Cereno Scientific’s Board of Directors have decided to carry out a rights issue of units of approximately SEK 110 million and intends to change marketplace to Nasdaq First North Growth Market

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The Board of Directors of Cereno Scientific AB (publ) ("Cereno Scientific" or the "Company") has, with authorization from the annual general meeting on 1 June, 2022, decided to carry out a new issue of up to 68,757,422 units with preferential rights for existing shareholders (the "Rights Issue"). The subscription period will take place from May 8 until and including May 24, 2023. In the event the Rights Issue is fully subscribed, the Company will be provided with approximately SEK 110 million before transaction costs. Upon full subscription in the Rights Issue and full exercise of all warrants of series TO3, the Company will be provided an additional amount of approximately SEK 110 million before transaction costs. The Rights Issue is covered to approximately 70 percent through subscription commitments and underwriting commitments from current shareholders and external investors. In conjunction with the Rights Issue, the Company has decided to initiate a process to change marketplace to Nasdaq First North Growth Market (“First North”). The Company aims to carry out the change of marketplace to First North during the second quarter of 2023. The board has also decided to postpone the Company’s quarterly report for the period January to March 2023 to May 22, 2023.

Summary

• In the event the Rights Issue is fully subscribed, Cereno Scientific will receive approximately SEK 110 million before transaction costs.
• The Rights Issue is covered to approximately 1.0 percent through subscription commitments from the board of directors and management and to approximately 69.0 percent through underwriting commitments. Thus, the Rights Issue is secured to 70.0 percent through subscription commitments and underwriting commitments.
• The subscription period in the Rights Issue will take place from May 8, 2023 until and including May 24, 2023.
• Anyone who is registered as a shareholder in Cereno Scientific in the shareholder registry on the record date May 4, 2023, will receive one (1) unit right for each share owned in the Company. Two (2) unit rights give the right to subscribe for one (1) unit in the Rights Issue. One (1) unit consists of two (2) newly issued shares of series B and one (1) warrant of series TO3. The subscription price is SEK 1.60 per unit, corresponding to SEK 0.80 per share. The warrants are issued free of charge.
• Upon full exercise of all warrants of series TO3 in conjunction to the Rights Issue, to a maximum subscription price of SEK 1.60, the Company may be provided an additional amount of maximum approximately SEK 110 million before transaction costs.

Background and motive to the Rights Issue

The board and the management team of Cereno Scientific have agreed that additional capital is required to reach important milestones in the development of the Company's innovative drug candidates in cardiovascular diseases. All three of the Company's drug candidates are currently in significant stages and thus, a capital injection enables continued development at a high rate to the next value-increasing milestone.

Cereno Scientific’s most advanced drug candidate CS1 is being developed as a treatment for the rare disease pulmonary arterial hypertension (PAH). The aim of CS1’s development is to offer a disease-modifying drug that potentially can slow down, or reverse, the course of disease and thus improve the patient’s quality of life and prolong the patients' life. CS1 is an HDAC (histone deacetylase) inhibitor that acts as an epigenetic modulator with a unique efficacy profile for the treatment of PAH. A Phase II study with nine clinics in the USA is currently ongoing in collaboration with the global healthcare company Abbott. Patient recruitment for the study is ongoing and top-line results are expected by the end of 2023.

Cereno Scientific’s drug candidate CS014 is also an HDAC inhibitor which is in late preclinical phase and is being developed as a treatment to effectively prevent thrombosis (also called blood clot). Thrombosis is a complication that causes a cardiovascular event, such as a heart attack or stroke. The aim is to be able to start a Phase I study with CS014 in the first half of 2024 in the indication thrombosis prevention.

Cereno Scientific’s second preclinical drug candidate, CS585, is being evaluated as a treatment for cardiovascular disease. CS585 has shown efficacy by stimulation of the prostacyclin (IP) receptor and thus prevents thrombosis without increased risk of bleeding. The Company believes that CS585 has the potential to be the most effective treatment among prostacyclin receptor agonists for the indications PAH and thrombosis prevention. The drug candidate CS585 has not yet been assigned a specific indication for clinical development as evaluation in the preclinical program is still ongoing.

Cereno Scientific believes that the Company, with its long experience in drug development, strong network of experts and collaborative partners, and the three innovative drug candidates has the opportunity to completely change the way cardiovascular diseases will be treated in the future.

The issue funds from the Rights Issue of maximum approximately SEK 110 million will be allocated to the following areas of application, in order of priority:

• Complete the ongoing clinical Phase II study with CS1 in the rare disease PAH, approximately 50 percent.
• Complete the preclinical development and the preparatory activities needed to file an application to initiate a clinical Phase I study with the drug candidate CS014, approximately 25 percent.
• Continue the preclinical development with the drug candidate CS585, approximately 25 percent.

The issue funds from the warrants of series TO3 of maximum approximately SEK 110 million will be allocated to the following areas of application, in order of priority:

• Initiate preparatory activities for a pivotal Phase III-study with the drug candidate CS1, approximately 33 percent.
• Carry out a clinical Phase I-study with the drug candidate CS014, approximately 35 percent.
• Finish the pre-clinical development and the preparatory activities needed to submit an application to regulatory authorities in order to initiate Phase I study with the drug candidate CS585, approximately 32 percent.

Terms for the Rights Issue

• In the event of full subscription in the Rights Issue, the Company is provided approximately SEK 110 million before transaction costs, which are estimated to amount to approximately SEK 16.8 million including underwriting costs.
• The subscription period for subscription of units will take place from May 8, 2023 until and including May 24, 2023.
• Anyone who is registered as a shareholder in Cereno Scientific in the shareholder registry on the record date, May 4, 2023, will receive one (1) unit right for each share owned in the Company. Two (2) unit rights give the right to subscribe for one (1) unit. One (1) unit consists of two (2) newly issued shares of series B and one (1) warrant of series TO3.
• The subscription price per unit is SEK 1.60, corresponding to SEK 0.80 per share. The warrants are issued free of charge.
• In the Rights Issue, a maximum number of 68,757,422 units will be issued, corresponding to 137,514,844 shares of series B and 68,757,422 warrants of series TO3.

Terms for the warrants of series TO3

• Every warrant of series TO3 gives the right to subscribe for one (1) new share of series B in the Company. The subscription price for subscription of shares through the exercise of warrants corresponds to 70 percent of the volume-weighted average price paid for the Company’s shares during the period from February 19, 2024, until and including March 1, 2024, but not less than the share’s quota value (currently SEK 0.10) and not more than SEK 1.60.
• The exercise period for subscription of shares through the exercise of the warrants of series TO3 will take place from March 5, 2024, until and including March 19, 2024.
• In the event the Rights Issue is fully subscribed and full exercise of all warrants of series TO3 in conjunction with offered units, the Company may be provided with an additional maximum of approximately SEK 110 million.
• Upon full exercise of the warrants of series TO3, the number of shares of series B may increase by a maximum of 68,757,422, corresponding to a dilution of maximum 20 percent of the number of shares and 19.6 percent of the total number of votes in the Company.
• The warrants of series TO3 are intended to be admitted to trading on the same stock exchange that the shares of series B are traded after final registration with the Swedish Companies Registration Office and Euroclear.

Change in number of shares and share capital as well as dilution

In the event of full subscription in the Rights Issue, the amount of shares in the Company may increase by 137,514,844, from 137,514,844 to maximum 275,029,688 and the share capital may increase by maximum SEK 13,751,484.40, from SEK 13,751,484.40 SEK to maximum SEK 27,502,968.80, corresponding to a maximum dilution effect of 50.0 percent of the number of shares and 48.7 percent of the total number of votes in the Company.

In the event of full exercise of the warrants of series TO3, the amount of shares in the Company may increase by maximum 68,757,422,from 275,029,688 to maximum 343,787,110 and the share capital by maximum SEK 6,875,742.20, from SEK 27,502,968.80 SEK to maximum SEK 34,378,711, corresponding to a maximum dilution effect of 20.0 percent of the number of shares and 19.6 percent of the total number of votes in the Company.

EU growth Prospectus

Full terms and conditions for the Rights Issue and other information about the Company will be available in the EU growth prospectus, which is expected to be published by May 5, 2023 (the “Prospectus”).

Subscription commitments and underwriting commitments

The Company has obtained subscription commitments of approximately SEK 1.1 million, corresponding to 1.0 percent of the Rights Issue and approximately SEK 75.8 million of underwriting commitments, corresponding to approximately 69.0 percent of the Rights Issue. In total, the Rights Issue is covered to approximately 70.0 percent of subscription commitments and underwriting commitments.

Underwriting compensation of twelve (12) percent of the guaranteed amount is paid if the underwriters choose compensation in the form of cash, corresponding to maximum of SEK 9.1 million, or fifteen (15) percent of the guaranteed amount if the underwriters choose compensation in the form of new issued units, corresponding to a maximum of 14,222,688 shares of series B and 7,111,344 warrants of series TO3. If the underwriters choose to receive the underwriting compensation in new issued units, the board will decide to issue such new units with the authorization from the annual general meeting held on 1 June 2022. The subscription price for any units issued to underwriters shall correspond to the subscription price in the issue, that is SEK 1.60 per unit, corresponding to SEK 0.80 per share. The warrants are issued free of charge. No compensation is paid for the subscription commitments. Neither the subscription commitments nor the underwriting commitments are secured by bank guarantee, blocking measures, pledges, or similar arrangements.

Background and motive for change of marketplace to First North

The Company has been listed on the Spotlight Stock Market since the summer of 2016 and has achieved several milestones in its development. The board assesses that a change of marketplace for the Company's shares to First North will increase the market's awareness of the Company and have a positive impact on the Company's relationships with commercial partners and other stakeholders. Therefore, a change of marketplace to First North is a natural next step in the Company's development and is deemed value-creating for the Company's shareholders.

Overall, the Company assesses that the change of marketplace will be positive for the Company's future development.

Postponement of financial report

Cereno Scientific's board has decided to postpone its quarterly report for the period January to March 2023, from May 17, 2023 to May 22, 2023

Indicative timetable for the Rights Issue

Advisers

Mangold Fondkommission AB is financial adviser and MAQS Advokatbyrå AB is legal adviser to Cereno Scientific in connection with the Rights Issue. Mangold Fondkommission AB is the Company’s adviser in connection to the change of marketplace to First North and has been appointed as the Company’s Certified Adviser.

For further information, please contact:

Josefine Göranson, Head of IR & Communications
Phone: +46 704 92 35 63
Email: info@cerenoscientific.com

http://www.cerenoscientific.com/

This information is information 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 08:40 (CEST) on April 20, 2023.

About Cereno Scientific AB

Cereno Scientific is a clinical stage biotech company within cardiovascular diseases. The lead drug candidate, CS1, is a Phase II candidate in development for the treatment of the rare disease pulmonary arterial hypertension (PAH). CS1 is an HDAC (histone deacetylase) inhibitor that acts as an epigenetic modulator with pressure-reducing, reverse-remodeling, anti-inflammatory, anti-fibrotic and anti-thrombotic properties, all relevant for PAH. A clinical Phase II study is ongoing to evaluate CS1’s safety, tolerability, and efficacy in patients with PAH. A collaboration agreement with global healthcare company Abbott allows Cereno to use their cutting-edge technology CardioMEMS HF System in the study. Cereno also has two promising preclinical drug candidates in development for cardiovascular disease through research collaborations with the University of Michigan. Drug candidate CS585 is a stable, selective, and potent prostacyclin receptor agonist. It has been documented in preclinical studies to target the IP receptor for prevention of thrombosis without increased risk of bleeding. Drug candidate CS014 is a novel HDAC inhibitor with epigenetic effects. In preclinical studies it has been documented to regulate platelet activity, fibrinolysis and clot stability for prevention of thrombosis without increased risk of bleeding. The company is headquartered in Gothenburg, Sweden, and has a US subsidiary Cereno Scientific Inc. based in Kendall Square in Boston, Massachusetts, US. Cereno is listed on the Swedish Spotlight Stock Market (CRNO B). More information on www.cerenoscientific.com.

Important information

Publication, release, or distribution of this press release may in certain jurisdictions be subject to legal restrictions and persons in the jurisdictions where this press release has been made public or distributed should inform themselves of and follow such legal restrictions. The recipient of this press release is responsible for using this press release and the information herein in accordance with applicable rules in each jurisdiction.

The information in this press release neither contains nor constitutes an offer to acquire, subscribe for or otherwise trade shares, warrants or other securities in Cereno Scientific. No action has been taken and no action will be taken to allow an offer to the public in any jurisdiction other than Sweden. Invitation to relevant persons to subscribe to units in Cereno Scientific will only take place through the Prospectus that will be published by the Company around May 5, 2023, on Cereno Scientific's website, www.cerenoscientific.se. The Swedish Financial Supervisory Authority's upcoming approval of the Prospectus shall not be construed as an approval of the Company's shares, warrants or other securities. However, this press release is not a prospectus within the meaning of the Prospectus Regulation (EU) 2017/1129 ("Prospectus Regulation"), and this press release neither identifies nor purports to identify risks (direct or indirect) that may be associated with an investment in shares, warrants or other securities in Cereno Scientific. The information in this press release is only intended to describe the background to the Rights Issue and does not claim to be complete or exhaustive. No assurance shall be given with respect to the accuracy or completeness of the information in this press release. Any investment decision should, in order for an investor to fully understand the potential risks and benefits associated with the decision to participate in the Rights Issue, be based solely on the information in the Prospectus. Therefore, an investor is recommended to read the entire Prospectus. This press release constitutes marketing in accordance with Article 2(k) of the Prospectus Regulation.

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Forward-looking statements

This press release contains forward-looking statements that reflect the Company's intentions, beliefs, or current expectations about and targets for the Company's future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the Company operates. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "intend", "may", "plan", "estimate", "will", "should", "could", "aim" or "might", or, in each case, their negative, or similar expressions. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not guarantee that the assumptions underlying the forward-looking statements in this press release are free from errors and readers of this press release should not place undue reliance on the forward-looking statements in this press release. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of its date and are subject to change without notice. Neither the Company nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release, unless it is required by law or the regulations of the Spotlight Stock Market for issuers.