The Board of Directors in FlexQube has resolved on a previously announced fully guaranteed rights issue of approximately SEK 75 million

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Mölndal, August 31, 2023

The Board of Directors in FlexQube AB (“FlexQube” or the “Company”) announced on August 14, 2023 its intention to resolve on a fully guaranteed issue of shares with preferential rights for the Company’s existing shareholders, corresponding to approximately SEK 74.6 million before deductions of costs attributable with the transaction (the “Rights Issue”). The Board of Directors has today, by virtue of the authorisation of the Extraordinary General Meeting held on August 30, 2023, resolved on the Rights Issue. The Company has received subscription undertakings for subscription of shares with preferential rights of approximately SEK 29.4 million, corresponding to approximately 39.4 percent of the Rights Issue. Moreover, the Company has received guarantee commitments from existing shareholders and external investors of approximately SEK 45.2 million, corresponding to approximately 60.6 percent of the Rights Issue. The Rights Issue is thus fully guaranteed.

In the announcement of the intention to resolve on a fully guaranteed rights issue, the Board of Directors furthermore announced its intention to explore the conditions to carry out a directed new share issue of approximately SEK 25 million (the “Directed Share Issue” and together with the Rights Issue referred to as the “Transactions”). The Board of Directors was granted authorisation to resolve on the Directed Share Issue on the Extraordinary General Meeting held on August 30, 2023. The Directed Share Issue is expected to be carried out in connection with the completion of the Rights Issue and at the same terms as the Rights Issue.

Summary

• The Board of Directors in FlexQube has today, by virtue of the authorisation of the Extraordinary General Meeting held on August 30, 2023, resolved on the Rights Issue.
• Upon full subscription of the Rights Issue, the Company receives approximately SEK 74.6 million before deductions of costs attributable with the Rights Issue.
• The net proceeds are intended to be used to increase market awareness and sales activities, launch and continued product development of FlexQube’s innovative AMR system, increase working capital to support larger production volumes and develop strategic alliances with technical, distribution and integration partners.
• The subscription price in the Rights Issue will be SEK 16.30 per share.
• Anyone who, on the record date of September 7, 2023, is a shareholder in FlexQube will have preferential rights to subscribe for new shares in the Rights Issue.
• The Rights Issue will comprise a maximum of 4,574,070 shares. One (1) existing share in the Company will entitle to one (1) subscription right. Nine (9) subscription rights will entitle to subscribe for five (5) new shares.
• Shareholders who choose not to participate in the Rights Issue will, under the condition that the Rights Issue is fully subscribed, have their ownership diluted with up to approximately 35.7 percent, but have the opportunity to be economically compensated for the dilutive effect by selling subscription rights.
• The subscription period in the Rights Issue will commence from September 11, 2023 until September 25, 2023.
• The Company has received subscription undertakings totalling approximately SEK 29.4 million, corresponding to approximately 39.4 percent of the Rights Issue, from several of the Company’s larger shareholders, including RoosGruppen, Co-founder and chairman of the Board of Directors Christian Thiel and Co-founder and former CEO, Anders Fogelberg.
• The Company has furthermore received guarantee commitments totalling approximately SEK 45.2 million from existing shareholders and external investors, corresponding to approximately 60.6 percent of the Rights Issue.
• Complete terms and conditions for the Rights Issue will be disclosed in the prospectus, expected to be made publicly available on September 8, 2023.
• In connection with the Rights Issue, the Company explores the conditions to carry out the Directed Share Issue of approximately SEK 25 million, with the purpose of reaching investors interested in investing in the Company through a directed share issue and thereby adding new institutional and/or strategic owners to the Company.
• The Board of Directors was granted authorisation to resolve on the Directed Share Issue on the Extraordinary General Meeting held on August 30, 2023.
• The Directed Share Issue is expected to be carried out in connection with the completion of the Rights Issue and at the same terms as the Rights Issue.

The Rights Issue

Background and motive

FlexQube is an innovative robot technology company within material handling with global provision of an ecosystem of modular material carts and transportation robots. The system consists of cart systems, train systems, autonomous mobile Robots (“AMR-system”) and systems for automated guided vehicles (“AGV-system”). The foundation in FlexQube’s ecosystem is a patented building block-concept to create material adapted carts that can be transported in the factory with different technologies depending on the customer needs and maturity level. The products are primarily used to present and transport material in factories from a warehouse out to an operator at the production line.

The demand for FlexQube’s products has increased significantly during last year. Between the years 2021 and 2022, net sales increased by 81.7 percent amounting to SEK 204.6 million and the third quarter 2022 constituted the highest turnover in the Company’s history for a single quarter.

During recent years, the Company actively worked to expand its AGV and AMR concept and to further increase production volumes. The Company is now ready with a complete and proven product offering and is consequently entering a new phase in its business development with focus on scaling up sales and market expansion. In doing so, the Company intend to accelerate growth and reach profitability. Furthermore, the Company assesses that strengthening margins and cash flow require a focus on robot sales, implementation of service and aftermarket organisation and optimisation of the supply chain. This is also a central part of the overall product development aimed at expanding the portfolio of intellectual property rights that encompass continued product development of FlexQube’s innovative AMR system. In light of the above, the Company see a need to initially increase working capital to ensure delivery of the products.

Through the Rights Issue, which is fully guaranteed through subscription undertakings and guarantee commitments, the Company can execute on aforementioned initiatives and strengthen the working capital. The Rights Issue is considered to cover all capital needs until the Company achieves profitability and positive cash flow.

Use of proceeds

The Rights Issue is to be carried out to ensure that FlexQube can realise the Company’s adopted strategy and thereby allow the Company to increase market awareness and sales activities, launch and continued product development of FlexQube’s innovative AMR system, increase working capital to support larger production volumes and develop strategic alliances with technical, and distribution and integration partners. The Company expects the net proceeds of SEK 66.2 million provided through the Rights Issue will cover all capital requirements until the Company can achieve profitability and positive cash flow. FlexQube intends to use the net proceeds from the Rights Issue for the following purposes, listed in order of priority below (approximate share of the net proceeds state in parentheses)

1. Increase market awareness and sales by updating and implementing a comprehensive sales and marketing strategy, encompassing a comprehensive sales infrastructure. This entails a purposeful and efficient sales network for long-term growth as well as increased predictability and quantity regarding order intake. It also entails continued development of the newly established department for Service & Commissioning and expanding the business model to include so-called Robot-as-a-Service ("RaaS") to maximize customer value and increase recurring revenue (approximately 50 percent)

2. Leverage additional alternatives to build out the intellectual property portfolio that includes the product development of FlexQube’s AMR system to drive innovation and maintain competitive advantage, improve design, functionality, and map customer requirements and use cases. It also involves increasing the number of customer pilot cases in the short term to accelerate feedback from the market and improve the production efficiency and scope of FlexQube’s patented AMR system, FlexQube Navigator. This by involving essential manufacturing components, upgrading production processes and strengthening overall operational efficiency, as well as building technical customer support capabilities for AMR and AGV (approximately 20 percent)

3. Increase working capital to support larger product volumes vis-à-vis partners, distributors and integrators (approximately 20 percent)

4. Develop strategic alliances with technology, distribution and integration partners with the aim of enabling faster and more cost-effective growth (approximately 10 percent)
    

Right to subscribe

Anyone who on the record date of September 7, 2023 is recorded as a shareholder in the share register of FlexQube will receive one (1) subscription right for each share held in the Company. Nine (9) subscription rights will entitle to subscription of five (5) new shares. In addition, investors are offered to register for subscription of share without support of subscription rights. The subscription price will be SEK 16.30 per share, which entail FlexQube will receive gross proceeds of approximately SEK 74.6 million before deductions for transaction costs, provided that the Rights Issue is fully subscribed.

Under the condition that the Rights Issue is fully subscribed, the number of shares in FlexQube will increase by 4,574,070 shares, from 8,233,333 to 12,807,403 and the share capital will increase by a maximum of approximately SEK 457,407, from approximately SEK 823,333 to approximately SEK 1,280,740.

Subscription undertakings and guarantee commitments

The signed subscription undertakings and guarantee commitments entail that the Rights Issue is fully guaranteed.

The Company has received subscription undertakings totalling approximately SEK 29.4 million, corresponding to approximately 39.4 percent of the Rights Issue, from a number of the Company’s major shareholders including RoosGruppen AB, Co-founder and chairman of the Board of Directors Christian Thiel (through Feldthusen Invest AB) and Co-founder and former CEO, Anders Fogelberg (through Birdmountain Invest AB).

No commissions are paid for subscription undertakings for the subscription of shares with or without preferential rights.

The Company has furthermore received guarantee commitments totalling approximately SEK 45.2 million, corresponding to approximately 60.6 percent of the Rights Issue. Signed guarantee commitments will receive a guarantee commission of seven (7.0) percent of the guaranteed amount in cash.

Timetable of the Rights Issue

Prospectus

Full information regarding the Rights Issue and information about the Company will be provided in a prospectus, expected to be made publicly available on September 8, 2023. Furthermore, subscription will be made available when the subscription period commence on Nordic Issuing’s webpage (www.nordic-issuing.se) and on the Company’s webpage (www.flexqubegroup.com).

The Directed Share Issue

In connection with the Rights Issue, the Company will explore the conditions to carry out the Directed Share Issue of approximately SEK 25 million, with the purpose of reaching investors interested in investing in the Company through a directed share issue and thereby adding new institutional and/or strategic owners to the Company. The Board of Directors was granted authorisation to resolve on the Directed Share Issue on the Extraordinary General Meeting held on August 30, 2023. The Directed Share Issue is expected to be carried out in connection with the completion of the Rights Issue and at the same terms as the Rights Issue.

For more information on the background, motive and terms, use of proceeds and reasons for deviation from the shareholders preferential rights in relation to the Directed Share Issue, refer to the press release published on August 14, 2023.

Advisors

The Company has engaged ABG Sundal Collier as financial advisor and Baker McKenzie as legal advisor in connection with the Transactions. Nordic Issuing acts as issuing agent in connection with the Transactions.

For further information, please contact:

Mårten Frostne, CEO

Telephone: +46 72 155 19 37

E-post: marten.frostne@flexqube.com

About FlexQube

FlexQube is a technology company headquartered in Gothenburg, Sweden with subsidiaries in USA, Mexico, Germany and England. FlexQube offers solutions for cart-based material handling using a patented modular concept. FlexQube develops and designs customized solutions for both robotic and mechanical cart logistics. Through the own developed and unique automation concept FlexQube can offer robust and self-driving robotic carts. FlexQube has more than 1000 customers in 37 countries with primary markets being North America and Europe.

The share (FLEXQ) is traded on Nasdaq First North. FNCA Sweden AB, telephone +46 8-528 00 399, is the Company's Certified Adviser. Read more at www.flexqube.com

IMPORTANT INFORMATION

Publication, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions by law and persons in the jurisdictions where this press release has been published or distributed should 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 the Company in any jurisdiction, neither from the Company nor from anyone else.

This press release 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 new shares. Any investment decision in connection with the Transactions shall only be made on the basis of all publicly available information relating to the Company and the Company’s shares. Such information has not been independently verified by ABG Sundal Collier. The information contained in this announcement is for background purposes only and does not purport to be complete. Thus, an investor should not place undue reliance on the information contained in this press release or its accuracy or completeness. ABG Sundal Collier is acting for the Company in connection with the transaction and no one else. ABG Sundal Collier will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for giving advice in relation to the transaction or any other matter referred to herein.

This press release does not constitute a recommendation concerning any investor’s decision with respect to the Transactions. Each investor or prospective investor should conduct his, her or its own investigation, analysis and evaluation of the business and information described in this press release and in all publicly available information. The price and value of the securities can decrease as well as increase. Past performance is not a guide to future performance.

This press release does not constitute or form part of an offer or invitation 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 subject to an exemption from, or 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 or distributed, directly or indirectly, in whole or in part, within or into the United States, Australia, Canada, New Zealand, Hong Kong, Japan, Singapore, South Africa, South Korea, Russia, Belarus or in any other jurisdiction where the announcement, publication or distribution of the information would be contrary to the applicable laws and regulations or would require prospectuses, registration or any other measures than those required by Swedish law. Actions taken in violation of this instruction may constitute a crime against applicable securities laws and regulations.

This press release is not a prospectus for the purposes of Regulation (EG) 2017/1129 (the “Prospectus Regulation”) and has not been approved by any regulatory authority in any jurisdiction. FlexQube has not authorized any offer to the public of shares or rights in any member state of the EEA and no prospectus has been or will be prepared in connection with the Transactions. In any EEA member state, this press release is only addressed to and is only directed at "qualified investors" in that member state within the meaning of the Prospectus Regulation.

In the United Kingdom, this document and any other materials regarding the securities described herein is only being distributed and directed to, and any investment or investment activity to which this document relates is available only to, and can only be used by, “qualified investors” (within the meaning of the United Kingdom version of the EU Prospectus Regulation (2017/1129/ EU) which is part of United Kingdom law by virtue of the European Union (Withdrawal) Act 2018) who are (i) persons having professional experience in matters relating to investments and who fall within the definition of “investment professionals” in Article 19(5) of the British Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (ii) high net worth individuals falling within Article 49(2) (a)-(d) of the Order (all such persons together being referred to as “Relevant Persons”). An investment or an investment measure, as this notice refers to in the United Kingdom only available to and will only be carried out with Relevant Persons. Persons who are not Relevant Persons should not take any action based on this press release nor act or rely on it.

Forward-looking statements

This press release contains forward-looking statements that reflect the Company’s intentions, assessments, or current expectations about and targets for the Company’s future results of operations, financial condition, development, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the Company operates. Forward-looking statements are statements that are not historical facts and may be identified by the fact that they contain 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. Even if 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, which are 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 nor does it accept any responsibility for the future accuracy of the opinions expressed in this press release or any obligation to update or revise the statements in this press release to reflect subsequent events. 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 contained in this press release speak only as of its date and are subject to change without notice. Neither the Company nor anyone else does undertake any obligation 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 required by law or Nasdaq First North Growth markets rule book for issuers.

Information to distributors

Solely for the purposes of the product governance requirements contained within: (a) Directive 2014/65/EU of the European Parliament and the Council 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 FlexQube 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 “EU Target Market Assessment”). Solely for the purposes of each manufacturer's product approval process in the United Kingdom, the target market assessment in respect of the shares in the Company has led to the conclusion that: (i) the target market for such shares is only eligible counterparties, as defined in the FCA Handbook Conduct of Business Sourcebook, and professional clients, as defined in Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 ("UK MiFIR"); and (ii) all channels for distribution of such shares to eligible counterparties and professional clients are appropriate (the “UK Target Market Assessment” and, together with the EU Target Market Assessment, the “Target Market Assessment”). Notwithstanding the Target Market Assessment, distributors should note that: the price of the shares in FlexQube may decline and investors could lose all or part of their investment; the shares in FlexQube offer no guaranteed income and no capital protection; and an investment in the shares in FlexQube 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 Transactions. Furthermore, it should be noted that regardless the Target Market Assessment, ABG Sundal Collier will only provide to investors who comply the criteria for professional clients and acceptable 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 UK MiFIR; 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 FlexQube.

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