SenzaGen performs largest test order for GARD®skin – valued at approximately SEK 1m

SenzaGen has been selected to test substances for a new customer, a world leader in the chemicals industry, for a total value of approximately SEK 1 million. The order, which is the single largest for GARD®skin and also the largest from a chemicals company, was received at the end of the second quarter and will be completed in the third quarter of 2022 at SenzaGen’s GLP-certified laboratory in Lund.

The customer, who has its headquarters in the US, aims to use GARD®skin to obtain more detailed information about the skin sensitizing effect of substances traditionally considered difficult to test with other previous generations of test methods, thus expanding its reference library.

“We are seeing a strong increased demand for our tests and it is highly gratifying that more customers are choosing to place larger test orders with us, this time a world leader in chemicals with global operations. This serves as further confirmation of interest in GARD® skin’s unique capability to be used for and generate more data on difficult-to-test substances. With GARD®skin, we meet a skin sensitization need not covered by any other available tests”, says Peter Nählstedt, President and CEO of SenzaGen.

With high reliability, GARD®skin test results help product development companies and producers ensure that the products they bring to market are free of allergens, enabling them, when needed, to prove this in their product filings. GARD®skin has been approved by the OECD as a test guideline for non-animal skin sensitization since 30 June 2022.

SenzaGen obtains OECD approval for GARD®skin – a breakthrough that opens up significantly larger markets, paving the way for increased sales

SenzaGen today announced that the Company has obtained approval from the OECD for GARD®skin as a test guideline for non-animal skin sensitization. This means that customers in all OECD member countries can now use GARD®skin test results for regulatory filings, which creates excellent prospects and opens up vast potential for sales growth for SenzaGen. The test is the first and only non-animal OECD-approved test for assessing the allergenicity of chemicals based on genomics and machine learning.

The Organisation for Economic Co-operation and Development (OECD) today published its approval of SenzaGen’s non-animal skin sensitization test, GARD®skin, as a part of Test Guideline 442E In vitro Skin Sensitization. An OECD test guideline enables customers in industries including cosmetics and chemicals in the EU, US and parts of Asia to use GARD®skin test results for regulatory filings. The approval gives the Company access to the entire non-animal toxicology market for skin sensitization.

“The OECD decision is a regulatory breakthrough for our GARD® technology. With OECD approval in place, we can offer the GARD®skin test to a much broader group of customers, which will result in greater demand for the test, and we expect increased sales volumes in the future. GARD®skin is a high-performance and highly reliable method with a broad application area, especially because it is very well suited for use with chemicals that are traditionally considered difficult to assess. This is an area in which we hold a unique industry position. SenzaGen is the first company in the world to develop and apply new technology based on genomics and machine learning to the field of toxicology and skin sensitization, which will lead to results that are better and safer for humans,” says Peter Nählstedt, President and CEO of SenzaGen.

GARD®skin meets a unique customer need
With high reliability, GARD®skin test results help product development companies and producers ensure that the products they bring to market are free of allergies, enabling them to prove this in their regulatory filings. This is the first test to give customers the capability to test chemicals traditionally considered difficult to test. As a result, GARD®skin meets a need in skin sensitization not covered by any other available tests.

The OECD approval
The OECD’s applicable regulatory testing strategy for non-animal skin sensitization includes chemical assessment with several parameters. For skin sensitization assessment, GARD®skin is accepted as a stand-alone method for positive results and together with additional evidence for negative results.

The OECD’s official announcement on the adoption of GARD®skin as a test guideline for non-animal skin sensitization is available on the following web page: https://www.oecd-ilibrary.org/environment/oecd-guidelines-for-the-testing-of-chemicals-section-4-health-effects_20745788

Web conference
SenzaGen invites the media and investors to a web conference on July 5 at 14.00 CEST at which CEO Peter Nählstedt will provide a briefing on the OECD approval. The web conference will be held in English starting with a presentation followed by a Q&A session.

Weblink
https://tv.streamfabriken.com/senzagen-press-conference-2022

Phone number for the conference
To participate in the conference call, use the dial-in numbers below.

SE: +46 856642651
UK: +44 3333000804
NE: +31 207095189
FR: +33 170750711
DE: +496913803430
CH: +41 225809034

Pin code: 65480307#

After the live broadcast, the web conference will be available on the Company’s website.

SenzaGen wins its largest order for non-animal testing with GARD® – value SEK 4.2m

SenzaGen has secured an order for non-animal testing with GARD®skin Dose-Response from a larger international industry association. The order, valued at SEK 4.2 million, represents the largest single purchasing commitment of GARD® test to date, confirming the strength and the many unique application areas of the technology. The tests will be performed in SenzaGen's GLP-certified laboratory in Lund during the coming six to nine months.

SenzaGen’s unique GARD®skin Dose-Response test provides the customer with information on the dosage at which skin sensitizers can be used in consumer products without inducing skin allergies in humans.

“The transition from animal testing to methods that provide better results for humans is ongoing in the toxicology testing industry and SenzaGen has taken the lead in skin sensitization. The order, which is our largest to date, is a result of the GARD® technology's unique capabilities to provide quantitative information and the strong relationship we have built with the customer over a long time. It marks a major milestone for the company and significantly strengthens our market position. We are very much looking forward to providing the customer with valuable data to determine safe levels for substances in humans, a need that the industry has expressed for a long time”, says Peter Nählstedt, President and CEO, SenzaGen AB.

GARD®skin Dose-Response is a unique non-animal test that provides quantitative information on the concentration at which a substance causes allergy. The test enables companies in industries including cosmetics, pharmaceuticals and chemicals to identify the concentration of a substance at which it is safe for human use, which serves as a crucial basis for prioritization and decision-making in research and development. The test is an expanded application domain of GARD®skin, and it is one of the first of its kind on the market.

RIFM supports SenzaGen with new SEK 1.5m grant for non-animal photosensitization testing

SenzaGen will continue its collaboration with the Research Institute for Fragrance Materials (RIFM) on non-animal photosensitization testing. The new grant provided by RIFM will add SEK 1.5 million to SenzaGen’s sales and is for testing chemicals with GARD® for photosensitization. The tests will be performed at SenzaGen’s GLP-certified laboratory in Lund in the spring and summer of 2022.

Following successful initial evaluation in 2021, RIFM decided to test more ingredients with GARD®skin Dose-Response, which has been adapted to identify the dose levels at which a fragrance can induce skin allergies when exposed to sunlight (photosensitization).

“We are very proud to continue our collaboration with RIFM. RIFM’s continued trust in us affirms their appreciation of the many application areas that our GARD® technology offers and can be adapted to. The need to measure the photosensitization risk is significant for product development companies in the cosmetics and chemicals industries, which are two of the industries we prioritize,” says Peter Nählstedt, President and CEO of SenzaGen.

RIFM is an international scientific institute ensuring the safe use of fragrance ingredients in consumer products with an independent expert panel and a comprehensive library of chemicals. Both companies have collaborated on several projects since 2020 and look forward to jointly contributing to progress in terms of sustainability and ethics in the testing market.

”We were very excited by the preliminary results we saw with the GARD®skin Dose-Response adapted for photosensitization. Continuation of this work was the logical next step. Although it is rare, photosensitization is one of the critical human health endpoints RIFM evaluates and having a non-animal assay to assess for photosensitization is key,” says Gretchen Ritacco, Principal Scientist, Phototoxicology at RIFM.

GARD®skin Dose-Response is a test that provides quantitative information on the concentration at which a substance causes allergy. In the RIFM project, the test materials are exposed to sunlight in one step to identify their photosensitization. The test enables companies in industries including cosmetics, pharmaceuticals and chemicals to identify the concentration of a substance at which it is safe for human use, which serves as a crucial basis for prioritization and decision-making in research and development. The test is an expanded application domain of GARD®skin, and it is one of the first of its kind on the market.

For more information, please contact:
Peter Nählstedt, President and CEO, SenzaGen AB
Email: peter.nahlstedt@senzagen.com | Mobile: +46 700-23 44 31

Gretchen Ritacco, Principal Scientist, Phototoxicology, RIFM
Email: gritacco@rifm.org | Phone: +1 201.689.8089 ext. 153

About RIFM
Established in 1966, the Research Institute for Fragrance Materials (RIFM) generates, analyzes, evaluates, and distributes data to provide a scientific basis for the safe use of fragrances. RIFM has compiled the most comprehensive, worldwide source of toxicology data, literature, and general information on fragrance and flavor raw materials. RIFM’s Fragrance Ingredient Safety Assessment program draws from its comprehensive database of over 70,000 references and more than 135,000 human health and environmental studies.

RIFM assesses the safety of fragrance ingredients by the most current, internationally accepted guidelines—and has done so since its founding. The Expert Panel for Fragrance Safety, an independent, international team of researchers and academics with no ties to the fragrance industry, reviews all of RIFM’s work before RIFM submits it for peer-reviewed publication in a reputable scientific journal. RIFM makes all of its published, peer-reviewed work—current and historical—available for free at fragrancematerialsafetyresource.elsevier.com.

About SenzaGen AB (publ)
SenzaGen aims to be a leader in non-animal toxicology testing, driving the transition from animal testing to methods better suited to reflect human biology. The Company provides high-performance, non-animal test methods and advisory and innovation services based on the latest technology. Non-animal methods are more effective, more accurate and less expensive than traditional animal-based methods while also helping to reduce the number of laboratory animals. The Company has a growth strategy centered around continued commercialization of its proprietary GARD® and ORA® test platforms, expansion of its test portfolio and evaluation of acquisition opportunities of profitable and growing companies with complementary offerings. SenzaGen has its headquarters and GLP-certified laboratory in Lund, Sweden and subsidiaries in the US and Italy. For more information, please visit: www.senzagen.com.

SenzaGen is listed on Nasdaq Stockholm First North (ticker: SENZA),
and FNCA Sweden AB, +46(0)8-528 00 399, info@fnca.se, is the Company’s Certified Adviser.

Report from AGM of SenzaGen AB on 5 May 2022

The Annual General Meeting (AGM) of SenzaGen held on today’s date, 5 May 2022 in Lund, resolved to pass all proposals presented by the board and shareholders.

Adoption of income statement and balance sheet
The AGM adopted the income statement and balance sheet and the consolidated income statement and consolidated balance sheet for 2021.

Appropriation of earnings
The AGM resolved that no dividend be paid to shareholders and that the earnings at the disposal of the AGM be carried forward.

Discharge from liability
The AGM discharged the board directors and CEO from liability for the 2021 financial year.

Election of directors and auditors and their fees
The AGM resolved that the board shall consist of six directors and no alternates. Carl Borrebaeck, Ian Kimber, Laura Chirica, Anki Malmborg Hager, Paula Zeilon and Paul Yianni were re-elected as directors. Carl Borrebaeck was also re-elected as board chairman. Authorized Public Accountant Mats-Åke Andersson was elected as auditor, with Authorized Public Accountant Martin Gustafsson as deputy auditor.

The AGM resolved to set directors’ fees at SEK 1,400,000 in total, with SEK 200,000 for each non-employee director and SEK 400,000 for the board chairman. Auditor’s fees shall be payable on the basis of approved invoices.

Remuneration policies for senior executives
The AGM resolved, as proposed by the board, to adopt remuneration policies for senior executives.

Authorization for the board to resolve to issue new shares
The AGM resolved, as proposed by the board, to authorize the board, for the period until the next AGM, with the shareholders’ preemptive rights waived, on one or more occasions, to decide to issue new shares, stock options or convertibles. The total number of shares that may be issued or, if convertibles or stock options are issued, added following conversion or exercise of rights under the authorization is limited to 20 percent of the number of shares outstanding on the date of the notice of the AGM. As a result, the maximum number of shares that may be issued is 6,016,229, and the Company’s share capital may be increased by a maximum of SEK 300,811.45.

The purpose of the authorization is to enable the board to raise working capital for the Company, and/or bring in new owners of strategic significance to the Company, and/or acquire other companies or businesses.

Directed issue of a maximum of 812,500 stock options
The AGM resolved, as proposed by the board, to issue a maximum of 812,500 stock options, as a result of which the Company’s share capital may increase by a maximum of SEK 40,625. The stock options will entitle the holder to subscribe for new shares in the Company.

With the shareholders’ preemptive rights waived, employees of the Company and the Group shall be entitled to subscribe for the stock options as follows:

  • The Group CEO will be offered to subscribe for a maximum of 75,000 options.
  • Members of Group Management and key personnel comprising up to eight positions will each be offered to subscribe for a maximum of 50,000 options, altogether comprising a maximum of 400,000 options.
  • Consultants within Group Management, comprising two individuals, will each be offered to subscribe for a maximum of 25,000 options, altogether comprising a maximum of 50,000 options.
  • Other employees and consultants considered key personnel in the Group, comprising up to twenty-one individuals, will be offered to subscribe for between 12,500 and 25,000 options each, altogether comprising a maximum of 287,500 stock options.

The subscriber is entitled to subscribe for stock options free of charge. Given that the stock options are issued free of charge, the Company estimates that fringe benefits and social security expenses will be incurred for the participant and the Company as a result of the option plan. The total expenses, including other expenses in the form of fees to external advisers and expenses for the administration of the plan, are estimated at around SEK 100,000 over the program’s term and the cost of social security expenses is estimated at SEK 326,768.

The market value of the option shall be calculated using the Black-Scholes pricing model subject to barrier conditions to calculate the Company’s social security expenses. The valuation of the options shall be performed by an independent valuation institute or auditing firm.

Each stock option entitles the holder to subscribe for one new share in the Company in exchange for cash payment, provided that the barrier conditions have been met, during the period from 1 June 2025 to 30 September 2025 or the earlier date set out in the option rules.

Payment for shares subscribed for by exercising stock options shall be made in cash at an exercise price of 100% of the average of the listed volume-weighted price paid for each trading day as per Nasdaq First North Growth Markets’ official price list for shares in the Company during the period from 21 April 2022 to 4 May 2022.

For each individual participant in the stock option plan, 80 percent of all allotted stock options are subject to barrier conditions, and these 80 percent of the stock options can only be exercised to subscribe for shares once the volume-weighted price paid measured per trading day as per the Nasdaq First North Growth Market’s official price list for shares is higher than the respective barrier level.

The barrier levels are calculated as a percentage of the average volume-weighted price as per the Nasdaq First North Growth Market’s official price list for shares in the Company during the period from 21 April 2022 to 4 May 2022 (“the Barrier Price”).

The barrier levels shall consist of two barriers, with the first barrier accounting for 25 percent (“Barrier 1”) and the second barrier accounting for 55 percent (“Barrier 2”) of all the stock options allotted to participants, in accordance with what is set out below.

  • Barrier 1: 25 percent of the stock options are subject to Barrier 1 and the barrier is calculated at 158 percent of the Barrier Price.
  • Barrier 2: 55 percent of the stock options are subject to Barrier 2 and the barrier is calculated at 300 percent of the Barrier Price.

New shares subscribed for by exercising stock options entitle the holder to dividends for the first time on the dividend record date most immediately following the date the new share issue was registered with the Swedish Companies Registration Office and Euroclear Sweden AB.

For detailed rules regarding the resolution passed at the AGM, please see the AGM notice available at the Company’s website, www.senzagen.com.

SenzaGen update: Strong sales performance in January–March 2022

SenzaGen’s sales increased by over 370% to SEK 9.0 million in the first quarter of 2022 due to very strong organic and acquisition-driven growth, which is a testament to the Company’s strategy and investments.

Consolidated net sales for the first quarter totaled SEK 9.0 (1.9) million, comprising SEK 4.2 million in organic sales and SEK 4.8 million in acquired sales. This represents 118% year-on-year organic growth and 373% year-on-year total growth.

“SenzaGen is continuing to exhibit strong performance and the positive sales trend from 2021 is intensifying in 2022. Sales more than quadrupled during the quarter, driven by continued strong organic growth with new and returning leading global customers and acquisition growth with VitroScreen. The market situation is beginning to return to normal after the pandemic and the quarter was characterized by a high pace of business with more in-person customer meetings. Along with the launch of a broadened non-animal offering for medical device companies, this gives SenzaGen excellent prospects for continuing successful performance and growth,” says Peter Nählstedt, President and CEO of SenzaGen.

Organic sales growth during the quarter was very strong. The Company’s customer base grew with new customer acquisitions primarily in the chemicals and cosmetics industries and existing customers returned to place new orders. A good example of a returning customer is the global US-based world leader in chemicals that ordered more GARD® tests in February following an initial successful project.

VitroScreen delivered sales well in line with the Group’s expectations. The majority of these sales came from new and existing customers in the medical devices and pharmaceuticals industries. VitroScreen’s tailored solutions and advisory services performed well during the quarter.

With VitroScreen in the Group, SenzaGen has created new opportunities for expansion via revenue synergies. One of the most significant activities of the quarter was the launch of a joint test and service offering targeting the substantial medical devices market, whose interest in non-animal solutions is growing, especially in Europe. The Company secured the first orders in just the first weeks following the launch. One of these came from a leading medical device company, an existing customer of SenzaGen, that ordered advisory services from VitroScreen.

After the pandemic, industry is beginning to return to in-person meetings, trade fairs and conferences. During the quarter, SenzaGen participated in the Society of Toxicology’s Annual Meeting and ToxExpo in San Diego, USA, where the Company held several scientific GARD® presentations in collaboration with customers, which attracted great industry interest. The ongoing war in Ukraine has not had a direct impact on SenzaGen because the Group does not have any customers or suppliers in Russia or Ukraine. However, Management is closely monitoring developments.

SenzaGen is also continuing to work on completing the OECD test guideline process for GARD®skin. Several preparatory meetings were held with the OECD’s expert group for the OECD’s upcoming decision meetings. Once approval is in place, results from the test will be usable for product filings in all OECD member countries – which is expected to further increase demand for the test.

In parallel with continuing very strong sales growth and progress in strategic areas, SenzaGen is moving forward with its acquisition agenda.

These sales figures have not been audited by an auditor, they should not be interpreted as meaning that profitability has been achieved, and they are subject to change at the time of the half-yearly financial statements. The Company chose to report these figures to provide shareholders with relevant information.

NOTICE OF ANNUAL GENERAL MEETING OF SENZAGEN AB (Publ)

The shareholders of SenzaGen AB (Publ.), company registration number 556821–9207, (“the Company”) are hereby given notice of the annual general meeting (“AGM”) on Wednesday, 5 May 2022 at 4 PM in The Spark Sharience, Medicon Village, Scheeletorget 1, Lund, Sweden. The meeting will be held in Swedish.

Eligibility to attend the AGM and notice of attendance
Shareholders wishing to attend the AGM must be registered in the share register kept by Euroclear Sweden AB on the record date, Wednesday 27 April 2022.

Shareholders must also give notice of their attendance and that of any proxies (max two) by Friday, 29 April 2022 by mail to SenzaGen AB, Medicon Village, 223 81 Lund, Sweden, or by email to anmalan@senzagen.com. The notice of attendance should include the full name, personal or company registration number, shareholding, address, phone number and, if applicable, information about proxies or other representatives. If applicable, the notice of attendance should be followed by a proxy document, a certificate of registration and other documentation.

Nominee shares
Shareholders who have their shares held in custody with a bank or some other nominee must have their nominee temporarily register the shares in their own name to be eligible to attend the AGM. Such registration, which normally takes a couple days, must be complete by Wednesday, 27 April 2022. Therefore, shareholders must request this registration from their nominee well in advance of this date. Registration of voting rights that has been requested by shareholders at such a time that the registration has been made by the relevant nominee no later than Friday, 29 April 2022 will be taken into account in the production of the share register.

Proxies
Shareholders represented by proxy must grant a written and dated proxy document to the designated proxy. If the proxy was granted by a legal entity, a certified true copy of the entity's certificate of registration, or equivalent documentation proving that those who signed the proxy are authorized signatories for the legal entity, must be enclosed with the proxy. If the proxy specifically states a term of validity, this term is not permitted to exceed five years. If no term of validity is stated, the proxy will be valid for no more than one year. A copy of the proxy and, if applicable, the certificate of registration should be sent to the Company's address above well in advance of the AGM. The original proxy and the certificate of registration must also be presented at the AGM. A proxy form will be available on the Company’s website, www.senzagen.com.

Proposed agenda

  1. Opening of the meeting and election of AGM chairman
  2. Preparation and approval of the voting register
  3. Election of one or more people to verify the minutes
  4. Check that the AGM has been duly convened
  5. Approval of agenda
  6. Address by the CEO
  7. Presentation of the annual report and auditor's report and of the consolidated financial statements and the auditor's report on the consolidated financial statements
  8. Resolutions to:
    1. Adopt the income statement and balance sheet and the consolidated income statement and consolidated balance sheet
    2. Appropriate the Company's profit or loss as per the adopted consolidated balance sheet
    3. Discharge the board of directors and CEO from liability
  9. Setting of the number of directors and auditors
  10. Setting of directors’ fees and auditor’s fees
  11. Election of directors and auditors
  12. Resolution on remuneration policies for senior executives
  13. Resolution to authorize the board to issue shares, stock options and/or convertibles
  14. Resolution on directed share issue of a maximum of 812,500 stock options
  15. Closing of the meeting

Proposed resolutions

Item 1: Election of AGM chairman
The Nomination Committee proposes that Board Chairman Carl Borrebaeck be elected AGM chairman.

Item 8.b Resolution to appropriate the Company's profit or loss as per the adopted balance sheet
The board proposes that all earnings at the disposal of the AGM be carried forward.

Items 9–11: Setting of the number of directors and auditors; setting of directors’ fees and auditor’s fees; election of directors and auditors
The Nomination Committee’s proposals are as follows:

Item 9 The board shall consist of six directors and no alternates. The number of auditors and the number of deputy auditors shall each be one.

Item 10 Directors’ fees shall be SEK 200,000 (SEK 200,000) for each director elected by the AGM who is not employed by the Company and SEK 400,000 (SEK 400,000) for the board chairman, for a total amount of SEK 1,400,000 (SEK 1,600,000). The amounts in parentheses are the fees for 2021.

Auditor’s fees shall be payable on the basis of approved invoices.

Item 11 Re-election of Carl Borrebaeck, Ian Kimber, Laura Chirica, Ann-Christin Malmborg Hager, Paula Zeilon and Paul Yianni as directors.

Re-election of Carl Borrebaeck as board chairman.

Information about the proposed directors can be found at www.senzagen.com.

Re-election of Authorized Public Accountant Mats-Åke Andersson as the Company’s auditor, with Authorized Public Accountant Martin Gustafsson as deputy auditor.

Item 12: Resolution on remuneration policies for senior executives
The board proposes that the AGM resolve to adopt the following policies for the remuneration of senior executives:

  1. Scope

Senior executives are defined as the CEO and Group Management. These policies apply to employment agreements for senior executives entered into after approval of the policies by the AGM and to amendments to existing employment agreements for senior executives made thereafter. The board may deviate from the policies in individual cases in the event of special reasons. A special reason could be that a senior executive residing outside of Sweden must be offered terms that are competitive in the country in which they reside.

  1. Fundamental principle and deliberation process for matters of remuneration

The fundamental principle of the policies is for the Group to offer remuneration on market terms in order to attract and retain proficient executives.

The board as a whole comprises the remuneration committee with the task of deliberating on the remuneration policies for senior executives that will be presented to the AGM for resolution. The board resolves on matters regarding the salary and employment conditions of the CEO.

In coordination with the board, the CEO resolves on the salary and employment conditions of the senior executives who report directly to the CEO.

  1. Fixed salary

The fixed salary is adjusted annually and is based on the individual executive's expertise and area of responsibility.

  1. Variable remuneration

The variable remuneration includes (i) an individual variable annual fee and may also include (ii) a long-term incentive program as a complement.

  1. The individual variable annual fee can range from 8% to 25% of the fixed remuneration depending on the position. The ultimate amount payable depends on the degree of attainment primarily of set financial goals as well as qualitative goals to a limited extent.
  2. The long-term incentive program is intended to serve as a complement to the individual variable annual fee.

The board may deliberate on whether to propose share-related or share price-related programs for senior executives to the AGM.

  1. Non-monetary remuneration

Subject to agreement with the Company's CEO, senior executives may be entitled to normal types of non-monetary remuneration, such as a company car and occupational health services.

  1. Termination and severance pay

In the event of termination of a senior executive on the part of the Company, remuneration during the notice period and severance pay shall be no higher in amount than the equivalent of twelve (12) monthly salaries.

  1. Fee for services that do not constitute board work

In individual cases, the Company’s directors shall be remunerable for services rendered in their respective area of expertise that do not constitute board work. These services shall be remunerated with a fee on market terms, which is subject to approval by the board and must be disclosed at the AGM.

The total amount of remuneration that has been or will be paid directly or indirectly by the Company to senior executives is disclosed in its entirety in the Company’s 2021 annual report, which is available on the Company’s website, www.senzagen.com.

Item 13: Resolution to authorize the board to issue shares, stock options and/or convertibles
To enable the board to raise working capital for the Company, and/or bring in new owners of strategic significance to the Company, and/or acquire other companies or businesses, the board proposes that the AGM resolve to authorize the board, for the period until the next AGM, with or without the shareholders’ preemptive rights waived, on one or more occasions, to decide to issue new shares, stock options or convertibles. The total number of shares that may be issued or, if convertibles or stock options are issued, added by way of conversion or exercise of rights under the authorization may not exceed 20 percent dilution of the number of outstanding shares in the Company after completed share issues under the authorization, based on the number of shares issued at the time of the AGM. The board shall also be entitled to resolve on whether new shares are payable in the form of cash, non-cash, offsetting, or in another manner consistent with the provisions of Chapter 2 Section 5 Paragraph 2 items 1-3 and 5 of the Swedish Companies Act.

To prevent the Company’s current shareholders from being disadvantaged in relation to external investors who could subscribe for shares in the Company, the board plans, by virtue of this authorization, to set the issue price on market terms (meaning that an issue discount on market terms may be provided) for issues with the shareholders’ preemptive rights waived. If found appropriate by the board to enable delivery of shares in conjunction with a share issue as set out above, a subscription price equal to the nominal (quotient) value of the shares can be used.

As a result, the maximum number of shares that may be issued is 6,016,229, and the Company’s share capital may be increased by a maximum of SEK 300,811.45.

The board, or those designated by the board, are proposed to be granted authorization to make adjustments as may be necessary in conjunction with registering the resolution with the Swedish Companies Registration Office (Bolagsverket).

Item 14: Resolution on directed share issue of a maximum of 812,500 stock options
The Company’s board proposes that an extraordinary general meeting resolve to issue a maximum of 812,500 stock options, as a result of which the Company’s share capital may increase by a maximum of SEK 40,625, with an exception for possible increases caused by recalculation in the event of share issues. The stock options will entitle the holder to subscribe for new shares in the Company.

The following rules shall apply to the directed share issue:

With the shareholders’ preemptive rights waived, employees of the Company and the Group shall be entitled to subscribe for the stock options as follows:

  • The Group CEO will be offered to subscribe for a maximum of 75,000 options.
  • Members of Group Management and key personnel comprising up to eight positions will each be offered to subscribe for a maximum of 50,000 options, altogether comprising a maximum of 400,000 options.
  • Consultants within Group Management, comprising two individuals, will each be offered to subscribe for a maximum of 25,000 options, altogether comprising a maximum of 50,000 options.
  • Other employees and consultants considered key personnel in the Group, comprising up to twenty-one individuals, will be offered to subscribe for between 12,500 and 25,000 options each, altogether comprising a maximum of 287,500 stock options.

Oversubscription cannot take place.

The stock options must be subscribed for by 27 May 2022 on a separate subscription list. The board shall be entitled to extend the subscription period but no later than until 1 November 2022.

The subscriber is entitled to subscribe for stock options free of charge. The market value of the option shall be calculated using the Black-Scholes pricing model subject to barrier conditions to calculate the Company’s social security expenses. The valuation of the options shall be performed by an independent valuation institute or auditing firm. A preliminary calculation (4 March 2022) based on an exercise price and barrier conditions at the time of exercising the stock options of SEK 10.30 per share results in an option value of SEK 1.28.

The stock options allotted will be offered for subscription free of charge. Such an offer to allot stock options must be provided within 10 banking days of the date a resolution to allot options has been passed.

Each stock option entitles the holder to subscribe for one new share in the Company in exchange for cash payment, provided that the barrier conditions have been met, during the period from 1 June 2025 to 30 September 2025 or the earlier date set out in the option rules. However, the stock options shall be exercisable at an earlier point in time in the event of a merger, compulsory redemption, liquidation, or similar circumstances.

Payment for shares subscribed for by exercising stock options shall be made in cash at an exercise price of 100% of the average of the listed volume-weighted price paid for each trading day as per Nasdaq First North Growth Market’s official price list for shares in the Company during the period from 21 April 2022 to 4 May 2022. The exercise price established in this manner shall be rounded to the nearest whole tenth in SEK öre, with SEK 5 öre rounded down.

For each individual participant in the stock option plan, 80 percent of all allotted stock options are subject to barrier conditions, and these 80 percent of the stock options can only be exercised to subscribe for shares once the volume-weighted price paid measured per trading day as per the Nasdaq First North Growth Market’s official price list for shares is higher than the respective barrier level.

The barrier levels are calculated as a percentage of the average volume-weighted price as per the Nasdaq First North Growth Market’s official price list for shares in the Company during the period from 21 April 2022 to 4 May 2022 (“the Barrier Price”).

The barrier levels shall consist of two barriers, with the first barrier accounting for 25 percent (“Barrier 1”) and the second barrier accounting for 55 percent (“Barrier 2”) of all the stock options allotted to participants, in accordance with what is set out below.

  • Barrier 1: 25 percent of the stock options are subject to Barrier 1 and the barrier is calculated at 158 percent of the Barrier Price.

  • Barrier 2: 55 percent of the stock options are subject to Barrier 2 and the barrier is calculated at 300 percent of the Barrier Price.

Barrier 1 and Barrier 2 established in this manner shall be rounded to the nearest whole tenth in SEK öre, with SEK 5 öre rounded down. The barriers shall be recalculated in the same way as for the redemption price in the option rules.

New shares subscribed for by exercising Stock options entitle the holder to dividends for the first time on the dividend record date most immediately following the date the new share issue was registered with the Swedish Companies Registration Office and Euroclear Sweden AB.

The purpose of the share issue and the reason for waiving shareholders’ preemptive rights is to implement an option program suited for allotment to key personnel in the Company so that they can be offered the opportunity to participate in the growth in value of the Company’s stock. This is expected to lead to stronger interest in the Company’s growth – as well as the Company’s share price performance – and stimulate continued company loyalty over the coming years.

In conjunction with the transfer of the stock options to the participants in the program, the Company reserves the right to buy back all stock options if the participant’s employment is terminated or if the participant wishes to transfer the stock options to another party during the period until 31 May 2025.

The complete rules for the stock options will be kept available on the Company’s premises and on the Company’s website no later than two (2) weeks prior to the AGM. These rules include that the exercise price and the number of shares to which a stock options entitles the holder to subscribe for may be recalculated in certain cases.

It is proposed that the board or those designated by the board be authorized to make minor adjustments to this resolution as may be necessary in conjunction with registration with the Swedish Companies Registration Office and, if applicable, with Euroclear Sweden AB.

Deliberation on the board’s proposed 2022/2025 series incentive program, the costs of the program, other outstanding stock-based incentive programs, dilution
The proposed agenda item 12 has been deliberated on by the board in consultation with external advisers.

Valuation
The stock options shall be subscribed free of charge, which means that social security expenses for the Group may be incurred in conjunction with subscriptions for stock options. According to a preliminary valuation based on a market value of the underlying stock of SEK 10.28, the market value of the stock option is SEK 1.28 per option with a redemption price of 10.30 per share in the 2022/2025 series program. The Black-Scholes pricing model has been used for this valuation on the assumption of a risk-free 0.030% interest rate and 41.7% volatility and taking into account that no dividend or other transfers of value to shareholders are expected to occur during the program’s term.

Expenses and impact on financial ratios

Given that the stock options are issued free of charge, the Company estimates that fringe benefits and social security expenses will be incurred for the participant and the Company as a result of the option program. The total expenses, including other expenses in the form of fees to external advisers and expenses for the administration of the program, are estimated at around SEK 100,000 over the program’s term and the cost of social security expenses is estimated at SEK 326,768.

The program is expected to have a marginal impact on the Company’s financial ratios.

Dilution
The total number of registered shares and votes at the time of this proposal is 24,064,916. The maximum dilutive effect of the 2022/2025 series incentive program is estimated to be a maximum of approximately 3.27% of the total number of shares and votes in the Company (calculated based on the number of existing shares in the Company and taking into account other outstanding stock options), provided that all offered stock options are subscribed for and exercised.

There are earlier programs in which share subscription will not take place until November 2022, November 2023, June 2024 and September 2024, totaling a maximum of 614,500 options with an exercise price of SEK 19.84, SEK 39.68 and SEK 14.30, respectively. If all previously issued stock options and stock options issued in the 2022/2025 incentive program are exercised, the dilution may amount to a maximum of approximately 5.60 percent of the total number of shares and votes in the Company (calculated on the basis of the number of existing shares in the Company and taking into account other outstanding stock options).

Other outstanding stock-based incentive programs
For disclosures on the Company’s other stock-based incentive programs, please see the Company’s 2021 annual report. Apart from the programs disclosed there, the Company does not have any other stock-based incentive programs.

Majority requirement
Shareholders representing at least two thirds of both the votes cast and the shares represented at the AGM must vote for the resolution under item 13 for it to be deemed duly passed.

Shareholders representing at least nine tenths of both the votes cast and the shares represented at the AGM must vote for the resolution under item 14 for it to be deemed duly passed.

General information

Number of shares and votes
The total number of shares in the Company at the date of this notice is 24,064,916 with the same number of votes. The Company does not hold any treasury shares.

Documents
Copies of the financial statements, auditor’s report and proxy form will be kept available at the Company’s premises at Medicon Village, Scheelevägen 2, Building 401, Lund, Sweden, and on the Company’s website, www.senzagen.com no later than three (3) weeks prior to the AGM. Complete proposals and other documentation that must be made available under the Swedish Companies Act will be kept available in the locations above no later than two (2) weeks prior to the AGM. All of the aforementioned documents will be sent to those shareholders who so request and provide their email address or mailing address.

Shareholders are reminded of their right, at the AGM, to request disclosures from the board and CEO under Chapter 7 Section 32 of the Swedish Companies Act.

Personal data processing
For information on how your personal data is processed, please see the privacy policy available on the Company’s website: https://senzagen.com/wp-content/uploads/2018/05/Policy-for-processing-personal-data.pdf.

* * * * *

Lund, March 2022,
the Board of Directors of
SenzaGen AB

SenzaGen’s Annual Report 2021 published

SenzaGen has today published its 2021 Annual Report. A digital copy can be downloaded at www.senzagen.com or read via the link below.

To request a printed copy, please email name and address to IR@senzagen.com.

SenzaGen receives follow-on order from global US-based world leader in chemicals

SenzaGen has received another project to test chemicals with GARD®skin and GARD®potency worth around SEK 0.7 million. The project is a follow-on order from collaboration initiated in 2020 with one of the leading US-based chemicals companies with global operations, which demonstrates how much customers value the Company's tests. The tests will be performed at SenzaGen’s GLP-certified laboratory in Lund. The agreement includes an option for more tests in 2022.

The customer has a global presence and its headquarters are located in the US. The corporation has a rich tradition of innovation with a world-leading range of products and technology. The new order is the result of successful evaluation of GARD during 2020-2021 and is linked to one of the company's research and development projects.

“We are delighted to have received this follow-on order, which confirms the reliability and performance of our GARD® technology for chemical risk assessment. A decisive factor for this order was the unique capability of GARD® to support complex mixtures and, when needed, provide information on whether the allergenicity of the substances is strong or weak. The project is fully in line with our commercial focus and the customer’s commitment to the Three Rs: reduce, refine, and replace animals in allergy testing. Working with this type of global customer is how we build credibility and lay the foundation for value creation and future growth,” says Peter Nählstedt, President and CEO of SenzaGen.

SenzaGen’s GARD® test platform is designed for companies looking to increase the accuracy of their test results and ensure product safety while avoiding animal studies. The platform combines genomic data from human cells with machine learning, making the method both more effective and more accurate than traditional animal-based methods, including for formulations that are traditionally considered difficult to assess.

SenzaGen’s Year-end report 2021: Strong performance with more than 150% growth in H2 and nearly doubled sales for full year

CEO comment

”SenzaGen continues its strong performance and 2021 was a very positive year. We increased sales by 94% during the year, and we more than doubled sales during the second half year, driven by very strong organic growth with new and returning leading global customers and the acquisition of a profitable, growing company. Sales growth will remain our highest priority in 2022 while we continue working on our acquisition agenda, the integration of VitroScreen and completing the OECD Test Guideline process for GARD®skin.”

Peter Nählstedt, President and CEO, SenzaGen AB

Full year 1 January–31 December

  • Net sales totaled SEK 15.4 (8.0) million.
  • The operating loss was SEK -31.5 (-27.1) million.
  • Earnings per share were SEK -1.35 (-1.27).
  • Cash and cash equivalents at 31 December amounted to SEK 69.2 (89.3) million.
  • The board proposes that no dividend be paid to the Company’s shareholders.

Second half year 1 July–31 December

  • Net sales totaled SEK 10.4 (4.1) million.
  • The operating loss was SEK -17.5 (-14.2) million.
  • Earnings per share were SEK -0.78 (-0.67).

Significant events during the second half year

  • Peter Nählstedt was appointed the new CEO.
  • New growth strategy combining organic growth with acquisition activities.
  • Positive ESAC opinion on GARD® paves the way for OECD validation.
  • One of the largest cosmetics companies in the world became a new customer and tested ingredients with GARD®skin Dose-Response for a cumulative value of SEK 1.65 million.
  • One of the largest pharmaceuticals companies in the world became a new customer with an order for GARD®skin totaling SEK 0.7 million.
  • A new global consumer product customer ordered skin allergy and irritation tests for SEK 0.65 million.
  • Collaboration with the US Research Institute for Fragrance Materials (RIFM) was expanded with an SEK 0.6 million grant.
  • SenzaGen acquired Italy-based VitroScreen, which is active in preclinical testing and innovation.
  • SEK 30 million in capital was raised with a directed share issue.

Significant events after the end of the year

  • SenzaGen broadened its non-animal offering for medical devices with more tests and toxicology consulting services, establishing itself deeper in the market and realizing acquisition synergies.

Conference call
SenzaGen is pleased to invite press and investors to a conference call on Friday February 11 at 9.30 CET where President and CEO Peter Nählstedt comments SenzaGen’s 2021 second half year and full year results. The conference call, which will be held in English, will begin with a presentation of the report followed by a Q&A session.

Phone number for the conference
To participate in the conference call, use the dial-in numbers below.

FR: +33170750736
DE: +4969222239166
SE: +46850558352
CH: +41225675632
NE: +31107129163
UK: +443333009031

Weblink
https://tv.streamfabriken.com/senzagen-q4-2021