Episurf Medical resolves on an issue of units to guarantors in connection with the completed rights issue
THIS PRESS RELEASE MAY NOT BE MADE PUBLIC, PUBLISHED OR DISTRIBUTED, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, THE UNITED KINGDOM, AUSTRALIA, BELARUS, HONG KONG, JAPAN, CANADA, ISRAEL, NEW ZEALAND, RUSSIA, SWITZERLAND, SINGAPORE, SOUTH AFRICA, SOUTH KOREA, OR ANY OTHER JURISDICTION WHERE SUCH DISTRIBUTION WOULD REQUIRE ADDITIONAL PROSPECTUS, REGISTRATION OR OTHER MEASURES IN ADDITION TO THOSE REQUIRED BY SWEDISH LAW, IS PROHIBITED, OR OTHERWISE IS UNLAWFUL OR CANNOT BE MADE WITHOUT THE APPLICATION OF AN EXEMPTION FROM SUCH ACTION. REFER TO THE SECTION "IMPORTANT INFORMATION" AT THE END OF THIS PRESS RELEASE.
Episurf Medical AB (publ) (“Episurf”, “Episurf Medical” or the “Company”) (NASDAQ Stockholm: EPIS B) has today, based on the authorisation granted by the annual general meeting on 9 April 2024, resolved on an issue of 583,331 units to guarantors who entered into guarantee commitments in the rights issue of units announced on 22 April 2024 (the “Rights Issue”) and who have chosen to receive guarantee compensation in the form of units issued by the Company (the “Compensation Issue”). The subscription price in the Compensation Issue amounts to SEK 3.60 per unit, which corresponds to the subscription price per unit in the Rights Issue. Payment of the subscription price is made by offsetting claims.
Terms of the Compensation Issue
In connection with the Rights Issue, certain external investors have undertaken to guarantee a total of SEK 73 million of the Rights Issue. The Board of Directors has resolved that payment shall be made by offsetting the guarantors' claims on the Company, in relation to the guarantors that have chosen to receive guarantee compensation in the form of units, consisting of newly issued shares of series B and warrants of series TO13 B, corresponding to a total of approximately SEK 2.1 million.
The Board of Directors of Episurf has today, based on the authorization granted by the annual general meeting on 9 April 2024, resolved on the Compensation Issue, which comprises a total of 583,331 units, consisting of 8,749,965 shares of series B and 3,499,986 warrants of series TO13 B, corresponding to a total subscription price of approximately SEK 2.1 million which is offset by guarantor claims in the corresponding amount. The subscription price in the Compensation Issue amounts to SEK 3.60 per unit, the same as the subscription price in the Rights Issue. The cash component of the guarantee compensation to be paid by the Company to the guarantors who have chosen to receive guarantee compensation in cash amounts to approximately SEK 7.0 million.
In accordance with the guarantee commitments, guarantors are entitled to guarantee compensation corresponding to 12 percent of the guaranteed amount in cash or 14 percent of the guaranteed amount in units. As a result of the guarantee commitments, each subscribing guarantor thus has a claim on the Company regarding guarantee compensation. Each such subscriber has declared its willingness to allow the Company to offset its debt regarding guarantee compensation by carrying out an offset issue of units. The Compensation Issue is thus carried out to fulfil the Company's obligations to the guarantors as a result of the guarantee commitments. The Company's alternative to carrying out the Compensation Issue would be to settle the guarantee compensation through cash payment. The Board of Directors is of the opinion that – taking into account current market conditions – it is in the interest of the Company’s financial position and in the interest of the shareholders to carry out the Compensation Issue on the abovementioned terms and conditions, as the Company will then release funds that strengthen the Company's working capital. The subscription price in the Compensation Issue is based on the guarantee commitments which have been negotiated ahead of the announcement of the Rights Issue. The Board of Directors has thoroughly evaluated the possibility for the guarantors to receive their guarantee commission in the form of units at the abovementioned terms and conditions and concluded that offering such possibility has been necessary to obtain the guarantee commitments and is in the best interest of the Company and its shareholders.
After registration of the shares of series B issued through the Rights Issue with the Swedish Companies Registration Office, the Compensation Issue will entail that the share capital is increased by approximately SEK 1,149,375.59 by issue of 8,749,965 new class B shares, resulting in the total number of shares increasing from 642,727,877 shares to 651,477,842 shares, divided into 473,357 class A shares and 651,004,485 class B shares, corresponding to a dilution effect of approximately 1.3 percent of the shares and approximately 1.3 percent of the votes in the Company. Upon full exercise of the warrants of series TO13 B that are issued in the Compensation Issue, the number of shares will increase by a maximum of 3,499,986 class B shares and the share capital will increase by a maximum of approximately SEK 459,750 (not taking into account the reduction of share capital which was resolved at the extraordinary general meeting in the Company on 22 May 2024 and which requires permission from the Swedish Companies Registration Office or public court), corresponding to a dilution effect of approximately 0.5 percent of the shares and approximately 0.5 percent of the votes in the Company.
Advisors
Pareto Securities is Sole Manager and Bookrunner in the Rights Issue. Hannes Snellman Advokatbyrå AB is legal adviser to Episurf in connection with the Rights Issue. Advokatfirman Vinge KB is legal adviser to the Sole Manager and Bookrunner in connection with the Rights Issue. Nordic Issuing acts as issuing agent in connection with the Rights 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.
The information was submitted for publication, through the agency of the contact person set out above, at 12.15 CEST on 17 June 2024.
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 legal 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 Episurf Medical in any jurisdiction, neither from Episurf Medical 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, prepared in accordance with the simplified disclosure regime for secondary issuances as set forth in the Prospectus Regulation, regarding the Rights Issue described in this press release has been prepared by the Company, reviewed and approved by the SFSA and published on the Company’s website.
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 relating to the Rights Issue and Compensation Issue 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. Pareto Securities are acting for Episurf Medical in connection with the Rights Issue and the Compensation Issue and no one else and will not be responsible to anyone other than Episurf Medical for providing the protections afforded to its clients nor for giving advice in relation to the Rights Issue or the Compensation Issue or any other matter referred to herein. Pareto Securities are not liable to anyone else for providing the protection provided to their customers or for providing advice in connection with the Rights Issue or Compensation Issue or anything else mentioned 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 Rights Issue 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 US, the United Kingdom, Australia, Belarus, Canada, Hong Kong, Israel, Japan, New Zeeland, Russia, Singapore, South Africa, South Korea, Switzerland 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” (within the meaning of the Prospectus Regulation as it forms part of domestic law in the United Kingdom by virtue of the European Union (Withdrawal) Act 2018) 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 Stockholm's rule book for issuers.
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 offered shares 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 the Company may decline and investors could lose all or part of their investment; the shares in the Company offer no guaranteed income and no capital protection; and an investment in the shares in the Company 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 or the Compensation Issue. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Sole Manager and Bookrunner will only procure investors who meet the criteria of professional clients and eligible counterparties.
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 the Company.
Each distributor is responsible for undertaking its own target market assessment in respect of the shares in the Company and determining appropriate distribution channels.
Tags: