Qlife Holding AB: Qlife provides strategic business update and plans rebranding as 'Egoo Health' - a new era begins

As outlined in the press release dated 29 August 2024, Qlife has successfully executed directed issues of shares and warrants pursuant to the authority granted by the annual general meeting 2024. These directed issues facilitate the repurchase of critical assets from the Qlife ApS estate and secures the funding needed to fully leverage existing collaboration agreements with Hipro Biotechnology ("Hipro").

Qlife's board and management have taken decisive steps to reduce the Company's burn rate to approximately MSEK 0.50 per month. Additionally, the agreement with the Danish bankruptcy estate drastically alleviates the Company's balance sheet by reducing liabilities. Furthermore, upon approval from the extraordinary general meeting, some members of the board and management will participate in the directed issues of shares and warrants following a proposal from a major external shareholder, Jørgen Drejer, substantially increasing their ownership.

Background

Since December 2023, Qlife has focused on advancing its partnership with Hipro and securing long-term financing for its subsidiary, Qlife ApS. However, on 19 July 2024, the Company announced that, due to significant debt, an unsustainable cost structure, and the lack of a viable long-term financing solution, the board of directors, in consultation with the reconstructor, determined that Qlife ApS had no sustainable path forward and Qlife ApS filed for bankruptcy.

In response to these challenges, Qlife's board and management have taken decisive steps to strengthen the Company's financial position and strategic direction. The Company has successfully reduced its burn rate to approximately MSEK 0.50 per month. The bankruptcy of the subsidiary is expected to significantly improve Qlife's balance sheet by alleviating its debt burden. Additionally, the board completed directed issues of shares and warrant, pursuant to the authority granted by the annual general meeting 2024, further enhancing the Company's financial flexibility and confirming the interest in Qlife.

The directed issues made it possible for Qlife to enter into an agreement to repurchase key assets from the Qlife ApS estate. These assets, particularly the patented Egoo Health technology, have substantial market potential, especially in the rapidly expanding Hospital-at-home sector. The board remains optimistic about the future, recognizing the value of continued collaboration with Hipro and anticipating that the commercialization of Egoo Health, supported by this partnership, will generate significant revenue in 2025.

With a streamlined company structure, reduced burn rate, and strengthened balance sheet, Qlife is well-positioned to sustain its operations and capitalize on the growing demand for its patented technology.

Directed issues of shares and warrants

Tranche 1 of the directed issues of shares and warrants has been successfully completed, securing an initial MSEK 6.90 for Qlife from external investors and existing shareholders, before deduction of transaction costs. As part of tranche 2, some members of the board and management team has committed to an investment of MSEK 5.05, with MSEK 4.05 offset against deferred consultancy fees, and the remaining MSEK 1.00 contributed in cash. The managements participation in the directed issues of tranche 2 is conditioned on a resolution from an extraordinary general meeting. The raised capital will support the collaboration agreement with Hipro, enhance working capital, and fortify the balance sheet, providing financial stability through the first half of 2025.

Upon resolution of tranche 2 from the extraordinary general meeting, the participating members of the board and management will increase their ownership stake upon the transaction's completion. This commitment underscores their dedication to the Company's long-term success and their belief in the technology's potential. Post-transaction, the participating members of the board and management are expected to hold approximately 28 per cent of the outstanding shares in Qlife. Additionally, the management team has committed to waiving their salaries as part of this initiative. For complete information about the directed issues, please see the press release named "Qlife acquires the assets of Qlife ApS, carries out directed issues of a total of approx. MSEK 6.9 and proposal of directed issues of approx. MSEK 5.05" and dated 29 August 2024.

"We are extremely pleased that it has been possible to complete this transaction and to reorganize the company into a new and more agile structure. For the founders it has never been an option not to continue our effort to bring decentralized blood testing into people's homes. Egoo Health has been developed over the past five years and is today a highly competitive one-of-a-kind blood testing that delivers diagnostic data on-par with hospital testing. We will now continue our quest towards getting the product into a revenue-stage and we believe we have built a good foundation for this, specially together with our Chinese partner who is contributing significant resources to achieving product approval in China.

It has been important for the founders to underline our commitment to making Egoo Health successful. We have over the years invested significant capital into the company, and we have never sold shares simply because we believe in the long-term value of what we do. Our participation this time is a logic continuation of our commitment to the future value of Egoo Health" - Thomas Warthoe, CEO

Repurchase Of Assets

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). For complete information about the acquisition, please see the press release named "Qlife acquires the assets of Qlife ApS, carries out directed issues of a total of approx. MSEK 6.9 and proposal of directed issues of approx. MSEK 5.05" and dated 29 August 2024.

Rebranding - Egoo Health

The Company has announced its intention to rebrand as Egoo Health, 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.

Operational update

Over the past few years, the Egoo Health platform has been validated and quality assured during the pandemic through extensive system usage. This process has resulted in a mature platform that has demonstrated reliability, even under challenging environmental conditions, delivering diagnostic blood data comparable to more established laboratory systems. This positions Egoo Health uniquely, as no other system offers similar capabilities, and there is currently no approved self-testing home-use system available on the market.

Egoo Health is therefore striving to become a first mover in the approved self-testing of immuno-diagnostic data in the home environment. These data are crucial for managing major diseases and chronic conditions, and the Company believes there is a significant market for this, positioning Egoo Health to capture it effectively. This is especially true in partnership with their Chinese collaborator, who has the resources to finalize the transition and an established presence in the Chinese market, having sold over 25 million tests into the hospital point-of-care field. The partner is now seeking to shift some of that blood testing from hospitals to people's homes, offering significant market potential for high-volume sales.

In addition to this, Egoo Health is focusing on making life easier for those affected by the rare disease Phenylketonuria (PKU). After years of developing a complex biochemical test, the Company has recently seen a breakthrough with their blood test in a U.S. study. Qlife is proud of this achievement and anticipates making a meaningful difference in the rare disease field, particularly for individuals who require lifelong blood monitoring.

"Qlife has had the pleasure of having faithful and visionary shareholders who still have faith that Qlife's products can make a difference in the world's healthcare systems - even though it has been difficult to see the light at times.

Qlife has also benefited from highly skilled employees and external contributors with a strong commitment and desire to advance the technology into products that can improve patients' everyday life.

We are happy to have the opportunity to continue this work and make Egoo Health the success it deserves and which we all believe in - looking forward to a new beginning." - Lars Bangsgaard, Chairman of the Board.

New group structure

Following the bankruptcy of Qlife ApS, Qlife will operate as a standalone entity, eliminating the previous group structure. This transition has allowed the Company to significantly reduce both its burn rate and debt burden. Management estimates the monthly burn rate will now be approximately MSEK 0.50. Consequently, the directed share issue will provide the necessary resources for the Company to continue advancing its strategy with Hipro and to pursue ongoing negotiations with potential partners.

For more information please contact:

Thomas Warthoe

Chief Executive Officer (CEO)

Phone: +45 21 63 35 34

E-mail: tw@egoo.health