2023 IMPACT RELATION

D-Tails Srl Società Benefit

Dear Readers, we are proud to present the first Impact Report of Disruptive Technological Advances in Life Science Benefit Society (hereafter also “D-Tails”), which represents a significant milestone in a journey we have just embarked on and which testifies to our continuing ambition and passion to also make sustainability a foundational element of our daily actions. The changing economic and social environment, the pandemic that has just passed, the addition, over the past few years, of growing social inequalities, and the evidence of the impact of human activity on the environment, have led to the need for a revisiting of corporate governance policies and the consequent assumption of social responsibility. Our company operates in the field of applied research. We work hard and passionately in the research and development of new methodologies and devices for early screening - non-invasive and inexpensive - of neurodegenerative diseases and cancer. We operate in the life-science sector, and this is certainly conducive to our focus on sustainability and the benefits we bring to the community. The past year has been characterized by significant volatility. The improving post-pandemic economic environment has been severely challenged by cascading crises, including the Russian-Ukrainian, Israeli-Palestinian conflict, with the ever-increasing new political, social tensions erupting in these areas. Volatility is further amplified by the increasing intensity of climate change and rapid loss of biodiversity. However, our business model has proven its resilience and spurs us to speed up, as much as possible, our research that we believe can bring great benefits to public health. We are aware that our growth must be sustainable, regenerative and cannot be separated from the adoption of solutions and initiatives, as per our purpose, aimed at improving social and community health impacts that can contribute to improving the well-being of society as a whole and not only of the area in which we live and operate. We believe that truly sustainable development is based on caring for people and the environment, networking resources and skills, and always seeking innovative solutions. It is a strategic competitive lever to build a relationship based on trust and transparency with our stakeholders. A sustainable business model requires the consistent development of the social fabric and ecosystems that host us. We believe in a business culture that connects, in a single vision, different spheres, heterogeneous sectors, complementary competencies, through a complex interweaving of multiple actors working together for the creation of shared value in the long run. Sincere and genuine collaboration. Much has been done and a great deal is still to be done, but challenges and continuous improvement belong to our DNA and we start from here to proceed on the path that has ambitious goals for the growth of the company but above all of the welfare of the whole community. Enjoy reading!

D-TAILS Srl SB

D-Tails Srl SB (Disruptive Technological Advances in Life Science, a Limited Liability, Benefit Company) is a business project that originates from a 30-year history. Its genesis dates back to the founding of Crisel Instruments by Vincenzo Ricco, who, again, assembled the team of engineers that currently makes up the engineering component of the company.

In 2010 as a consequence of an internal project aimed at the development of an Italian solution to confocal microscopy, the CrestOptics project was born, which would later be the subject of a spin off that saw the sales force of Crisel Instruments acquire the company and the engineering team take over CrestOptics.

In 2015 in order to find new ideas for the future development of CrestOptics, an agreement is signed with IIT (Italian Institute of Technology) and thus the IIT-CrestOptics JointLab is born.

Soon the mix of scientific expertise pooled in the JointLab causes interest to shift from confocal microscopy to diagnostic techniques and in particular on early detection of Alzheimer’s disease and noninvasive techniques for early detection of breast and prostate cancer. It is now 2021, when the British fund Apposite Capital LLP acquires a majority stake in CrestOptics, which over the years has become one of the world leaders in spinning disk confocal microscopy.

Following this acquisition, D-Tails was founded (late 2021) as a spin off of Crest Optics, which in May 2023 changed its bylaws to a Benefit Corporation to incorporate ESG principles and thus more clearly redefining its purpose: to do research.

Founders and Board of Directors

The Board of Directors consists of five members, with the following responsibilities:

• Management, ESG and Finance (Alessandro M Cremona) - President & CEO;

• Biochemistry and Medicine (Alberto Boffi); independent director without proxies;

• Intellectual Property (Federico Bellan); director without proxies;

• Corporate Management (Renato Giacobbo Scavo) - co-founder; director without delegated authority;

• Research and Development Management (Vincenzo Ricco) - Research delegate; co-founder and majority shareholder.

The research and development team are dedicated to three areas:

• Biotechnology (head Viola Folli and project leader of the CD project);

• Lab Test (responsible Silvia Di Angelantonio and co-project leader with Alberto Boffi on AD );

• Engineering (head Vincenzo Ricco).

Company Mission Description.

D-Tails is a platform mainly dedicated to two projects namely research and development of new methods for early detection of Alzheimer’s disease and mass screening of breast and prostate cancer.

Objective

  1. Alzheimer’s Detection (AD): during 2023, a marker for phosphorylated tau protein was developed, which is currently at an advanced stage of patenting. By the end of 2024, we plan to develop a delivery solution for this marker that allows it to be used not only in vitro but directly on the patient in order to identify the presence of phosphorylated TAU micro-aggregates to make an early diagnosis of Alzheimer’s disease. Implementation of the regulatory phase is planned for 2025.

  2. Cancer Detection (CD): development within the next 18 to 24 months of a lateral flow diagnostic kit for breast and prostate cancer, similar to those now in use for COVID or pregnancy testing. The Cancer Detection project (whose product is named EUCRASYC) is the main project on which D-Tails is currently engaged.

Description of the business model

The business model is different for each of the two projects:

  • AD possible pharmaceutical industry outlet;

  • CD possible outlet analytical laboratories (public/private) and over-the-counter sales. The common underlying aspect is the strictly scientific and patent-covered approach.

Staff

D-TAILS began as a company for research and development of new diagnostic techniques. It currently employs about 20 staff members. It has offices and laboratories in Via Agrigento 4, Rome and at the JointLab in Viale Regina Elena 291, Rome.

In order to achieve the set results, multidisciplinary skills have been aggregated or contributed both by professional figures with multi-decade experience, developed in an industrial environment, and by professional figures from institutions dedicated to scientific research such as universities, IIT, etc.

The specific areas of expertise are:

• Biotechnology (Viola Folli, Alessandro Rosa*, Valeria Lucente, Silvia Schwartz, Enrico Lanza);

• Spectroscopy (Vincenzo Ricco);

• Biochemistry (Alberto Boffi*);

• Imaging and microscopy (Silvia Di Angelantonio*, Ylenia Gigante);

• Electronic design (Franco Fazioli);

• Electro-optical design (Vincenzo Ricco, Marco Leonetti);

• Optical-mechanical design (Franco Castelmani, Marco Tomassucci).

Complementary skills, such as mechanical design, microfluidics and software development, are obtained through external consultancies with companies of proven expertise (mechanical design) or through the existing agreement with IIT.

*University professors acting as advisors

CAP Table as of 12/31/2023

D-Tails has a share capital of € 173,750. It has an approved stock option plan that will be granted in 2025 to: Boffi, Di Angelantonio, Folli, Leonetti, Bellan and Cremona. This plan is expected to include other key people in the company in the future. The following are the key shareholders.

  • Ricco: 52,88%
  • Galileo: 15,73%
  • Aldabra: 11,32%
  • CrestOptics: 6,96%
  • Fazioli: 7,54%
  • Castelmani: 2,96%

Galileo is the SPV formed by Apposite Capital LLP to acquire a majority stake in CrestOptics. Aldabra is the family vehicle of Renato Giacobbo Scavo (CEO of CrestOptics).

Brief financial description

The company during the year 2023 continued and increased its research activity in innovative diagnostic techniques. Collaboration with IIT continued, adding to the company’s unique and multidisciplinary in-house expertise (in areas as diverse as Biology, Biotechnology, Physics, Optics and super-resolution imaging, electronic and mechanical design).

Research activities for the development of new diagnostic techniques for Alzheimer’s and for noninvasive diagnosis of breast and prostate cancers have led to important results that have resulted in the application for a new patent (for AD) and in the final writing stage for one in the CD project. One of the current research projects (Cancer Detection) is planned to achieve industrializable results from 2H of 2025. TRL#5 and #6, i.e., pillar two, that of product demonstration, is currently being completed.

In addition, agreements have been initiated for testing protocols and related approvals from bioethics committees to perform spectral reflectivity testing at the Santa Lucia Foundation and urine testing provided by Oncology.

To support these efforts, the company continues to seek new finance.

During 2023, the society implemented a capital increase, reserved for family and friends. The CD project “Realization of a prototype for a non-invasive and low-cost diagnostic device for early detection of breast, prostate cancer from urine samples” has been admitted to subsidized finance measures under the Lazio ERDF PR 20212 - 2027 of the Lazio Region , for a duration of 18 months (deadline May 2025). It is finalizing the bureaucratic aspects to obtain the actual disbursement.

These days we are participating in other European and/or ministerial calls (both for AD and CD) and we are confident that we will be able to obtain some additional funding.

Seeking funding is crucial for start-ups like ours. Current shareholders have already injected about € 4 million. Instrumentation, protocols, and research are the main expense items. D-Tails is always looking for new shareholders. The Venture Capital (VCs) market shows a downturn this year. D-Tails is seeking VCs mainly from abroad, as the risk assessment, future vision ability is more properly evaluated/implemented than domestic players, who show more followers than leaders.

IMPACT

i. Background

The activity of D-Tails is a research activity: it requires both technical and humanistic expertise. This belief of ours is the basis of our daily work. Each of our projects contains within itself a therapeutic goal, fitting coherently into that overall theology that places well-being, the health of the community as the goal of any action that is endowed with meaning.

D-Tails was born on this basis: it has in its DNA the purpose to search for non-invasive, inexpensive, easily usable solutions to some neurodegenerative diseases and/or cancer while respecting human beings, nature, biodiversity, community and rules.

The foregoing describes our platform/methodology. To study, analyze, take into consideration all variables and then act, generate and/or refine investigation and analysis protocols that are innovative and give quantifiable results that allow the construction of KPIs (Key Performance Indicators) for a time review.

D-Tails approved, in February 2023, its own Code of Ethics for the purpose of providing general ethical-behavioral guidelines to be adhered to in the execution of activities as well as to help prevent the realization of wrongdoing.

The Code aims to ensure that the activities of DTAILS are inspired by principles of fairness, transparency, diligence, honesty, loyalty, sustainability, efficiency and legality, and presupposes compliance with the applicable regulatory and administrative provisions in force and observance of company regulations and procedures.

ii. Metrics used

D-Tails is a start-up; it does not yet have a positive bottom line. It is refining all procedures to be implemented to implement international best practices. It is a Benefit Company and on that we are going to indicate some KPIs that it wants to target. In the future we will use, as a method of impact assessment by a third party, the BIA (B Impact Assessment) and SDG Action Manager, although for now we think it is premature as we cannot fully answer some questions.

In fact, from an initial application of these methodologies (anchored in a purely Anglo-Saxon culture) many questions fail to be answered in a meaningful way as we are still in the phase of defining the result of the research , that is, the “product,” although it is very clear and well mapped out the path we want to take both as a methodology and as a target market.

However, there is no doubt, and it is constantly monitored, that every action of the company has no negative impact on either the environment or the community. D-Tails is regenerative in the way it is designed and set up.

iii. Goals - KPIs 2024

D-Tails is a company that works with immense care, considering its people first and foremost and maintaining a precise direction in research. It places the focus on qualitative factors, results based on future imagery (vision) but still related to reaching in “short” time to concrete and scalable applications. That is, going from the future to the present, with creative thinking and breaking the complex into simple and with a view to worldwide use of its results.

Simple and transparent assumptions, proactive thinking and, very importantly, pushing the transition from research to technology transfer by trying to minimize time while still maintaining the most rigorous scientific discipline.

Research takes time and money. So far, the activity has been supported by the current shareholders who continue to believe in the goodness, necessity, and indispensability of our research.

It is clear that seeking new funds is a priority we are pursuing, especially for our independence and the field (life science) in which we operate. Specifically:

  1. Internal training: D-Tails will continue to devote resources to this end;
  2. Monitoring on consumption: starting this year (from the second quarter) we will begin monitoring, having our own office/laboratory in use;
  3. Incentivize and monitor mandatory use of public transportation;
  4. Participation in at least three (3) tenders/competitions in coordination with other institutes and research centers;
  5. Complete best practices in terms of procurement, monitoring of suppliers, attention to social and environmental issues.