The Board of Directors of NextCell resolves on a rights issue of units of approximately SEK 40.1 million, subject to approval by an Extraordinary General Meeting

THIS PRESS RELEASE MAY NOT BE RELEASED, PUBLISHED OR DISTRIBUTED, DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, JAPAN, NEW ZEALAND, SOUTH AFRICA, SOUTH KOREA, SWITZERLAND, CANADA, HONG KONG, BELARUS, RUSSIA OR IN ANY OTHER JURISDICTION WHERE SUCH RELEASE, PUBLISHING OR DISTRIBUTION OF THIS PRESS RELEASE WOULD BE UNLAWFUL OR REQUIRE REGISTATION OR OTHER MEASURES IN ADDITION TO THOSE REQUIRED BY SWEDISH LAW. SEE SECTION ”IMPORTANT INFORMATION” AT THE END OF THIS PRESS RELEASE.

The Board of Directors of NextCell Pharma AB (publ) (”NextCell” or the ”Company”) has today, subject to subsequent approval by an Extraordinary General Meeting in the Company on 27 May 2024, resolved on a new issue of no more than 37,817,475 units, with preferential rights for existing shareholders, of approximately SEK 40.1 million (the ”Rights Issue”). Each unit consists of one (1) share and one (1) warrant of series TO2 free of charge. Upon full exercise of the warrants, the Company may receive an additional of up to approximately SEK 113.5 million before deduction of issue costs, provided full subscription of the Rights Issue. The Rights Issue is covered to approximately 80 percent by guarantee commitments and subscription undertakings as well as declarations of intent, corresponding to approximately SEK 32.1 million. The purpose of the Rights Issue is primarily to provide the Company with additional capital to enable an out-licensing of the Company’s drug candidate ProTrans™ for the treatment of type 1 diabetes.

Summary

• Upon full subscription, the Rights Issue will initially provide NextCell with approximately SEK 40.1 million, before deduction of issue costs. Upon full exercise of the warrants of series TO2, the Company may receive an additional of up to approximately SEK 113.5 million before deduction of issue costs, provided full subscription of the Rights Issue.
• Those who, on the record date on 29 May 2024, are shareholders in NextCell will have preferential rights to subscribe for units in the Rights Issue. The last day of trading in the Company’s shares including the right to receive unit rights in the Rights Issue is 27 May 2024. Each (1) existing share in the Company entitles to eleven (11) unit rights. Ten (10) unit rights entitle to subscription of one (1) unit. One (1) unit consists of one (1) newly issued share and one (1) warrant of series TO2. The subscription price is SEK 1.06 per unit, corresponding to SEK 1.06 per share. The warrants of series TO2 are issued free of charge.
• The subscription period for the Rights Issue will run from and including 31 May 2024 until and including 14 June 2024.
• The Rights Issue is covered to approximately 80 percent by guarantee commitments and subscription undertakings as well as declarations of intent, corresponding to approximately SEK 32.1 million.
• The Rights Issue is subject to approval from an Extraordinary General Meeting in the Company and requires an amendment of the limits on share capital and number of shares in the Articles of Association.
• A notice convening the Extraordinary General Meeting on 27 May 2024, for approval of the Rights Issue and resolution on amendment of the Articles of Association to enable the Rights Issue, will be published through a separate press release.

Background and rationale for the Rights issue in summary

A larger, placebo-controlled phase 2 study with NextCell’s drug candidate ProTrans™ in a total of 66 patients with newly diagnosed type 1 diabetes is ongoing at Uppsala University (”ProTrans-Young”). ProTrans-Young is divided into three parts where the study, after a small safety assessment with six young patients (7-11 years old), has continued and included and treated 30 patients in the age group 12-21 years old. After an additional safety assessment, planned for this summer, recruitment of an additional 30 patients in the younger age group (7-11 years old) is estimated to be commenced after this summer.

NextCell plans to develop ProTrans™ in cooperation with external parties and conduct a phase 3 study. The Company’s intention is to sign an out-licensing agreement based on the results from ProTrans-Young, in which it shall be included that studies conducted in order to receive market approval will be at the expense of the licensee. In order to enable an out-licensing of ProTrans™ for treatment of type 1 diabetes, the Company needs additional capital.

The proceeds from the Rights Issue shall be used for:

• Study drugs, counselling and support, subgroup analysis and eventual final analysis in the ProTrans-Young study.
• Business development with the intention to out-license ProTrans™ for treatment of type 1 diabetes.
• Pre-clinical development of ProTrans™.
• Clinical development of ProTrans™ in new indication.
• Capitalization of Qvance and Cellaviva for operating costs and expansion.

Terms for the Rights Issue

The Board of Directors of NextCell has today, subject to subsequent approval by an Extraordinary General Meeting in the Company on 27 May 2024, resolved on the Rights Issue, with the following main terms:

• For each (1) share owned on the record date, the holder will receive eleven (11) unit rights. Ten (10) unit rights entitle to subscription of one (1) unit. One (1) unit consists of one (1) newly issued share and one (1) warrant of series TO2. The subscription price is SEK 1.06 per unit, corresponding to SEK 1.06 per share. The warrants of series TO2 are issued free of charge.

• The Rights Issue entails an issue of no more than 37,817,475 units, corresponding to 37,817,475 shares and 37,817,475 warrants of series TO2.
• The record date for receiving unit rights, and the right to participate in the Rights Issue with preferential rights, will be 29 May 2024. The last day of trading in the share including the right to participate in the Rights Issue with preferential rights will be 27 May 2024.
• The subscription period for the subscription of units will run from and including the 31 May 2024 until and including 14 June 2024. The Board of Directors shall have the right to extend the subscription period.
• Trading in unit rights will be conducted on Nasdaq First North Growth Market during the period from and including 31 May 2024 until and including 11 June 2024 and trading in paid subscribed units will commence on 31 May 2024 and is expected to finish during week 27.
• Upon full subscription of the Rights Issue, the Company will initially receive issue proceeds of approximately SEK 40.1 million, before deduction of issue costs.

• Each (1) warrant of series TO2 entitles the holder to subscription of one (1) new share in the Company during the period from and including 16 May 2025 until and including 30 May 2025. The subscription price when subscribing for new a share by support of a warrant shall be set at an amount corresponding to 70 percent of the volume-weighted average price of the Company’s share during the period from and including 2 May 2025 until and including 15 May 2025, but no less than SEK 1 and no more than SEK 3.
• Provided full subscription of the Rights Issue, the Company may upon full exercise of all warrants of series TO2 receive up to approximately SEK 113.5 million in total, before deduction of issue costs.
• The warrants of series TO2 are intended to be admitted to trading on Nasdaq First North Growth Market after final registration with the Swedish Companies Registration Office.
• Existing shareholders in the Company who do not subscribe for units in the Rights Issue will be subject to a dilution of their shareholding. A fully subscribed Rights Issue entails a dilution corresponding to approximately 52.4 percent, based on the number of shares in the Company after the Rights Issue. The maximum increase of the number of shares in the Company as a result of full subscription in the Rights Issue and full exercise of the warrants of series TO2 will entail a dilution of approximately 68.7 percent (for more information, see the section “Dilution and shareholder structure” below).

Subscription undertakings and guarantee commitments

The Company has received subscription undertakings and declarations of intent from existing shareholders of approximately SEK 6.8 million in total, corresponding to approximately 17 percent of the Rights Issue. Among those who have submitted subscription undertakings are, inter alia, all members of the Company’s management and Board of Directors with shareholdings in the Company as well as the Company’s largest shareholder Diamyd Medical AB. The Company’s partner, the Polish stem cell bank Polski Bank Komórek Macierzystych, has declared its intention to enter into a subscription undertaking of approximately SEK 0.9 million. The subscription undertakings do not entitle to any compensation.

Furthermore, through agreements with the Company, investors have committed to subscribe for units in the Rights Issue through so-called bottom guarantees up to a value of approximately SEK 25.3 million, corresponding to approximately 63.1 percent of the Rights Issue in total. If the Rights Issue is subscribed and paid for above an amount totalling 32.1 percent, the bottom guarantees will not be called upon. Guarantee commitments have been provided by both existing shareholders and external investors.

Guarantee commission will be paid for the guarantee commitments, whereby commission for the bottom guarantees is paid with either 12 percent of the guaranteed amount in cash or with 14 percent of the guaranteed amount in the form of newly issued units in the Company. Each (1) unit shall consist of one (1) newly issued share and one (1) warrant of series TO2 free of charge. The subscription price per share for units issued to guarantors shall correspond to the volume-weighted average price (VWAP) for the Company’s share on Nasdaq First North Growth Market during the subscription period in the Rights Issue, but no less than the subscription price in the Rights Issue. Should the guarantor decide to receive the guarantee commission in the form of units, the Board of Directors will resolve on such new issue of units by virtue of the authorisation from the Annual General Meeting on 30 November 2023.

The guarantee commission and the subscription price have been determined through negotiations at arm’s length between the Company and the parties that have provided guarantee commitments, in consultation with the financial advisor and by analysing several market factors. The Board of Directors therefore makes the assessment that the terms have been determined in such a way that market fairness has been ensured and that the terms reflect prevailing market conditions. The guarantee commission will be paid regardless of whether the guarantee commitments are called upon.

In total, the Rights Issue is covered to approximately 80 percent by subscription undertakings and guarantee commitments as well as declarations of intent, corresponding to approximately SEK 32.1 million. Neither the subscription undertakings nor the guarantee commitments are secured by bank guarantee, escrow funds, pledging or similar arrangements in order to ensure that the proceeds covered by the commitments will be contributed to the Company. Further information regarding the parties that have entered into subscription undertakings or guarantee commitments will be provided in the prospectus that will be published in connection with the Rights Issue.

Dilution and shareholder structure

Through the Rights Issue, the share capital will increase with no more than SEK 7,752,582.375, from SEK 7,047,802.215 to SEK 14,800,384.590, through new issue of no more than 37,817,475 shares, which results in an increase of the total number of shares from 34,379,523 up to a maximum of 72,196,998 shares, which corresponds to a dilutive effect of approximately 52.4 percent.

Upon full exercise of all warrants of series TO2, the share capital will increase by an additional maximum of SEK 7,752,582.375, and the number of shares will increase by an additional maximum of 37,817,475 shares, corresponding to a dilutive effect of approximately 34.4 percent, provided a fully subscribed Rights Issue.

Upon full subscription of the Rights Issue and full exercise of the warrants, the dilutive effect amounts to a maximum of approximately 68.7 percent.

Extraordinary General Meeting

A notice convening the Extraordinary General Meeting on 27 May 2024, for approval of the Rights Issue and resolution on amendment of the Articles of Association to enable the Rights Issue, will be published through a separate press release.

Prospectus

The complete terms and conditions of the Rights Issue and information about the Company will be presented in an EU Growth prospectus, which will be published on the Company’s website, www.nextcellpharma.com, and Redeye’s website, www.redeye.se, prior to the commencement of the subscription period.

Preliminary timetable for the Rights Issue

Subscription subject to investment notification under the FDI Act

The Swedish Foreign Direct Investment Review Act (2023:560) (Sw. lagen (2023:560) om granskning av utländska direktinvesteringar) (the “FDI Act”) is applicable to the Company’s business. Upon subscription of shares to the extent that the investor’s shareholding in the Company would exceed the thresholds of 10, 20, 30, 50, 65 or 90 percent of the voting rights in the Company, the investor is obligated to notify its investment in accordance with the FDI Act. This obligation does not apply when an investor is only subscribing for shares with preferential rights in relation to the number of shares held by the investor on the record date on 29 May 2024.

Advisors

Redeye AB is financial advisor to NextCell in connection with the Rights Issue. Törngren Magnell & Partners Advokatfirma KB is legal advisor to the Company in connection with the Rights Issue.

This disclosure contains information that NextCell Pharma AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 24-04-2024 18:05 CET.

For more information about NextCell Pharma, please contact
Mathias Svahn, CEO
Patrik Fagerholm, CFO
Tel: +46 8 735 5595
E-mail: info@nextcellpharma.com

Website:
NextCell Pharma AB: www.nextcellpharma.com

Certified Adviser
FNCA Sweden AB is assigned as Certified Adviser.

About NextCell Pharma AB

NextCell is a cell therapy company that is in phase 2 studies with the drug candidate ProTrans for the treatment of type 1 diabetes. The focus is to obtain market approval of ProTrans via a phase 3 study. ProTrans is manufactured utilizing the patented platform technology for selection of optimal cells with potency to treat inflammatory disorders including autoimmune diseases. NextCell owns Cellaviva, the largest stem cell bank in the Nordics and QVance, a quality analysis CRO company in start up.

Important information

The information in this press release does not constitute an offer to acquire, subscribe for or otherwise trade with shares, paid subscribed units, unit rights or other securities in NextCell in any jurisdiction. An invitation to eligible persons to subscribe for unit rights in NextCell will only be made through the prospectus which NextCell intends to publish following the approval and registration thereof by the Swedish Financial Supervisory Authority.

The information in this press release may not be released, published, copied, reproduced or distributed, directly or indirectly, within or into the United States of America (including its territories and possessions, any state of the United States and the District of Columbia, the "USA"), Australia, Belarus, Canada, Hong Kong, Japan, New Zealand, Russia, Switzerland, Singapore, South Africa or any jurisdiction where doing so might be unlawful, subject to legal restrictions or require other actions than the ones prescribed under Swedish law. Actions in violation of these instructions may constitute a breach of applicable securities law.

This press release does not constitute an offer or invitation to acquire or subscribe for shares or other securities in the USA. No shares, paid subscribed units, unit rights, or other securities issued by the Company (the "Securities") have been, nor will they be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or the securities laws in any other state or jurisdiction in the USA, and no Securities may be offered, subscribed, used, pledged, sold, retailed, delivered or transferred, directly or indirectly, in or into the USA other than pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the USA. The Securities have not been and will not be approved or registered by the Securities and Exchange Commission, any state securities authority or other authority in the USA. No such authority has assessed or made any statements about the Rights Issue or the accuracy or reliability of the prospectus. To assert the contrary is a criminal act in the USA.

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.

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 United Kingdom's version of the EU Prospectus Regulation (2017/1129/ EU) which is part of United Kingdom's 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"); 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.

This press release does not identify, or purport to identify, risks (direct or indirect) that may be associated with an investment in Securities. Any investment decision to acquire or subscribe for Securities in connection with the Rights Issue must be made only on the basis of the prospectus to be published in connection with the Rights Issue.

Matters discussed in this press release may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "intends", "estimate", "will", "may", "continue", "should" and 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 these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond the Company's control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this press release by such forward-looking statements.