CLS resolves on a partially guaranteed Rights Issue of approximately SEK 59m

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The Board of Directors of Clinical Laserthermia Systems AB AB (publ) ("CLS" or the "Company") has today, with authorization from the annual general meeting on June 29, 2023, decided to carry out a preferential Rights Issue of B-shares and warrants ("Units") corresponding to initial gross issue proceeds of approximately SEK 59 million (the "Rights Issue"). The company has entered into guarantee commitments amounting to SEK 38 million, corresponding to 65 percent of the Rights Issue. The issue proceeds will mainly be used to continue to support the commercial launch and market establishment of the Company's products at a desirable pace and to strengthen CLS's balance sheet.  To secure the Company’s liquidity needs until the completion of the Rights Issue, the Company has entered into agreements on bridge loans of a total of SEK 12.5 million on market terms.

Summary of the Rights Issue

• The Rights Issue comprises a maximum of 9,422,048 Units, where each Unit consists of one (1) B-share and one (1) warrant of series TO 7 B free of charge.
• The subscription price amounts to SEK 6.25 per Unit, corresponding to SEK 6.25 per new share, which, assuming that the Rights Issue is fully subscribed, results in the Company receiving approximately SEK 59 million before deductions for issue costs.
• If the Rights Issue is fully subscribed and the warrants are fully exercised, the Company receives an additional gross issue proceeds of SEK 22-85 million, depending on the final strike price for the new shares issued as a result of the exercised warrants.
• One (1) existing A-share and/or B-share in the Company on the record date entitles to six (6) Unit rights. Five (5) Unit rights entitles to subscription of one (1) Unit, which corresponds to an exchange ratio where 5 existing B-shares give the right to subscribe for 6 new B-shares.
• One (1) warrant will entitle the holder to subscribe for one (1) new B-share in the Company at a subscription price corresponding to 70 percent of the volume-weighted average price of the Company’s B-share on Nasdaq First North Growth Market during a period of ten (10) trading days before, and including, 7 November 2024, however not lower than the share’s quota value of SEK 2.31 and not higher than SEK 9. The exercise period will run between 11 and 22 November 2024.
• The record date for the Rights Issue is 10 June 2024 and the subscription period runs from and including 12 June 2024 to and including 26 June 2024.
• The last day of trading in CLS B-share with the right to participate in the Rights Issue is 5 June 2024.
• The company has entered into an agreement on guarantee commitments amounting to SEK 38 million, corresponding to 65 percent of the Rights Issue.
• To secure the Company’s liquidity needs until the completion of the Rights Issue, the Company has entered into agreements on bridge loans of a total of SEK 12.5 million on market terms.
• The company intends to publish a prospectus regarding the Rights Issue on 10 June 2024.

Reasons for the Rights Issue

According to the Board of Directors assessment, the existing working capital is not sufficient for CLS current needs during the coming twelve-month period. In order to add working capital to strengthen CLS’s balance sheet and continue to support the commercial launch and market establishment of the Company’s products at a desirable pace, has the Board of Directors decided on the Rights Issue of Units. The issue proceeds from the Rights Issue and subsequent exercise of warrants are intended to be used, in collaboration with the Company’s exclusive partner Clearpoint Neuro, to continue to support further development and increase the pace of commercialization of the Prism™ products within the neurosurgery market segment. With a fully subscribed Rights Issue and full use of warrants of series TO 7 B at the highest price, it is the Board of Directors assessment that the Company will, by a good margin, not need to seek additional capital in order to achieve the objective of a positive operating result in 2026.

Rights issue proceeds

In order to meet the capital requirement, CLS is now carrying out the Rights Issue, which, if fully subscribed, can initially provide the Company with approximately SEK 59 million before issue costs, expected to amount to a maximum of approximately 9.3 million SEK, of which approximately 5.3 million SEK pertains to guarantee compensation (assuming all guarantors opt for cash compensation).The issue proceeds are intended to finance the following activities:

1. Repayment of bridge loan (circa 20 percent)
2. Operating costs linked to quality work and certification, pre-clinical testing, product adaptations, premises costs, personnel costs, legal, trademark and patent costs (circa 30 percent)
3. Continued commercial launch and market establishment (circa 35 percent)
4. Ongoing clinical development and new clinical collaborations (circa 15 percent)

Issue proceeds from redemption of warrants of series TO 7 B

Upon a fully subscribed Rights Issue and upon full exercise of warrants of series TO 7 B at the lowest and highest prices, the Company can be provided with approximately SEK 22-85 million before issue costs. The issue proceeds are intended to finance the following activities:

1. Operating costs linked to quality work and certification, pre-clinical testing, product adaptations, premises costs, personnel costs, legal, trademark and patent costs (circa 40 percent)
2. Continued commercial launch and market establishment (circa 40 percent)
3. Ongoing clinical development and new clinical collaborations (circa 20 percent)

Terms of the Rights Issue

The Board of Directors of CLS decided on 30 May 2024, to carry out a preferential Rights Issue of a maximum of 9,422,048 Units. Each Unit consists of one (1) B-share and one (1) warrant of series TO 7 B free of charge.

The right to subscribe for Units shall be granted to existing shareholders, where one (1) existing A-share and/or B-share entitles to six (6) Unit Rights and five (5) Unit Rights entitles to the subscription of one (1) Unit. In addition, investors have the possibility to subscribe for Units without Unit rights.

The subscription price in the Rights Issue amounts to SEK 6.25 per Unit, corresponding to SEK 6.25 per share, resulting in the Company raising a maximum of SEK 59 million before deduction of issue costs and excluding any additional capital that may be raised wh the warrants are exercised.

The warrants are issued free of charge and can be used to subscribe for new shares during the period from and including 11 November 2024 to and including 22 November 2024. One (1) warrant entitle the holder to subscribe for one (1) new B-share in the Company at a strike price of seventy (70) percent of the average volume-weighted price for the CLS share's official price statistics during a period of ten (10) trading days immediately preceding, and including, 7 November 2024, but at least the share’s quota value of circa SEK 2.31 and at most SEK 9 per share. Provided that all warrants are exercised, CLS will receive SEK 22-85 million before deductions for issue costs. The warrants will be admitted to trading on the Nasdaq First North Growth Market after final registration of the Rights Issue with the Swedish Companies Registration Office (Sw. Bolagsverket).

The record date for obtaining Unit Rights and the right to participate in the Rights Issue with preferential rights is 10 June 2024. The last day for trading in the share including the right to participate in the Rights Issue with preferential rights is 5 June 2024. The subscription period in the Rights Issue will commence 12 June 2024 and end 26 June 2024. The company's Board of Directors has the right to prolong the subscription period. Trading in Unit Rights will take place on the Nasdaq First North Growth Market during the period of 12 June 2024 to and 20 June 2024 and trading in paid subscribed Units (Sw. Betalda Tecknade Units, “BTU”) will commence on 12 June 2024 and continue until the Rights Issue has been registered with the Swedish Companies Registration Office (Sw. Bolagsverket).

Allocation principles

In the event where not all the Units have been subscribed with the support of Unit rights, the Board of Directors shall allocate, within the framework of the maximum amount set in the terms of the Rights Issue, decide upon allocation of Units subscribed for without preferential right, according to below order:

• Firstly, allotment of Units subscribed without the support of Unit Rights shall take place to subscribers who also subscribed for Units with the support of Unit Rights, regardless of whether the subscriber was a shareholder on the record date or not, and in the event that allotment to these cannot take place in full, allotment shall take place pro rata in relation to the number of Unit Rights that have been used for the subscription of Units and, to the extent that this cannot be done, by lottery.
• Secondly, allotment of Units subscribed without the support of Unit Rights shall be made to others who have subscribed without the support of Unit Rights, and in the event that allotment to these cannot take place in full, allotment shall be made pro rata in relation to the number of Units subscribed by each and, to the extent that this cannot happen, by lottery.
• Finally, allocation of Units subscribed without the support of Unit Rights shall be made to the guarantors in relation to the size of their guarantee commitments, and to the extent that this cannot be done, by lottery.

Guarantee commitments

The Company has received guarantee commitments from external investors of SEK 38 million, corresponding to 65 per cent of the Rights Issue.

Compensation paid for guarantee commitments corresponds to fourteen (14) percent of the guaranteed amount paid in cash, or seventeen (17) percent of the guaranteed amount through newly issued Units. The subscription price for any Units issued to underwriters shall correspond to 85 percent of the volume-weighted average share price (VWAP) of the Company's B-share on the Nasdaq First North Growth Market during trading with Unit rights in the Rights Issue (that is, during the period from and including 12 June and 20 June 2024), however, not less than the subscription price in the Rights Issue.

The guarantee commitments are not secured through bank guarantees, blocked funds, or pledge of collateral or similar arrangement.

Change in number of shares and share capital, including dilution

Provided that the Rights Issue is fully subscribed, the Company’s share capital will increase by SEK 21,760,975.34, from SEK 18,134,146.88 to SEK circa 39,895,122.22, through the issue of 9,422,048 new B-shares, resulting in the total number of shares increasing from 7,851,707 to 17,273,755, corresponding to a dilution of 55 percent of the number of shares. If all the warrants are exercised, (and assuming the Rights Issue is fully subscribed) the share capital will increase by an additional circa 21,760,975.34 SEK and the number of shares increase by a maximum of 9,422,048 B-shares, corresponding to a dilution of approximately 35 per cent of the number of shares.

The total dilution, assuming full subscription of the Rights Issue and all warrants being exercised, corresponds to a maximum of 70.6 percent. Shareholders who choose not to participate in the Rights Issue will have the opportunity to receive compensation for the financial dilution by selling their Unit rights.

Bridge loan

In order to secure the Company’s liquidity needs until the Rights Issue has been completed, the Company has raised bridge loans of a total of SEK 12.5 million from a smaller group of external investors who also entered into guarantee commitments in the Rights Issue. As compensation for the loans an arrangement fee of 5 percent and a monthly interest rate of 1.5 percent are paid. According to the bridge loans, the loans shall be repaid in connection with the Rights Issue or no later than 31 August 2024.

Prospectus

Complete terms and conditions for the Rights Issue, as well as other information regarding the Company as well as information on potential subscription and guarantee commitments, will be provided in the prospectus that is planned to be published on 10 June 2024 (“Prospectus”). The prospectus will be published on the CLS, Redeye AB, and Nordic Issuing AB respective websites (www.clinicallaser.se, www.redeye.se, www.nordic-issuing.se).

Preliminary time plan for the Rights Issue

Advisers

Redeye AB is acting as financial adviser and Markets & Corporate Law Nordic AB is acting as legal adviser to CLS in connection with the Rights Issue. Nordic Issuing AB is acting as issuing agent.

For more information, please contact

Dan J Mogren, CEO Clinical Laserthermia Systems AB (publ)

Phone: +46 (0) 70-590 11 40

E-mail: dan.mogren@clinicallaser.com

About CLS

Clinical Laserthermia Systems AB (publ) develops and sells the TRANBERG®|Thermal Therapy Systems, including Thermoguide Workstation and sterile disposables, for minimally invasive treatment of cancer tumors and drug-resistant epilepsy, according to regulatory approvals in the EU and the US. The products are marketed for image-guided laser ablation and used in studies for treatment with imILT®, the Company’s interstitial laser thermotherapy for immunostimulant ablation with potential abscopal effects. CLS is headquartered in Lund and has subsidiaries in Germany, the US and Singapore. CLS is listed on the Nasdaq First North Growth Market under the symbol CLS B. The Certified Advisor (CA) is FNCA Sweden AB.

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 CLS in any jurisdiction, neither from CLS nor from someone else. 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. A prospectus, corresponding to an EU Growth Prospectus regarding the Rights Issue described in this press release will be prepared and published by the Company on the Company's web page after the prospectus has been scrutinized and approved by the Swedish Financial Supervisory Authority ("SFSA") (Sw. Finansinspektionen). The SFSA only approves the prospectus as meeting the standards of completeness, comprehensibility and consistency imposed by the Prospectus Regulation.

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.

Redeye is acting for CLS in connection with the Rights Issue and no one else and will not be responsible to anyone other than CLS for providing the protections afforded to its clients nor for giving advice in relation to the Rights 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 Unites States, Australia, Canada, Hong Kong, Japan, New Zeeland, Singapore, South Africa 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.

In the United Kingdom, this document and any other materials in relation to the securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this document relates is available only to, and will be engaged in only with, “qualified investors” who are (i) persons having professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). In the United Kingdom, any investment or investment activity to which this communication relates is available only to, and will be engaged in only with, relevant persons. Persons who are not relevant persons should not take any action on the basis of this press release and should not act or rely on it.

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 and the group's future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportUnities and the markets in which the Company and the group 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 Nasdaq First North Growth Market rule book for issuers.

Disclosure to investors pursuant to the act (2023:560) on the Screening of Foreign Direct Investments

The Act (2023:560) on the Screening of Foreign Direct Investments ("FDI Act") applies to the company's operations. In the event that the subscription of new units or subscription of shares under warrants would result in an investor, after the investment, directly or indirectly, holding votes representing or exceeding any of the thresholds of 10, 20, 30, 50, 65, or 90 percent of the votes in the company, the investor is required to notify their investment to the Inspectorate for Strategic Products in accordance with the FDI Act

Information to distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the “MiFID II Product Governance Requirements”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the shares in CLS have been subject to a product approval process, which has determined that such shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the “Target Market Assessment”).

Notwithstanding the Target Market Assessment, Distributors should note that: the price of the shares in CLS may decline and investors could lose all or part of their investment; the shares in CLS offer no guaranteed income and no capital protection; and an investment in the shares in CLS is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom.

The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Rights Issue. For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the shares in CLS.

Each distributor is responsible for undertaking its own target market assessment in respect of the shares in CLS and determining appropriate distribution channels.

This disclosure contains information that CLS is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 30-05-2024 18:20 CET.