Notice to attend the extraordinary general meeting of Cereno Scientific AB (publ)

The shareholders of Cereno Scientific AB (publ), reg. no. 556890-4071 (the “Company”), are hereby given notice to attend the extraordinary general meeting to be held on Tuesday, 7 November 2023 at 11:00 a.m. at MAQS Advokatbyrå’s premises on Östra Hamngatan 24 in Gothenburg.

Exercising voting rights at the general meeting

Any shareholder wishing to participate in the general meeting must:

(i)                       be entered in the share register kept by Euroclear Sweden AB as per Monday 30 October 2023, and, if the shares are nominee-registered, request the nominee to register the shares for voting rights no later than Wednesday 1 November 2023, and

(ii)                      have provided notice of their intention to participate by letter to the address Cereno Scientific AB, "EGM 2023", BioVentureHub, Pepparedsleden 1, 431 83 Mölndal, Sweden, or by e-mail to info@cerenoscientific.com, no later than Tuesday 31 October 2023.

The notification shall include name, address, telephone number, personal identity number or registration number, and the number of assistants (maximum two).

Shareholders who wish to be represented by a proxy must issue a written and dated power of attorney for the proxy. A power of attorney form can be obtained from the Company and is also available on the Company's website, www.cerenoscientific.com. The power of attorney in original should, if possible, be sent to the Company at the above address well in advance of the general meeting. The representative of a legal entity shall enclose a copy of the current certificate of registration or another applicable document.

Nominee registered shares

Shareholders whose shares are registered with a nominee must temporarily register their shares in their own name in order to be able to participate in the general meeting. Such temporary registration of ownership, so-called voting rights registration, made by the nominee no later than 1 November 2023 will be taken into account in the preparation of the share register. This means that shareholders must notify the nominee of their wish to register their voting rights in due time in accordance with the nominee's procedures.

Business at the general meeting

Proposed agenda:

1. Opening of the meeting;
2. Election of chairperson of the meeting;
3. Preparation and approval of the voting register;
4. Election of one or two persons to verify the minutes;
5. Determination of whether the general meeting has been duly convened;
6. Approval of the agenda;
7. Determination of the number of members of the board of directors;
8. Determination of remuneration to the members of the board of directors;
9. Election of board of directors;
10. Resolution regarding a directed issue of warrants to a member of the board of directors;
11. Resolution regarding a directed issue of warrants and adoption of an incentive program;
12. Resolution regarding adjustment authorization;
13. Closing of the general meeting.

Proposed resolutions by the board of directors

2. Election of chairperson of the meeting

The board of directors proposes that attorney Eric Ehrencrona from MAQS Advokatbyrå or, in the event of an impediment, the person appointed by the board of directors instead be elected as the chair of the general meeting.

11. Resolution regarding a directed issue of warrants and adoption of an incentive program

The board of directors proposes that the general meeting resolves to issue warrants of series 2023/2026:4 to the Company, with the right and obligation to transfer warrants to a current employee of the Company, as follows.

The board of directors proposes that the general meeting resolves on a directed issue of a maximum of 250,000 warrants of series 2023/2026:4 leading to an increase of the share capital upon full exercise with a maximum of SEK 25,000. The following conditions shall otherwise apply to the resolution.

The right to subscribe for the warrants shall, with deviation from the shareholders' preferential rights, belong to the Company, with the right and obligation to transfer warrants to a current executive in the following category:

The reasons for the deviation from the shareholders' preferential rights are to stimulate shareholding in the Company through an incentive program, whereby a current employee of the Company can take part in and work for a positive value development of the share in the Company during the period covered by the proposed program, and that the Company shall be able to retain competent and committed employees, which is deemed to be beneficial to the Company and its shareholders.

The warrants of series 2023/2026:4 shall be issued free of charge.

Subscription of the warrants of series 2023/2026:4 shall take place within two weeks from the date of the general meeting. The board of directors has the right to extend the subscription period.

The Company shall have the right to, on one occasion, transfer the warrants to a current employee in the above category provided that the person concerned has not resigned or been dismissed at the time of transfer. Transfer of the warrants may take place up to and including 31 October 2023. The warrants shall be transferred free of charge.

A prerequisite for acquiring warrants of series 2023/2026:4 is that the person concerned, through an agreement with the Company, undertake to sell back subscribed warrants to the Company if the person's involvement in the Company ceases within three years of the transfer. The number of warrants that the participant will be obliged to sell back to the Company will gradually decrease by 8.25 percent at the end of each three-month period, provided that the participant is still employed by the Company at the end of each three-month period, and subject to special conditions according to which a participant may, under certain circumstances, be obliged to sell back all held warrants to the Company.

Each warrant of series 2023/2026:4 entitles the holder to subscribe for one new share of series B in the Company during the period from and including 30 November 2026 up to and including 14 December 2026.

The subscription price per share of series B shall amount to 200 percent of the volume-weighted average price of the Company’s share of series B on Nasdaq First North Growth Market during the period from and including 24 October 2023 until and including 6 November 2023. The subscription price shall never be less than the quota value of the share. The part of the subscription price that exceeds the quota value of the shares shall be transferred to the unrestricted share premium reserve.

The shares added as a result of subscription with the support of warrants entitle to dividends for the first time on the record date for dividends that occurs following the registration of the new shares with the Swedish Companies Registration Office and the shares have been entered in the share register at Euroclear Sweden AB.

Other terms and conditions for the warrants of series 2023/2026:4 are set out in the complete terms and conditions of the warrants. The terms and conditions contain, among other things, customary conversion principles.

Other information

Dilution

Upon full subscription with the support of all warrants of series 2023/2026:4, the number of shares and votes in the Company will increase by 250,000 (subject to recalculation according to the terms and conditions of the warrants of series 2023/2026:4), which corresponds to a dilution of approximately 0.11 percent of the number of shares and approximately 0.10 percent of the votes in the Company. The dilution effect has been calculated as the number of additional shares and votes in relation to the number of existing and additional shares and votes.

Impact on key figures and costs for the Company, etc.

The Company's earnings per share are not affected by the issue of the warrants as the present value of the exercise price of the warrants will exceed the current market value of the share at the time of transfer to the participant in the program.

The participant will acquire the warrants free of charge. However, there will be a benefit for the subscriber corresponding to the market value of the warrants. For tax purposes, the benefit will be regarded as salary and the Company has an obligation to pay social security contributions of 31.42 percent on the benefit. This means that the acquisition cost of the warrants for the participant will amount to the tax effect of the benefit.

Optionspartner AB, as an independent valuation institute, has made an indicative valuation of the warrants using the Black & Scholes valuation model. Based on an assumed market value of the underlying share of SEK 5.00 at the time of allotment of the warrants, a subscription price of SEK 10.00, a term of approximately three (3) years, the market value of the warrants has been calculated to SEK 0.71 per warrant. The right of disposal restrictions has been taken into account in the valuation. The preliminary valuation is based on assumptions. Upon transfer of the warrants to the participant, the market value will be determined based on updated assumptions and then known parameters.

Based on the above-mentioned valuation and the assumptions on which it is based, and the assumption that all warrants are transferred to the participant, the warrant program is estimated to entail a net cost for the Company of approximately SEK 55,770, which relates to social security contributions. Any payroll tax incurred due to the benefit shall be paid by the participant. The warrant program will otherwise entail certain limited costs in the form of external consultancy fees and administration regarding the warrant program.

Preparation of the matter

The principles of the option program have been prepared by the Company's board of directors. No person who may be covered by the program has thus participated in the formulation of the terms and conditions.

Other share-related incentive programs etc.

The extraordinary general meeting on 28 August 2019, resolved to issue 450,000 warrants of series 2019/2023 N01 to key employees and 200,000 warrants of series 2019/2023 S01 to operational members of the board of directors. After recalculation in accordance with the terms and conditions of the warrants, the warrants of series 2019/2023 N01 and series 2019/2023 S01 entitle for subscription of a total of 907,071 shares of series B at a subscription price of SEK 10.94. The warrants can be exercised to subscribe for shares of series B during the period from and including 1 April 2023 up to and including 31 October 2023. Upon full exercise of all warrants of series 2019/2023 N01 and series 2019/2023 S01, it will result in a dilution of approximately 0.39 percent of the number of shares and approximately 0.38 percent of the number of votes. The dilution effect has been calculated as the number of additional shares and votes in relation to the number of existing and additional shares and votes.

On 6 September 2019, the board of directors resolved to issue 300,000 warrants of series 2019/2023 SAB01 to members of the Company's scientific council. After recalculation according to the warrant terms, the warrants of series 2019/2023 SAB01 entitle for subscription of 418,468 shares of series B at a subscription price of SEK 15.26. The warrants can be used to subscribe for shares of series B during the period from 1 April 2023 up to and including 31 October 2023. Upon full exercise of the warrants of series 2019/2023 SAB01, it will result in a dilution of approximately 0.18 percent of the number of shares and approximately 0.17 percent of the number of votes. The dilution effect has been calculated as the number of additional shares and votes in relation to the number of existing and additional shares and votes.

The extraordinary general meeting on 28 February 2022, resolved to introduce a long-term employee option program for employees of the Company by issuing a maximum of 3,000,000 so-called qualified employee stock options in accordance with Chapter 11a of the Swedish Income Tax Act to be allocated free of charge. There are 1,666,665 employee stock options outstanding within the incentive program and, after recalculation in accordance with the terms and conditions of the options, the employee stock options entitle for acquisition of a total of 1,754,719 shares of series B at an exercise price of SEK 0.10, corresponding to the quota value of the shares. Allocated employee stock options are vested during 36 months and can be exercised during the period from the end of the vesting period up to and including the entire tenth year from the allocation date, the last allocation date being 31 December 2022. If the outstanding employee stock options are fully exercised, it will result in a dilution of approximately 0.75 percent of the number of shares and approximately 0.73 percent of the number of votes. The dilution effect has been calculated as the number of additional shares and votes in relation to the number of existing and additional shares and votes.

The extraordinary general meeting on 28 February 2022, resolved to introduce a long-term employee stock option program for members of the board of directors of the Company by issuing a maximum of 1,111,111 so-called qualified employee stock options in accordance with Chapter 11a of the Swedish Income Tax Act to be granted free of charge. There are 444,444 employee stock options outstanding within the incentive program and, after recalculation according to the terms and conditions of the options, the employee stock options entitle for acquisition of a total of 467,925 shares of series B at an exercise price of SEK 0.10, corresponding to the quota value of the shares. Allocated employee stock options are vested during 36 months and can be exercised during the period from the end of the vesting period up to and including the entire tenth year from the allocation date, the last allocation date being 31 December 2022. If the outstanding employee stock options are fully exercised, it will result in a dilution of approximately 0.20 percent of the number of shares and approximately 0.19 percent of the number of votes. The dilution effect has been calculated as the number of additional shares and votes in relation to the number of existing and additional shares and votes.

The extraordinary general meeting on 28 February 2022, resolved to implement a long-term incentive program for key employees in the company who cannot be allocated qualified employee stock options by issuing a maximum of 3,333,333 warrants of series 2022:3. After recalculation in accordance with the terms and conditions of the warrants, the warrants of series 2022:3 entitle for subscription of 3,509,440 shares of series B at a subscription price of 150 percent of the volume-weighted average price of the share during the fifteen-day period immediately preceding the allocation. Subscription of new shares by virtue of the warrants of series 2022:3 shall take place during a one-year period starting three years from the allotment. If the warrants of series 2022:3 are fully exercised, it will result in a dilution of approximately 1.48 percent of the number of shares and approximately 1.44 percent of the number of votes. The dilution effect has been calculated as the number of additional shares and votes in relation to the number of existing and additional shares and votes.

The extraordinary general meeting on 14 September 2023, resolved to issue 13,000,000 warrants of series 2023/2026:1 to the Company, with a right and obligation to transfer warrants to current and future executives in the Company. A total of 11,550,000 warrants of series 2023/2026:1 have been transferred to executives in the Company, entitling for subscription of 11,550,000 shares of series B at a subscription price of SEK 2.00. The warrants can be exercised to subscribe for shares of series B during the period from and including 16 November 2026 up to and including 30 November 2026. Upon full exercise of all warrants of series 2023/2026:1, it will result in a dilution of approximately 4.71 percent of the number of shares and approximately 4.59 percent of the number of votes. The dilution effect has been calculated as the number of additional shares and votes in relation to the number of existing and additional shares and votes.

The extraordinary general meeting on 14 September 2023, resolved to issue maximum 7,000,000 warrants of series 2023/2026:2 to certain members of the Company’s board of directors. A total of 6,500,000 warrants of series 2023/2026:2 was subscribed and allocated, entitling for subscription of 6,500,000 shares of series B at a subscription price of SEK 2.00. The warrants can be exercised to subscribe for shares of series B during the period from and including 16 November 2026 up to and including 30 November 2026. Upon full exercise of all warrants of series 2023/2026:2, it will result in a dilution of approximately 2.71 percent of the number of shares and approximately 2.63 percent of the number of votes. The dilution effect has been calculated as the number of additional shares and votes in relation to the number of existing and additional shares and votes.

Voting procedure

A resolution of the general meeting shall be valid only if supported by shareholders holding at least nine-tenths of both the shares voted and the shares represented at the general meeting.

12. Resolution regarding adjustment authorization

The board of directors, the CEO, or the person appointed by the board of directors shall be authorized to make such minor amendments and clarifications of the resolution by the general meeting that may prove necessary in connection with the registration of the resolutions.

Proposed resolution by shareholder

The proposal below is submitted by a shareholder group consisting of, among others, the shareholder Cihan Punar, (the "Shareholders"), who on the date of the notice holds more than ten (10) percent of the number of shares and of the number of votes in the Company.

7. Determination of the number of members of the board of directors

The Shareholders propose that the number of members of the board of directors for the period until the next annual general meeting is six (6) and that no deputy board member shall be appointed.

8. Determination of remuneration to the members of the board of directors

The Shareholders propose that the remuneration paid to the members of the board of directors for the period from the annual general meeting 2023 until the end of the next annual general meeting be distributed as follows (fees according to what was resolved at the annual general meeting on 1 June 2023 in brackets): fee of three (three) price-base amounts to each of the board members and nine (six) price-base amounts to the chairman of the board of directors. The price-base amounts for 2023 shall be applied.

If the general meeting resolves according to the Shareholders proposal as regards the composition of the board of directors, the total fee will amount to SEK 1,260,000 (SEK 945,000).

9. Election of board of directors

The Shareholders proposes re-election of the board members Jonas Faijerson Säljö, Sverker Jern, Lena Mårtensson Wernrud, Anders Svensson, and Joakim Söderström as well as new election of the board member Jeppe Øvlesen.

Furthermore, it is proposed to re-elect Joakim Söderström as chairman of the board of directors.

Jeppe Øvlesen (born 1962) has experience as founder, CEO, board member, and chairman in several biotech companies. Jeppe has previously, among others, been CEO in Synact Pharma AB, ChemoMetec A/S, and Cercare Medical A/S. Jeppe is currently chairman in HG Energy Group A/S, Cercare Medical A/S, Go-Pen A/S, and Neurescue ApS, and is a board member in Perfusion Tech Aps, and ResoTher Pharma Aps.

Further information about the proposed additional board member, as well as the existing board members, can be found on the Company’s website, www.cerenoscientific.com.

10. Resolution regarding a directed issue of warrants to a member of the board of directors

The Shareholders proposes that the general meeting resolves to issue warrants of series 2023/2026:3 to the proposed additional member of the board of directors in the Company, in accordance with the following.

The Shareholders proposes that the general meeting resolves on a directed issue of maximum 1,000,000 warrants of series 2023/2026:3 leading to an increase of the share capital upon full exercise with not more than SEK 100,000.

The right to subscribe for the warrants shall be granted, with deviation from the shareholders’ preferential rights, the member of the board of directors, Jeppe Øvlesen.

Warrants that are not subscribed for may not be subscribed for by anyone else. The right to subscribe for warrants in the issue is conditional on the subscriber being a member of the board of directors at the time of subscription.

The reason for the deviation from the shareholders' preferential rights is to stimulate shareholding in the Company through an incentive program whereby the member of the Company's board of directors can take part in and work for a positive value development of the share in the Company during the period covered by the proposed program, which is deemed to be beneficial to the Company and its shareholders.

The warrants of series 2023/2026:3 shall be issued free of charge.

Subscription of the warrants shall be made on a subscription list which shall be kept available to the subscriber. Subscription of the warrants of series 2023/2026:3 shall take place within two weeks from the date of the general meeting. The board of directors has the right to extend the subscription period.

A condition for the allotment of warrants of series 2023/2026:3 is that the subscriber, through an agreement with the Company, undertake to sell back subscribed warrants to the Company if he actively leaves his engagement in the Company or does not stand for re-election during a period of three years from the allotment. The number of warrants that the subscriber may be obliged to sell back to the Company will gradually decrease by approximately 8.25 percent at the end of each three-month period, provided that he still holds his position as a member of the board of directors in the Company at the end of each three-month period, and subject to special conditions according to which the member of the board of directors under certain circumstances may be obliged to sell back all held warrants to the Company.

Each warrant of series 2023/2026:3 entitles the holder to subscribe for one new share of series B in the Company during the period from and including 30 November 2026 up to and including 14 December 2026.

The subscription price per share of series B shall amount to 200 percent of the volume-weighted average price of the Company’s share of series B on Nasdaq First North Growth Market during the period from and including 24 October 2023 until and including 6 November 2023. The subscription price shall never be less than the quota value of the share. The part of the subscription price that exceeds the quota value of the shares shall be transferred to the unrestricted share premium reserve.

The shares added as a result of subscription with the support of the warrants shall entitle to dividends for the first time on the record date for dividends that occurs following the registration of the new shares with the Swedish Companies Registration Office and the shares have been entered in the share register at Euroclear Sweden AB.

Other terms and conditions for the warrants of series 2023/2026:3 is set out in the complete terms and conditions of the warrants. The terms and conditions contain, among other things, customary conversion principles.

Other information

Dilution

Upon full subscription with the support of all warrants of series 2023/2026:3, the number of shares and votes in the Company will increase by 1,000,000 (subject to recalculation according to the terms and conditions of the warrants of series 2023/2026:3), which corresponds to a dilution of approximately 0.43 percent of the number of shares and approximately 0.41 percent of the votes in the Company. The dilution effect has been calculated as the number of additional shares and votes in relation to the number of existing and additional shares and votes.

Impact on key figures and costs for the Company, etc.

The Company's earnings per share are not affected by the issue of the warrants as the present value of the exercise price of the warrants will exceed the current market value of the share at the time of transfer to the subscriber.

The subscriber will subscribe for the warrants free of charge. However, there will be a benefit for the subscriber corresponding to the market value of the warrants. For tax purposes, the benefit will be considered as salary and the Company has an obligation to pay social security contributions of 31.42 percent on the benefit provided. This means that the subscription cost of the warrants for the subscriber will amount to the tax effect of the benefit.

Optionspartner AB, as an independent valuation institute, has made an indicative valuation of the warrants using the Black & Scholes valuation model. Based on an assumed market value of the underlying share of SEK 5.00 upon allotment of the warrants, a subscription price of SEK 10.00, a term of approximately three (3) years, the market value of the warrants has been calculated to SEK 0.71 per warrant. The right of disposal restrictions has been taken into account in the valuation. The preliminary valuation is based on assumptions. Upon subscription of the warrants, the market value will be determined based on updated assumptions and then known parameters.

Based on the above-mentioned valuation and the assumptions on which it is based, and the assumption that all warrants are subscribed for, the warrant program is estimated to entail a net cost for the Company of approximately SEK 223,082, which relates to social security contributions. Any payroll tax incurred due to the subsidy shall be paid by subscriber. The warrant program will otherwise entail certain limited costs in the form of external consultancy fees and administration regarding the warrant program.

Preparation of the matter

The principles of the option program have been prepared by the Shareholder, who then instructed the board of directors to include this proposal in the notice. No one who may be covered by the program has participated in the formulation of the terms and conditions.

Other share-related incentive programs etc.

Other outstanding share-related incentive programs are presented above under the corresponding heading in the proposal under item 11 on the agenda.

Voting procedure

A resolution of the general meeting shall be valid only if supported by shareholders holding at least nine-tenths of both the shares voted and the shares represented at the meeting.

Number of shares

As of the notice date, the Company has 722,248 shares of series A with ten votes each and 233,052,986 shares of series B with one vote each, which means that the total number of shares in the Company amounts to 233,775,234 and the total number of votes in the Company amounts to 240,275,466.

Other information

The shareholders are reminded of the right to, at the extraordinary general meeting, request information from the board of directors and the CEO in accordance with Chapter 7, Section 32 of the Swedish Companies Act.

Documents to be considered at the meeting will be made available at the Company's office with the address BioVentureHub, Pepparedsleden 1, 431 83 Mölndal, Sweden, and on the Company's website, www.censeroscientific.com, no later than two weeks before the meeting. The documents will also be sent free of charge to shareholders who so request and provide their postal address.

Processing of personal data

For information on how your personal data is processed please see https://www.euroclear.com/dam/ESw/Legal/Integritetspolicy-bolagsstammor-svenska.pdf.

Gothenburg in October 2023
Cereno Scientific AB (publ)
The board of directors

For further information, please contact:

Eva Jagenheim, CFO
Email: info@cerenoscientific.com
http://www.cerenoscientific.com/

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 CS014 is a novel HDAC inhibitor with epigenetic effects, selected for prevention of thrombosis as target indication. In preclinical studies, it has been documented to regulate platelet activity, fibrinolysis and clot stability for prevention of thrombosis without increased risk of bleeding. Thrombosis prevention in venous or arterial and cardiovascular disease has been selected as the first indication area for CS014. Drug candidate CS585 is a prostacyclin receptor agonist that has been documented in preclinical studies to target the IP receptor 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 Nasdaq First North (CRNO B). More information on www.cerenoscientific.com.