Reviewing Notice to Annual General Meeting in Bioservo Technologies AB (publ)

The shareholders of Bioservo Technologies AB (publ), reg. no. 556650-7264 (”Company”), are hereby summoned to the annual general meeting on Monday 19 April 2021 at 4.00 p.m.,  Torshamnsgatan 35, Kista.

With regards to the risks related to the spread of the Coronavirus (COVID-19), Bioservo has decided to take the following precautionary steps at the Annual General Meeting:

•    No food or drink will be served.
•    Participation by both Board of Directors and Management will be restricted.
•    The duration of the General Meeting will be reduced, but without infringing on the rights of the shareholders.

Bioservo is taking these measures to protect the health of our shareholders and employees and as far as possible limit the spread of the new coronavirus. 

Prior to the General Meeting, Bioservo may update the above precautionary steps if required and in case of publication of new recommendations by the health authorities. 

Right to attend the Meeting
Shareholders who wish to attend the meeting, must 

1. be registered the share register maintained by Euroclear Sweden AB as of Friday 9 April 2021,
2. also to register with Bioservo by mail to Bioservo AB (publ), Torshamnsgatan 35, 164 40 Kista or by e-mail to invest@bioservo.com, latest on Friday 9 April 2021. Notification shall include the shareholders name, personal identification number/corporate registration number, shareholding, address, telephone number, as well as, wherever applicable, details of representatives, proxies, and advisors.

Nominee-registered shares
To be entitled to participate in the Meeting, shareholders whose shares are registered in the name of a nominee must temporarily re-register their shares in their own names in the share. 

Proxy
Shareholders represented by proxy must submit a dated power of attorney. If the power of attorney is executed by a legal person, a certified copy of the certificate of registration or equivalent must be attached. The power of attorney may not be valid for a longer period than five years from its issuance.  A copy of the power of attorney and certification should be submitted to the Company by post at the address mentioned above in duly time prior to the Meeting. Power of attorney in original and registration certificate must also be presented at the AGM. The form for power of attorney will be available via the Company's website, www.bioservo.se, and sent free of charge to the 
the shareholders who request it and state their postal address.

Annual report
The annual report and the auditor’s report will be available on the Company’s website www.bioservo.com on March 26, 2021. These documents can also be sent to shareholders who so request and who inform the Company of their postal address.

Proposed agenda

1.     Opening of the Meeting
2.     Appointment of chairman of the Meeting
3.     Preparation and approval of the voting list
4.     Election of one or two persons to approve the minute
5.     Approval of the agenda
6.     Determination that the Meeting has been duly convened
7.     Submission of the annual accounts and the auditor
8.     Resolution regarding:
       a) the adoption of the income statement and the balance sheet
       b) appropriation of the Company’s results in accordance with the adopted balance sheet
       c) discharge of the members of the board of directors and the managing director from liability
9.     Determination of fees for members of the board of directors and auditors
10.     Election of members of board of directors and election of auditor
11.     The board of directors’ proposal regarding authorization for the board of directors to resolve on issue of new shares
12.     Resolution regarding adoption of new performance-based long-term incentive program LTIP 2021
13.     Closing of the Meeting

Proposed for decision

Election of chairman of the meeting (item 2)
Anders Lundmark is proposed as chairman of the Annual General Meeting.

Fees to the Board and auditors (item 9)
The Board of Directors proposes that unchanged annual fees be paid to the Board of Directors of SEK 200,000 to the Chairman of the Board and SEK 80,000 to each of the other Board members and that the auditor be paid according to approved invoice.

Election of members of board of directors and election of auditor (item 10)
The nomination committee proposes that the number of Board members on the Board should be six (6). The Nomination Committee proposes re-election of the Board members Anders Lundmark, Runar Bjørklund, Kunal Pandit and Nikolaj Sørensen, as well as new election of Kerstin Valinder Strinnholm and Margit Alt Murphy PhD. As the Chairman of the Board, it is proposed that Anders Lundmark be re-elected. Claes Mellgren has declined re-election.

Kerstin Valinder Strinnholm has many years of experience in sales, marketing, and business development from senior positions at Astra/AstraZeneca and Nycomed/Takeda including EVP Business Development for the Nycomed Group. Currently Kerstin is a board member of Camurus AB, Klifo A/S, KVS Invest AB, Immedica AB, Gedea Biotech AB, Promore Pharma AB and Cavastor AB. She holds a degree from the School of Journalism at the University of Gothenburg.

Margit Alt Murphy PhD is a neurology specialist that currently is Associate Professor in Experimental Rehabilitation Medicine at University of Gothenburg and Senior University Hospital Specialist Physiotherapist at Sahlgrenska University Hospital. Margit is a leading researcher in the field of stroke rehabilitation of upper extremities. She has over 40 peer reviewed publications and has received multiple awards for her research. In addition, Margit is working with new technologies to support patients recovering from a stroke including wearable sensors in smart textiles and EMG augmented VR feedback.  She holds a PhD in Medical Science from the Institute for Neuroscience and Physiology at University of Gothenburg.  

Proposal to re-elect auditor Anna Stenberg from Mazar SET Revisionsbyrå AB, for the period until the end of the next Annual General Meeting. 

Authorization for the board of directors to resolve on issue of new shares (item 11)
The Board of Directors proposes that the Meeting authorizes the Board of Directors to, for the period until the next Annual General Meeting, on one or more occasions, decide on a new issue. However, such issue of shares must never result in the company’s issued share capital or the number of shares in the company at any time, being increased by more than a total of 20 percent than at the time of the Annual General Meeting. The issue may be made with or without deviation from the shareholders' preferential rights and against cash payment, payment by kind, by set-off or otherwise with terms according to Chapter 2. Section 5, second paragraph, 1-3 and 5 the Swedish Companies Act. The purpose of the authorization is for the Company to be able to issue shares to enable payment of the purchase price when acquiring a company or business and to be able to make targeted issues with a view to acquiring capital for the Company. For decisions according to the Board's proposal, it is required that the AGM's decision be assisted by shareholders representing at least two-thirds of both the votes cast and the shares represented at the Meeting.

Number of shares and votes
The total number of shares and votes in the Company, as of the date of the notice, amounts to 15,798,321 of which each share is representing one vote. The company does not hold any own shares on the day of this notice.
 
Resolution regarding adoption of new performance-based long-term incentive program LTIP 2021 (item 12)
The Board of Directors of Bioservo Technologies AB (the ”Company”) proposes that the General Meeting pass a resolution on the implementation of a long-term incentive program 2021 (”LTIP 2021”). The proposal is divided into the following items.

A.    Resolution regarding issue and approval of transfer of warrants, series 2021-2024 A and series 2021-2024 B

B.    Other matters in relation to the LTIP 2021

A.1    Issue of warrants, series 2021-2024 A
The Board of Directors of the Company proposes that the General Meeting resolve to carry out a private placement in respect of not more than 285,000 warrants of series 2021-2024 A, entailing an increase in the share capital of not more than SEK 57,000 if the private placement is fully taken up. 

A.1    Issue of warrants, series 2021-2024 B
The Board of Directors of the Company proposes that the General Meeting resolve to carry out a private placement in respect of not more than 31,000 warrants of series 2021-2024 B, entailing an increase in the share capital of not more than SEK 6,200 if the private placement is fully taken up. 

1.    The resolutions according to A.1 – A.2 shall otherwise be governed by the following terms and conditions
 

1.1    The right to subscribe for the warrants, with derogation from the shareholders’ pre-emption rights, shall vest in the Company, with right and obligation to transfer the warrants to present and future employees in the Company in accordance with below. 
No oversubscription is allowed.

1.2    The reason for derogation from the shareholders’ pre-emption rights is to implement an incentive programme through which present and future employees in the Company shall be able to become long-term owners and participate in and work for a positive growth of value of the Company’s share for the period that the programme covers, and to ensure that the Company can keep and recruit qualified and motivated personnel.

1.3     The warrants shall be issued at no consideration.

1.4    Subscription for the warrants shall take place on the same day as the date of the resolution to issue warrants. The Board of Directors shall be entitled to extend the subscription period. 

1.5    Each warrant entitles the holder to subscribe for one new share in the Company.

 
1.6    The warrants may be exercised to subscription for new shares during the following periods:

 A)    Commencing on 10 May 2024, up to and including 10 June 2024 for series 2021-2024 A.

 B)    Commencing on 10 November 2024, up to and including 10 December 2024 for series 2021-2024 B.

1.7    The subscription price per share shall be calculated in accordance with the following:

 A)    For warrants of series 2021-2024 A, the subscription price per share shall correspond to 150 percent of the volume weighted average price according to Nasdaq First North Growth Market’s official price list for the share during the 10 trading days immediately preceding 19 April 2021, however, at least SEK 0.2.

B)     For warrants of series 2021-2024 B, the subscription price per share shall correspond to 150 percent of the volume weighted average price according to Nasdaq First North Growth Market’s official price list for the share during the 10 trading days immediately preceding 19 October 2021, however, at least SEK 0.2.

1.8    Any share premium shall be transferred to the unrestricted premium reserve. 

1.9    The shares subscribed for based on the warrants shall carry a right to participate in dividends for the first time on the next record date for dividends, which occurs after subscription is completed.

1.10  Other terms and conditions according to the complete terms and conditions for series 2021-2024 A and series 2021-2024 B.

2.    Approval of transfer of warrants, series 2021-2024 A 

2.1    The Board of Directors proposes that the General Meeting approves the Company’s transfer of warrants series 2021-2024 A in accordance with the following.

2.2    The right to acquire warrants from the Company shall vest in three categories of participants (the ”Participants”) in accordance with the table below.

2.3    Initially, each Participant will be offered to acquire warrants in accordance with the table set out below. Any remaining warrants may be allotted to other Participants pro rata, based on the maximum number of warrants per Participant in a certain category in relation to the total number of warrants of series 2021-2024 A. However, such allotment may at most result in that the maximum number of warrants per person within a certain category is exceeded by fifty (50) percent. 

2.4    The warrants shall be transferred at no consideration to Participants, which means that the Participant is taxed on the benefit at the time of acquisition and the Company pays social security contributions on the benefit, see section B1.1 below.2.5    Allotment requires that the warrants can be legally acquired and that, in the Board of Director’s opinion, such acquisition can take place using a reasonable amount of administrative and financial resources.

2.6    Application for acquisition of warrants shall take place during the period commencing on 20 April 2021, up to and including 4 May 2021. The Board of Directors is authorized to extend the application period.

2.7    The Company reserves the right to repurchase warrants if the Participant’s employment with the Company is terminated or if the Participant in turn wishes to transfer warrants. In addition, the Company reserves the right to repurchase warrants during a certain period of time at the end of the term of the warrants. 

2.8    The warrants shall otherwise be governed by market terms. Warrants held by the Company that are not transferred to Participants or that is repurchased from Participants, may be cancelled through a decision by the Board of Directors. The cancellation shall be notified to the Swedish Companies Registration Office. 

3.    Approval of transfer of warrants, series 2021-2024 B 

3.1    The Board of Directors proposes that the General Meeting approves the Company’s transfer of warrants series 2021-2024 B in accordance with the following.

3.2    The right to acquire warrants from the Company shall vest in one category of participants (the ”Participants”) in accordance with the table below.

3.3    Initially, each Participant will be offered to acquire warrants in accordance with the table set out below. Any remaining warrants may be allotted to Participants in Category D pro rata, based on the maximum number of warrants per Participant in category D in relation to the total number of warrants of series 2021-2024 B. However, such allotment may at most result in that the maximum number of warrants per person within Category D is exceeded by fifty (50) percent.
 

3.4    The warrants shall be transferred at no consideration to Participants, which means that the Participant is taxed on the benefit at the time of acquisition and the Company pays social security contributions on the benefit, see section B1.1 below. 

3.5    Allotment requires that the warrants can be legally acquired and that, in the Board of Director’s opinion, such acquisition can take place using a reasonable amount of administrative and financial resources.

3.6    Application for acquisition of warrants shall take place during the period commencing on 20 October 2021, up to and including 4 November 2021. The Board of Directors is authorized to extend the application period.

3.7    The Company reserves the right to repurchase warrants if the Participant’s employment with the Company is terminated or if the Participant in turn wishes to transfer warrants. In addition, the Company reserves the right to repurchase warrants during a certain period of time at the end of the term of the warrants. 

3.8    The warrants shall otherwise be governed by market terms. Warrants held by the Company that are not transferred to Participants or that is repurchased from Participants, may be cancelled through a decision by the Board of Directors. The cancellation shall be notified to the Swedish Companies Registration Office. 

B.    Other matters in relation to the LTIP 2021

1.1    Costs 
As the warrants are granted free of charge to the participants, LTIP 2021 involves costs for the Company in terms of the IFRS 2 cost as well as social security. The cost for LTIP 2021 is calculated to amount to approximately SEK 0.8 million, excluding social contributions, accounted in accordance with IFRS 2 based on the following assumptions: (i) that 316,000 warrants are granted, (ii) that the share price, at the time of grant, is SEK 15 per share and (iii) that the fair market value per warrant is calculated at SEK 2.60 (see section B1.4 below). Based on the same assumptions as above, and subject to social contributions of 31.42%, the costs for social contribution costs are estimated to SEK 0.3 million. The total cost for LTIP 2021, including costs according to IFRS 2, is therefore estimated at SEK 1.1 million. Only the social contribution costs of SEK 0.3 million have an effect on the Company's cash flow.

1.2    Effect on important key ratios 
Given the above assumptions regarding costs, and that LTIP 2021 was introduced in 2019 instead, it is estimated that the key figure earnings per share for full year 2020 would have decreased from SEK -1.82 to approximately SEK -1.90, based on average number of shares outstanding. Correspondingly, shareholders’ equity per share would have decreased from SEK 3.94 to approximately SEK 3.93, based on number of shares outstanding as end-of-year.

1.3    Dilution of existing shares and votes 
Based on the number of shares and votes outstanding in the Company, the LTIP 2021 implies, upon exercise of all 316,000 warrants, a full dilution corresponding to approximately 1.96 percent of the total number of shares and votes outstanding in the Company, however, subject to the recalculation of the number of shares that each warrant entitles to subscribe for that may occur as a result of certain issues etc.

1.4    Calculation of the market value 
The preliminary market value has been established based on a calculated market value for the warrants, applying the Black & Scholes valuation model calculated by PwC. 

The preliminary value is calculated to SEK 2.60 per warrant based on a share price of SEK 15.00, a subscription price per share of SEK 22.50, a term of 3.00 years, a risk-free interest rate of -0.33 percent and a volatility of 45.00 percent.

The preliminary calculation above assumes that no dividends are paid to shareholders during the warrant’s term, or that such dividends are fully compensated for by recalculation in accordance with market practice.

The final valuation of the warrants takes place in connection with the Participants’ acquisition of the warrants and will be based on market conditions at that time.

1.5    Other share-related incentive programmes  
The Company’s share-related incentive programs are described on page 14 in the Company’s annual report for the financial year 2020.

1.6    Authorizations for the Board of Directors 
The General Meeting authorizes the Board of Directors to execute the resolution under items 2 and 3 above. In addition, the Board of Directors, or a person appointed by the Board of Directors, shall be authorized to make minor adjustments to the resolutions above that may be necessary in connection with the registration with the Swedish Companies Registration Office and Euroclear Sweden AB, respectively.

1.7    The background and rationale for the proposal
The Board of Directors wishes to implement an incentive programme through which present and future employees in the Company shall be able to become long-term owners and participate in and work for a positive growth of value of the Company’s share for the period that the programme covers, and to ensure that the Company can keep and recruit qualified and motivated personnel.

1.8    Preparation of the proposal
The basis for the LTIP 2021 has been prepared by the Board of Directors of the Company. The work has been supported by external advisors and has been made in consultation with shareholders. The Board of Directors has thereafter decided to present this proposal for the General Meeting. Except for the staff that have prepared the matter upon instruction from the Board of Directors, no employee that may be a Participant of the program has participated in the preparations of the program’s terms.
 
1.9    Majority requirements
The resolution by the General Meeting regarding the implementation of the LTIP 2021 in accordance with the above requires that shareholders representing not less than nine-tenths of the votes cast as well as the shares represented at the General Meeting approve the resolution.

Kista, 17 March 2021

Bioservo Technologies AB (publ)

The board of directors