Lifeline SPAC I Oyj : Plc_Half-Year Report_22H1

Lifeline SPAC I Plc

Business ID 3229349-3

Half-Year Report

1 January - 30 June 2022

15 Sep 2022

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Half-Year Report, 1 Jan - 30 Jun 2022

1 January - 30 June 2022

• Lifeline SPAC I Plc ("Lifeline SPAC I" or the "Company") has continued to evaluate and analyse high-growth technology companies in Finland and other Nordic countries during the review period.
• The operating loss for the review period was EUR 0.3 million and the loss was EUR 1.1 million. Typically for a SPAC company in the search phase, the Company had no revenue during the review period.
• At the end of the review period, the Company's cash and bank receivables were approximately EUR 1.9 million.
• The funds deposited on the Company's escrow account were approximately EUR 99.8 million1.

The Half-Year Report is unaudited.

CEO Tuomo Vähäpassi:

"Lifeline SPAC I has continued to operate systematically.

We have analysed an increased number of high-growth technology companies in different stages of maturity in Finland and other Nordic countries. In the more profound analysis the companies have, from the perspective of the Lifeline SPAC structure, again been divided into three: potentially interesting, potentially interesting at a later date and non-interesting. The number of companies defined as potentially interesting has increased.

We have also been closely monitoring the development in the market capitalisations and valuation levels of listed companies, particularly in the technology sector. For instance, compared to the market values that prevailed at the time of our IPO, BVP Nasdaq Emerging Cloud Index declined some 53% by the end June 2022 and some 51% by the end of August 2022 whereas the Goldman Sachs NonProfitable Technology Company Index declined 63% and 61% over the same time periods. From Lifeline SPAC 1's perspective the strong decline in valuation levels embodies both positive and negative factors. For instance, the decline in market level valuation risk is a positive whereas the potential slowness in discussions with the target companies is a negative. Based on our overall assessment, we continue to deem the said development for Lifeline SPAC I as fairly neutral.

There are still certain uncertainties in the capital markets caused by, among other things, inflation and interest rate outlooks as well as by Russia's invasion of Ukraine and other geopolitical factors. In this environment we believe that the value of systematic and diligent target analysis is even more

• On 15 October 2021, the Company raised EUR 100 in gross proceeds in the initial public offering by issuing 10 million new series A shares. These proceeds are deposited in an escrow account and are primarily intended to be used on financing the growth of the target company of the acquisition. The funds deposited in the escrow account are presented in the balance sheet item Other receivables.

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Half-Year Report, 1 Jan - 30 Jun 2022

emphasised and that the adequate growth capital and long-term support offered by Lifeline SPAC I increase their relative value amongst our potential target companies."

Lifeline SPAC I

Lifeline SPAC I is a Finnish Special Purpose Acquisition Company founded for corporate acquisitions. We raised capital with an initial public offering and listed on the SPAC segment of the regulated market of Nasdaq Helsinki on 15 October 2021 (the "IPO"). Our objective is to carry out an acquisition within 24-36 months from the IPO.

The Company raised EUR 100 million in gross proceeds in the IPO by issuing 10 million new series A shares. These proceeds are deposited in an escrow account2 and the proceeds are primarily intended to be used on financing the growth of the target company of the Acquisition.

We offer investors an opportunity to invest in companies that retail investors or many institutional investors otherwise would not be able to invest in, because these kinds of investments are typically made by later-stage private equity funds. Our aim is to generate profit for shareholders and increase the value of the target company by supporting its growth and development also after the acquisition3.

The so-called sponsors of Lifeline SPAC I are Timo Ahopelto, Kai Bäckman, Petteri Koponen and Juha Lindfors (the "Sponsors"). At the end of the review period all Sponsors were partners of the Lifeline Ventures venture capital firms4.

Investment Strategy

The primary strategy of Lifeline SPAC I is to identify and acquire an unlisted target company with high growth potential operating in the technology sector. The core of our strategy is to carry out the acquisition through a share consideration, in which case the funds raised by the company from the IPO will be used to finance the growth of the target company.

Our investment strategy includes detecting such corporate acquisition targets and carrying out such acquisitions that will provide considerable long-term value to shareholders. We are seeking a target company with excellent long-term growth and internationalization potential that we, along with our Sponsors, can support and accelerate.

Our target segments include, for instance, enterprise software, healthtech, climate technology, digital consumer products and services, as well as robotics and hardware. These technology segments represent markets that are extremely large globally, with also a very strong growth outlook.

• These assets are presented in the balance sheet item Other receivables.

• The Company's Sponsors, members of the Board of Directors and management have committed to a lock-up of 24 months in respect of their series A shares after the completion of the Acquisition.
  4 LLV Fund Management Ltd., Lifeline Ventures Fund Management Ltd. and the funds managed by them

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Half-Year Report, 1 Jan - 30 Jun 2022

Generally speaking, the Company's investment strategy is rooted in the notion that the best possible way of creating value for the shareholders in the long term is to select a target company whose growth and development may be supported through leveraging the company's extensive expertise and experience as well as its international contact network.

Financial development

Lifeline SPAC I's operating loss for the review period 1 January - 30 June 2022 was EUR 0.3 million and the loss for the review period was EUR 1.1 million. Earnings per share (basic and diluted) was EUR -0.435. Typically for a SPAC company in the search phase, the Company had no revenue during the review period.

The Company's personnel expenses, totalling EUR 0.1 million, consisted of wages and salaries and related social security expenses.

The Company's other operating expenses, totalling EUR 0.1 million, consisted mainly of administrative services related to company's operations.

The Company's financial expenses, totalling EUR 0.7 million, consisted mainly of the negative interest, which the Company paid for its cash reserves and for the funds deposited to the escrow account, as well as costs related to the IPO, which had been allocated as an expense to the review period.

The Company's return on equity during the review period was -31.9%6.

Financial Position and Cash Flow

Lifeline SPAC I's balance sheet total on 30 June 2022 was EUR 101.7 million. The proceeds raised from the issue of series A shares in the IPO have been deposited in an escrow account and are therefore presented in other receivables in the Company's balance sheet. Series A shares are financial instruments subject to IAS 32 and, due to the redemption clause included in them, the share subscription prices have been recognised in financial liabilities and measured at amortised cost using the effective interest rate method. Considering that the Acquisition may be completed within 12 months, 1/3 of the amortised cost were recorded as current debt of the Company and 2/3 as non-current debt of the Company.

At the end of the review period, the Company's cash and bank receivables were EUR 1.9 million. If the Company needs additional working capital for the search of the target company and its operations, the

• Earnings per share = Profit for the financial period / Weighted average number of series B-shares during the period. Redeemable series A-shares as well as Founder and Sponsor Warrants are not taken into account as dilutive potential ordinary shares in the calculation of earnings per share.
  6 Return on equity = Profit for the financial period / Shareholders equity (average)

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Half-Year Report, 1 Jan - 30 Jun 2022

Company's Sponsors have undertaken to subscribe for a maximum of 200,000 series A shares of the Company at a subscription price of EUR 10.00 per share.

The Company's cash flow from operating activities totalled EUR -0.2 million. There was no cash flow from investing activities and financing activities during the review period.

At the end of the review period, the Company's equity ratio was 2.8%7 and shareholders' equity per share was EUR 1.148.

Shares, Shareholders and Share Price Development

Lifeline SPAC I's share capital was EUR 80,000 in the end of the review period and the number of shares totalled 12,500,000. Lifeline SPAC I has two series of shares. Series A shares (FI4000512496) are listed on the SPAC segment of the regulated market of Nasdaq Helsinki. Series B shares (FI4000512124) are held by the Company's Sponsors, members of the Board of Directors and management and are not publicly traded. In the end of the review period, the number of series A shares totalled 10,000,000 and the number of series B shares 2,500,000.

The average weighted number of series B shares during the review period was 2,500,000.

All of the Company's shares carry equal voting and economic rights, except for the redemption condition of series A shares and the exclusion of the right to dividend and distribution of assets and of the right to distributive share in the dissolution of the Company of series B shares. Series B shares can be converted into series A shares if the conditions set out in the Articles of Association, which are described in the Company's listing prospectus, are met.

In accordance with the Company's Articles of Association, the Company's Sponsors and the Company's founder-CEO Tuomo Vähäpassi have, until the acquisition and two years thenceforth, together the right upon written notice to the company to appoint two members of the Board, in aggregate. The General Meeting appoints the other from three to six ordinary members. The Board of Directors elects a Chair from among its members.

Lifeline SPAC I had a total of 3,204 shareholders on 30 June 2022. The twenty largest registered shareholders held a total of 69.0% of all the Company's shares. Nominee-registered shareholders held a total of 3.7% of all the Company's shares.

• Equity ratio = Shareholders' equity / (Balance sheet total - Advance payments received)

• Shareholders' equity per share = Equity / Number of series B-shares at the end of the financial period

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