OSLO - 8th of January 2024: Through 2023, SoftOx Solutions (SoftOx) has
restructured
the entire business, as a consequence of a cost base that was too high and an
operating model that was not optimal. Following this operational restructuring,
SoftOx
has now initiated a process of evaluating different financing alternatives.
SoftOx's patent-protected technology has shown an excellent ability to
contribute to
solving some of the world's biggest health challenges, such as antimicrobial
resistance and viral infections in the lungs and in wounds. "If we succeed
developing
SoftOx technology for wound and respiratory care, it will be an alternative to
today's
antibiotic in more than 50% of the cases which lead to death from Antimicrobial
Resistance in 2019", says Professor Thomas Bjarnsholt, Chief Scientific Officer
of
SoftOx Solutions AS.
"Despite the fact that last year was a tough year for SoftOx, several positive
actions
can be highlighted. The strategy for the new SoftOx shall soundly develop the
SoftOx
technology going forward and enhance shareholder value. With a clear strategy
for
bringing products to market and continued research & development over the next
2-3
years, our ambition is to deliver results that will confirm a significant value
potential within Wound Care, at the same time as secured funding from the
European
Defence Fund (EDF) will further develop SoftOx Inhalation Solutions (SIS)", says
Geir
Almaas, executive Chairman of SoftOx Solutions.
The strategy depends on successful financial restructuring of the company,
including a
solution to the company's convertible debt of about NOK 67 million.
The following progress has been made during 2023:
Changed Business Model:
- Established a small and effective organization reducing cost base by 70%:
- Outsourced product development for SIS and EDF.
- Prepared a drop down of Wound & Skin care to become a separate company
  covering its own cost.
- Achieved a sufficient reduction in the short-term unsecured debt.
New Research & Development results:
- Next Generation SoftOx technology: The next generation technology will have
  highly improved stability, even with high concentrations. An abstract of
  SoftOx Next Generation technology was presented at the US Military Health
System Research Symposium in Florida in August.
- Biofilm removal: Research results from use of SoftOx technology in dental
  health show a unique ability to remove oral biofilm, to prevent and treat
  periodontitis.
Customer acceptance and distribution agreement
- Talks with major international players on distribution of animal
  health products worldwide, and distribution of human wound rinse in
  Europe.
"New SoftOx" - Going forward the next two-three years
The new cost-effective business model, promising results from Next Generation
technology, and additional research results, create the foundation for the
strategy
going forward.
Next Generation SoftOx technology - stable solutions at higher concentrations
SoftOx' clinical studies in wounds have shown that the human body is tolerant of
higher doses of the active ingredient hypochlorous acid than was originally
anticipated. These findings set the conditions for the development of higher
concentrations and more stable solution of hypochlorous acid than what was
possible
with SoftOx 's First Generation technology.
With the purpose of developing this next generation of SoftOx technology an
industrial
PhD program was established at the Department of Pharmacy at the University of
Oslo.
An abstract of Next Generation SoftOx was presented at the US Military Health
System
Research Symposium in Florida in August 2023. Patent pending, filed Autumn 2022.
Strategically, this technological leap means that SoftOx considers itself to
have
leading technology for products based on hypochlorous acid. This new technology
enables the development of products with higher efficacy and longer shelf-time
than
what we see in the market today.
Inhalation
The EDF/COUNTERACT project has synergies to the development of SoftOx Next
Generation
Inhalation solution for the civilian market. The EDF project Phase I aims at
regulatory bridging on API (Active Pharmaceutical Ingredient) and finding the
maximum
tolerated dose in humans. "The synergies between the military development
program and
the civilian development are clear, and the market potential is great. Hopefully
we
will be able to achieve grants from future EDF-programs for phase 2 and 3 when
we have
successfully finished the program that has already been funded through
EDF/COUNTERACT"
says Christian Harstad, Interim CEO SoftOx Solutions.
- Inhalation Military: Research and development continue, funded by the
EDF/COUNTERACT program until Phase I study (Maximum Tolerated Dose) is
completed in 2025.
- Inhalation Civilian: Civilian development of the inhalation project
will require NOK 30 million in separate funding for a Phase II study
(Proof of Concept for hospital acquired pneumonia (HAP)). To avoid
double work and to keep required capital at a minimum, the company
plans to conduct this Phase II study when we have maximum tolerated
dose data from the EDF/COUNTERACT studies. These data will be
available late 2025.
In 2023 SoftOx entered into an agreement with the University of Copenhagen for
the
development of the company's unique technology, where SoftOx outsource its
research
and product development to the University of Copenhagen.
"University of Copenhagen has some of the best scientists in the world within
the
field of antimicrobial resistance and infections. Together we will establish new
and
innovative solutions for fighting infections in the respiratory system", says
Harstad.
Wound Care
During 2024, the company intends to continue the work to separate the Wound and
Skin
care business into a separate company. As a basis for this work, in February
2023,
SoftOx obtained an external valuation of the wound technology as a stand-alone
technology, which estimated a "fair market value" of the technology of
approximately NOK 2.1
billion (USD 200 million)at that time, with significant value upside after
successful completion
of Phase II study.
It was a severe setback for the company when the American health authorities,
FDA in
January 2023 rejected the company's application to register SoftOx Wound Rinse
as a
Medical Device class 2 in the USA. The reason for rejection was insufficient
clinical
documentation.
"We had large international distributors ready to distribute SoftOx Wound Rinse
and we
had built up production facilities at Fornebu. With production and distribution
in
place, together with excellent clinical results, SoftOx Wound and Skin care
would have
been ready for sale or separate listing. Following this experience, we have
decided to
cooperate with leading partners instead of trying to do everything ourselves",
says
Almaas.
Establish a new SoftOx Wound and Skin company
We have considered several solutions for Wound and Skin care, including
discussions of
merger with a specific NASDAQ NY listed company where SoftOx should keep
approximately.
85% of the shares in the merged company. After careful considerations, SoftOx
concluded that before seeking a listing, SoftOx should receive further clinical
data.
SoftOx has therefore chosen a model where we first establish Wound and Skin care
as a
non-listed company and prepare it for either future sale or listing.
The strategy for the new Wound and Skin company will be:
- Finance the new company with separate funding of about EUR 10 million.
- Achieve regulatory approval of Medical Device wound cleanser in Europe
and US.
- Perform Phase 2 for SoftOx Biofilm Eradicator (SBE):
- The estimated probability of success is statistically over 80%.
- According to the company's expectations the estimated value will increase
significantly after finish a successful phase 2 study on SBE.
- Establish an outsourced production for both first - and next generation
technology.
- Through partners and distributors, bring products to market within
animal health care, human wound health care, oral health care and skin
disinfection.
- Within two to three years list/sell the Wound and Skin care company on
a relevant international market. If successful, Wound and Skin care
can finance further development of SIS or be used to pay dividends to
shareholders.

Due to the fact that the SoftOx Wound Care Technology Valuation Guidance was
prepared for a different purpose nearly a year ago, it can be in risk of
misguiding the investor when published today, KWC AS have therefore kindly asked
SoftOx to republish the stock notes without including the guidance as
attachment. For the company the purpose for the publication was to give the
market relevant tools and information to independently consider the value
potential of the wound care technology, but we understand and respect KWC's
request. 

SoftOx Solutions AS
Mail: ir@soft-ox.com
Phone: (+47) 977 50 071 (Chairman of the Board Geir Almås)
About SoftOx Solutions AS
SoftOx Solutions AS (SoftOx, listed on Euronext Growth Oslo) is a Medtech and
clinical-stage pharmaceutical company based in Oslo, Norway, with the goal of
reducing
the spread of infection and emergence of antimicrobial resistance.
For more information on SoftOx, visit www.soft-ox.com