ChromoGenics targets an offensive market expansion and announces a rights issue with pre-emption rights of ca 40 MSEK

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Summary

• The board of directors of ChromoGenics AB (publ), (“ChromoGenics”, the “Company”) has resolved to issue new shares and warrants (units) (the “Rights Issue”), subject to approval by an extraordinary general meeting on 15 December 2017. Upon full subscription in the Rights Issue, the Company raises approx. 40.6 MSEK, before transaction costs. If all warrants are exercised, the Company raises an additional approx. 81 MSEK.
• Anyone registered as a shareholder in ChromoGenics on 4 January, has a pre-emptive right to subscribe for units in the Rights Issue, where one (1) existing share entitles to one (1) unit right. One (1) unit right entitles to subscription for one (1) unit, consisting of one (1) share at a subscription price of SEK 1.75 per share and one (1) warrant against no consideration.
• The subscription period for units starts (including) 8 January and ends (including) 22 January 2018.
• Each warrant entitles to subscription for one (1) new share in the Company for SEK 3.50 (the exercise price) during the period from and including 10 January 2020 until and including 31 January 2020.
• The proceeds from the Rights Issue are intended to fund and enable an offensive expansion of ConverLight™ in the European market as well as investments in the production process. 
  

Summary of the background and reasons for the Rights Issue

A sustainable and appreciated product. ChromoGenics’ business is based on world leading research which has resulted in edge competence and leading products in dynamic glass with controllable heat and light transmission. The Company’s unique electrochromic technology, ConverLight™, gives a sustainable solar control with increased indoor comfort and energy efficiency and contributes to environmental certifications of buildings. In addition to these unique qualities, the products have sustainable and environmentally sound attributes that make them attractive in a society where sustainability is becoming increasingly important, driven by knowledge as well as regulations.

On the right track. The product is a very competitive replacement for awnings and other exterior solar control products and there is great interest for the products on the market. During 2017, the Company has received several important customer references, such as Atrium Ljungberg, Fabege and Skellefteå kommun, where sustainability as well as maintenance cost and investments related economic advantages have been the basis of the deals. Customers are very pleased with the initial projects. There have been initial disturbances in the production process, which negatively affects the result for 2017. The production process has gradually improved during the year. To finance further expansion, additional cash and a solid balance sheet are required.

Ready for the next step. ChromoGenics is now ready of the next step in the development.
Substantial market expansion – The market for dynamic glass is expected to grow significantly during the coming years, according to the American analytics company n-tech Research. ChromoGenics addresses commercial real estate, and has the ambition to materially increase its sales revenue.
Market expansion in the rest of Europe – Offensive sales activities are carried out and market presence is increased in the rest of Europe.
Shorter lead times in sales – the Company increases the pace in so called retro-fit sales, where current ineffective glass and solar control products are upgraded to ConverLight™.
Solid balance sheet – Stronger finances enables business with customers that request a strong balance sheet.
Lower costs and higher production efficiency – the Company intends to invest in production equipment for increased capacity and significantly decreased unit costs.

In order to support ChromoGenics strategic initiative, the board of directors has resolved to carry out a rights issue, such resolution is subject to approval by the extraordinary general meeting.

As per 30 September, cash and cash equivalents amounted to 57 MSEK, compared to the net proceeds of 78 MSEK raised by the Company through the unit issue in connection with the IPO in March 2017.

The Rights Issue strengthens the Company’s balance sheet and secures continued market expansion and necessary investments in the production process, for better cost efficiency and profitability. Construction projects involve long lead times, which tie up working capital. The proceeds from the Rights Issue are intended to fund Sales- and marketing costs and investments in the production process.

Issue of units with pre-emption rights

On 16 November 2017, the board of directors of ChromoGenics resolved, subject to approval by the extraordinary general meeting, to carry out an issue of units with pre-emption rights for the Company’s existing shareholders. Upon full subscription in the Rights Issue, the Company raises 40.6 MSEK, before transaction costs. Anyone registered as a shareholder in ChromoGenics on 4 January 2017, has a pre-emptive right to subscribe for units in the Rights Issue, where one (1) existing share entitles to one (1) unit right. One (1) unit right entitles to subscription for one (1) unit, consisting of one (1) share at a subscription price of SEK 1.75 per share and one (1) warrant against no consideration.

The subscription price amounts to SEK 1.75 per unit. Of the subscription price per unit, the subscription price per share represents SEK 1.75. The subscription period for units starts (including) 8 January and ends (including) 22 January 2018. In the Rights Issue, a maximum of 23 214 326 new shares will be issued, corresponding to an increase of the share capital with maximum SEK 4 642 865.45.

In addition, a maximum of 23 214 326 new warrants will be issued. One (1) warrant entitles to subscription for (1) new share at a subscription price of SEK 3.50 during the period from and including 10 to 31 January 2020 (when the warrants will lapse). As a consequence of the issue of warrants, ChromoGenics’ share capital may be increased with an additional SEK 4 642 865.45, and the total number of shares may increase with 23 214 326 new shares.

The Rights Issue is subject to approval by the extraordinary general meeting to be held on 15 December 2017 and is also subject to approval of new articles of association. Notice of the extraordinary general meeting is announced today in a separate press release.

Complete terms and instructions for the Rights Issue and other information about the Company will be presented in the prospectus which will be announced before the start of the subscription period.

Indicative timetable

Due to the timetable above, the Company has decided to postpone its Year-end report 2017 from Wednesday 31 January 2018 to Friday 23 February 2018.

Financial and legal advisors regarding the Rights Issue
Evli Bank Plc. is financial advisor and Advokatfirman Lindahl KB is legal advisor to ChromoGenics in connection with the issue.

For more information, please contact
Thomas Almesjö, CEO
Susanne Andersson, CFO & Head of Communications
+46 (0)18 430 04 30
info@chromogenics.com
Certified Adviser: G&W Fondkommission

This information constitutes such information that ChromoGenics AB (publ) is obligated to disclose in accordance with the EU Market Abuse Regulation. The information was submitted by the above-mentioned contact persons for publication on 17 November 2017, at 8:30 a.m. CET.

Every care has been taken in the translation of this document. In the event of discrepancies, the Swedish original will supersede the English translation.

 
IMPORTANT INFORMATION

The information in this press release does not constitute an offer to acquire, subscribe for or otherwise trade in shares or other securities in ChromoGenics. Any invitation to the persons concerned to subscribe for shares in ChromoGenics will only be made through the prospectus referred to in this press release.

This press release may not be released, published or distributed, directly or indirectly, in or into the United States, Australia, Canada, Japan, New Zealand, South Africa or any other jurisdiction where such action is wholly or partially subject to legal restrictions or where such action would require additional prospectuses, registrations or other actions in addition to those required under Swedish laws and regulations. Nor may the information in this press release be forwarded, reproduced or disclosed in a manner that contravenes such restrictions or would entail such requirements. Failure to comply with this instruction may result in a violation of applicable securities laws.

No shares have been or will be registered under the U.S. Securities Act of 1933, as amended ("Securities Act"), or securities legislation in any state or other jurisdiction in the United States, and may not be offered or sold, directly or indirectly, in or into the United States, except pursuant to an available exemption from the registration requirements of the Securities Act and in compliance with the securities laws of any state or other jurisdiction of the United States.

This press release may contain forward-looking statements which reflect ChromoGenics's current view on future events and financial and operational development. The words "intend", "estimate", "expect", "may", "plan", "anticipate" or similar expressions regarding indications or predictions of future developments or trends and which are not statements based on historical facts constitute forward-looking information. Although ChromoGenics believes that these statements are based on reasonable assumptions and expectations, ChromoGenics cannot give any assurances that such statements will materialize. Forward-looking statements are in its nature involved with both known and unknown risks and uncertainties, since it is depending on future events and circumstances. Forward-looking statements do not constitute any representations and warranties, and the outcome could differ materially from the information set out in the forward-looking statements.

About ChromoGenics
ChromoGenics is a leader in dynamic glass with controllable heat- and light transmission. The company’s unique electrochromic technology ConverLight™, provides sustainable solar control with increased indoor comfort and energy efficiency. In 2016 the company started commercial sales to real estate projects in Scandinavia.

ChromoGenics is located in Uppsala and has about 20 employees. The technology is derived from the world leading research center at Ångström Laboratory at Uppsala University. The plant has been partly financed by a conditional loan from the Swedish Energy Agency. ChromoGenics share (CHRO) is listed on Nasdaq First North Stockholm with G&W Fondkommission as Certified Adviser. www.chromogenics.com

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