The BOD of Veg of Lund resolves on new issue of shares with pre-emptive rights for the shareholders of MSEK 23.7, obtains bridgefacility of MSEK 3.3 and changes date for the interim report for Q2 2023

The Board of Directors of Veg of Lund AB (publ) (“Veg of Lund” or the “Company”) has today, 4 August 2023, with support of the authorisation granted by the Annual General Meeting held on 14 June 2023 resolved on an issue of units consisting of shares of approximately MSEK 23.7 before issue costs (the “Rights Issue”) with subscription period 15 August 2023 - 29 August 2023. In connection with the Rights Issue, the Company has received subscription commitments of approximately MSEK 4.8 and underwriting commitments of approximately MSEK 13, corresponding to a total of approximately 75 percent of the Rights Issue. The issue proceeds from the Rights Issue are primarily intended to be used for continued international expansion, financing other operational costs and repayment of loans. Veg of Lund has on this day also obtained bridge loans of approximately MSEK 3.3 from the Chairman of the Board Johan Möllerström and one current shareholder to finance the Company’s operations until the Rights Issue has been completed. Furthermore, the Board of Directors of Veg of Lund has decided to change the date for publication of the interim report for the second quarter of 2023 from 24 August 2023 to 14 August 2023.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, HONG KONG, JAPAN, CANADA, NEW ZEALAND, SWITZERLAND, SINGAPORE, SOUTH AFRICA, SOUTH KOREA, RUSSIA, BELARUS OR ANY OTHER JURISDICTION WHERE THE DISTRIBUTION OF THIS PRESS RELEASE WOULD BE UNLAWFUL OR WOULD REQUIRE OTHER MEASURES THAN SUCH MEASURES WHICH FOLLOWS FROM SWEDISH REGULATIONS. SEE THE “IMPORTANT INFORMATION” SECTION AT THE END OF THIS PRESS RELEASE.

Summary

• The Rights Issue will, upon full subscription, provide Veg of Lund with approximately MSEK 23.7, before issue costs.
• The Rights Issue is covered to approximately 20.2 percent by subscription commitments and approximately 54.8 percent by underwriting commitments. Thus, the Rights Issue is secured to approximately 75 percent.
• All existing shareholders receive one (1) unit right per each share held on the record date on 11 August 2023, and five (5) unit rights give the right to subscribe for one (1) unit consisting of four (4) shares. The subscription price is SEK 4.6 per unit and thus SEK 1.15 per share.
• The subscription period for the Rights Issue will run from and including 15 August 2023 up to and including 29 August 2023. Unit rights that are not exercised during the subscription period become invalid and thereby lose their value.
• No prospectus will be registered with the Swedish Financial Supervisory Authority (Sw: Finansinspektionen) and no information memorandum will be published in connection with the Rights Issue.

Conditions and instructions will be published on the Company’s website before the subscription period begins.

Motive for the Rights Issue and use of the issue proceeds

The motive for the Rights Issue is primarily to obtain working capital to finance current operational costs and to repay loans.

If the Rights Issue is fully subscribed, the Company will receive approximately MSEK 23.7 before deduction of issue costs which, under the presumption that all underwriters choose to receive their underwriting compensation in cash,  are estimated to approximately MSEK 5 whereof approximately MSEK 2 is related to underwriting compensation. The net proceeds from the Rights Issue are planned to be distributed according to the following order of priority and scope:

• Repayment of loans: 46 percent (of which approximately 17 percent pertains to repayment of the bridge loan which was obtained in connection with the Rights Issue) 
• Continued sale- and market activities internationally: 28 percent
• Continued development of product- and patent portfolio: 8 percent
• Other operational costs: 18 percent

Information about the Rights Issue

On 4 August 2023, the Board of Directors of Veg of Lund resolved, with support of the authorisation granted by the Annual General Meeting held on 14 June 2023, on a Rights Issue of a maximum of 5,159,064 units and thereby 20,636,256 shares. Upon full subscription in the Rights Issue, the Company will receive issue proceeds of approximately MSEK 23.7 before issue costs. Through the Rights Issue, the share capital may increase by a maximum of SEK 1,320,720.384, from SEK 1,650,900.54 to SEK 2,971,620.928. The number of shares may increase by a maximum of 20,636,256 shares, from 25,795,321 shares to 46,431,577 shares. The dilution effect for shareholders who choose not to participate in the Rights Issue amounts to approximately 44.44 percent of the shares and votes (calculated as the number of new shares as a result of the Rights Issue divided by the number of shares in the Company after a fully subscribed Rights Issue).

All registered shareholders on the record date of 11 August 2023 have a pre-emption right to subscribe for units in relation to their existing shareholdings, whereby each existing share in the Company entitles to one (1) unit right and five (5) unit rights entitle to subscription of one (1) unit consisting of four (4) shares. The subscription price is SEK 4.60 per unit, corresponding to SEK 1.15 per share.

The subscription period runs from and including 15 August 2023, up to and including 29 August 2023. Unit rights that are not exercised during the subscription period can no longer be used to subscribe for shares and therefore lose their value. Trading of unit rights is expected to take place on Nasdaq First North Growth Market during the period from and including 15 August 2023, up to and including 24 August 2023 and trading in BTUs (paid subscribed units) during the period from and including 15 August 2023 until the Rights Issue is registered with the Swedish Companies Registration Office (Sw: Bolagsverket).

If not all units are subscribed for by virtue of pre-emption rights, the Board of Directors shall decide on allotment within the scope of the maximum amount of the Rights Issue. Allotment is made on the following basis:

1. first, to those who have subscribed for units by virtue of unit rights and who wish to subscribe for additional units (regardless of whether they were shareholders on the record date or not), pro rata their subscription by virtue of unit rights, and, to the extent this cannot be done, by drawing lots;
2. secondly, to others who have notified an interest in subscribing for units without unit rights (and who are not covered by item a) above), pro rata their notified interest, and to the extent this cannot be done, by drawing lots;
3. thirdly, to those who have provided underwriting commitments for subscription of units, pro rata to their respective commitments.

No prospectus will be registered with the Swedish Financial Supervisory Authority (Sw: Finansinspektionen) and no information memorandum will be published in connection with the Rights Issue. Conditions and instructions are expected to be published on the Company's website on or about 14 August 2023.

Subscription commitments and underwriting commitments

The Rights Issue is covered by subscription commitments of approximately MSEK 4.8 corresponding to approximately 20.2 percent of the Rights Issue and underwriting commitments of approximately MSEK 13 corresponding to approximately 54.8 percent of the Rights Issue. By this, the Rights Issue is secured to approximately 75 percent. The subscription commitments and underwriting commitments are not secured through bank guarantees, pledges, or similar arrangements.

For the underwriting commitments, the underwriters are entitled to choose between receiving compensation in the form of cash compensation or through shares in the Company. If the underwriters choose cash compensation, the compensation amounts to 15 percent of the guaranteed amount. If the underwriters choose to receive their compensation in the form of newly issued shares, the compensation amounts to 18 percent of the guaranteed amount in shares in the Company at a subscription price corresponding to the subscription price in the Rights Issue. No compensation is paid for the subscription commitments entered into.

Preliminary schedule, all dates occur within 2023
The below schedule for the Rights Issue is preliminary and subject to change.

Information on bridge loan agreements

Veg of Lund has today entered into an agreement regarding a bridge financing according to which the lenders, consisting of the Chairman of the Board Johan Möllerström and one current shareholder Anders Färnqvist, have committed to provide loans of approximately MSEK 3.3. The loan is due for repayment after one (1) month from signing the agreement and has an interest rate of, in total, two percent. The Company has the right to choose between repaying the loan through set-off within the Rights Issue which in such case would be handled through the loan givers subscription of units being set-off against the loan, or by repaying the loan in cash.

Interim report for the second quarter 2023

Due to the Rights Issue, the Board of Directors of Veg of Lund has decided to change the date for publication of the interim report for the second quarter of 2023 from 24 August 2023 to 14 August 2023.

Advisors
EK Equity AB acts as financial advisor and Fredersen Advokatbyrå AB acts as legal advisor in connection with the Rights Issue. Hagberg & Aneborn Fondkommission is the issuing agent in the Rights Issue.

For more information, please contact:

Veg of Lund AB (publ)

Fredrik Carling, CEO

Telephone: +46 (0) 703 12 19 42

E-mail: fredrik.carling@vegoflund.se

www.dugdrinks.com

This information is such that Veg of Lund AB (publ) is obligated to disclose pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above on 4 August 2023 at 08.45 CEST.

About Veg of Lund

Veg of Lund AB (publ) develops, markets and sells plant-based foods that meet consumer demands for taste and sustainability. Veg of Lund has its roots in research at Lund University and the company’s business concept is to use its knowledge, patented methods and innovative solutions to develop and sell tasty, climate-smart and locally produced products based on potatoes. Veg of Lund offers alternatives to dairy products (milk drinks) and snacks (smoothies) and also develops meat alternatives. The company’s products are sold under the DUG brand to consumers, restaurants and food companies in Sweden, Switzerland, Denmark, England and Ireland. The company has the ambition to expand mainly in Europe and Asia. The share is listed on Nasdaq First North and trades under the name VOLAB. Read more at ir.vegoflund.se. Mangold Fondkommission AB is the company’s Certified Adviser and can be contacted by phone: +46 8 5030 15 50 or e-mail: ca@mangold.se.

Important information

The publication, announcement or distribution of this press release may, in certain jurisdictions, be subject to legal restrictions and persons in the jurisdictions where this press release has been published or distributed should inform themselves about and comply with such legal restrictions. The recipient of this press release is responsible for using this press release and the information contained herein in accordance with the applicable rules in each jurisdiction. No action has been taken and no action will be taken to permit an offer to the public in jurisdictions other than Sweden.

Any investment decision in connection with the Rights Issue shall be made based on all publicly available information relating to the Company. The information in this press release is published only as background information and does not claim to be complete. Accordingly, an investor should not rely solely on the information in this press release or its accuracy or completeness.

This press release may not be announced, published, or distributed, directly or indirectly, in or into the United States, Australia, Canada, Hong Kong, Japan, New Zealand, Switzerland, Singapore, South Africa, South Korea, Russia, Belarus or in any other jurisdiction where the distribution of this press release would be unlawful. Nor does this press release constitute an offer to sell new units, shares, unit rights, BTUs or other securities to any person in a jurisdiction where it would not be permitted to make such an offer to such a person or where such action would require other prospectus, registration or other measures other than under Swedish law. The application form and other documents related to the Rights Issue may not be distributed in or to any country where such distribution or the Rights Issue requires measures as stated in the previous sentence or where they would be contrary to the rules of such country. Actions contrary to this instruction may constitute a violation of applicable securities laws.

None of the units, shares, unit rights, BTUs or other securities have been or will be registered under the United States Securities Act of 1933, as amended (the "Securities Act") or the securities laws of any state or other jurisdiction in the United States and may not be offered, subscribed for, exercised, pledged, sold, resold, allotted, delivered or transferred, resold, assigned, delivered or otherwise transferred, directly or indirectly, in or into 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 in compliance with the securities laws of any state or other jurisdiction of the United States.

This press release may contain some forward-looking statements that reflects the Company’s current view of future events and financial and operational development.  Words such as “intend”, “consider” “expect”, “may”, “plan”, “believe”, “estimate” and other expressions that imply indications or predictions of future developments or trends, and that are not based on historical facts, constitute forward-looking statements. By its nature, forward-looking statements involves known and unknown risks and uncertainties because it is dependent on future events and circumstances. Forward-looking statements is not a guarantee of future results or development and actual outcomes may differ materially from those expressed in forward-looking statements. Neither the Company nor anyone else undertakes to review, update, confirm or publicly announce 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 required by law or the Nasdaq First North regulations for issuers.