Qlife carries out a SEK 4,6m directed issue of convertibles
The board of directors of Qlife Holding AB (“Qlife” or the “Company”) has, pursuant to the authorization granted by the annual general meeting on 4 May 2023, resolved on a directed issue of a convertible loan raising gross proceeds of SEK 4,647,035 prior to deduction of transaction costs. The convertible loan is expected to satisfy the Company’s financing need until the end of 2023.
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.
Term and Conversion price: The convertible has a 12-month term to maturity on 31 July 2024. The lenders, a consortium of microcap-investors, including Jinderman & Partners AB and Pensys AB, have the right to request conversion of the convertibles (amount owed, increased with set-up fee, ref. below) at a conversion price of SEK 0.08 per share, corresponding to the quota value of the Company’s shares. Conversion can be requested as from the date of registration of the convertibles with the Swedish Companies Registration Office to and including 30 July 2024.
Other terms: In connection with the disbursement of the convertible loan to the Company, a set-up fee of 66.67 per cent is added to the loan amount resulting in a total amount owed before interest of SEK 7,745, 058. The interest rate is two (2) per cent per month calculated on the loan amount increased with the set-up fee. The interest is calculated and paid in cash upon a potential conversion, and if not converted, then upon the maturity date. Interest only applies for the outstanding convertibles.
Deviation from the shareholders’ preferential rights etc.: The purpose of the convertible loan and the reason for the deviation from the shareholders’ preferential rights is the urgent need for ongoing working capital until the end of 2023 and thereby to improve the prospect for reaching the major milestones such as a strategic partnership. After careful consideration, the Board of Directors has taken into account the complexity of the convertibles, as well as the urgent nature of the Company’s funding need, which means that a rights issue is not considered suitable at this time. The Board of Directors’ assessment is hence that an issue with deviation from the shareholder's preferential rights is in the Company's and all shareholder's interest and therefore also justifies deviation from the main rule that issues of securities shall be carried out with preferential rights for the shareholders. The conversion price as well as the other terms for the convertible loan has been established through a negotiation at arm's length between the Company and the investors. In connection herewith, the Board of Directors has taken into account general market conditions that make it difficult to raise capital, whereby the terms and conditions for the convertible loans in an overall assessment are deemed to be in accordance with market conditions.
Share capital, shares, and dilution: Provided that all convertibles are converted into shares, the number of shares in Qlife will increase by 96,813,231, from 645,435,499 to 742,248,730. The share capital of the Company will increase by SEK 7.745.058.48, from SEK 51,634,839.92 to SEK 59,379,898.40. Thus, the convertible entails a potential maximum dilution of approximately 13 per cent based on the total number of shares in Qlife after conversion of the convertibles.
CEO, Thomas Warthoe comments: “We are happy to announce that we have managed to secure funding that is designed to cover Qlife’s short term financing needs till the end of 2023. Among other things, this allows us to intensify our dialogues with strategic partners, existing as well as new, in order to identify and pursue the fastest possible track to profitability. After all, we have invested +200mSEK in our patented technology and products to date. We know that there is a large and unmet demand for next generation easily available blood test technology at all levels, ranging from users/patients, to medical partners looking to take hospital-at-home concepts to the next level and large players in the pharma and medical device industries”.