Observe Medical ASA: Proposed rights issue and notice of extraordinary general meeting in connection with the rights issue
NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, THE HONG KONG SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE'S REPUBLIC OF CHINA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. OTHER RESTRICTIONS ARE APPLICABLE. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.
Observe Medical ASA: Proposed rights issue and notice of extraordinary general meeting in connection with the rights issue
Oslo, 1 November 2023: The board of directors of Observe Medical ASA (the "Company") has resolved to propose that the Company carries out a share capital increase, by way of a rights issue, to raise gross proceeds of minimum NOK 18,000,000.20 and maximum NOK 54,999,999.86 (the "Rights Issue"). The minimum proceeds from the Rights Issue will be used to finance the working capital requirements in connection with scale up of the production and sale of the Unometer portfolio. Any excess proceeds will be used for general corporate purposes.
The proposed Rights Issue is subject to a shareholder approval. The Company hereby calls for an extraordinary general meeting to be held on Wednesday 22 November 2023 at 09:00 hours (CET) at the Company's offices in Dronning Eufemias gate 16, 0191 Oslo, Norway.
Notice of the EGM, including proposed resolutions regarding the Rights Issue, will be sent to the shareholders today on 1 November 2023, and will also be made available on the Company's website https://observemedical.com/investor-relations/. Further information regarding attendance to the general meeting is included in the notice.
Sparebank 1 Markets has been engaged as manager for the Rights Issue (the "Manager"). Advokatfirmaet Thommessen AS is acting as legal advisor to the Company in connection with the Rights Issue.
Subscription price, subscription rights and proceeds
The subscription price for the new shares to be issued in the Rights Issue (the "New Shares"), will be proposed by the board of directors, based on a recommendation from the Manager, the day prior to the EGM, and will be minimum NOK 0.26 and maximum NOK 1.35 per share. The board of directors' resolution in this respect will be announced through a stock exchange announcement on the day prior to the EGM, and then be reflected in the final proposed resolution to the EGM.
Pursuant to section 10-4 of the Norwegian Public Limited Liability Companies Act, the shareholders of the Company at the date of the EGM who are not resident in a jurisdiction where such offering would be unlawful or, (in jurisdictions other than Norway) require any prospectus, filing, registration or similar action, will be granted a preferential right to subscribe for and be allocated the New Shares in proportion to the number of shares in the Company they own as of that date, and will according to the board of directors' proposal receive subscription rights proportionate to their existing shareholding as registered in the Company's shareholder register in the Norwegian Central Securities Depository (ESO) at the expiry of 24 November 2023. Provided that a purchase of shares is made with ordinary T+2 settlement, shares purchased up to and including 22 November 2023 will give the right to receive subscription rights, whereas shares purchased from and including 23 November 2023, will not give the right to receive subscription rights. The subscription rights will be tradable and listed on Euronext Expand Oslo from and including the first day of the subscription period and until 16:30 (Oslo time) four trading days prior to the expiry of the subscription period. Over-subscription and subscription without subscription rights will be permitted.
The maximum gross proceeds from the Rights Issue will be NOK 55 million (rounded up) and the minimum gross proceeds will be NOK 18 million (rounded down). The Company has received loans from its largest shareholders with an aggregate nominal value of NOK 16.75 million, in addition to accrued interests and interests that will accrue up to and including the agreed maturity date (the "Loans"). The Loans include (i) loans of in total NOK 7.25 as announced in the stock exchange announcement of the Company dated 11 September 2023 and (ii) loans with an aggregate nominal value of NOK 9.5 million based on loan agreements that were announced by the Company in a stock exchange notice dated 23 March 2023. As previously announced by the Company, the Lenders may choose to utilize the Loans (including accrued and unaccrued interest calculated up to and including the agreed maturity date) fully or partly to set-off against any subscription of shares in the Company during the terms of the Loans. As a result, the subscription amount for the new shares may be settled by both cash and by way of set-off against shareholder loans. However, it is a condition for the Lenders to be permitted to convert the Loans in the Rights Issue that the Company raises gross proceeds in cash of minimum NOK 18,000,000.20.
It is a condition for completion of the Rights Issue that (i) the Company raises gross proceeds in the Rights Issue of minimum NOK 18,000,000.20 in cash and (ii) that each of the Lenders convert the Loans in whole and/or enter into an amendment agreement for the remaining amount under each of the respective Loans that are not converted regarding extension of the maturity date and amendment of the terms to market terms.
Prospectus and indicative timeline
In connection with the Right Issue a prospectus (the "Prospectus") will be prepared, which is subject to the approval by the Norwegian Financial Supervisory Authority (the "NFSA"), expected to be obtained on or about 24 November 2023. The Prospectus will be published prior to the commencement of the subscription period and will form the basis for subscriptions in the Right Issue. Provided that the Prospectus is approved by the Norwegian Financial Supervisory Authority in time, the subscription period for the Rights Issue will commence on 28 November 2023 and expire on 12 December 2023 at 16:30 hours (CET). In the event that the Prospectus is not approved in time to uphold this subscription period, the subscription period will commence on the second trading day on Euronext Expand Oslo following the approval and expire at 16:30 hours (CET) two weeks thereafter. A further description of the Rights Issue and other circumstances that must be considered upon subscription of shares in the Rights Issue will be included in the Prospectus.
Included below is an indicative timeline for the Rights Issue:
22 November 2023: Extraordinary general meeting
22 November 2023: Last day of trading in the shares including subscription rights (assuming normal T+2 settlement)
23 November 2023: First day of trading in the shares excluding subscription rights (assuming normal T+2 settlement)
24 November 2023: Record date for determination of the right to receive subscription rights
On or around 24 November 2023: Publication of the Prospectus
On or around 28 November 2023: Commencement of the subscription period and first day of trading in the subscription rights
On or around 6 December 2023: Last day of trading in the subscription rights
On or around 12 December 2023: Last day of the subscription period
On or around 13 December 2023: Allocation of the New Shares
On or around 15 December 2023: Payment of the New Shares
On or around 21 December 2023: Registration of the share capital increase with the Norwegian Register of Business Enterprises
All dates and other figures with respect to the Rights Issue included herein remain tentative and subject to change. Any changes will be announced at the EGM or through stock exchange announcements.
For further information, please contact:
Rune Nystad, CEO Observe Medical
Mobile: +47 916 24 683
E-mail: rune.nystad@observemedical.com
Per Arne Nygård, CFO Observe Medical
Mobile: +47 411 04 345
E-mail: perarne.nygard@observemedical.com
This information is considered to be inside information pursuant to the EU Market Abuse Regulation (MAR) and is subject to the disclosure requirements pursuant to MAR article 17 and section 5-12 of the Norwegian Securities Trading Act.
This stock exchange announcement was published by Per Arne Nygård, CFO on 1 November 2023 at 08:40 CET on behalf of the Company.
About Observe Medical
Observe Medical is a Nordic medtech company that develops, markets and sells innovative medtech products for the global market. The Company is committed to improving patient welfare and patient outcomes, improving clinical data accuracy and promoting positive health economics.
The Company seeks to drive growth by leveraging its expertise in sales and commercialization of its broad portfolio of medical technology products, mainly in urine measurement, ultrasound, anesthesiology/ICUs, surgery and wound care, in combination with targeted M&A.
The Company is headquartered in Oslo, Norway, with additional offices in Narvik, Norway and Gothenburg, Sweden, and subsidiaries in Finland and the US. In addition, Observe Medical has a direct sale organization in the Nordics and a distributor network internationally.
Further information is available at www.observemedical.com.
***
- IMPORTANT INFORMATION –
This announcement does not constitute an offer of securities for sale or a solicitation of an offer to purchase securities of the Company in the United States or any other jurisdiction. Copies of this document may not be sent to jurisdictions, or distributed in or sent from jurisdictions, in which this is barred or prohibited by law. The securities of the Company may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"). The securities of the Company have not been, and will not be, registered under the U.S. Securities Act. Any sale in the United States of the securities mentioned in this communication will be made solely to "qualified institutional buyers" as defined in Rule 144A under the U.S. Securities Act. No public offering of the securities will be made in the United States.
Any offering of the securities referred to in this announcement will be made by means of the Prospectus. This announcement is an advertisement and is not a prospectus for the purposes of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on prospectuses to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (as amended) as implemented in any EEA Member State (the "Prospectus Regulation"). Investors should not subscribe for any securities referred to in this announcement except on the basis of information contained in the Prospectus. Copies of the Prospectus will, following publication, be available from the Company's registered office and, subject to certain exceptions, on the website of the Manager.
In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State.
In the United Kingdom, this communication is only addressed to and is only directed at Qualified Investors who (i) are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") or (ii) are persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.) (all such persons together being referred to as "Relevant Persons"). These materials are directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.
This document is not for publication or distribution in, directly or indirectly, Australia, Canada, Japan, the United States or any other jurisdiction in which such release, publication or distribution would be unlawful, and it does not constitute an offer or invitation to subscribe for or purchase any securities in such countries or in any other jurisdiction. In particular, the document and the information contained herein should not be distributed or otherwise transmitted into the United States or to publications with a general circulation in the United States of America.
The Manager is acting for the Company in connection with the Rights Issue and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients or for providing advice in relation to the Rights Issue or any transaction or arrangement referred to in this announcement.
Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "anticipate", "believe", "continue", "estimate", "expect", "intends", "may", "should", "will" and similar expressions. The forward-looking statements in this 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 its control. 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 information, opinions and forward-looking statements contained in this announcement speak only as at its date and are subject to change without notice. This announcement is made by and is the responsibility of, the Company. Neither the Manager nor any of its affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.
This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities of the Company. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness. Neither the Manager nor any of its respective affiliates accepts any liability arising from the use of this announcement.