NANOLOGICA RESOLVES ON A FULLY UNDERWRITTEN RIGHTS ISSUE OF UNITS OF APPROX. SEK 99.4 MILLION, AN OVER-ALLOTMENT ISSUE OF UP TO SEK 20 MILLION, AND RAISES BRIDGE LOANS OF SEK 15 MILLION

Summary of the Rights Issue and the Over-allotment Issue

• The rights issue relates to units and will initially, if fully subscribed, provide Nanologica with approximately SEK 99.4 million before issue costs.

• The Company's existing shareholders have preferential rights to subscribe for units in the Rights Issue in proportion to the number of shares held on the record date.

• One (1) share in the Company on the record date entitles to one (1) unit right and four (4) unit rights entitle the holder to subscribe for one (1) unit consisting of four (4) shares and one (1) warrant of series TO 2024/2025 (the "Unit").

• The warrants are intended to be admitted to trading on Nasdaq Stockholm.

• The subscription price has been set at SEK 9.00 per Unit, corresponding to SEK 2.25 per new share. The warrants will be issued free of charge.

• One (1) warrant entitles the holder to subscribe for one (1) new share in the Company during the period 7 May 2025 up to and including 21 May 2025, at a subscription price of SEK 3.00. Assuming a fully subscribed Rights Issue and upon full exercise of the warrants, the Company will thus receive additional proceeds of approximately SEK 33.1 million (before transaction costs) during 2025.

• The Board of Directors has also decided to propose that the Extraordinary General Meeting authorizes the Board of Directors to resolve on an Over-allotment Issue which, if fully exercised, will provide the Company with additional gross proceeds of approximately SEK 20 million. The Over-Allotment Issue is conditional upon the Rights Issue being oversubscribed and the subscription price will correspond to the subscription price in the Rights Issue. The primary purpose of the Over-Allotment Issue is to be able to ensure that new investors who have entered into subscription undertakings receive full allocation in the event that the issue is oversubscribed.

• The Rights Issue is subject to approval by an Extraordinary General Meeting expected to be held on September 23, 2024.

• The proceeds from the Rights Issue and the Over-allotment Issue will mainly be used to strengthen the Company's financial position and meet the Company's need for working capital for production and sales in preparative chromatography with the aim of creating a positive operating cash flow and achieving profitability. The proceeds from the warrants are primarily intended to be used to amortize the Company's outstanding loans.

• The largest shareholder Flerie Invest AB and a number of other existing shareholders, including CEO Andreas Bhagwani, all board members of Nanologica, CJ Hall Invest AB and Hall Family Office AB, Alexandra Montgomery, and Andre Oscar o Anna Wallenbergs stiftelse, have undertaken to subscribe for Units of approximately SEK 43.7 million, corresponding to approximately 44.0 percent of the Rights Issue. In addition, a number of investors, among which professional investors, have undertaken to subscribe for Units without preferential rights corresponding to approximately 16.6 percent of the Rights Issue.

• In addition, Flerie Invest AB has, free of charge, entered into an underwriting commitment of approximately  SEK 39.2 million, corresponding to 39.5 percent of the Rights Issue against set-off of loans. Flerie Invest AB's subscription and underwriting commitments are conditional upon exemption from mandatory bid which has been granted. The Rights Issue is thus fully covered by subscription commitments and underwriting commitments, provided that the conditions for Flerie Invest AB's subscription and underwriting commitment as set out above are met.

• The record date for participation in the Rights Issue is expected to be 25 September 2024. The subscription period in the Rights Issue is expected to run from 30 September 2024 up to and including 14 October 2024.

• The Company intends to publish a prospectus regarding the Rights Issue on or about 27 September 2024 (the "Prospectus").

• In order to ensure the Company's liquidity needs until the Rights Issue has been completed, the Company has entered into agreements with external lenders for bridge loans totaling SEK 15 million at a fixed interest rate of eight percent on the loan amount.

• Due to the Rights Issue, Nanologica has decided to postpone the publication of the interim report for the third quarter 2024 to November 8, 2024.

 
Background and rationale
Nanologica has scaled up production of its main product NLAB Saga®, a silica-based purification media for chromatography used to purify drugs such as insulin and GLP-1 analogues during production. The company operates in a global niche market that is growing as a result of an increased demand for drugs for the treatment of diabetes and obesity. The strong growth in this market segment in recent years has resulted in a lack of capacity in the production of high-quality silica. The demand for the Company's products is high as the market for high-quality silica for chromatography is an oligopoly market with few producers and high barriers of entry, and where the Company assesses only one produces the same type of high-quality silica as Nanologica.
 
NLAB Saga® is an advanced consumable in pharmaceutical production. This means that the sales process, including evaluation and documentation times for the customers is long. The company has well-established customer relationships and the product has been successfully evaluated by several pharmaceutical manufacturers.
 
However, both evaluation processes and sales have been hampered by limited access to NLAB Saga®. In the spring of 2024, the Company approved several large production batches from the production facility, whereby large-scale production of NLAB Saga® can be considered to have been established. As the production facility delivers significantly larger volumes than before, it has been possible to create a stock of certain products. This means that larger product volumes can be delivered to customers with well-defined and market-based delivery times. This is expected to significantly facilitate the commercialization of NLAB Saga®.
 
The company's opportunities to achieve significantly higher sales with continued sales growth in the coming years are therefore considered to be good.
 
Significantly higher sales entail a need for greater working capital to continue production of both the main product and other products. The production time for NLAB Saga® is several months and during this time the Company ties up capital, mainly in the form of compensation to the production partner and for raw materials. Continued production is a prerequisite for long-term delivery capacity, which in itself is a key criterion for customers when choosing a supplier. 
 
Alltogether, this means that the Company has a need for capital and to strengthen its financial position.
 
Comment from Nanologica's CEO Andreas Bhagwani:
”The issue strengthens Nanologica's financial position so that we can win customers' confidence in us as a long-term supplier, and so that we can conduct focused and efficient commercialization work. Our production is currently at a level that allows us to offer customers competitive delivery times, which removes further obstacles in the dialogue with customers. The fact that Flerie Invest AB and several other shareholders, both existing and new, share my strong belief in the company is very gratifying as we now intensify our sales efforts with the goal of creating a positive operating cash flow and achieving profitability.”
 
Use of proceeds
Upon full subscription in the Rights Issue, the Company will receive initial net proceeds of approximately SEK 95 million (after issue costs). The net proceeds are intended, after repayment of bridge loans (by cash or set-off), to be used for the following purposes, stated in order of priority:
 

• Increase in working capital for production (approx. 35 percent)

• Efforts in sales, marketing and application support (about 15 percent)

• General corporate purposes (approx. 30 percent)

• Amortization/set-off of loans (approx. 20 percent)

 
In the event that the Rights Issue is fully subscribed and all warrants issued in the Rights Issue are exercised for subscription of shares, the Company will receive additional proceeds of a maximum of approximately SEK 33.1 million (before transaction costs). These additional proceeds are primarily intended to be used to amortize the Company's remaining loans.
 
Subscription commitments and underwriting commitments
The company's largest shareholder Flerie Invest AB and a number of existing shareholders, including CEO Andreas Bhagwani, all members of the Board of Directors of Nanologica, CJ Hall Invest AB and Hall Family Office AB, Alexandra Montgomery, and Andre Oscar o Anna Wallenbergs stiftelse, have undertaken to subscribe for Units corresponding to approximately 44.0 percent of the Rights Issue. In addition, a number of investors, among which professional investors, have undertaken to subscribe for Units without preferential rights corresponding to approximately 16.6 percent of the Rights Issue. Flerie Invest AB intends to transfer the subscription rights that are not to be used to fulfill Flerie Invest AB's subscription commitments to certain board members and others who have submitted subscription commitments in the Rights Issue. Furthermore, Flerie Invest AB has free of charge entered into an underwriting commitment up to 100 percent of the Rights Issue. Flerie Invest AB's subscription and underwriting commitments are conditional upon exemption from mandatory bid which has been granted (see below under the heading Exemption from mandatory bid). The Rights Issue is thus fully covered by subscription commitments and underwriting commitments, provided that the conditions for Flerie Invest AB's subscription and underwriting commitments as set out above are met. No compensation will be paid for subscription commitments or underwriting commitments. Payment for Units subscribed for by Flerie Invest AB as a result of the fulfilment of the underwriting commitment will be made by set-off of claims that Flerie Invest has on the Company. Neither subscription commitments nor underwriting commitments are secured by bank guarantees, escrow funds, pledged assets or the like. Further information about subscription commitments and underwriting commitments will be published in the prospectus that will be published in connection with the Rights Issue.
 
Exemption from mandatory bid
In connection with the rights issue in 2020, Flerie Invest AB passed an ownership stake of 30 percent after receiving an exemption from the mandatory bid obligation. Flerie Invest AB has also participated in rights issues carried out in 2022 and 2024 after once again receiving an exemption from the mandatory bid obligation. As of the date of this press release, Flerie Invest AB holds approximately 39.2 percent of the shares in the Company and according to the terms of the previous exemption, a mandatory bid obligation arises in connection with the acquisition of additional shares unless a new exemption is obtained.
 
Flerie Invest AB has entered into a subscription and underwriting commitment in connection with the Rights Issue. The Swedish Securities Council has granted Flerie Invest AB an exemption from the mandatory bid obligation that may arise if Flerie Invest AB (i) fulfils its subscription undertaking and subscribes for its preferential share of Units in the Rights Issue and exercises the warrants included in the said units for share subscription, and (ii) fulfils its underwriting commitment and, in addition to its preferential share, subscribes for Units in the issue and exercises the warrants included in the said Units for share subscription. The exemption with respect to Flerie Invest AB's underwriting commitment is conditional upon the shareholders being informed prior to the general meeting of the size of the capital and voting shares that Flerie Invest AB can obtain as a result of its underwriting commitment, and that the issue resolution is approved by the general meeting with at least two-thirds of both the votes cast and the shares represented at the meeting, excluding the shares held and represented at the meeting by Flerie Invest AB.
 
The underwriting undertaking is conditional upon that the above-mentioned conditions for the mandatory bid exemption are met.
 
If Flerie Invest fulfils its subscription undertaking and the entire underwriting commitment is exercised and Flerie Invest exercises all warrants received for subscription of shares, Flerie Invest's ownership share after the rights issue may amount to a maximum of approximately 59.4 percent of the shares and votes in the Company. This calculation is based on the assumption that no one else exercises warrants for share subscription.
 
Extraordinary General Meeting
The Board of Directors' resolution on the Rights Issue is subject to approval by an Extraordinary General Meeting expected to be held on September 23, 2024. Notice of the Extraordinary General Meeting will be published today through a separate press release.
 
Bridge loans
To ensure the Company's liquidity needs until the Rights Issue has been completed, the Company has taken up bridge loans totaling approximately SEK 15 million from Wilhelm Risberg, Fredrik Lundgren and Gerhard Dal. As compensation for the loans, a fixed interest rate of 8.0 percent for the period is paid. The Lenders have also entered into subscription commitments and a part of the loan amount may be set off as payment for new shares in the Rights Issue and/or the Over-allotment Issue. The bridge loan shall be repaid by 31 October 2024.
 
Changed date for interim report for the third quarter 2024
In order to enable the proposed timetable in the Rights Issue, Nanologica has decided to postpone the publication of the interim report for the third quarter 2024 to November 8, 2024. The previously communicated date for publication was October 25, 2024.
 
Terms and conditions for the Rights Issue and the Over-allotment Issue
The Board of Directors of Nanologica has today resolved on the Rights Issue, which is subject to approval by an Extraordinary General Meeting expected to be held on September 23, 2024. The Board of Directors has also decided to propose that the Extraordinary General Meeting authorizes the Board of Directors to resolve on an Over-allotment Issue of up to SEK 20 million, conditional upon the Rights Issue being oversubscribed. The subscription price in the Over-allotment Issue will correspond to the subscription price in the Rights Issue.
 
One (1) share held on the record date 25 September 2024 entitles to one (1) unit right, according to the proposed terms and conditions. Four (4) unit rights entitle the holder to subscribe for one (1) Unit consisting of four (4) shares and one (1) warrant of series TO 2024/2025. In addition, investors are offered the opportunity to apply for subscription of Units without the support of unit rights. The subscription price for Units is SEK 9.00 per Unit, which corresponds to SEK 2.25 per share. The warrants are issued free of charge. One (1) warrant of series TO 2024/2025 entitles the holder to subscribe for one (1) new share in the Company during the period 7 May 2025 up to and including 21 May 2025, at a subscription price of SEK 3.00. In total, a maximum of 44,178,616 new shares will be issued through the Rights Issue, corresponding to an amount of approximately SEK 99.4 million before transaction costs related to the Rights Issue. Furthermore, a maximum of 11,044,654 warrants will be issued through the Rights Issue. Upon full exercise of the warrants, the Company will receive an additional maximum of approximately SEK 33.1 million before transaction costs.
 
Subject to approval by the Extraordinary General Meeting, the record date for participation in the Rights Issue will be 25 September 2024 and the subscription period for the Rights Issue is expected to run between 30 September 2024 – 14 October 2024. The last day of trading in Nanologica's share including the right to participate in the Rights Issue will be 23 September 2024.
 
Subscription can also be made without unit rights. In the event that all Units are not subscribed for with the support of unit rights, the Board of Directors shall, within the limit of the maximum amount of the Rights Issue, resolve on allotment of Units subscribed for without the exercise of unit rights. In the event of oversubscription, allotment shall be made in accordance with the following principles: First, such allotment shall be made to those who have subscribed for Units by virtue of unit rights, regardless of whether they were shareholders on the record date or not, proportionate to the number of Units subscribed for by virtue of unit rights. Second, such allotment shall be made to those who have subscribed for Units without the exercise of unit rights, regardless of whether they were shareholders on the record date or not, proportionate to the number of Units subscribed. Third, allotment are to be made to those who have entered into so-called underwriting commitments in proportion to such commitments. To the extent that allotment in accordance with the above cannot be made proportionately, allotment shall be made by drawing lots.
 
Trading in paid subscribed units ("BTU") on Nasdaq Stockholm is expected to take place during the period from and including 30 September 2024 up to and including 30 October 2024.
 
In order to meet a potential oversubscription of the Rights Issue and to broaden the shareholder base with potential new investors, it is proposed that the Board of Directors be authorized to resolve on the Over-allotment Issue of up to approximately SEK 20 million, conditional on the Rights Issue being oversubscribed. The Over-Allotment Issue may comprise up to 2,222,222 new Units and be carried out with deviation from the shareholders' preferential rights, taking into account the allotment principles in the Rights Issue regarding persons who have subscribed for Units in the Rights Issue without the exercise of unit rights, however, provided that the Board of Directors shall have the right to grant new investors' application for subscription if the Board of Directors deems it to be in the Company's best interest. The primary purpose of the Over-Allotment Issue is to be able to ensure that new investors who have entered into subscription commitments in the Rights Issue receive full allocation in the event that the issue is oversubscribed. The subscription price in the Over-Allotment Issue is the same as in the Rights Issue and amounts to SEK 9.00 per Unit, which corresponds to SEK 2.25 per new share. The Board of Directors believes that it is positive if the Company through the Over-allotment Issue can be provided with additional capital as it promotes the Company's opportunities to advance in sales and production and thereby create additional value for all shareholders, and provides the Company with increased financial flexibility. An issue based on the authorization can be carried out in a time and cost-effective manner, which means that the Company can quickly benefit from the proceeds. The authorization also enables the Company to bring in strategic, capital-strong and long-term shareholders, which the Board of Directors considers to be positive for the Company and the shareholders. The purpose of the authorization and the possibility to deviate from the shareholders' preferential rights is thus to take advantage of the opportunity to provide the Company with additional capital that in a time and cost-effective manner can contribute to the Company's commercialization work, as well as to enable a strategic expansion of the circle of owners.
 
Reduction of share capital
The Board of Directors has further proposed that the Extraordinary General Meeting expected to be held on 23 September 2024, where the Board of Directors' resolution on the Rights Issue is proposed to be approved, resolves to reduce the Company's share capital for allocation to non-restricted equity. According to the proposal, the reduction of the share capital shall be determined to an amount in SEK corresponding to the amount by which the share capital increases through a resolution by the Rights Issue, attributable to the increase due to newly issued shares (the share capital increase that may occur due to the exercise of newly issued warrants for subscription of shares shall not be taken into account), with relevant adjustments to achieve an appropriate quota value.
 
Prospectus
Complete terms and conditions and information regarding the Rights Issue, as well as information about subscription commitments and underwriting commitments as well as other information about the Company, will be provided in a Prospectus that is expected to be published by the Company before the start of the subscription period.
 
Shares and dilution
Through the Rights Issue, the share capital will increase by up to SEK 4,417,861.6, from SEK 4,417,861.8 to SEK 8,835,723.4 and the number of shares will increase by up to 44,178,616 shares, from 44,178,618 shares to 88,357,234 shares. For existing shareholders who do not participate in the Rights Issue, this entails a dilution of a maximum of 50 percent, with the possibility to be financially compensated for the dilution effect by selling their unit rights. Assuming full subscription in the Rights Issue and full exercise of the warrants issued within the Rights Issue, the share capital will increase by an additional SEK 1,104,465.4 and the number of shares will increase by up to 11,044,654 shares, corresponding to a dilution of a maximum of 55.6 percent.
 
If the Over-allotment Issue is exercised in full, the Company's share capital will increase by an additional SEK 888,888.8 to a total of SEK 10,829,077.6 and the number of shares will increase by an additional 8,888,888 new shares to a total of 108,290,776 shares. For existing shareholders who do not participate in the Rights Issue, and if the Over-allotment Issue is fully exercised, this entails a dilution of a maximum of 59.2 percent. Assuming full exercise of the Over-allotment Issue and full exercise of the warrants issued within the framework of the Over-allotment Issue, the share capital will increase by an additional SEK 222,222.2 and the number of shares will increase by 2,222,222 shares, corresponding to a dilution of a maximum of 60.0 percent in total. In the Over-allotment Issue, there is no possibility of financial compensation for the dilution effect by selling unit rights.
 
Please note that the reduction of share capital proposed by the Board of Directors (which will affect the quota value of the shares) has not been taken into account in the indication of the share capital increase in the previous two paragraphs. 
 
Indicative timetable

 
Advisors
Nanologica has engaged Redeye AB as Joint Bookrunner, Hagberg & Aneborn Fondkommission AB as Joint Bookrunner and issuing agent, and Advokatfirman Lindahl KB as legal advisor in connection with the Rights Issue.
 
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Important information
The publication, publication or distribution of this press release may be subject to restrictions by law in certain jurisdictions and persons in the jurisdictions in which this press release has been published or distributed should inform themselves of and comply with such legal restrictions. The recipient of this press release is responsible for using this press release and the information contained herein in accordance with applicable regulations in their respective jurisdictions. This press release does not constitute an offer to sell or a solicitation of an offer to buy or subscribe for any securities issued by the Company in any jurisdiction in which such offer or solicitation would be unlawful. In a member state of the European Economic Area ("EEA"), securities referred to in this press release may only be offered in accordance with the applicable exemptions in Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (the "Prospectus Regulation").

This press release does not constitute an offer, or a solicitation of any offer, to buy or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States absent registration, or without the application of an exemption from registration, under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States absent registration, an exemption from, or in a transaction not subject to the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States, or to make a public offer of such securities in the United States. The information in this press release may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, in or into the United States, Australia, Japan, Canada, Hong Kong, New Zealand, Switzerland, Singapore, South Africa or any other jurisdiction where such release, publication or distribution of this information would be contrary to applicable regulations or where such action is subject to legal restrictions or would require additional registration or other measures than what follows from Swedish law. Actions in violation of this instruction may constitute a violation of applicable securities legislation.

This press release is not a prospectus within the meaning of the Prospectus Regulation and has not been approved by any regulatory authority in any jurisdiction. The Company has not authorized any offer to the public of securities in any member state of the EEA and no prospectus has been or will be prepared in connection with the Issue. In each EEA Member State, this announcement is only directed at "qualified investors" in that Member State as defined in the Prospectus Regulation. This press release does not identify or purport to identify any risks (direct or indirect) that may be associated with an investment in equities. An investment decision to acquire or subscribe for Units in the Rights Issue may only be made based on publicly available information.

To the extent this press release contains forward-looking statements, such statements do not represent facts and are characterized by words such as "shall", "expects", "believes", "estimates", "intends", "intends", "assumes" and similar expressions. Such statements express Nanologica's intentions, opinions, or current expectations or assumptions. Such forward-looking statements are based on current plans, estimates and projections that Nanologica has made to the best of its ability, but that Nanologica does not claim to be accurate in the future. Forward-looking statements involve risks and uncertainties that are difficult to predict and generally cannot be influenced by Nanologica. It should be kept in mind that actual events or outcomes may differ materially from those covered by, or expressed, in such forward-looking statements.