Circio Holding ASA - Terms of the rights issue and related transactions

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, THE UNITED KINGDOM, CANADA, AUSTRALIA, HONG KONG, JAPAN OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.

Oslo, 29 May 2024: Reference is made to the stock exchange announcement made by Circio Holding ASA (the "Company") on 17  April 2024, regarding the Company's intention to carry out a rights issue (the "Rights Issue").

The board of directors of the Company (the "Board") has today, in consultation with Redeye AB (acting as manager in the Rights Issue (the "Manager"), determined the following proposed terms for the Rights Issue and related transactions in order to raise gross proceeds of up to NOK 67 million in new equity:

1. The Rights Issue is intended to raise gross proceeds of up to approx. NOK 52 million. The subscription price in the Rights Issue is proposed to be NOK 2.50 per new share  (the "Subscription Price"), representing a discount of 39.2% to the theoretical share price exclusive of the subscription rights (TERP) based on the volume weighted average price for the Company's on the Oslo Stock Exchange the last ten trading days up to and including 28 May 2024.
2. Minimum of 3,658,000 new shares ("New Shares") and maximum of 20,732,010 New Shares will be issued in the Rights Issue.
3. NOK 15 million of the amount owed to Atlas Special Opportunities LLC ("Atlas") under the investment agreement and bond terms entered into between Atlas and the Company (the "Investment Agreement" and the "Bond Terms", respectively) will be settled by the issuance of New Shares at the Subscription Price (the "Conversion").
4. The Company will issue one warrant (Nw.: frittstående tegningsrett) ("Warrant") for each New Share issued in the Rights Issue and the Conversion for no additional consideration.
5. Atlas is supporting the Rights Issue by a funding commitment of up to NOK 10 million which will be completed by the subscription of additional convertible bonds under the Bond Terms (the "CB Commitment") to secure minimum financing to the Company under the Rights Issue and CB Commitment of NOK 19.145 million. Further, Atlas will, to secure the Company's financing until completion of the Rights Issue, subscribe for bonds with a nominal value of NOK 4 million in accordance with the Investment Agreement (the "Bridge Financing").

In addition, Atlas has by the Financing Commitment (as defined below) on certain terms and conditions undertaken to provide the Company with the capital required to finance the Company's financial needs until the end of June 2025.

The Rights Issue, the Conversion, the CB Commitment and the issuance of the Warrants are subject to approval by the Company's annual general meeting (the "AGM"). Further information regarding the Rights Issue, the Conversion and the CB Commitment will be provided in the AGM notice which will be published by a separate stock exchange notice later today. The Rights Issue is also subject to the publication of a prospectus approved by the Financial Supervisory Authority of Norway (Nw.: Finanstilsynet) and, if deemed necessary by the Board, passported to Sweden on or prior to the first day of the subscription period in the Rights Issue (the "Prospectus").

Subject to approval by the AGM, each existing shareholder as of the date of the AGM held on or about 19 June 2024 (and being registered as such in Euronext Securities Oslo, the Norwegian Central Securities Depository, (the "VPS")) as at the expiry of the second trading day following the AGM (the "Record Date") will be granted 2.5 subscription right (rounded down to the nearest whole number of subscription rights) for each share in the Company registered as held by the shareholder. Each subscription right will, subject to applicable securities laws, give the right to subscribe for and be allocated one New Share.

For every New Share allocated to, and paid by, subscribers in the Rights Issue, the subscribers will receive one Warrant. Each Warrant will give the holder the right to subscribe for and be allocated one additional share in the Company at a subscription price equal to the to the higher of (i) the volume weighted average price quoted for trades in the Shares on the Company the ten last trading days on the Oslo Stock Exchange prior to commencement of the Exercise Period (as defined below) less a discount of 30%, and (ii) NOK 0.60, and which may be exercised in the period from 08:00 hours (CET) on 4 December 2024 to 16:30 hours (CET) on 18 December 2024 (the "Exercise Period") . The Company may apply for listing of the Warrants on the Oslo Stock Exchange or Euronext Growth Oslo.

The Company has received subscription commitments for participation in the Rights Issue (the "Pre-commitments") from certain existing shareholders, members of the Company's board of directors and management, and other investors (each a "Pre-committing Investor") for a total amount of NOK 9.145 million. The Pre-committing Investors have undertaken to vote the shares held by them at the time of the AGM in favour of the AGM agenda items related to the Rights Issue. The Pre-committing Investors will receive a commission equal to 17% of the pre-committed amount, which shall be settled by issuance of new shares at the Subscription Price and one Warrant per such new share for no additional consideration.

Atlas shall, in the Conversion, convert existing bonds under the Investment Agreement in the total amount of NOK 15 million, which shall be deducted from the total pool of bonds that Atlas is entitled to convert under the Investment Agreement. The conversion price in the Conversion shall be equal to the Subscription Price in the Rights Issue and Atlas will for no additional consideration receive one Warrant for each new share.

If Atlas (alone or together with other shareholders of the Company who are deemed to be closely associated parties of Atlas for the purpose of the mandatory offer rules in the Norwegian Securities Trading Act) by reason of being allotted shares in the Rights Issue, subscription of shares in the Conversion, issuance of commission shares or by the exercise of Warrants becomes the owner of more than 1/3 of the shares in the Company, then the number shares which otherwise would have exceed 1/3 of the ordinary voting shares in the Company shall be non-voting and unlisted class B shares (the "Class B Shares") so that the mandatory offer obligation is not triggered. Except for being non-voting, the Class B shares shall give the same rights as the ordinary shares in the Company and shall be exchangeable into ordinary shares on a one-for-one basis (cf. Section 4-1 (2) of the Norwegian Public Limited Liabilities Companies Act) provided that such exchange will not bring the Atlas' shareholding above the mandatory offer threshold.

If the Company is not successful in obtaining sufficient financing to cover the Company's financing needs for the period until end of June 2025 through the Rights Issue, including by investors' exercise of the Warrants in December 2024, the CB Commitment and the Bridge Financing, Atlas has undertaken to finance the Company's remaining financial needs until end of June 2025, up to a monthly cash requirement of NOK 4 million, limited to a total amount of NOK 48 million (the "Financing Commitment"). If the financing from the Rights Issue, including the exercise of the Warrants, results in gross proceeds of less than NOK 30 million, and the Company receive additional funding under the Financing Commitment, then Atlas shall be granted a first priority collateral in the Company's TG01 asset as security for the convertible bonds issued under the Bond Terms after 29 May 2024. Such grant of collateral is subject to approval by the AGM.

The full terms and conditions of the Rights Issue will be included in the Prospectus, which will be published prior to the commencement of the subscription period in the Rights Issue, expected to take place from on or about 24 June 2024 to 8 July 2024 at 16:30 hours (CEST).

Redeye AB is acting as Manager for the Rights Issue. Advokatfirmaet Thommessen AS is acting as legal counsel to the Company in connection with the Rights Issue.

For further information, please contact:
Erik Digman Wiklund, CEO
Phone: +47 413 33 536
Email: erik.wiklund@circio.com

Lubor Gaal, CFO
Phone: +34 683343811
Email: lubor.gaal@circio.com

This information is considered to be inside information pursuant to the EU Market Abuse Regulation (MAR) and is subject to the disclosure requirements pursuant to MAR article 17 and section 5-12 of the Norwegian Securities Trading Act.

This stock exchange announcement was published by Mats Hermansen, VP Finance, on behalf of the Company, at the time and date stated above in this announcement.

About Circio Holding ASA

Building next generation RNA therapeutics

Circio Holding ASA is a biotechnology company developing novel circular RNA gene therapies and immunotherapy medicines.

Circio has established a unique circular RNA (circRNA) platform for genetic medicine. The proprietary circVec technology is based on a modular genetic cassette design for efficient biogenesis of multifunctional circRNA from DNA and viral vectors, which can be deployed in multiple disease settings. The circVec platform has demonstrated enhanced and more durable protein expression than classic mRNA vector systems, and has the potential to become the new gold -standard for DNA and virus-based therapeutics in the future. The circRNA R&D activities are being conducted by the wholly owned subsidiary Circio AB based at the Karolinska Institute in Stockholm, Sweden.

In addition, Circio is developing a cancer vaccine, TG01, targeting KRAS driver mutations. TG01 is currently being tested in three clinical trials: RAS-mutated pancreatic cancer and lung and non-resectable pancreatic cancer in US, and multiple myeloma in Norway. These studies are being run through academic collaborative networks, supported by prestigious research grants from Innovation Norway and the Norwegian Research Council, creating read-outs and future optionality for the program at low cost to Circio.

***

- IMPORTANT INFORMATION –

This announcement is not and does not constitute an offer of securities for sale or a solicitation of an offer to purchase securities of the Company in the United States or any other jurisdiction. Copies of this document may not be sent to jurisdictions, or distributed in or sent from jurisdictions, in which this is barred or prohibited by law. The securities of the Company may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act").

The securities of the Company have not been, and will not be, registered under the U.S. Securities Act. Any sale in the United States of the securities mentioned in this communication will be made solely to "qualified institutional buyers" as defined in Rule 144A under the U.S. Securities Act. No public offering of the securities will be made in the United States.

Any offering of the securities referred to in this announcement will be made by means of a prospectus (the "Prospectus") which will be prepared and which is subject to the approval by the Norwegian Financial Supervisory Authority. This announcement is an advertisement and is not a prospectus for the purposes of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on prospectuses to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (as amended) as implemented in any EEA Member State (the "Prospectus Regulation"). Investors should not subscribe for any securities referred to in this announcement except on the basis of information contained in the Prospectus. Copies of the Prospectus will, following publication, be available from the Company's registered office and, subject to certain exceptions, on the websites of the Managers.

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, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State.

In the United Kingdom, this communication is only addressed to and is only directed at Qualified Investors who (i) are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") or (ii) are persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.) (all such persons together being referred to as "Relevant Persons"). These materials are directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.

This document is not for publication or distribution in, directly or indirectly, Australia, Canada, Japan, the United States or any other jurisdiction in which such release, publication or distribution would be unlawful, and it does not constitute an offer or invitation to subscribe for or purchase any securities in such countries or in any other jurisdiction. In particular, the document and the information contained herein should not be distributed or otherwise transmitted into the United States or to publications with a general circulation in the United States of America.

The Manager is acting for the Company in connection with the Rights Issue and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Rights Issue or any transaction or arrangement referred to in this announcement.

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "anticipate", "believe", "continue", "estimate", "expect", "intends", "may", "should", "will" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. 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 information, opinions and forward-looking statements contained in this announcement speak only as at its date and are subject to change without notice. This announcement is made by and is the responsibility of, the Company. Neither the Manager nor any of its affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.

This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities of the Company. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness. Neither the Manager nor any of its affiliates accepts any liability arising from the use of this announcement.