BrainCool AB (publ) draws down a second tranche of convertibles of SEK 5 million
BrainCool AB (publ) ("BrainCool") draws down a second tranche from European Select Growth Opportunities Fund (the "Investor") and issues free warrants to its shareholders.
On 22 November 2017 BrainCool AB (publ) ("BrainCool") entered into an investment agreement with the Investor (the "Agreement") (see press release dated 23 November 2017).
On 24 August 2018, BrainCool’s board of directors decided to draw down a second tranche pursuant to the Agreement as well as the issuance of the Notes and warrants under this second tranche. The issuance is within the limitations of the authorization from the shareholder's meeting held on 18 April 2018 and registered with the Swedish Companies Registration Office on 4 May 2018.
The capital will be used for BrainCool’s expanding operations in the US, while increasing the pace of operations in the parent company. Within business segment Pain Management, the capital will be allocated towards enhancing Cooral System applications for oral mucositis and neuropathy.
The transaction is carried out through the issuance of convertible notes (the “Notes”) with warrants attached (the “Warrants”). In connection with the transaction pursuant to the Agreement, BrainCool will also issue free warrants to existing shareholders, to protect them against dilution (the “Shareholders Warrants”). For this second tranche, one (1) warrant will be allocated for one hundred nineteen (119) shares held on the record date, which will be announced by BrainCool at a later date. The Shareholders Warrants will have the same characteristics as those of the Investor.
Post-issuance of this second tranche, the amount of Notes held by the Investor is SEK 10.7 million. In order to facilitate the process related to the spinoff of PolarCool and the distribution of PolarCool shares to Braincool’s shareholders, the Investor has agreed not to convert any Note until September 28, 2018.
Highlights about the second tranche:
- The second tranche is carried out through the issuance of Notes with Warrants attached to the Investor.
- The Notes have a principal amount of SEK 100,000 each. They bear no interest and have a maturity of 12 months from the date of the registration of their issuance with the Swedish Companies Registration Office. During their term, the Investor may request to convert any or all of the Notes at a variable conversion price representing a 7.5 % discount to the lowest daily volume weighted average price over the 15 trading days (the “Reference Price”) preceding the conversion date.
- Upon such conversion request, BrainCool have the option to remit, at its discretion, cash, shares in BrainCool or a combination of both. This characteristic will enable BrainCool to manage the potential dilution resulting from the Notes.
- The Warrants have a maturity of three (3) years from the date of the registration of their issuance with the Swedish Companies Registration Office and will immediately be detached from the Notes. Each Warrant gives right to subscribe for one (1) new share (subject to standard adjustments in accordance with the terms and conditions of the Warrants) in BrainCool at a fixed strike price representing a 30 % premium to the Reference Price on the date of the request from BrainCool to issue a new tranche.
- In the specific case of this second tranche, the strike price will be SEK 8.26.
- The Shareholders Warrants will have the same characteristics as those of the Investor and will together be admitted to trading on Spotlight Stock Market.
- Tranche amount: SEK 5,000,000
- Tranche issuance Reference Price: SEK 6.3601
- Strike price of Warrants: SEK 6.3601 * 1.30 ≈ SEK 8.26
- Number of Notes: 5,000,000 / 100,000 = 50 Notes
- Number of Warrants: 5,000,000 * 0.50 / 8.26 = 302,663
- Number of additional Shareholders' Warrants: 302,457 (approx. 100% of number of Warrants to the Investor)
For terms and conditions of the Notes and warrants, please visit BrainCool's website:
http://www.braincool.se/investor-relations-2/
This information is information that BrainCool (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out herein, on August 24, 2018.
For more information
Martin Waleij - CEO
+46 - 733 -93 70 76
E-mail: martin.waleij@braincool.se
About BrainCool AB (publ)
BrainCool AB (publ) is an innovative medical device company that develops, markets, and sells leading medical cooling systems for indications and areas with significant medical benefits within the healthcare sector. The company focuses on two business segments, Brain Cooling and Pain Management. BrainCool AB (publ) is based in Lund, Sweden, and its share is listed on Spotlight Stock Market.