BrainCool AB (publ) draws down a fourth tranche of convertibles of SEK 5 million

BrainCool AB (publ) ("BrainCool" or "Company") draws down a fourth tranche from European Select Growth Opportunities Fund (the "Investor") and issues free warrants to its shareholders.

On 22 November 2017, BrainCool entered into an investment agreement with the Investor ("Agreement"). On 4 November 2018, BrainCool and the Investor signed an amendment agreement relating to the Agreement ("Amendment Agreement") providing, inter alia, that the issuance of warrants can be postponed in order to facilitate the administrative process in relation to the issuance of tranches (see press release dated 5 November, 2018).

On the evening of 21 January 2019, BrainCool’ board of directors decided to (i) draw down a fourth tranche of SEK 5 million pursuant to the Agreement and the Amendment Agreement, and (ii) issue convertible notes ("Notes") and warrants under this fourth tranche. In connection with this fourth tranche, BrainCool also decides to issue warrants related to the third tranche, as well as free warrants to existing shareholders to protect them against dilution. Consequently, free warrants are issued to the Company's shareholders related both to tranche 3 and tranche 4 ("Shareholders Warrants"). One (1) Shareholder Warrant will be allocated for sixty-two (62) shares as per 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. The issuance of Notes and warrants is implemented within the limitations of the authorization from the shareholder's meeting registered with the Swedish Companies Registration Office on 4 May 2018.

The capital received under this fourth tranche will serve as working capital for BrainCool’s operations in the business segment Brain Cooling.

BrainCools CEO Martin Waleij comments;

-          We thank again ESGO for their continuous support and flexibility within this financing agreement, which provides BrainCool important funding during this intense period with several orders materializing, generating working capital needs. Since the execution of the financing agreement, we have been working together with ESGO to make it as efficient as possible for BrainCool and our shareholders.



Highlights about the fourth tranche:  

  •  The fourth 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 (VWAP) over the 15 trading days (“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 third and fourth tranche, the strike price will be SEK 8.35.
  •  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 6.4306
    • Strike price of warrants: SEK 6.4306 * 1.30 ≈ SEK 8.35
    • Number of Notes: 5,000,000 / 100,000 = 50 Notes
    • Number of warrants: 5,000,000 / 8.35 = 598,802
    • Number of additional Shareholders' Warrants: 604,596

For terms and conditions of the Notes and warrants, please visit BrainCool website:
http://www.braincool.se/en/nyemission_en/

Change in number of shares in BrainCool AB

On January 21, 2019, the investor L1 also converted convertible notes into shares, as part of the financing agreement announced 23 November 2017.

The number of convertible notes converted on January 21, 2019, was 10. The number of convertible notes remaining under the first tranche for future conversion is 0. The number of convertible notes remaining under the second tranche for future conversion is 12. The number of shares and the number of votes before the conversion was 37 331 594. Through this conversion, and once the shares from the conversion will be registered at Bolagsverket, the number of shares and the number of votes shall have increased by 153 374. The total number of shares and total number of votes after this conversion and once the shares have been registered at Bolagsverket will amount to 37 484 968.

Conversion price is 6,52 SEK per share and conversion amount is 1 000 000 SEK.

For terms and conditions of the convertible notes, please visit:

http://www.braincool.se/en/nyemission_en/ 

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 January 22, 2019.  

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.

About Us

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 AktieTorget.

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