Oneflow intends to list its shares on Nasdaq First North Premier Growth Market

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Press release

28 March 2022

Oneflow AB (publ) (”Oneflow” or the ”Company”), a fast-growing SaaS company within digital contract management, today announces its intention to launch an initial public offering of shares (the “Offering”) and to list the Company’s shares on Nasdaq First North Premier Growth Market (the “Listing”). The Offering is expected to consist of new shares issued by Oneflow and potentially a smaller proportion of existing shares in the Company.

The Company’s Board of Directors deems a listing on Nasdaq First North Premier Growth Market to be a natural and important step in the Company’s development to further accelerate the Company’s growth and geographical expansion. With a global, expanding, and low-penetrated addressable market, together with an innovative product offering, Oneflow sees great opportunities to grow faster than what the internally generated funds of the Company allow. The purpose of the Offering is primarily to enable the implementation of the Company’s business plan in the form of increased investments in product development and expansion to new markets, and thereby capitalize on the Company’s growth potential. Furthermore, a listing on Nasdaq First North Premier Growth Market is expected to increase the awareness of Oneflow and its operations, strengthen the brand among investors and employees as well as improve the Company’s position in attracting customers and talents. In addition, the Offering and the Listing will give the Company access to the Swedish and international capital markets.

Nasdaq Stockholm AB has assessed that Oneflow fulfils the current listing requirements at Nasdaq First North Premier Growth Market. Nasdaq Stockholm AB will approve an application for trading of the Company’s shares on Nasdaq First North Premier Growth Market, provided that certain customary conditions are met. Depending on market conditions, the Offering and the Listing are expected to be completed during the second quarter of 2022.

Anders Hamnes, CEO and founder of Oneflow, comments:

”Since day one, approximately 10 years ago, Oneflow’s ambition has been to help companies – both small and large – to fully benefit from truly digital contracts. Contracts are the foundation of all executed deals and to digitalize the process is a natural step for all modern companies to achieve a smarter and more streamlined contract flow in all departments and teams. As there is not one single firm in the world without some form of contract in its organization, the potential customer base is enormous. The recent years’ growing demand for a secure and cloud-based contract management process, not least due to more remote work, creates further tailwinds for us. By 31st of December 2021, we had approximately 19,000 paying users in 24 different countries using Oneflow, which provides a solid foundation for continued growth and expansion. The listing is an important step for us to accelerate our expansion plans, in both existing and new markets across Europe.”

Lars Appelstål, Chairman of the Board of Oneflow, comments:

”It has been amazing to work with Oneflow’s management team and to be a part of the exciting journey and enormous growth the Company has experienced since I joined in 2015. The contract management industry is currently undergoing a huge transformation with increased digitalization in society, stricter regulations for the handling of personal data, an increased demand of a hybrid workplace as well as more secure and automated work processes. Oneflow is perfectly positioned to be a driving force in this transformation. The Company’s earlier success, entrepreneurial culture and clear focus on innovation have provided the foundation for the impressive growth.“

The Offering in brief and prospectus

Should the Company proceed with the Listing, the Offering will be directed to the general public in Sweden and institutional investors in Sweden and abroad, and consist of new shares corresponding to SEK 275 million and potentially a smaller proportion of existing shares in the Company.

In order to cover any over-allotments in connection with the Offering, the Company has undertaken to issue additional shares, corresponding to up to 15 per cent of the Offering. Oneflow intends to use the net issue proceeds from the Offering for product development, geographical expansion and general business purposes.

Swedbank Robur Ny Teknik, Handelsbanken Fonder, Andra AP-fonden (AP2), and Humle Fonder (together the “Cornerstone Investors”) have, under certain customary conditions, undertaken to acquire shares in the Offering totalling an amount of approximately SEK 215 million at a pre-money market value of the Company of up to SEK 830 million.

Complete terms, conditions and instructions for the Offering will be described in a prospectus prepared by the Company in connection with the intended Offering and Listing. The prospectus will, if published, be available on Oneflow’s website, www.oneflow.com. All offers and sales outside the United States will be made in compliance with Regulation S under the U.S. Securities Act of 1933.

About Oneflow

Oneflow develops, sells and implements digital contract management and automation systems. The Company believes that contract processing today, both in Europe and globally, is mainly characterized by manual and paper or file-based contract management, which result in a high degree of time and resource-intensive administrative work and high exposure to human errors. Through the Company’s software platform, companies are given the opportunity to digitally handle contracts before, during and after signing within one single platform in order to automate and streamline the contract management process. The Company mainly operates in the Nordic market, but its product offering has a global reach and, by 31 December 2021, the Company had 18,886 paying users in 24 countries[1]. Oneflow’s business model primarily consists of providing long-term subscriptions of products adapted to different types of customer needs and preferences through a SaaS model (Software-as-a-Service). Oneflow was founded in 2012 and is headquartered in Stockholm, Sweden. The average number of employees was 83 during 2021, allocated in its three offices in Sweden, Norway and Finland.

The Company’s platform allows users to create, cooperate and work with contracts in real time, both internally within the organization and externally towards counterparties. Thereafter, the contract can be signed and archived in a structured and secure way. Contract data such as amounts, dates and deadlines are saved and can be filtered, summarized, aggregated and automatically integrated into other business systems and be used for notifications.

Oneflow assesses there are a number of main competitive advantages that distinguish the Company from its competitors and other players in the digital contract management market, which include:

1. Oneflow has an end-to-end platform for all steps in the contract management process, i.e. before, during and after signing;
2. Oneflow has a feature-rich and flexible HTML-editor that makes the contracts interactive, adaptable to different screen sizes and allows real-time editing; and
3. The contract data in Oneflow is structured and built so that users are able to easily and efficiently find information and transfer contract data to other business systems automatically.

In the financial year ended 31 December 2021, Oneflow’s net sales amounted to SEK 43.6 million, which represents a compounded annual growth rate of 59 per cent since 31 December 2019. To continue the Company’s high and sustainable growth, Oneflow has developed strategic initiatives that mainly include the four components; innovation and product development, marketing and increased awareness of the product, increased sales to existing customers and geographical expansion to new markets. From a long-term perspective the goal is to, with the help of the Company’s growth initiatives, become one of the global market leaders in digital contract management.

Selected financial information

The following table sets forth selected performance metrics1) for Oneflow:

1)        IFRS performance metrics: Net sales is derived from the Company’s consolidated financial statements that have been audited by the Company’s auditor. The other performance metrics are alternative performance metrics not defined in accordance with IFRS and are derived from the Company’s internal accounts. These alternative performance metrics have neither been audited nor reviewed by the Company’s auditor.

2)        ARR is defined as contracted revenue for the next 12 months. As these revenue streams are invoiced and accrued over 12 months, ARR may be higher than net sales.

3)        Defined as all the paying users among the Company’s existing customers.

4)        Gross retention rate demonstrates the churn rate and is defined as current customers’ ARR at a specific point in time, divided by the same customers’ ARR, excluding expansion sales 12 months prior. Gross retention rate does not include up and cross-selling (expansion sales), but only loss of revenue from existing customers.

5)        Net retention rate is defined as current customers’ ARR at a specific point in time, divided by the same customers’ ARR 12 months prior. Net retention rate considers both expansion sales, defined as up and cross-selling, and loss of revenue from existing customers.

6)        Lifetime value : Customer acquisition cost. The customer’s lifetime value is calculated by dividing the period’s ARR with the number of customers, multiplying the result with the customers' estimated lifetime, calculated from the period’s churn, and then multiplying the result with the gross margin for the period. The customer acquisition cost is calculated through dividing the new customer acquisition costs within sales and marketing with the number of new customers that have been added during the period. In the calculation of the customers’ lifetime value, future expansion sales is not considered.

Financial targets and Dividend policy

Oneflow’s Board of Directors has adopted the following financial targets and dividend policy:

• Growth: Increase ARR to at least SEK 600 million by the end of the financial year 2026
• Profitability: Achieve an EBIT margin of at least 20 per cent by the end of the financial year 2026 while maintaining a strong focus on growth
• Dividend policy: The Board of Directors of Oneflow does not intend to propose any dividends in the foreseeable future, but instead strives to reinvest cash flows in growth initiatives

Oneflow’s financial targets and dividend policy stated above constitute forward-looking information. The financial targets are based upon a number of estimates and assumptions relating to, among others, the development of Oneflow’s industry, business, result of operations and financial position, and are subject to risks and uncertainties which will be described in more detail in the prospectus expected to be published by Oneflow in connection with the Offering.

Advisors

Danske Bank A/S, Danmark, Sverige Filial (”Danske Bank”) is Sole Global Coordinator and Bookrunner. Baker & McKenzie Advokatbyrå KB is legal advisor to Oneflow and Advokatfirman Schjødt is legal advisor to Danske Bank in connection with the Offering and Listing.

FNCA Sweden AB is the Company’s Certified Advisor and can be reached at telephone: +46 (0)8 528 00 399 and e-mail: info@fnca.se.

For further information, please contact:

Anders Hamnes, CEO and founder
Mobile: +46 76 788 50 76
Email: anders.hamnes@oneflow.com

Important information

The release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions and 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 the Company in any jurisdiction, neither from the Company nor from anyone else.

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 offering 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 United States, Australia, Canada, Hong Kong, Japan, South Africa 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.

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. A prospectus is intended to be prepared and published by the Company in connection with the Offering. The prospectus will be scrutinized and approved by the Swedish Financial Supervisory Authority (Sw. Finansinspektionen), which is the national competent authority in Sweden under the Prospectus Regulation.

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 document 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"); 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 suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the new securities. Any investment decision to acquire or subscribe for securities in connection with the Offering must be made on the basis of all publicly available information relating to the Company and the Company’s securities. Such information has not been independently verified by Danske Bank. Danske Bank is acting for the Company in connection with the transaction and no one else and 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.

The information in this press release may not be forwarded or distributed to any other person and may not be reproduced at all. Any forwarding, distribution, reproduction or disclosure of this information in its entirety or in any part is prohibited. Failure to follow these instructions may result in a breach of the Securities Act or applicable laws in other jurisdictions.

This press release does not constitute an invitation to warrant, subscribe, or otherwise acquire or transfer any securities in any jurisdiction. This press release does not constitute a recommendation for any investors' decisions regarding the Offering. Each investor or potential investor should conduct a self-examination, analysis and evaluation of the business and information described in this press release and any publicly available information. The price and value of the securities can decrease as well as increase. Achieved results do not provide guidance for future results. Neither the contents of the Company's website nor any other website accessible through hyperlinks on the Company's website are incorporated into or form part of this press release.

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 future results of operations, financial condition, 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 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. 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 the Nasdaq First North Growth Market Rulebook (Premier segment).

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 Company's securities have been subject to a product approval process, which has determined that such securities 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 securities in the Company has led to the conclusion that: (i) the target market for such securities 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 securities 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 Company's securities may decline and investors could lose all or part of their investment; the Company's securities offer no guaranteed income and no capital protection; and an investment in the Company's securities 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 Offering and the Listing.

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 Company's securities.

Each distributor is responsible for undertaking its own target market assessment in respect of the Company's securities and determining appropriate distribution channels.