1967 ApS (owned by Thomas Warthoe, CEO), Altia Invest ApS (owned by Lars Bangsgaard, Chairman of the Board) and Warthoe Af 1964 ApS (owned by Peter Warthoe). Through the directed issues of shares and warrants proposed by the shareholder, the Company will initially receive approximately MSEK 5.05 before deduction of transaction costs. Upon full exercise of the warrants, the Company will receive an additional maximum amount of approximately MSEK 3.16 before deduction of transaction costs. Further the Company announces an upcoming rebranding as "Egoo Health" planned subject to approval by an extraordinary general meeting, signaling the dawn of a new chapter for the Company.

The Acquisition

On 19 July 2024, Qlife ApS, the Company's subsidiary, filed for bankruptcy, as the Company announced to the market in a press release on the same day. In the press release, the Company declared its intention to make an offer to purchase the assets from the bankruptcy estate and to raise capital to finance the offer and to secure the Company's long-term operations. Today, 29 August 2024, the Company has entered into an agreement with Qlife ApS in bankruptcy to acquire its assets, including goodwill and other intangible rights inventory, equipment, inventory and IT equipment and software, at a fixed purchase price of MDKK 3.00, with a potential earn-out of MDKK 3.00. The Acquisition is completed immediately with retroactive effect as of 24 July 2024.

The purchase price is to be paid in instalments and is distributed and adjusted as follows. No later than 14 days after today DKK 150,000 will be paid in cash. The remaining purchase price of a minimum of MDKK 2.85 up to a maximum of MDKK 6.00 shall be paid in annual instalments as described below.

The first MDKK 2.85 is to be paid twice a year starting from 2025. The half-yearly instalment, which relates to the period 1 January - 30 June, is due for payment no later than one month after the end of the period - i.e. no later than 31 July. The half-yearly instalment, which relates to the period 1 July - 31 December, is due for payment no later than one month after the end of the period - i.e. no later than 31 January. The half-annual instalments shall amount to 5 per cent of the Company's turnover (however, minimum amount according to the following table: 2025: DKK 200,000, 2026: DKK 250,000, 2027: DKK 400,000, 2028-2032: DKK 500,000 (i.e. minimum half the amount of the amount from the table per instalment), which will be calculated by an authorized public accountant at the Company's expense. The calculation, which is sent once a year, must be sent to Qlife ApS in bankruptcy no later than 30 June. The first half-yearly instalment to be paid relates to the period from the conclusion of the agreement and until 30 June 2025 and is thus due for payment no later than 31 July 2025. The instalment must be at least 5 per cent of revenue during the period - however, a minimum of DKK 100,000.

The following shall apply for the MDKK 3.00 earn out. When the MDKK 2.85 has been paid, including interest (5 per cent p.a.), the remaining MDKK 3.00 must be paid twice a year. The half-yearly instalment, which relates to the period 1 January - 30 June, is due for payment no later than one month after the end of the period - i.e. no later than 31 July. The half-yearly instalment, which relates to the period 1 July - 31 December, is due for payment no later than one month after the end of the period - i.e. no later than 31 January. The annual instalments amount to 5 per cent of the Company's turnover, which is to be calculated by an authorized public accountant at the Company's expense. The calculation, which is sent once a year, must be sent to Qlife ApS in bankruptcy no later than 30 June.

Since its inception, Qlife has invested hundreds of MSEK in Qlife ApS to develop and commercialize the patented product Egoo-Health. On 7 December 2023, Qlife announced that the Company had entered into a collaboration agreement with the industry-leading point-of-care diagnostics company, Hipro Biotechnology ("Hipro"). In accordance with the agreement, Hipro agreed to lead the regulatory process to secure approvals from the Nation Medical Products Administration ("NMPA") for Egoo Health. Additionally, Hipro also agreed to cover the costs and lead the production, distribution, and sales of Egoo Health to Chinese hospitals. Hipro today sell their current product portfolio to 14,000 hospitals in China and has sales of 25 million tests in the Chinese point-of-care market. Hipro is forecasting that they over the coming years will be able to transfer about 10 per cent of those sales into a home-hospital setting with Egoo Health. And continue to grow the home-hospital market, as well as migrate further into the Chinese society through sales to pharmacies and other decentralized outlets where people can access diagnostics testing in a new way. The agreement with Hipro is projected to generate significant revenues upon full implementation, which is anticipated to occur within five years. Therefore, the Board believes that there are compelling reasons to continue operations in the Company and to acquire Egoo Health.

The directed issues

The Board has today decided to issue 2,738,098 shares and 1,369,043 TO 6 series subscription warrants, free of charge, to several external investors and existing shareholders ("Tranche 1"). The investors have subscribed for all shares and warrants in Tranche 1. The Board will also convene an extraordinary general meeting (the "Extraordinary General Meeting") to decide on the directed issue of 2,003,967 shares and 1,001,983 subscription warrants of series TO 6, free of charge, on the same terms as in Tranche 1, following a proposal from Jørgen Drejer, a major external shareholder, ("Tranche 2"). Warthoe Af 1967 ApS (owned by Thomas Warthoe, CEO), Altia Invest ApS (owned by Lars Bangsgaard, Chairman of the Board) and Warthoe Af 1964 ApS (owned by Peter Warthoe), will participate in Tranche 2. Upon the execution of Tranche 1 and Tranche 2 (the "Directed Issues"), the Company will initially receive a maximum of approximately MSEK 11.95 before deduction of transaction costs. Upon full exercise of the warrants of series TO 6, the Company will receive an additional maximum amount of approximately MSEK 7.47 before deduction of transaction costs. The notice of the Extraordinary General Meeting will be published through a separate press release.

Tranche 1, through which 2,738,098 shares and 1,369,043 warrants of series TO 6 are issued, is carried out with the support of the authorization obtained from the annual general meeting on 26 June 2024 and is directed to external investors and certain existing shareholders. The subscription price has been determined through arm's length negotiations with the external investors and amounts to SEK 2.52 per share, which corresponds to the closing price of the Company's share on Nasdaq First North Growth Market on 29 August 2024. The Board considers the subscription price to be market-based and reflective of the demand for the Company's shares.

Tranche 1 is directed to and has been subscribed by:

Investors                            
Shares Warrants
JEQ Capital AB 396,825 198,412
Jinderman & Partners AB (http://jinderman.se/) 277,778 138,889
CapMate Aktiebolag 238,095 119,047
Andreas Johansson 198,413 99,206
Tommy Ure 198,413 99,206
Jørgen Drejer 198,413 99,206
Jes Olesen 178,571 89,285
Frostberget Invest AB 138,889 69,444
Östen Carlsson 119,048 59,524
JJV Investment Group AB 119,048 59,524
Petra Sas 119,048 59,524
Rune Löderup 119,048 59,524
Flemming Pedersen 119,048 59,524
Arnholmen Förvaltning AB 79,365 39,682
Elleme AB 79,365 39,682
John Andersson Moll 79,365 39,682
Race Venture Scandinavia AB 39,683 19,841
Andreas Ternström 39,683 19,841
Total number of shares 2,738,098
Total number of warrants 1,369,043

Tranche 2, through which 2,003,967 shares and 1,001,983 warrants of series TO 6 are issued, is intended to be carried out on the same terms as in Tranche 1 and is proposed to be directed to Warthoe Af 1967 ApS, Altia Invest ApS and Warthoe Af 1964 ApS. Tranche 2 is intended to be decided upon at the Extraordinary General Meeting, following a proposal from Jørgen Drejer, a major external shareholder. A separate notice of the Extraordinary General Meeting will be issued. The directed share issues in Tranche 2 require an amendment of the Articles of Association. Tranche 2 is material to the investors in Tranche 1, execution of Tranche 1 is not conditional upon the execution of Tranche 2.

Regarding Tranche 2, the proposed investors have accrued receivables from the Company in respect of deferred consultancy fees totaling approximately MSEK 4.05, which they have undertaken to convert into shares in the Company. Furthermore, Warthoe Af 1967 ApS, Altia Invest ApS and Warthoe Af 1964 ApS have committed to investing MSEK 0.40, MSEK 0.40, and MSEK 0.20 respectively, in cash, in the directed share issue. In total, Warthoe Af 1967 ApS, Altia Invest ApS and Warthoe Af 1964 ApS will participate with MSEK 5.05, of which MSEK 4.05 will be set-off against consultancy fees and MSEK 1.00 will be invested in cash. These investors have provided subscription undertakings regarding the subscription of shares in Tranche 2 for the below number of shares and warrants. The subscription undertakings are conditional upon the extraordinary general meeting resolving on Tranche 2.

Tranche 2 is directed to:

Investors                            
Shares Warrants
Warthoe Af 1967 ApS (owned by 694,444 347,222
Thomas Warthoe, CEO)
Warthoe Af 1964 ApS (owned by 694,444 347,222
Peter Warthoe)
Altia Invest ApS (owned by Lars 615,079 307,539
Bangsgaard, Chairman of the
Board)
Total number of shares 2,003,967
Total number of warrants 1,001,983

Terms for warrants of series TO 6

For every two shares subscribed for in the Directed Issues, one warrant is received free of charge. One warrant of series TO 6 entitles the holder to subscribe for one new share in the Company. The subscription price per share shall correspond to the lower of (i) SEK 3.15 and (ii) the lowest subscription price applied in any rights issues carried out by the company during the term of the warrants, but not less than the quota value of the share. The subscription period takes place during the period from 1 September 2025 up to and including 19 September 2025. The warrants are issued free of charge and are not intended to be admitted to trading. A total of 2,371,026 warrants of series TO 6 may be issued in connection with the Directed Issues.

The Board's considerations regarding Tranche 1

Prior to the Board's decision on the implementation of Tranche 1, the Board has conducted a comprehensive assessment and carefully considered the possibility of raising capital through a rights issue. However, the Board believes that an issue deviating from shareholders' preferential rights is a better option for the Company and its shareholders. The reasons for deviating from shareholders' preferential rights are

i. the rights issue of shares and warrants resolved by the Board on 12 December 2023, approved by the general meeting on 16 January 2024, and whose subscription period ended on 26 February 2024, was subscribed to a total of approximately 60.90 per cent, of which guarantors subscribed for approximately 49.70 per cent. The accompanying warrants of series TO4, whose subscription price was set at SEK 0.02 per new share and which could be used to subscribe for new shares in the Company during the period from 7 June 2024 to 21 June 2024, had a subscription rate of 0.00 per cent. Consequently, a significant part of the Company's capital requirement remains unmet;
ii. that the Company is in an important development phase and has an imminent need for financing, given the Acquisition and to secure the Company's long-term operations, and that a rights issue would require significantly more time and resources to carry out and also entail a higher risk of a negative effect on the share price, especially in light of today's volatile and challenging market conditions, as a rights issue, compared to a directed issue, would likely need to be carried out at a lower subscription price given the discounts that have been offered in recent rights issues on the market; and
iii. that the implementation of Tranche 1 can be done at a significantly lower cost and with less complexity than a rights issue.

Considering the above, the Board is of the overall opinion that a directed issue of shares and warrants deviating from shareholders' preferential rights is the most advantageous option for both the Company and all its shareholders. The reason why existing shareholders participate in the directed issues of Tranche 1 is that these shareholders have expressed and shown a long-term interest in the Company, which, according to the Board, creates security and stability for both the Company and its shareholders. The fact that existing shareholders have shown confidence in the Company has meant that the Company has been able to achieve favorable terms for the financing.

Prior to the Board's decision on the implementation of Tranche 1, the Board has also placed great emphasis on ensuring the market-based nature of the subscription price in relation to the prevailing share price. The subscription price has been determined through arm's length negotiations with the external investors and amounts to SEK 2.52 per share, corresponding to the share's closing price on 29 August 2024. Given that the subscription price has been determined through arm's length negotiations with the external investors and that it corresponds to the share's closing price on 29 August 2024, the Board's assessment is that the subscription price reflects the prevailing market conditions and demand and is thus market-based.

The proposer's considerations regarding Tranche 2

The proposer believes, after an overall assessment and careful consideration, that an issue deviating from shareholders' preferential rights is a better option for the Company and its shareholders than a rights issue. The reasons for deviating from shareholders' preferential rights are

i. that the rights issue of shares and warrants resolved by the Board on 12 December 2023, approved by the general meeting on 16 January 2024, and whose subscription period ended on 26 February 2024, was subscribed to a total of approximately 60.90 per cent, of which guarantors subscribed for approximately 49.70 per cent. The accompanying warrants of series TO4, whose subscription price was set at SEK 0.02 per new share and which could be used to subscribe for new shares in the Company during the period from 7 June 2024 to 21 June 2024, had a subscription rate of 0.00 per cent. Consequently, a significant part of the Company's capital requirement remains unmet;
ii. that the Company is in an important development phase and has an imminent need for financing, given the Acquisition and to secure the Company's long-term operations, and that a rights issue would require significantly more time and resources to carry out and also entail a higher risk of a negative effect on the share price, especially in light of today's volatile and challenging market conditions, as a rights issue, compared to a directed issue, would likely need to be carried out at a lower subscription price given the discounts that have been offered in recent rights issues on the market;
iii. that the implementation of Tranche 2 can be done at a significantly lower cost and with less complexity than a rights issue.

Considering the above, the proposer is of the overall opinion that a directed issue of shares and warrants deviating from shareholders' preferential rights is the most advantageous option for both the Company and all its shareholders. The reason why existing shareholders participate in the directed issues of Tranche 2 is that these shareholders have expressed and shown a long-term interest in the Company, which, according to the proposer, creates security and stability for both the Company and its shareholders. The fact that existing shareholders have shown confidence in the Company has meant that the Company has been able to achieve favorable terms for the financing.

As the subscription price in the Tranche 2 corresponds to the subscription price in the Tranche 1 determined through arm's length negotiations with the external investors and that it corresponds to the share's closing price on 29 August 2024, it is the proposer's assessment that the subscription price reflects the prevailing market conditions and demand and is thus market-based.

Rationale and use of issue proceeds

Due to significant indebtedness, an unsustainable cost structure, and the absence of a viable long-term financing solution, the board in Qlife ApS, in consultation with the reconstructor, determined that there was no sustainable path forward for the Company's subsidiary Qlife ApS and consequently declared the subsidiary bankrupt.

Qlife has proactively worked to reduce its burn rate, achieving a significant decrease to approximately MSEK 0.50 per month. The bankruptcy of the subsidiary is expected to considerably alleviate the Company's balance sheet by reducing its debt burden. The Board recognizes substantial potential in these assets and values the ongoing collaboration with Hipro. The patented technology and product, Egoo Health, is nearing commercialization, with the partnership with Hipro anticipated to generate significant revenues.

The Board is confident that the new streamlined Company structure, lower burn rate, and enhanced balance sheet provide the essential conditions to sustain Qlife's operations and leverage the existing demand for the Company's patented technology.

In light of these developments, Qlife is proceeding with the Directed Issues of shares and warrants. The Directed Issues is expected to generate initial gross proceeds of approximately MSEK 11.90 before transaction costs and set-offs. The net proceeds are intended to be allocated as follows:

• Capitalization on the collaboration agreement with Hipro
• Working Capital
• Strengthen the balance sheet

Rebranding - Egoo Health

The Company announces its intention to rebrand as Egoo Health AB, pending approval by an Extraordinary General Meeting. This name change represents a pivotal step in the Company's transformation into a more focused and streamlined organization. The decision to adopt the Egoo Health name aligns with the Company's core product identity, addressing market confusion that has arisen from the use of multiple names. The "Egoo" brand has garnered strong recognition, particularly in China, making this the ideal moment to unify the brand and place full emphasis on the Egoo Health platform. This rebranding not only clarifies the Company's market presence but also positions Qlife for greater global impact.

The rebranding of Qlife - to the formal registration as "Egoo Health (publ) AB" requires the approval of an Extraordinary General Meeting. After the Extraordinary General Meeting and after receiving shareholder consent, Qlife will rebrand to Egoo Health. Further information will be found in the notice of the Extraordinary General Meeting.

"We have spent the past years making Egoo Health a truly advanced high-tech clinical blood testing system, and the founders are co-investing at this time because we feel we have a new beginning in our quest to get Egoo Health approved in as many countries as possible over the coming years, allowing access to quality diagnostics in a completely new way. The transaction was complicated, with many unknowns during the process, but we have succeeded in making it successful, including some strong investor names, and I am really happy that we can continue from here." - CEO, Thomas Warthoe

Shares, share capital, and dilution

Assuming that the Extraordinary General Meeting resolves to approve Tranche 2, the Directed Issues will result in the number of outstanding shares in the Company potentially increasing by 4,742,065, from 2,318,516 to 7,060,581, and the share capital potentially increasing by SEK 1,043,254.30, from SEK 510,073.52 to SEK 1,553,327.82, resulting in a dilution effect of approximately 67.2 per cent.

In the event that all warrants of series TO 6 are exercised, the number of outstanding shares will increase by an additional 2,371,026, from 7,060,581 to 9,431,607, and the share capital will increase by SEK 521,625.72, from SEK 1,553,327.82 to SEK 2,074,953.54. This will result in an additional dilution effect of approximately 25.1 per cent and a total dilution effect of approximately 75.4 per cent.

Extraordinary General Meeting

The directed issues in Tranche 2 are subject to Chapter 16 of the Swedish Companies Act (2005:551) (the so-called Leo rules). Accordingly, a resolution of the Extraordinary General Meeting is only valid if it has been supported by shareholders representing at least nine-tenths (9/10) of both the votes cast and the shares represented at the Extraordinary General Meeting. Furthermore, Tranche 2 requires an amendment of the Articles of Association. The notice of the Extraordinary General Meeting will be published through a separate press release.

Advisors

Eminova Partners Corporate Finance AB act as financial advisor, and Eminova Fondkommission AB has been appointed as issuing agent, in connection with the Directed Issue. Moll Wendén Advokatbyrå AB is legal advisor to Qlife.

Thomas Warthoe

Chief Executive Officer (CEO)

Phn: +45 21 63 35 34

E-mail: tw@egoo.health

Important information

The publication, release or distribution of this press release in certain jurisdictions may be restricted by law and persons in the jurisdictions in which this press release has been published or distributed should inform themselves about and observe any such legal restrictions. The recipient of this press release is responsible for using this press release and the information contained herein in accordance with the applicable rules in each jurisdiction. This press release does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities issued by the Company in any jurisdiction in which such offer or solicitation would be unlawful.

This press release is not a prospectus within the meaning of Regulation (EU) 2017/1129 (the "Prospectus Regulation") and has not been approved or reviewed by any regulatory authority in any jurisdiction. A prospectus will not be prepared in connection with the Directed Issues.

This press release does not constitute an offer or invitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States absent registration or an applicable exemption from registration under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public offering of such securities in the United States. The information in this press release may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, in or into the United States of America, Canada, Australia, New Zealand, Japan, Hong Kong, South Korea, Singapore, South Africa, Switzerland, Russia or Belarus or any other jurisdiction where such announcement, publication or distribution of this information would be unlawful or where such action is subject to legal restrictions or would require additional registration or other measures than those required by Swedish law. Actions contrary to this instruction may constitute a violation of applicable securities laws.

This press release does not identify or purport to identify any risks (direct or indirect) that may be associated with an investment in new shares. This press release does not constitute an invitation to underwrite, subscribe or otherwise acquire or transfer securities in any jurisdiction. This press release does not constitute a recommendation for any investor's decision regarding the Directed Issue. Each investor or potential investor should conduct its own investigation, analysis and evaluation of the business and information described in this press release and any publicly available information. The price and value of the securities may go down as well as up and past performance is no guide to future results. Neither the contents of the Company's website nor any other website accessible through hyperlinks on the Company's website are incorporated into or form part of this press release.

Forward-looking statements

This press release contains forward-looking statements that reflect the Company's intentions, beliefs or expectations regarding the Company's future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the Company operates. Forward-looking statements are statements that are not historical facts and can be identified by the use of words such as "believes", "expects", "anticipates", "intends", "estimates", "will", "may", "anticipates", "should", "could" and, in each case, the negatives thereof, or similar expressions. The forward-looking statements in this press release are based on various assumptions, many of which are based on additional assumptions. Although the Company believes that the assumptions reflected in these forward-looking statements are reasonable, there can be no assurance that they will materialize or that they are accurate. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, actual results or outcomes could differ materially from those in the forward-looking statements for a variety of reasons. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this press release by the forward-looking statements. The Company does not guarantee that the assumptions underlying the forward-looking statements contained in this press release are accurate and any reader of this press release should not place undue reliance on the forward-looking statements contained in this press release. The information, opinions and forward-looking statements expressed or implied herein are made only as of the date of this press release and are subject to change. Neither the Company nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release, unless required to do so by law or the rules of Nasdaq First North Growth Market.

This disclosure contains information that Qlife Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 29-08-2024 22:33 CET.