Information from Lifecare – September 2021

Lifecare’s activities in the period after the shareholder letter distributed July 2nd, 2021 have been focused on streamlining the continued development of the Sencell technology and to continue to ensure organizational adjustments with the aim to optimize the R&D set-up. In addition, the Board and administration of Lifecare have focused on financial preparations ensuring operational stability and predictability in the ongoing product developments.

Lifecare’s sensing technology has the ability to continuously monitor changes in the glucose level based on perfectly correlating changes in the osmotic pressure inside of the sensor. The patented Sencell technology is based on chemical reactions in our proprietary chemical solution, of which we also have a pending patent.

Lifecares original sensing element was based on conventional piezoresistive pressure sensors requiring a minimum thickness that was identified as a limitation to ensure a miniaturization in line with our original sensor specifications. Back in 2018 Lifecare established a cooperation with Nanoscale Systems GmbH (Nanoss) and it’s then subsidiary cantiMED UG (cantiMED) to miniaturize the physical sensing element used in the Sencell technology based on nanoscience and nanotechnology. By help of the Nanoss patented technology for 3D nanoprinting, cantiMED managed to develop a miniaturized sensing element in the size of 20 nanometers (one nanometer = one millionth of a millimeter). This made it possible to miniaturize the Sencell technology to less than the original aim, as we now are able to assemble the complete Sencell Glucose sensor at the size of a grain of rice.

As previously announced, Lifecare has acquired cantiMED to ensure an unlimited access to the Nanoss technology within the field of medical devices. We have decided to rename cantiMED to Nanobiosensors, restructure it into a GmbH, and to make it our local operational headquarter in Germany.

Following the strategical take-over, Lifecare has hired Dr. Boris Stamm to be lead scientist of the MEMS- & Sensor Research Laboratory of Lifecare Nanobiosensors. Dr. Stamm holds a PhD from the Natural and Medical Science Institute (NMI) in Reutlingen (Germany)and has  broad experience within the field of thin film technology, nanotube electronics and microelectronics. Dr. Stamm has previously worked as a Scientist and Project Manager at Nanoss, as well as a Research associate at NMI.

Furthermore, Lifecare has recently agreed to take over the laboratory of Pfützner Science & Health Institute GmbH (PSHI). The laboratory is an established and profitable laboratory for testing and validating of glucose monitoring systems, including system accuracy studies and clinical testing for interfering substances, to name a few. Up to now Lifecare has contracted evaluation and validation of the Sencell technology from the PSHI laboratory. By taking over the laboratory – and integrate this in the Lifecare Nanobiosensors structure – we ensure overall R&D capacities going forward being predictable and effective, meanwhile we are positioned to continue with the profitable existing activities at the laboratory.

The take-over of the laboratory includes several strategical and operational advantages for Lifecare, including a strengthened relationship and affiliation with Lifecare CSO Prof. Andreas Pfützner.

The acquisition of the PSHI laboratory will primarily be settled with shares in Lifecare and a future profit based earn-out. The acquisition settlement include Euro 100,000 paid in cash and Euro 300,000 settled in new shares in Lifecare. In addition, the settlement includes a profit-based combined cash and share earn-out up to Euro 775,000 based on profitability from the PSHI laboratory in the years 2021 – 2025, bringing the maximum deal value to Euro 1.175 million depending on future profitability. This settlement structure is a clear manifestation from Prof. Pfützner and PSHI related to the outlook for the success of Lifecare and Sencell, as the major share of the settlement is based on shares in Lifecare. At the same time, the transaction also represents a strong commitment from Lifecare to uphold, continue and further intensify our close and longstanding cooperation with Prof. Pfützer as our CSO.

The ongoing organizational adjustments ensure and improve the Lifecare R&D throughput and efficiency, as we prepare for upcoming product developments based on the Sencell technology and the 3D nanoprinting technology.

The Lifecare Board of Directors has decided to convene an extraordinary shareholder meeting September 10th, 2021, proposing to pass a resolution authorizing the Board to increase the share capital of Lifecare with up to 25%. The proposal is part of overall preparations to ensure operational stability and predictability in the upcoming product developments.

The intention of the Lifecare Board is to ensure a private placement of new shares with gross proceeds up to NOK 40 million and the Offer price will be set by the Board. The company has engaged Carnegie AS as bookrunner and manager of the process. Prior to the Board decision to convene an extraordinary shareholders meeting, several of the major shareholders of Lifecare already pre-committed NOK 17,8 million subscribing for new shares in the contemplated private placement:

Teigland Eiendom AS (Lifecare’s current largest shareholder with 18.2%) has pre-committed for NOK 10 million, Lacal AS (Lifecare’s current second largest shareholder with 13.1%) has pre-committed for NOK 6 million, Spit Air AS (Lifecare’s current eight largest shareholder with 2.2%) has pre-committed for NOK 1 million and Patricia Sandquist (Lifecare’s current seventh largest shareholder with 2.2%) has pre-committed for NOK 0,8 million,

In addition, several existing investors have indicated a positive interest to participate in the capital increase.

The existing pre-commitments is without reservation on terms or request for pre-commitment fee. In addition, the Board of Lifecare has expressed the intention to commence a repair offering towards existing shareholders not participating in a private placement.