Episurf Medical carries out a directed share issue of SEK 159 million. Ilija Batljan enters as new large shareholder

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The Board of Directors of Episurf Medical AB (publ) (“Episurf Medical” or the “Company”) has, based on the authorisation granted by the Annual General Meeting on 10 May 2021, resolved on a directed issue of 44,408,108 shares of series B at an issue price of SEK 3.59 per share (the “Share Issue”). The Company will thereby receive proceeds of SEK 159,425,107.72 before transaction costs.

“We are welcoming Ilija Batljan as a new, large shareholder to Episurf Medical. Having a strong entrepreneur as our largest shareholder is fantastic. We are also grateful for the continued support from all of our shareholders. We are confident that together, we can continue to develop Episurf Medical and thereby create shareholder value during the coming years”, says Pål Ryfors, CEO of Episurf Medical.

The issue price, which corresponds to the closing price for the Company’s shares of series B on Nasdaq Stockholm on 14 October 2021, has been determined based on a negotiation and agreement with the investors. The Share Issue is directed mainly to Health Runner AB, a company controlled by Ilija Batljan, which invests approximately SEK 125 million and which will consequently own approximately 13 percent of the total number of shares in Episurf Medical after the Share Issue, and in addition to a limited number of institutional investors, among others Fjärde AP-fonden and Rhenman Healthcare Equity L/S, who have undertaken to subscribe for and pay for all shares in the Share Issue. The finalisation of the Share Issue is conditional upon that a prospectus regarding admission to trading of the new shares of series B is approved and registered by the Swedish Financial Supervisory Authority and that Nasdaq Stockholm AB approves an application for admission to trading of the new shares of series B no later than 31 December 2021.

“Through the share issue, we assess that our financial needs are secured at least until mid-2025, by which time we expect to have achieved several additional commercial and clinical milestones. Our increased commercial focus has led to an increase in the customer base during the year, and we have sold implants in 15 countries during 2021. Now, we must focus on increased market penetration in our target markets. We are working on expanding our product portfolio, which now includes two products for which we target US launches during 2022 and 2023. Meanwhile, the EPIC-knee study is ongoing, targeting a pre-market approval process around 2024-2025. In summary, this means that we have a broad and interesting strategy with several milestones ahead of us, including interesting commercialization opportunities”, Pål Ryfors, CEO of Episurf Medical continues.

The purpose of the Share Issue is to satisfy the Company’s capital needs in order to create additional financial capacity to realise the Company’s business plan and thereby create shareholder value. More specifically, the proceeds will enable the Company to:

• Accelerate efforts in the commercialization of Episealer® Knee and Episealer® Talus in existing markets with the aim of creating profitability in the commercial business.
• The company would like to secure access to the US market in 2022 and 2023 for two 510(k) products, the Episealer® Patellofemoral System and an Episealer® implant system for the greater toe. This will enable the Company to have a foothold in the US prior to the expected launch of the Episealer® Knee implants in the US market.

The Board of Directors considers it to be positive for the Company with a continued enhanced institutional shareholder base including a strong entrepreneurial larger owner like Ilija Batljan. The reason for deviating from the pre-emptive rights of existing shareholders is to enhance the institutional shareholder base in this manner and at the same time implement the capital raising in a time- and cost-efficient manner.

As a result of the Share Issue, the total number of shares in the Company will increase from 222,129,633 shares to 266,537,741 shares, divided on 951,020 shares of series A and 265,586,721 shares of series B, and the Company’s share capital increases from SEK 66,695,295.92 to SEK 80,029,005.00. The Share Issue entails a dilution of approximately 16.66 percent and 16.54 percent in relation to the total number of issued shares and votes in the Company, respectively, after the Share Issue.

Zonda Partners AB has acted as financial advisor and Hannes Snellman Attorneys Ltd has acted as legal advisor in connection with the Share Issue. Eminova Fondkommission AB is settlement agent for the Share Issue.

For more information, please contact:

Pål Ryfors, CEO, Episurf Medical
Tel:+46 (0) 709 62 36 69
Email: pal.ryfors@episurf.com

Veronica Wallin, CFO, Episurf Medical
Tel:+46 (0) 700 37 48 95
Email: veronica.wallin@episurf.com

About Episurf Medical

Episurf Medical is endeavoring to bring people with painful joint injuries a more active, healthier life through the availability of minimally invasive and individualised treatment alternatives. Episurf Medical’s Episealer® individualised implants and Epiguide® surgical drill guides are developed for treating localised cartilage injury in joints. Episurf Medical’s μiFidelity® system enables implants to be cost-efficiently tailored to each individual’s unique injury for the optimal fit and minimal intervention. Episurf Medical’s head office is in Stockholm, Sweden. Its share (EPIS B) is listed on Nasdaq Stockholm. For more information, go to the company’s website: www.episurf.com.

This information is information that Episurf Medical AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 21.00 CEST on 14 October 2021.

Important information

This press release does not constitute an offer to, or an invitation to, acquire or subscribe for any securities in Episurf Medical in any jurisdiction, neither from Episurf Medical, Zonda Partners AB or anyone else. Copies of this press release will not be produced and may not be distributed or sent to the United States, Australia, Hong Kong, Japan, Canada, New Zealand, Switzerland, Singapore, South Africa or any other jurisdiction where such distribution would be illegal or require registration or other action. The recipient of this press release is responsible for using this press release and the information herein in accordance with applicable rules in each jurisdiction.

This press release is not a prospectus for the purposes of Regulation (EU) 2017/1129 (the “Prospectus Regulation”) and has not been approved by any regulatory authority in any jurisdiction. Episurf Medical has not authorised any offer to the public of shares or other securities in any member state of the EEA.

This press release and the information contained in the press release may not be distributed in or to the United States. This press release does not constitute an offer to acquire securities in the United States. Securities referred to herein have not been registered and will not be registered in accordance with the US Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States without being registered, subject to an exception to, or refers to a transaction that is not subject to registration under the Securities Act. No offer will be made to the public in the United States to acquire the securities mentioned here.

This press release may contain certain forward-looking information which reflect Episurf Medical's current view of future events and financial and operational developments. Words such as "intends", "estimates", "expects", "may", "plans", "deems", "believes", "assesses", and other similar expressions which imply indications or predictions regarding future developments or trends, and which are not based on historical facts, constitute forward-looking information. Forward-looking information is by nature affiliated with known and unknown risks and uncertainties since it is dependent on future events and circumstances. Forward-looking information does not constitute any guarantee regarding future results or development and the actual outcome may materially differ from forward-looking information. The information, assessments and forward-looking statements in this press release are only relevant as of the date of this press release and may change without notice.

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