Artificial Solutions announces upsize and completes a directed share issue of approximately SEK 50 million

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Artificial Solutions International AB (“Artificial Solutions” or the “Company”) has, in accordance with the intention announced in the Company’s press release earlier today, carried out a directed issue of 100,000,000 shares (the “Directed Share Issue”). As a result of the strong demand from long-term institutional investors, the Company has decided to increase the size of the Directed Share Issue with approximately SEK 10 million from approximately SEK 40 million to SEK 50 million. The subscription price of the shares in the Directed Share Issue amounts to SEK 0.50 per share and was determined through an accelerated book building procedure led by Pareto Securities AB (“Pareto Securities”). After the Directed Share Issue, the Company will have a new largest shareholder with a total ownership of approximately 18 percent of the Company.

The Board of Directors of Artificial Solutions has, in accordance with the intention announced in the Company’s press release earlier today, resolved on the Directed Share Issue, pursuant to the authorization granted to the Board of Directors by the annual general meeting on 27 June 2023. As a result of the strong demand from long-term institutional investors, the Company has decided to increase the size of the Directed Share Issue with approximately SEK 10 million from approximately SEK 40 million to SEK 50 million. The subscription price in the Directed Share Issue was SEK 0.50 per share and was determined through an accelerated book building procedure carried out by the Company’s financial advisor Pareto Securities. It is therefore the Board of Directors’ assessment that the terms for the Directed Share Issue and the subscription price per share reflects prevailing market conditions and investor demand. The subscription price per share in the Directed Share Issue constitutes a discount of approximately 24.2 percent compared to the closing price on Nasdaq First North Growth Market on 19 June 2024 and a discount of approximately 10.4 percent in relation to the volume-weighted average trading price of SEK 0.55799 during the period from and including 5 February 2024 (which was the date on which the Company carried out its latest rights issue) until and including 19 June 2024. Through the Directed Share Issue Artificial Solutions will receive SEK 50 million before deduction of transaction costs.

After the Directed Share Issue, the Company will have a new largest shareholder with a total ownership of approximately 18 percent of the Company.

Background and rationale

The net proceeds from the Directed Share Issue are intended to be used to enhance sales and marketing efforts, including hiring senior account managers and executing targeted campaigns in the US and UK. The net proceeds are also intended to support ongoing innovation and development of the Teneo.ai platform, rebranding and market penetration initiatives to strengthen brand identity and customer engagement, and to finance the working capital needs until the Company achieves self-financing status.

The Board of Directors has made an overall assessment and carefully considered the possibility to raise capital through a new share issue with preferential rights for the Company's shareholders instead and has made the assessment that it currently, for several reasons, is more advantageous for the Company and the shareholders to raise capital through a directed share issue. A rights issue would take significantly longer time to execute, which could impair the Company's financial flexibility and entail an exposure to market volatility and risk reducing the ability to raise capital. The Company further assesses that a rights issue under current market conditions would entail higher costs related to considerations to potential guarantee undertakings. In addition, a directed share issue provides the opportunity to further diversify and strengthen the Company’s shareholder base with institutional investors in order to increase the liquidity of the Company’s shares, and the execution of a directed share issue can take place at a lower cost and with less complexity than a rights issue. In the current volatile market environment - which may entail that the conditions for capital raises can change rapidly - the Company deems it prudent to act on the prevailing opportunity and to raise further capital from reputable institutional and professional investors. With the above considered, the Board of Directors has made the assessment that a directed issue of shares with deviation from the shareholders’ preferential rights is the most favorable alternative for the Company, and thus that it is in the shareholders' interest to carry out the capital raising.

Shares and share capital

Through the Directed Share Issue, the number of outstanding shares in the Company will increase by 100,000,000 shares, from 273,144,240 shares to 373,144,240 shares and the share capital will increase by SEK 43,906,963.480178, from SEK 119,929,341.705009 to SEK 163,836,305.185187. The Directed Share Issue entails a dilution of approximately 26.8 percent of the number of shares and votes in the Company based on the number of shares and votes following the Directed Share Issue.

Lock-up

In connection with the Directed Share Issue, the Company has undertaken, subject to customary exceptions, not to issue additional shares for a period of twelve months after the announcement of the outcome of the Directed Share Issue. Shareholding board members, the Company's CEO Per Ottosson and the Company's CFO Fredrik Törgren have undertaken, subject to customary exceptions, not to sell any securities in Artificial Solutions for a period of 180 calendar days after the announcement of the outcome of the Directed Share Issue.

Advisers

Pareto Securities is Sole Manager and Bookrunner, Advokatfirman Schjødt is legal adviser to the Company and Advokatfirman Lindahl is legal adviser to Pareto Securities in connection with the Directed Share Issue.

For further information, contact

Per Ottosson, CEO, Artificial Solutions

E-mail: per.ottosson@artificial-solutions.com

This information is such that Artificial Solutions International AB is obliged to disclose pursuant to the EU Market Abuse Regulation. The information was released for public disclosure, through the agency of the contact person above, on 19 June 2024 at 23:59 CEST.

About Artificial Solutions

Artificial Solutions® (SSME: ASAI) is a leader in AI. Our platform, Teneo®, is used by millions of people across hundreds of private and public sector SaaS deployments worldwide. Our solution OpenQuestion® optimizes routing for Contact Centers to better serve customers and reduce costs.

Teneo runs 86 languages and dialects and can be fully integrated with call center and contact center systems. Teneo.ai, Teneo and OpenQuestion are registered brands by Artificial Solutions.

Artificial Solutions International is listed on Nasdaq First North Growth Market in Stockholm with short name ASAI. Redeye is the Company's Certified Adviser certificateadviser@redeye.se,+46 8 121 576 90.

Learn more at www.investors.artificial-solutions.com

Important information

The release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions. The recipients of this press release in jurisdictions where this press release has been published or distributed shall inform themselves of and follow such 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, where such offer would be considered illegal. This press release is not a prospectus for the purposes of the Prospectus Regulation (EU) 2017/1129 (the “Prospectus Regulation”) and has not been approved or reviewed by any regulatory authority in any jurisdiction. Artificial Solutions has not authorized any offer to the public of shares or rights in any Member State of the EEA and no prospectus has been or will be prepared in connection with the Directed Share Issue. In any EEA Member State, this communication is only addressed to and is only directed to “qualified investors” in that Member State within the meaning of the Prospectus Regulation.

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 Australia, Belarus, Canada, Hong Kong, Japan, New Zeeland, Russia, Singapore, South Africa, South Korea, the United States, 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.

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 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 announcement 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 shares. Any investment decision in connection with the Directed Share Issue must be made on the basis of all publicly available information relating to the Company and the Company’s shares. Such information has not been independently verified by Pareto Securities. Pareto Securities 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 Directed Share Issue or any other matter referred to herein.

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 Directed Share Issue. 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 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 required by law or Nasdaq First North Growth Market's rule book for issuers.

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 Artificial Solutions 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 “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 shares in the Company has led to the conclusion that: (i) the target market for such shares 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 shares 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 shares in Artificial Solutions may decline and investors could lose all or part of their investment; the shares in Artificial Solutions offer no guaranteed income and no capital protection; and an investment in the shares in Artificial Solutions 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 Directed Share Issue. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Pareto Securities 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 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 shares in Artificial Solutions.

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