Redsense Medical completes a directed new share issue of 1,500,000 shares, raising approximately SEK 73 million and the company’s largest shareholder has sold shares

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Press Release

Halmstad 8 October 2020

Redsense Medical completes a directed new share issue of 1,500,000 shares, raising approximately SEK 73 million and the company’s largest shareholder has sold shares

Redsense Medical AB (publ) (ticker: REDS) (“Redsense Medical” or the “Company”) has, based on the authorisation granted by the annual general meeting on 22 June 2020, resolved on a directed new share issue to selected Swedish and international institutional investors. In total, 1,500,000 new shares were issued at a price of SEK 48.5 per share, corresponding to a premium of 1.3 per cent in relation to the 30 trading day volume weighted average price for the Company’s share price on 8 October 2020. Through the new share issue, the Company will raise approximately SEK 73 million before issue costs. In connection with the directed new share issue, the Company’s largest shareholder, Susanne Olausson, through her company, sold in total 1,500,000 shares to the investors at the same price as in the directed new share issue. In addition, the Company’s managing director Patrik Byhmer, through his company, has acquired all remaining shares, totaling 318,419, from Susanne Olausson, through her company, who post this transaction will not own any remaining shares in the Company. The price per share was the same as in the directed new share issue. This means that the managing director Patrik Byhmer, through his company, will be the largest shareholder in the Company.

The board of directors of the Company has today, based on the authorisation granted by the annual general meeting on 22 June 2020, resolved on a directed new share issue. The directed new share issue encompasses a total of 1,500,000 new shares where the price for the shares has been determined through negotiations with a number of institutional investors and was set at SEK 48.5 per share. The Company intends to mainly use the proceeds from the new share issue to secure financing for the Company’s continued growth journey, and especially the efforts in the US and the wound care project.

The directed share issue generated a very strong interest and has been carried out to the selected Swedish and international institutional new investors TIN Fonder, Handelsbanken Fonder, Swedbank Robur Microcap, Andra AP-fonden, OstVast Capital Management and Aktia Asset Management. Through the directed new share issue, the Company will raise approximately SEK 73 million before issue costs. In connection with the directed new share issue, the Company’s largest shareholder, Susanne Olausson, through her company, sold in total 1,500,000 shares at the same price as in the directed new share issue.

The board of directors’ assessment is, based on the negotiations with the investors, that the terms for the share issue are market-based and that the price per share in the directed share issue accurately reflects current market conditions and demand.

The reason for deviating from the shareholders’ pre-emption rights, is that a directed share issue is the most appropriate alternative for the Company at this time, allowing it to raise capital in a timely and cost-effective manner, with the purpose of financing the Company’s continued growth journey and to diversify the Company’s shareholder base with local and international institutional long-term investors.

Through the directed new share issue, the Company will raise approximately SEK 73 million before issue costs. The Company's share capital will increase by SEK 150,000 from SEK 1,254,081 to SEK 1,404,081, by new issue of 1,500,000 shares, resulting in the total number of shares increasing from 12,540,810 shares to 14,040,810 shares. The new share issue results in a dilution of approximately 10.7 per cent of the capital and votes for existing shareholders based on the total number of shares and votes in the Company after the new share issue.

In connection with the share issue the Company has agreed to, with customary exceptions, not carry out any additional equity issues for a period of 180 days after the settlement date. In addition, the Company’s managing director Patrik Byhmer as well as all board members who are shareholders in the Company, have agreed to, with customary exceptions, not sell any shares in the Company for a lock-up period of 180 days after the settlement date.

Advisers

In conjunction with the directed new share issue, the Company has engaged Danske Bank as Sole Bookrunner and Advokatfirman Lindahl as legal adviser.

For further information, please contact:

Patrik Byhmer, CEO Redsense Medical AB (publ)

Phone: +46 35 10 60 30

patrik.byhmer@redsensemedical.com

About Redsense Medical

Redsense Medical is a corporate group with operations mainly in Europe and the United States. The company has developed the Redsense System, an innovationused for monitoring and alarm in the case of blood leakage in connection with a hemodialysis treatment. Redsense Medical solves one of the most serious remaining safety problems within hemodialysis – to quickly detect Venous Needle Dislodgement and catheter leakage to minimize blood leakage. The system consists of a patented fiber optic sensor, designed for either venous needle or central venous catheter, which is connected to an alarm unit. From the very start, the development of the company's technology has been based on the demands and safety requirements of healthcare providers in the dialysis sector.

This information is information that Redsense Medical AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the above mentioned contact person, at 19:20 CET on 8 October 2020.

Important information

This press release is not and does not form a part of any offer for sale of securities. Copies of this communication may not be made in, and may not be distributed or sent into, the United States, Australia, Canada, Japan, South Africa, New Zealand, Hong Kong, Singapore or any other jurisdiction in which distribution of this press release would be unlawful or would require registration or other measures. The distribution of this announcement in other jurisdictions may be restricted by law and persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions.

The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or under the securities laws of any state or other jurisdiction of the United States and, accordingly, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with applicable state securities law. The Company does not intend to register any part of the directed new share issue in the United States or to conduct a public offering of shares in the United States.

The securities referred to herein have not been and will not be registered under the applicable securities laws of Canada, Japan, Australia, South Africa, New Zealand, Hong Kong or Singapore and, subject to certain exemptions, may not be offered or sold in or into or for the account or benefit of any person having a registered address in, or located or resident in, Canada, Japan, Australia, South Africa, New Zealand, Hong Kong or Singapore. There will be no public offering of the securities described herein in Canada, Japan, Australia, South Africa, New Zealand, Hong Kong or Singapore.

This press release is not a prospectus for purposes of Prospectus Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 and its delegated and implemented regulations (the “Prospectus Regulation”) and has not been approved by any regulatory authority in any jurisdiction. The Company has not authorised any offer to the public of securities in any EEA Member State and no prospectus has been or will be prepared in connection with the directed new share issue. 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.

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” 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.

Any investment decision in connection with the directed new share issue must be made on the basis of all publicly available information relating to the Company and the issued shares. The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. This announcement does not purport to identify or suggest the risks (direct or indirect) which may be associated with an investment in the Company or the new shares.

None of the Company, the Bookrunner or any of their respective affiliates directors, officers, employees, agents, affiliates or advisers is under any obligation to update, complete, revise or keep current the information contained in this press release to which it relates or to provide the recipient of with access to any additional information that may arise in connection with it.

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 materialise 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 Spotlight’s regulations.

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 shares in Redsense Medical 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 "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors should note that: the price of the shares in Redsense Medical may decline and investors could lose all or part of their investment; the shares in Redsense Medical offer no guaranteed income and no capital protection; and an investment in the shares in Redsense Medical 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 s) 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 directed new share issue. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Bookrunner will only procure investors who meet the criteria of professional clients and eligible 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 (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 Redsense Medical.

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

Every care has been taken into consideration when translating this press release into English. In the event of differences between the English version and the Swedish original, the Swedish version shall apply.

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