GomSpace resolves on a rights issue of approximately SEK 122 million to execute on product investment program

On 25 November 2022, the board of directors of GomSpace Group AB (publ) (”GomSpace” or the “Company”) announced its intention to carry out a rights issue of approximately SEK 100 to 125 million with preferential rights for the Company’s existing shareholders. Today, the board of directors has, with support of the authorisation from the annual general meeting held on 22 April 2022, resolved on a rights issue of up to 94,094,644 new shares at a subscription price of SEK 1.30 per share with preferential rights for the Company’s existing shareholders (the “Rights Issue”). The Rights Issue is covered by subscription undertakings corresponding to approximately 44 per cent of the Rights Issue through a convertible loan provided by a consortium consisting of, inter alia, the Company’s largest shareholder The Hargreaves Family No. 14 Settlement as well as board members and members of the executive management. For more information about the subscription undertakings, including the condition that the Company’s largest shareholder shall not pass the applicable threshold for placing a mandatory bid for the remaining shares in the Company, please refer to “Subscription undertakings through the convertible loan” below.    

Chairman Jukka Pertola comments:

"We have the basic technology and strategy in place to benefit from a market of increasing commercial value. With the EIB credit facility and the expected proceeds from the Rights Issue, we will have the funding to execute on our plans, which are to update our product offering with a standardized satellite platform that can be manufactured at scale and thus more profitable.”

The Rights Issue in brief:

• The net proceeds from the Rights Issue are intended to be used for investment in internal research and development projects relating to an enlarged satellite platform, for operating expenses, to finance the working capital needs consisting of supplier payments, and for general corporate purposes.
• For each existing share held on the record date, three (3) subscription rights will be received. The subscription rights entitle the holder to subscribe for new shares with preferential rights, whereby two (2) subscription rights give the right to subscribe for one (1) new share.
• The subscription price has been set at SEK 1.30 per share which, assuming that the Rights Issue is fully subscribed, amounts to proceeds of approximately SEK 122 million (of which approximately SEK 53.6 million is expected to be contributed by way of set-off of a convertible loan) in total before deduction of costs related to the Rights Issue.
• The Rights Issue is covered by subscription undertakings corresponding to approximately 44 per cent of the Rights Issue through a convertible loan provided by a consortium consisting of, inter alia, the Company’s largest shareholder The Hargreaves Family No. 14 Settlement as well as board members and members of the executive management.
• The subscription period will run from and including 3 April 2023 until and including 19 April 2023.
• The record date for participation in the Rights Issue with preferential rights is 30 March 2023. Last day of trading in GomSpace’s shares including right to receive subscription rights in the Rights Issue is 28 March 2023 and the first day of trading in the Company’s shares without right to receive subscription rights in the Rights Issue is 29 March 2023.
• Trading in subscription rights will take place on the Nasdaq First North Premier Growth Market during the period from and including 3 April 2023 until and including 14 April 2023 (trading in paid-up subscribed shares (“BTA”) will commence on the same date and continue until the Rights Issue has been registered with the Swedish Companies Registration Office).
• Through the Rights Issue, a maximum of 94,094,644 new shares may be issued. In order not to lose the value of the subscription rights, holders of subscription rights must either use the subscription rights to subscribe for new shares within the subscription period or sell the subscription rights that are not to be exercised within the period for trading in subscription rights.

Background and reasons

As announced through press release on 25 November 2022, the Rights Issue is part of a financing plan to secure both the long-term funding for a research and development project relating to an enlarged satellite platform, within the framework of the Company’s product investment program and the short-term working capital needs of the Company, consisting of the convertible loan of SEK 53.6 million provided by, inter alia, the Company’s major shareholder, certain board members and members of the executive management of the Company, the EUR 18 million credit facility from the European Investment Bank, and the Rights Issue of approximately SEK 122 million (of which approximately SEK 53.6 million is expected to be contributed by way of set-off of the convertible loan).

Upon full subscription in the Rights Issue, the Company will receive approximately SEK 122 million (of which approximately SEK 53.6 million is expected to be contributed by way of set-off of the convertible loan) before deduction of costs related to the Rights Issue, which are estimated to amount to around SEK 4 million. For the sake of clarity, the loan amount under the convertible loan agreement has already been received by the Company meaning that conversion into new shares in the Rights Issue (through set-off) will reduce existing debts of the Company.

Subscription undertakings through the convertible loan

GomSpace has entered a convertible loan agreement of SEK 53,593,350 in total with a consortium consisting of the Company’s largest shareholder The Hargreaves Family No. 14 Settlement as well as certain board members (Steen Hansen, Kenn Herskind and Nikolaj Wendelboe) and all members of the executive management at the time of entering the agreement (i.e. Niels Buus, Troels Dalsgaard, Thomas Pfister, Lars K. Alminde, Søren Lind Therkildsen, and Eduardo Cruz), as well as one other employee, the majority of which are existing shareholders. The Company’s and the lenders’ mutual intention is to have the loan amount converted into new shares in the Rights Issue (through set-off), and pursuant to the loan agreement, the lenders have undertaken to subscribe for a total number of new shares corresponding to the loan amount, i.e. in total 41,225,646 new shares (as adjusted based on the respective loan amounts and the applicable subscription price in the Rights Issue), corresponding to approximately 44 per cent of the Rights Issue. The lenders do not have any separate preferential right in the Rights Issue that goes beyond the pro rata preferential right that the respective lender has based on its shareholding (if any) in the Company as per the record date of the Rights Issue and there are no transfer restrictions (lock-up) in respect of the respective lender’s shareholding. No renumeration will be paid for the subscription undertakings. The subscription undertakings provided by each lender shall only apply to the extent the lender, as a result of subscription, will not pass the applicable threshold for placing a mandatory bid for the remaining shares in the Company (30 per cent of the total number of votes in the Company). At the day of this press release, the lenders’ pro rata preferential rights which will be exercised to subscribe for new shares in the Rights Issue pursuant to the convertible loan agreement corresponds to SEK 37,229,478 in total. The Hargreaves Family No. 14 Settlement holds 12,054,960 shares in the Company as of today, corresponding to approximately 19 percent of the total number of votes in the Company and has contributed approximately 72 percent of the convertible loan, corresponding to a maximum of 29,551,576 new shares in the Rights Issue. In order not to reach the mandatory bid threshold and based on today’s shareholding, full set-off of the part of the convertible loan provided by The Hargreaves Family No. 14 Settlement will thus require subscription in addition to the subscription undertakings pursuant to the convertible loan corresponding to no less than approximately 37 percent of the Rights Issue. None of the other lenders will risk reaching the applicable threshold for placing a mandatory bid for the remaining shares in the Company as a result of fulfilment of their respective set-off undertakings pursuant to the convertible loan agreement (based on the shareholdings of the respective lenders as of today).

The Rights Issue

The board of directors has resolved to carry out an issue of up to 94,094,644 new shares with preferential rights for the Company’s shareholders, i.e. the Rights Issue as defined above. The resolution was made with support of the authorisation from the annual general meeting held on 22 April 2022. The subscription price is SEK 1.30 per new share.

Provided that the Rights Issue is fully subscribed, the Company will receive approximately SEK 122 million before deduction of costs related to the Rights Issue (of which approximately SEK 53.6 million is expected to be contributed by way of set-off of the convertible loan), which are estimated to amount to around SEK 4 million (primarily consisting of fees to legal advisor, issuing agent, layout and other costs for the drafting and registration of a prospectus and practical management as well as advertisement of the Rights Issue). Upon full subscription in the Rights Issue, the Company’s share capital will increase with SEK 6,586,625.08 from SEK 4,391,083.41 to SEK 10,977,708.49 and the number of shares and votes in the Company will increase with 94,094,644 from 62,729,763 to 156,824,407, resulting in a dilution of approximately 60 percent (calculated by dividing the share capital increase and the number of new shares and votes with the total share capital and total number of shares and votes in the Company following the Rights Issue).

The shareholders of the Company will have preferential rights to subscribe for the new shares in the Rights Issue. For each share held on the record date, 30 March 2023, three (3) subscription rights will be received, and two (2) subscription rights will entitle to subscription for one (1) new share. Shareholders who do not participate in the Rights Issue have an opportunity to receive economic compensation for the dilution by selling their subscription rights. In order not to lose the value of the subscription rights, the holder must either use the subscription rights to subscribe for new shares within the subscription period or sell the subscription rights that are not to be exercised within the period for trading in subscription rights.

If all new shares are not subscribed for with subscription rights, the board of directors will, within the limit of the maximum amount of the Rights Issue, decide on allotment of new shares subscribed for without subscription rights as follows:

• firstly, to those who subscribed for new shares with subscription rights and who applied to subscribe for additional shares, whether they were shareholders on the record date or not, pro rata in proportion to the number of shares that such per­sons subscribed for in the Rights Issue with subscription rights; and
• secondly, to those who applied to subscribe for new shares without subscription rights and, in the event of oversubscription, in proportion to the number of shares subscribed for in the application.

To the extent allotment in accordance with the above cannot be made pro rata, allotment shall be made by the drawing of lots.

Full terms and conditions for the Rights Issue and further information regarding estimated net proceeds, use of proceeds, subscription undertakings etc. will be disclosed in the prospectus which will be published by the Company no later than in conjunction with the commencement of the subscription period.

Indicative timetable for the Rights Issue

• 31 March 2023 at the latest – Publication of prospectus.
• 28 March 2023 – Last day of trading including the right to receive subscription rights.
• 29 March 2023 – First day of trading without the right to receive subscription rights.
• 30 March 2023 – Record date for participation in the Rights Issue with preferential rights, that is, shareholders who are registered in the share register kept by Euroclear Sweden AB as of this day will receive subscription rights that entitle to participation in the Rights Issue with preferential rights.
• 3 April 2023 – 14 April 2023 – Trading in subscription rights (trading in paid-up subscribed shares (“BTA”) will commence on the same date and continue until the Rights Issue has been registered with the Swedish Companies Registration Office).
• 3 April 2023 – 19 April 2023 – Subscription period.
• Around 21 April 2023 – Announcement of the outcome of the Rights Issue.
• Around week 18 2023 – The Rights Issue is registered with the Swedish Companies Registration Office.

Advisors
Setterwalls Advokatbyrå AB acts as legal adviser to GomSpace in respect of the Rights Issue. Nordic Issuing AB acts as issuing agent in relation to the Rights Issue.

For more information, please contact:
Troels Dalsgaard (CFO)
Tel: +45 31 50 11 82                   
Email: trn @ gomspace.com        

About GomSpace Group AB
The Company’s business operations are mainly conducted through the wholly-owned Danish subsidiary, GomSpace A/S, with operational office in Aalborg, Denmark. GomSpace is a space company with a mission to be engaged in the global market for space systems and services by introducing new products, i.e. components, platforms and systems based on innovation within professional nanosatellites. The Company is listed on the Nasdaq First North Premier Growth Market exchange under the ticker GOMX. FNCA Sweden AB, info@fnca.se is the Company’s Certified Adviser. For more information, please visit our website on www.gomspace.com.

                          
Miscellaneous 
This information is information that GomSpace 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 6.00 p.m. CET on March 17, 2023.

Important information
The information in this press release does not contain or constitute an offer to acquire, subscribe or otherwise trade in shares or other securities in the Company. No action has been taken and no measures will be taken to permit a public offering in any jurisdictions other than Sweden.

This release is not a prospectus in accordance with the definition in the Prospectus Regulation (EU) 2017/1129 (“Prospectus Regulation”) and has not been approved by any regulatory authority in any jurisdiction. This announcement does not identify, or purport to identify, risks (direct or indirect) that may be associated with an investment in shares or other securities in the Company. A prospectus (the “Prospectus”) will be prepared in connection with the Rights Issue and be reviewed and approved by the Swedish Financial Supervisory Authority (Sw. Finansinspektionen) which is the national competent authority in Sweden under the Prospectus Regulation. In order for investors to fully understand the potential risks and benefits associated with a decision to participate in the Rights Issue, any investment decision should only be made based on the information in the Prospectus. Thus, investors are encouraged to review the Prospectus in its entirety. This press release constitutes an advertisement in accordance with article 2 k of the Prospectus Regulation.

The information in this press release may not be released, distributed or published, 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 such action would be unlawful or would require registration or any other measures than those required by Swedish law. Actions in violation of these restrictions may constitute a violation of applicable securities laws. No shares or other securities in the Company have been registered, and no shares or other securities will be registered, under the United States Securities Act of 1933, as amended (the “Securities Act”) or the securities legislation of any state or other jurisdiction in the United States of America and no shares or other securities may be offered, sold or otherwise transferred, directly or indirectly, in or into the United States of America, except under an available exemption from, or in a transaction not subject to, the registration requirements under the Securities Act and in compliance with the securities legislation in the relevant state or any other jurisdiction of the United States of America.

Within the European Economic Area (“EEA”), no public offering of shares or other securities (“Securities”) is made in other countries than Sweden. In other member states of the European union (“EU”), such an offering of Securities may only be made in accordance with an applicable exemption in the Prospectus Regulation. In other member states of the EEA which have implemented the Prospectus Regulation in its national legislation, any offer of Securities may only be made in accordance with an applicable exemption in the Prospectus Regulation and/or in accordance with an applicable exemption under a relevant national implementation measure. In other member states of the EEA which have not implemented the Prospectus Regulation in its national legislation, any offer of Securities may only be made in accordance with an applicable exemption under national law.

In the United Kingdom, this press release 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 press release relates is available only to, and will be engaged in only with, “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 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”); (ii) high net worth entities etc. falling within Article 49(2)(a) to (d) of the Order; or (iii) such other persons to whom such investment or investment activity may lawfully be made available under 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 the Company’s future results, financial condition, liquidity, development, 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 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 not required by law or Nasdaq First North Growth Market’s Rulebook for Issuers of Shares.