Brain+ A/S: Brain+ announces the outcome of its series TO 4 warrant exercise and the decision to carry out a directed share issue to cover guarantor subscriptions

Kim Baden-Kristensen, CEO and founder of Brain+ commented on the result:

"I am truly pleased and grateful for the loyal support we continue to receive from our existing shareholders. The total proceeds from the TO 4 warrant exercise and the guarantor commitments provides sufficient funding to bridge our planned commercial and next step funding activities for the rest of 2024. I firmly believe that with the imminent launch of Ayla - your CST Assistant into the UK, Brain+ is on the brink of its commercial break-through. The UK market is highly attractive as the first market to benefit of our Ayla platform of digital CST solutions for better dementia therapy and care, and with a strong commercial team in place, all sails have been set to deliver value to people with dementia, the healthcare sector - and not least to our shareholders."    

Background

Brain+ completed a pre-emptive rights issue of units during June 2024. As part of the issue, a total of 65,496,978 warrants of series TO 4 were issued. Each Warrant gave the holder the right to subscribe for one (1) new share in the Company. The exercise price of the Warrants was determined to DKK 0.08 and the exercise period for the Warrants was from 16 September to 27 September 2024.

Warrant exercise outcome

During the exercise period, a total of 38,522,165 Warrants were exercised for the subscription of 38,522,165 new shares in the Company, corresponding to approximately 58.8% of all outstanding Warrants. Brain+ receives approximately DKK 3.1 million in gross proceeds from the Warrant exercise.

Investors, who have exercised Warrants, will upon payment of the subscription amount (exercise price times the number of Warrants exercised), receive Brain+ interim shares (IA/midlertidige aktier), pending registration with the Danish Business Authorities. The interim shares will be converted into ordinary shares in Brain+ within a few days.

Directed issue to guarantors

As part of the exercise of Warrants, Brain+ received guarantor commitments to cover a total of 2,517,179 warrants. The guarantor commitments were provided by board member Johan Luthman (1,000,000 shares) as well as by two external investors from Denmark and Germany, respectively (combined: 1,517,179 shares). 

To cover the guarantor commitments, the Board of Directors in Brain+ today resolved, based on an existing authorization in the Company's Articles of Association, to increase the Company's share capital by a directed issue of 2,517,179 new shares of nominally DKK 0.08 each, totaling nominally DKK 201,374.32. No compensation is paid to the guarantors. The Directed Issue approach is a cost-effective way to provide Brain+ with total new capital closer to the maximum exercise amount of the Warrants.

The subscription price in the Directed Issue is DKK 0.08, the same as in the warrant exercise, which means that the Directed Issue will provide approximately DKK 0.2 million in additional new capital to the Company before issue related costs.

Financial runway and next step funding

Combined net proceeds to Brain+ from the Warrants exercise and the Directed Issue amounts to approximately DKK 2.9 million. This will secure funding of the Company's planned activities for the rest of 2024, thus bridging market entry of Ayla - the CST Assistant into the UK, building a pipeline of UK customer leads, closure of the first UK sales contracts and getting longer-term funding in place. As earlier communicated, the preferred funding route is a directed issue of new shares or convertible notes to existing and new investors both in Denmark and abroad, since it is also the cheapest option. Ways to benefit from the significantly higher valuation of near-commercial healthtech companies in the private equity markets is also taken into consideration.  The main objectives for the board and management are to secure the Company's operations, while optimizing the value for existing shareholders and other stakeholders. As soon as a decision on subsequent funding measures has been taken, Brain+ will inform the market in a separate company announcement.

Shares and nominal share capital

Through the exercise of Warrants, the number of shares in Brain+ will increase by 38,522,165 shares, and the nominal share capital will increase by DKK 3,081,773.20. For existing shareholders who did not exercise Warrants, the dilution amounts to approximately 18.3% in relation to the number of shares and the nominal share capital before the exercise.

Through the Directed Issue to guarantors, the number of shares in Brain+ will increase further by 2,517,179 shares, and the nominal share capital will increase by a further DKK 201,374.32. For existing shareholders, the additional dilution arising from the Directed Issue amounts to approximately 1.2% in relation to the number of shares and the nominal share capital after the warrant exercise and before the Directed Issue.

After the completion and registration of the Warrant exercise and Directed Issue with the Danish Business Authority, the number of shares in Brain+ will have increased by 41,039,344 shares, from 171,501,141 to 212,540,485 shares, and the Company's nominal share capital will have increased by DKK 3,283,147.52, from DKK 13,720,091.28 to DKK 17,003,238.80. For existing shareholders who did not exercise Warrants, the total dilution amounts to approximately 19.3% in relation to the number of shares and the nominal share capital before the two events.  

Following registration with the Danish Business Authority, application will be made to Nasdaq Copenhagen A/S for the new shares to be admitted to trading on Nasdaq First North Growth Market Denmark. It is expected that the first day of trading of the new shares will be on or around 8 October 2024.

Advisors
In connection with the unit rights issue including the issue and exercise of warrants of series TO 4, Sedermera Corporate Finance AB act as financial advisors to Brain+. Markets & Corporate Law Nordic AB acts as legal advisor. Nordic Issuing AB is the issuing agent.

For more information about the warrant exercise, please contact:

Sedermera Corporate Finance AB
Phone: +46 (0) 40 615 14 10
E-mail: cf@sedermera.se
www.sedermera.se

For more information about Brain+, please contact:

Kim Baden-Kristensen, CEO          Hanne Vissing Leth, CFO
Phone: +45 31 39 33 17                Phone: +45 53 88 99 02
E-mail: kim@brain-plus.com       E-mail: hanne@brain-plus.com

www.brain-plus.com

Certified Adviser

Keswick Global AG

Phone: +43 1 740 408 045

E-mail: info@keswickglobal.com