4. April 2021, Bergen - Digital Diagnostics AG’s (Digid) management has filed for bankruptcy at the district court of Mainz. The filing was delivered without any prior information to or discussion with the Digid Supervisory board.
The joint venture agreement regarding Digid provides protection of Lifecare’s interests, including Lifecare IP rights, in the event of a bankruptcy.
“All things considered; we have benefited greatly from the agreement with Digid. We would for sure have preferred to avoid this new development. However, we see a potential restructuring as an opportunity to get better control and manage the venture in an even more beneficial direction for Lifecare.”, says Joacim Holter, CEO of Lifecare and member of the supervisory board at Digid.
“The joint venture with Digid has contributed positively to our technology and strategy, and we will be in a position to build on this progress going forward, while continuing with the development of our core technology Sencell for glucose measurement. The great technology potential is not affected by the management’s bankruptcy filing”, continues Holter.
Digid was founded in December 2019 and the company owners, Lifecare not included, has provided more than EUR 8 million in equity and shareholder-loans to finance its operations in accordance with the founding partners joint venture agreement. Lifecare's shareholding in Digid is based on contribution in kind, as the foundation for the company includes a non-exclusive license for the Lifecare IP, without any competition restrictions. In addition, Lifecare has provided a loan of EUR 50 000 to Digid, hence the financial exposure for Lifecare is limited.
The joint venture agreement related to Digid protects all the IP rights of Lifecare and ensure Lifecare access and the right to use and sublicense all emerging IP in Digid related to Lifecares core business of glucose measurement and to unabated continue the Digid product development in the case of a termination. Furthermore, Lifecare has access to all background IP of importance for the continued product development. In event of a Digid bankruptcy, Lifecare will keep full control of the complete IP and hence considers a bankruptcy not to have material impact given the already known trajectory of Digid’s go-to-market progress.
The Digid cooperation has significantly helped advance several key aspects of the Lifecare Sencell development over the last 12-14 months at no costs for Lifecare. The Digid product development still represents a value and Lifecare will seek to join solutions for the venture to be brought back on track.
For more information, please contact:
Joacim Holter, CEO
Phone: +47 40 05 90 40