Cereno Scientific AB completes a directed issue of units of approximately SEK 60 million and issues warrants to current shareholders
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Cereno Scientific AB (”Cereno” or the ”Company”) hereby announces that the Company has carried out a directed issue of 15,800,000 units. One unit will consist of two (2) shares of series B and two (2) warrants. Of the warrants, one (1) warrant will be of series TO1 and one (1) warrant will be of series TO2. The directed issue has been targeted to a limited group of qualified investors. Additionally, the Company will issue and allocate two (2) warrants of series TO1 and two (2) warrants of series TO2 respectively to current shareholders for every five (5) shares owned on the applicable record date. The subscription price in the directed issue was set to SEK 3.80 per unit, corresponding to SEK 1.90 per share. The warrants are issued and allotted free of charge. Through the directed issue, the Company will initially receive approximately SEK 60 million before deduction of transaction costs. The Company's Board of Directors has also entered into a loan financing agreement of SEK 10 million with Formue Nord Fokus A/S, whom also will receive warrants of series TO1 and TO2.
The Board of Directors of Cereno has, based on the authorization granted by the Annual General Meeting on June 10, 2020, resolved on and carried out a directed issue of 15,800,000 units (the “Directed Issue). One unit consists of two (2) shares of series B and two (2) warrants. Of the warrants, one (1) warrant will be of series TO1 and one (1) warrant will be of series TO2. The subscription price for a unit in the Directed Issue was set to SEK 3.80 per unit, corresponding to SEK 1.90 per share. The warrants are issued free of charge. The Company will initially receive approximately SEK 60 million (pertains to shares of series B which are included in the unit) from the Directed Issue before deduction of transaction costs, whereof approximately KSEK 800 has been paid by way of set-off of claims towards the Company. The Directed Issue was carried out through a so-called accelerated book-building procedure and is subject to an issue discount of approximately ten percent per share in relation to the volume weighted average price of the Company’s share of series B during a ten day period leading up to the issue.
The Board of Directors of Cereno assess, given that the Directed Issue was carried out through an accelerated book-building procedure (conducted by Mangold Fondkommission AB), that the Directed Issue was carried out in accordance with prevailing market conditions.
The rationale for carrying out the Directed Issue and for the deviation from the shareholders’ preferential rights is to broaden the shareholder base, as well as the fact that a directed issue provides the opportunity to raise capital to favorable terms in a time and cost effective manner. This is in line with the assessment of the Company’s Board of Directors that it lies in the Company’s and the shareholders´ best interest to carry out an issue with deviation from the shareholders’ preferential rights. The purpose of the Directed Issue is to finance the preparation and initiation of a clinical phase IIa study with the drug candidate CS1 for the treatment of rare disease pulmonary arterial hypertension (PAH). The warrants of series TO1 and TO2 are intended to finance the completion of the clinical phase IIa study. The transaction will also, given exercise of the issued warrants, solidify the financial position of the Company providing the opportunity to further strengthen the Company’s pipeline and continue the work with its preclinical HDAC inhibitor development program.
The Directed Issue entails an initial dilution of 44.0 percent of the number of shares in the Company. Through the Directed Issue, the number of outstanding shares will increase by 31,600,000 from 40,219,312 to 71,819,312. The share capital will increase by SEK 3,160,000.00 from SEK 4,021,931.20 to SEK 7,181,931.20.
The Directed Issue will be registered after the warrants of series TO1 and TO2, issued to current shareholders, are registered. This entails that investors in the Directed Issue and the Lender will not receive additional warrants in capacity as shareholders in the Company on the applicable record date.
Loan
In connection with the Directed Issue, the Company has also entered into a loan financing agreement of SEK 10 million (the ”Loan”) with Formue Nord Fokus A/S (”the Lender”). The Loan has in consultation with the Company’s financial advisers been procured at market conditions with a 5.0 percent set-up fee and an interest rate of 0.5 percent per initiated 30-day period starting from the date the Loan is paid out to the Company. The Lender will as part of the market term agreement receive 2,631,579 warrants of series TO1 and 2,631,579 warrants of series TO2. The maturity dates of the Loan coincide with the periods during which the Company will receive proceeds from the exercise of respective series of warrants (TO1 and TO2).
Warrants to current shareholders in Cereno
In order to provide current shareholders with the opportunity to be partially compensated for the dilution that arise from the Directed Issue, including the warrants allotted to the Lender, the Board of Directors of Cereno has resolved to issue an additional 16,087,724 warrants of series TO1 and 16,087,724 warrants of series TO2 (i.e. the same series as in the Directed Issue and the Loan) to the Company. The Company will, on the record date, allocate the additional warrants free of charge to current shareholders in the Company.
The record date for cost free allotment of warrants of series TO1 and warrants of series TO2 will be announced separately, as soon as these warrants are registered with the Swedish Companies Registration Office. The shareholders in Cereno on the record date will receive two (2) warrants of series TO1 and two (2) warrants of series TO2 for every five (5) shares held (regardless of share class) on the record date. Round down will be applied.
Terms and information regarding warrants of series TO1
A total of 34,519,303 warrants of series TO1 will be issued, where 15,800,000 are allotted to investors in the Directed Issue, 2,631,579 to the Lender and 16,087,724 to current shareholders in the Company.
Each warrant of series TO1 will give the holder the right to subscribe for one (1) new share of series B in Cereno during the period from 15 September 2021 until and including 29 September 2021 to a subscription price corresponding to the following:
70 percent of the volume weighted average price of the Company’s share during the period from 30 August 2021 until and including 13 September 2021. The subscription price shall however never be determined to an amount below the quotation value of the Company’s share or to a higher amount than SEK 2.85.
Warrants of series TO1 will, upon full exercise, provide the Company an additional maximum of approximately SEK 98.4 million, based on the maximum subscription price. The actual issue amount will naturally depend upon the final subscription price
Upon full exercise of the warrants of series TO1, the dilution will amount to approximately 32.5 percent, in proportion to the number of shares after the registration of the Directed Issue. Through the issue of warrants of series TO1, the number of outstanding shares in the Company will increase by 34,519,303 from 71,819,312 to 106,338,615. The share capital will increase by SEK 3,451,930,30 from SEK 7,181,931.20 to SEK 10,633,861.50.
Terms and information regarding warrants of series TO2
A total of 34,519,303 warrants of series TO2 will be issued, where 15,800,000 are allotted to investors in the Directed Issue, 2,631,579 to the Lender and 16,087,724 to current shareholders in the Company.
Each warrant of series TO2 will give the holder the right to subscribe for one (1) new share of series B in Cereno during the period from 14 September 2022 until and including 28 September 2021 to a subscription price corresponding to the following:
70 percent of the volume weighted average price of the Company’s share during the period from 29 August 2022 until and including 12 September 2022. The subscription price shall however never be determined to an amount below the quotation value of the Company’s share or to a higher amount than SEK 3.33.
Warrants of series TO2 will, upon full exercise, provide the Company an additional maximum of approximately SEK 114.8 million, based on the maximum subscription price. The actual issue amount will naturally depend upon the final subscription price.
Upon full exercise of the warrants of series TO2, the dilution will amount to approximately 24.5 percent, in proportion to the number of shares after the registration of the Directed Issue and full exercise of warrants of series TO1. Through the issue of warrants of series TO2, the number of outstanding shares will increase by 34,519,303 from 106,338,615 to 140,857,918. The share capital will increase by SEK 3,451,930,30 from SEK 10,633,861.50 to SEK 14,085,791.80.
The Company has the intention to apply for admission to trade the warrants of series TO1 and TO2 on Spotlight Stock Market as soon as possible after the registration of the Directed Issue and the allotment to current shareholders and the Lender has been completed.
Advisers
Mangold Fondkommission AB is acting as sole bookrunner and financial adviser and MAQS Advokatbyrå AB is legal adviser in connection with the Directed Issue.
For more information about Cereno:
Daniel Brodén, CFO
E-mail: info@cerenoscientific.com
Telephone: +46 768 66 77 87
www.cerenoscientific.se
This information is such that Cereno Scientific AB 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 above, at 08:55 CET on September 30, 2020.
About Cereno Scientific AB
Cereno Scientific is a leading clinical stage biotech company within cardiovascular epigenetic modulation. The lead drug candidate, CS1, is a Phase II candidate in development for the treatment of the rare disease pulmonary arterial hypertension (PAH) and thrombotic indications. CS1 is an HDAC (Histone DeACetylase) inhibitor that acts as an epigenetic modulator with anti-thrombotic, anti-inflammatory, anti-fibrotic and pressure-relieving properties. A clinical phase II study program for CS1 in PAH is planned to start during spring 2021 under its US FDA granted orphan drug designation (ODD) status. In addition, Cereno has a preclinical HDAC inhibitor development program targeted at treating cardiovascular diseases. The company is headquartered in AstraZeneca’s BioVenture Hub, Sweden, and has an office in Kendall Square in Boston, Massachusetts, US. Cereno is listed on the Swedish stock market Spotlight (CRNO B). More information on www.cerenoscientific.com.
Important information
The release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions. The recipients of this press release in jurisdictions where this press release has been published or distributed shall inform themselves of and follow such restrictions. The recipient of this press release is responsible for using this press release, and the information contained herein, in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer, or a solicitation of any offer, to buy or subscribe for any securities in Cereno in any jurisdiction, neither from Cereno nor from someone else.
This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Company. The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. Mangold Fondkommission AB is acting for Cereno in connection with the Directed Issue and no one else and will not be responsible to anyone other than Cereno for providing the protections afforded to its clients nor for giving advice in relation to the Directed Share Issue or any other matter referred to herein.
This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold within the United States absent registration or an applicable 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 offering of the 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, within or into the United States, Australia, Canada, New Zealand, Hong Kong, Japan, Singapore, South Africa, South Korea or in any other jurisdiction where such announcement, publication or distribution of the information would not comply with applicable laws and regulations or where such actions are subject to legal restrictions or would require additional registration or other measures than what is required under Swedish law. Actions taken in violation of this instruction may constitute a crime against applicable securities laws and regulations.
This press release is not a prospectus for the purposes of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (the “Prospectus Regulation”) and has not been approved by any regulatory authority in any jurisdiction. Cereno has not authorized any offer to the public of shares or rights in any member state of the EEA and no prospectus has been or will be prepared in connection with the Directed Issue. In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation.