OptiCept’s outstanding warrants exercised

OptiCept has reached an agreement to bring forward the exercise period for all outstanding warrants, resulting in the subscription of 4,350,000 shares worth around 13 MSEK. We had previously flagged that this was a possibility, so the outcome is roughly in line with our expectations, even though the exercise of the warrants was in our estimates for 2025. This will therefore have a minor impact on our estimates.

In June 2024, OptiCept secured a loan of 29 MSEK, which was directed towards some existing investors. The compensation to the lenders included an annual interest rate of 6% and 4,350,000 warrants in the company. Each warrant entitled the holder to subscribe for one new share in the company at a price of SEK 3.00 during the period from June 2, 2025, to June 16, 2025. In addition, the terms allowed holders of at least 60% of the outstanding warrants to agree with the company to bring forward the exercise period. According to a recent announcement, OptiCept and the warrant holders have agreed to accelerate the exercise period for all outstanding warrants, resulting in the subscription of 4,350,000 shares with a value of approximately 13 MSEK. Payment for the shares has been made by offsetting against outstanding loans. This will strengthen the balance sheet by reducing debt but will also result in a dilution of approximately 8.5%.

Lower debt, but additional financing will likely be needed

At the end of Q2’24, the company's cash position stood at around 4.0 MSEK, which was subsequently strengthened by a loan of 10.3 MSEK. However, given the high operating burn rate, we still believe that OptiCept may require additional financing by the end of this year or early next year. While using the capital gained from the warrants to repay part of the 29 MSEK loan is positive in terms of debt reduction, the company's current financial situation remains highly dependent on the timing of cash flow generation from the FPS order. As we continue to believe that the cash flow from the FPS order will not be sufficient to cover short-term capital requirements, we continue to expect that the company will require further financing in the next six months or so.