The board of directors of Dicot Pharma has resolved on a rights issue of approximately SEK 122.6 million

Uppsala, Sweden, August 7, 2024. The Board of Directors of Dicot Pharma AB ("Dicot" or the "Company") announced on June 30, 2024, its intention to resolve on a rights issue, consisting of shares and warrants ("Units"), of approximately SEK 125 million. With the support of authorization from the Extraordinary General Meeting on August 1, 2024, the Board of Directors of Dicot has today resolved on an issue of Units of approximately SEK 122.6 million with preferential rights for the Company's existing shareholders (the "Rights Issue"). The subscription price has been set at SEK 1.20 per Unit, corresponding to SEK 0.15 per share. The subscription price per share corresponds to the volume-weighted average price of the ten trading days before the decision of Dicot's share listed on the Spotlight Stock Market with a discount to TERP (the theoretical price after separation of the subscription right) of approximately 30.2 percent. The Company has received subscription commitments from the largest owners, including Bertil Lindkvist, Tor Finans AB and Torsten Söderberg privately and via companies, as well as from the Company's founder Jarl Wikberg and all board members and senior executives for a total of approximately SEK 17.4 million, corresponding to approximately 14.2 percent of the Rights Issue. Underwriting undertakings amounting to approximately SEK 62.4 million, corresponding to approximately 50.9 percent, have been obtained on market terms. Hence, the Rights Issue is secured up to approximately 65.0 percent which provides Dicot with sufficient funds to start the planned phase 2a trial.

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES OF AMERICA, AUSTRALIA, BELARUS, CANADA, HONG KONG, JAPAN, NEW ZEALAND, RUSSIA, SINGAPORE, SOUTH AFRICA, SOUTH KOREA, SWITZERLAND OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, DISTRIBUTION OR PUBLICATION WOULD BE UNLAWFUL OR REQUIRE REGISTRATION OR ANY OTHER MEASURE.

Summary

• The purpose of the Rights Issue is primely to finance a clinical phase 2a trial with the potency drug candidate LIB-01. The Company also intends to start preparations for a clinical phase 2b trial in parallel.
• The preferential rights issue means that existing shareholders have priority to participate in order to benefit from the expected value creation. The work with establishing partnerships and seeking external capital for subsequent phases will continue in parallel with the further development of the Company's assets.
• The subscription price has been set at SEK 1.20 per Unit, corresponding to SEK 0.15 per share. The subscription price per share corresponds to the volume-weighted average price, over the ten trading days before the decision, of Dicot's shares listed on the Spotlight Stock Market with a discount against TERP (the theoretical rate after separation of the subscription right) of approximately 30.2 percent. The warrants are issued free of charge.
• Provided that the Rights Issue is fully subscribed, Dicot will receive issue proceeds of approximately SEK 122.6 million before issue costs, which are estimated to amount to approximately SEK 15.1 million, if all underwriters chose cash remuneration. Additionally, the Company may receive a further maximum of SEK 46.0 million upon full exercise of the warrants issued as part of the Units.
• At the Extraordinary General Meeting on August 1, 2024, the Board of Directors received an authorization for a so-called over-allotment option that can be used in the event of oversubscription in the Rights Issue. The Board of Directors announced at the said meeting that the authorization may be exercised, and then on the same terms as in the Rights Issue, up to five percent of the existing number of shares after the Rights Issue.
• The record date for the right to receive unit rights is August 14, 2024. Dicot's shares will be traded inclusive of the right to receive unit rights up to and including August 12, 2024. From August 13, 2024, onwards, Dicot's shares will be traded without the right to unit rights.
• For each existing share held on the record date, one unit right is received. The unit rights entitle the holder to subscribe for Units with preferential rights, whereby eight unit rights entitle the holder to subscribe for one Unit. Each Unit consists of eight shares and one warrant of series 6.
• The subscription period for the Rights Issue runs from August 16, 2024, to August 30, 2024.
• Trading in unit rights will take place on the Spotlight Stock Market from August 16, 2024, to August 27, 2024.
• The Rights Issue is covered to approximately 65.0 percent through a combination of subscription commitments and underwriting undertakings as follows:
  • certain existing shareholders, the founder of the Company, and all members of the Board of Directors and executive management have undertaken to subscribe for Units in the Rights Issue. Total subscription commitments amount to approximately SEK 17.4 million, equivalent to approximately 14.2 percent of the Rights Issue; and
  • Fejna Capital I A/S, Buntel AB, Munkenkullen 5 förvaltning AB, Fredrik Lundgren, and Wilhelm Risberg as well as some current shareholders have provided underwriting undertakings subject to market terms which, in aggregate, amount to approximately SEK 62.4 million, equivalent to approximately 50.9 percent of the Rights Issue.
• Through the Rights Issue, a maximum of 817,561,832 new shares can be issued. If the Rights Issue is fully subscribed and all accompanying warrants are exercised for the subscription of new shares, an additional 204,390,458 new shares will be issued.

Background and reasons

Dicot Pharma is developing the drug candidate LIB-01 to treat erectile dysfunction and premature ejaculation in men, which is common worldwide. Studies show that more than half of all men over 40 suffer from erectile dysfunction to some degree. The most used potency drugs today have certain drawbacks and almost half of all those who try these drugs choose to discontinue the treatment. Around 35 percent do not get the desired effect and many experience side effects and concerns about cardiovascular implications.  DrugsDrugs like Viagra also have a short duration of action and require planning, which reduces the spontaneity in thein sex life.

The Company's goal with LIB-01 is to create a completely new generation of potency drugs that surpass current available treatments; with longer duration of action, fewer side effects and a differentiated mode if action. A treatment where the effect lasts for a long time would be equal to great advantages. Affected men and couples do not have to plan their sex life, which results in a more normal everyday life and increases the quality of life. "LIB-01, with its unique duration of action, promises a paradigm shift in the treatment of erectile dysfunction. It is the first revolutionary molecule to come into the field since Viagra", comments the world's leading medical expert in erectile dysfunction, Dr Harin Padma-Nathan.

Dicot has taken important steps in the development of LIB-01. In 2024, the Company completed its phase 1 clinical trial with very positive results showing that LIB-01 has a good safety profile. In addition to this, an efficacy signal could be captured where participants reported an improved erectile function, in some cases beyond 28 days post first dose. In parallel with this, the Company has made significant preparations for an upcoming clinical phase 2a trial such as completed GMP manufacturing of the study drug. The Company intends to start a clinical phase 2a trial during the fourth quarter of 2024.

The Company is now executing a rights issue of Units with the aim of conducting a clinical phase 2a trial. The Company also intends to start preparations for clinical phase 2b studies in parallel. This follows the Company's business strategy to develop LIB-01 under its own auspice until phase 2a trial. Dicot's ambition is to enter into collaborations with other established pharmaceutical companies ahead of future clinical phases to finance, further develop and launch LIB-01 on the world market.

The issue proceeds after deducting issue costs are intended to finance the following activities:

• Implementation of the clinical phase 2a study, as well as preparations for the clinical phase 2b study.
• Other R&D and scaling up of the manufacturing process.
• Business development, patents, quality and regulatory processes, etc.
• Preclinical studies for the development of new indications.
• Corporate governance and management (incl. legal, IT, insurance, marketplace, personnel, board, etc.)

The Rights Issue

The Board of Directors has resolved, with the support of the authorization received from the extraordinary general meeting on August 1, 2024, to carry out the Rights Issue. For each existing share held on the record date, one unit right is obtained. The unit rights entitle the holder to subscribe for Units with preferential rights, whereby eight unit rights give the right to subscribe for one Unit. Each Unit consists of eight shares and one warrant of series 6. The subscription price has been set at SEK 1.20 per Unit, corresponding to SEK 0.15 per share. The subscription price per share corresponds to the volume-weighted average price over the ten trading days before the decision of Dicot's shares listed on the Spotlight Stock Market with a discount against TERP (the theoretical price after separation of the subscription right) of approximately 30.2 percent. The warrants are issued free of charge. Each warrant entitles the holder to subscribe for two new shares during the period March 17-31, 2025, at an exercise price of 100-150 percent of the subscription price in the Rights Issue, i.e., a minimum of SEK 0.15 and a maximum of SEK 0.225 per share. The exercise price will be determined as 70 percent of the volume-weighted average price of the Company's share during a measurement period falling on February 24, 2025 - March 10, 2025.

Provided that the Rights Issue is fully subscribed, the Company will initially receive approximately SEK 122.6 million before transaction-related costs, which are estimated to amount to approximately SEK 15.1 million (mainly consisting of compensation for underwriting guarantees, advisor fees, and handling costs). If fully subscribed, 817,561,832 shares will be issued, and the Company's share capital will increase by SEK 5,722,932.824, resulting in a dilution of approximately 50.0 percent. If the Rights Issue is fully subscribed and all accompanying warrants are exercised for the subscription of new shares, the Company will receive an additional maximum of SEK 46.0 million, and a further 204,390,458 new shares will be issued. In such a case, the Company's share capital will increase by an additional SEK 1,430,733.206, resulting in a dilution of approximately 11.1 percent (calculated after the completion of the first part of the Rights Issue but without the exercise of the over-allotment option). Shareholders who do not participate in the Rights Issue have the opportunity to receive some financial compensation for the dilution by selling their unit rights. To not lose the value of the unit rights, the holder must either use them to subscribe for new Units within the subscription period or sell the unit rights that are not to be used within the trading period for unit rights.

Units not subscribed for with the support of unit rights are offered to Dicot's shareholders and other investors who apply to subscribe for Units without the support of unit rights.

Unless all new Units are subscribed for with the support of unit rights, the Board of Directors shall, within the framework of the maximum amount of the Rights Issue, decide on the allocation of new Units without the support of unit rights as follows:

In the first instance, allotment of Units subscribed for without unit rights shall be made to subscribers who have also subscribed for shares with unit rights, regardless of whether the subscriber was a shareholder on the record date or not, and if allotment to them cannot be made in full, allotment shall be made pro rata in relation to the number of unit rights exercised for subscription of Units and, to the extent this cannot be done, by drawing lots. Secondly, allotment of Units subscribed for without unit rights shall be made to others who have subscribed for Units without subscription rights, and if allotment to these cannot be made in full, allotment shall be made pro rata in relation to the number of Units subscribed for by each person and, to the extent that this cannot be done, by drawing lots. Thirdly, Units subscribed for without unit rights shall be allocated to the underwriters in proportion to the size of the underwriting commitments, and to the extent this cannot be done, by drawing lots.

Preliminary Timetable for the Rights Issue

August 12, 2024                 Last day of trading in shares including right to receive unit rights

August 13, 2024                 First day of trading in shares excluding right to receive unit rights

August 14, 2024                 Record date for participation in the Rights Issue

August 14, 2024                 Publication of the EU growth prospectus

August 16-27, 2024            Trading in unit rights

August 16-30, 2024            Subscription period in the Rights Issue

August 16, 2024                 Trading in paid subscribed units (BTUs) begins

September 4, 2024             Announcement of final outcome in the Rights Issue

Subscription commitments, underwriting undertakings and voting commitments

Certain existing shareholders, among others Bertil Lindkvist, Tor Finans AB and Torsten Söderberg private and via company, Dicot’s founder Jarl Wikberg, and all members of the Board of Directors and executive management have committed to subscribe for Units in the Rights Issue. Total subscription commitments from these amount to approximately 14.2 percent of the Rights Issue, which corresponds to approximately SEK 17.4 million.

Fejna Capital I A/S, Buntel AB, Munkenkullen 5 förvaltning AB, Fredrik Lundgren, and Wilhelm Risberg as well as some current shareholders have provided underwriting undertakings subject to market terms, which in aggregate, amount to approximately SEK 62.4 million, corresponding to approximately 50.9 percent of the Rights Issue. For the underwriting undertakings, a guarantee remuneration of twelve percent of the guaranteed amount shall be paid as a cash remuneration, alternative 15 percent in Units in the Company. No remuneration shall be paid for the subscription commitments to subscribe for Units.

Neither of these commitments are secured by bank guarantee, blocked funds, pledges or similar arrangements. Further information regarding the parties who have submitted subscription commitments and underwriting undertakings will be stated in the prospectus published before the start of the subscription period.

Prospectus

Complete information and instructions regarding the Rights Issue and other information about the Company will be provided in the prospectus which will be published before the start of the subscription period. The prospectus and subscription form will be made available on Dicot's website www.dicotpharma.com as well as on Carnegie Investment Bank’s website www.carnegie.se, Corpura Fondkommission’s website www.corpura.se, and on Spotlight Stock Market’s website www.spotlightstockmarket.com.

Advisors

Corpura Fondkommission AB acts as Global Coordinator and Joint Bookrunner together with Penser by Carnegie, Carnegie Investment Bank AB (publ) in connection to the Rights Issue, and Advokatfirman Lindahl KB is legal adviser.

For further information, please contact:

Elin Trampe, CEO
Phone: +46 72 502 10 10
E-mail: elin.trampe@dicotpharma.com

About Dicot Pharma AB

Dicot Pharma is developing the drug candidate LIB-01, which will be a potency agent to better treat erectile dysfunction and premature ejaculation. The ambition is to create a drug with significantly longer effect and far fewer side effects, compared to current available drugs. Today, over 500 million men suffer from these sexual dysfunctions and the market is valued at USD 8 billion. Dicot's strategy is to develop LIB-01 under own auspices until phase 2a study and thereafter in partnership with larger, established pharmaceutical companies, finance and develop LIB-01 further to a registered pharmaceutical on the world market.

Dicot is listed on Spotlight Stock Market and has approximately 6,100 shareholders. For more information, please visit www.dicotpharma.com.

Important Information

The information in this press release neither contains nor constitutes an offer to acquire, subscribe or otherwise trade in shares, warrants or other securities in Dicot. No action has been taken and no action will be taken to permit an offer to the public in any jurisdictions other than Sweden. The invitation to interested persons to subscribe for shares in Dicot takes place solely through the prospectus that the Company intends to publish.

The information contained in this press release may not be disclosed, published or distributed, directly or indirectly, within or to the United States, Australia, Belarus, Hong Kong, Japan, Canada, New Zealand, Russia, Switzerland, Singapore, South Africa or any other jurisdiction where such action would be illegal, subject to legal restrictions or require measures other than those that follow from Swedish law. Actions contrary to this instruction may constitute a violation of applicable securities legislation. This press release does not constitute an offer, or a solicitation of any offer, to buy or subscribe for securities in the United States. No shares, subscription rights or other securities issued by the Company (“Securities”) have been registered, and no shares or other Securities will be registered, under the United States Securities Act of 1933 from time to time ("Securities Act") or the securities laws of any state or other jurisdiction of the United States and may not be offered, subscribed, exercised, pledged, sold or otherwise transferred, directly or indirectly, in or to the United States, except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and pursuant to the securities laws of the relevant state or other jurisdiction in the United States. The securities have not been approved or registered, and will not be approved or registered, by the U.S. Securities and Exchange Commission, any state securities regulator or any other authority in the United States. Nor has any such authority assessed or commented on the offering or the accuracy and reliability of the prospectus. To say the opposite is a criminal offense in the United States.

This press release is not a prospectus within the meaning of Regulation (EU) 2017/1129 (the "Prospectus Regulation") and has not been approved by any regulatory authority in any jurisdiction. In an EEA Member State, other than Sweden, this announcement is only intended for and is only directed at "qualified investors" in the respective Member State within the meaning of the Prospectus Regulation.

In the United Kingdom, this document, and other materials relating to the securities referred to herein, are distributed and directed only to, and an investment or investment activity attributable to this document is only available to and will only be able to be exercised by “qualified investors” (in a sense in the UK version of Regulation (EU) 2017/1129 which is part of UK legislation by the European Union (Withdrawal) Act 2018) who are (i) persons who have professional experience in dealings relating to investments and who fall within the definition of “ investment professionals” in Article 19(5) of the UK Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Regulation”); (ii) “high net worth entities” etc. as referred to in Article 49(2)(a)-(d) of the Regulation; or (iii) such other persons to whom such investment or investment activity may lawfully be directed under the Regulations (all such persons are collectively referred to as “relevant persons”). An investment or an investment measure to which this notice relates is available in the United Kingdom only to relevant persons and will only be carried out with relevant persons. Persons who are not relevant persons shall not take any action based on this document nor act or rely on it.

Forward-looking statements

This press release may contain forward-looking statements which reflect the Company’s current view on future events and financial and operational development. Words such as “intend”, “expect”, “anticipate”, “may”, “believe”, “plan”, “estimate” and other expressions which imply indications or predictions of future development or trends, and which are not based on historical facts, are intended to identify forward-looking statements. Forward-looking statements inherently involve both known and unknown risks and uncertainties as they depend on future events and circumstances. Forward-looking statements do not guarantee future results or development and the actual outcome could differ materially from the forward-looking statements.

The English text is an unofficial translation of the original Swedish text. In case of any discrepancies between the Swedish text and the English translation, the Swedish text shall prevail.