WntResearch carries out a rights issue of units of approximately SEK 56 million

The Board of Directors of Wntresearch AB ("WntResearch" or the “Company") has today, subject to subsequent approval by the extraordinary general meeting in the Company on 22 December 2023, resolved to carry out a rights issue of units, consisting of shares and warrants, with preferential rights for the Company’s existing shareholders (the "Rights Issue"). The Rights Issue is mainly intended to finance and complete the Company’s ongoing Phase 2 study NeoFox as well as continued clinical and regulatory development and intensified business development. In connection with the Rights Issue, the Company has received subscription undertakings of approximately SEK 4.6 million, corresponding to approximately 8 per cent of the Rights Issue. Furthermore, the Company has received guarantee commitments of approximately SEK 23.4 million, corresponding to approximately 42 per cent of the Rights Issue, which, in aggregate, is covered by subscription undertakings and guarantee commitments of approximately SEK 28.0 million in total, corresponding to approximately 50 per cent of the Rights Issue. In the Rights Issue, two (2) existing shares entitle to subscription of one (1) unit where each unit consists of four (4) shares, one (1) warrant series TO 7 and one (1) warrant series TO 8. The subscription price is SEK 0.28 per unit. Provided that the Rights Issue is fully subscribed, WntResearch will receive initial proceeds of approximately SEK 56 million before issue costs. The Rights Issue is subject to approval by the extraordinary general meeting on 22 December 2023. Notice to the extraordinary general meeting will be published through a separate press release.

"It is extremely gratifying that we have been able to secure the company's momentum until the end of the study. Many thanks for the support we have received from several existing owners and others involved in these preparations.", says Christer Nordstedt, chairman of the Board of Directors.

Background and reason

WntResearch is a biotech company developing the drug candidate Foxy-5 to prevent the development of cancer metastases. A Phase 2 clinical study (NeoFox) of Foxy-5 is currently being conducted in patients with stage II/III colon cancer. Foxy-5 is a peptide that mimics the effect of the WNT5A protein that is naturally present in the body and prevents the spread of cancer cells.

The aim of Foxy-5 is to prevent metastasis, the spread of a tumor to other parts of the body. Preclinical data and ad hoc clinical observations support the hypothesis. Clinical data have so far shown that the substance has a very high level of safety and tolerance, which may make it possible to avoid the problems normally associated with other cancer treatments. Although current cancer treatments have become more effective, there are currently no effective ways to prevent the development of metastases, which cause about 90 per cent of all cancer-related deaths.

NeoFox is a proof of concept study being conducted in around 25 hospitals in Spain and Hungary. Previous ad hoc observations from the study indicate that Foxy-5 has an anti-tumor effect. This means that the drug candidate can counteract the ability of cancer cells to spread and invade healthy tissue, but also potentially eliminate cancer cells – this already after three weeks of treatment. Overall, the ad hoc observations indicate that Foxy-5 has a biological activity with the potential to improve patients' prognosis. Based on these observations, the Company decided to revise the study plan, which was approved by the Spanish authorities in July 2023. This allows the Company to continue developing Foxy-5 as a potential new treatment for colon cancer patients. In addition to changing the efficacy measures, the changes mean that the patients' participation in the study is shortened by almost two years, which reduces the cost per patient and shortens the time to complete the study. In the first phase, the Company will follow a limited number of patients to investigate the possibilities of treatment at higher doses than those previously studied. This phase is expected to take about six months and takes place in Spain, where the first patient was recruited in October 2023. After the most suitable dose has been defined, the recruitment of the 80 patients needed to evaluate the effect in the study will begin, which will then be expanded to a number of clinics in Hungary.

In October 2023, WntResearch decided to perform an initial analysis of the data already after 20 patients in the Foxy-5 group and 20 patients in the control group have had their tumor removed. The intention is to evaluate the effect of Foxy-5 and at the same time assess whether the planned number of 80 patients in total is large enough for the study as a whole to demonstrate the desired effect. Final results from the study are expected in 2025.

Provided that the Rights Issue is fully subscribed, the Company will initially receive approximately SEK 56 million before issue costs, which are expected to amount to approximately SEK 9 million. The net proceeds from the Rights Issue thus amount to approximately SEK 47 million. The Rights Issue is mainly intended to finance the Company's ongoing Phase 2 study NeoFox and to finance continued clinical and regulatory development and intensified business development.

In November 2024, the Company may receive additional proceeds if the warrants series TO 7 issued in the Rights Issue are exercised for subscription of shares. Upon full subscription and full exercise of all warrants series TO 7 within the framework of the issued units, the Company may receive an additional capital contribution of approximately SEK 24 million, based on a maximum subscription price of SEK 0.12. The proceeds from the exercise of warrants series TO 7 are intended to be used to complete the Company's ongoing Phase 2 study NeoFox and to finance continued clinical and regulatory development and intensified business development.

In April 2025, the Company may receive additional proceeds if the warrants series TO 8 issued in the Rights Issue are exercised for subscription of shares. Upon full subscription and full exercise of all warrants series TO 8 within the framework of the issued units, the Company may receive an additional capital contribution of approximately SEK 24 million, based on a maximum subscription price of SEK 0.12. The proceeds from the exercise of warrants series TO 8 are intended to be used to finance continued clinical and regulatory development and intensified business development.

Terms and conditions of the Rights Issue

The Board of Directors has today, subject to approval by the extraordinary general meeting on 22 December 2023, resolved to carry out the Rights Issue by issuing a maximum of 200,483,714 units. The right to subscribe for units with preferential rights shall vest in those who are registered as shareholders in the Company on the record date, 11 January 2024, whereby one (1) existing share entitles to one (1) unit right and two (2) unit rights entitle to subscription of one (1) unit consisting of four (4) shares, one (1) warrant series TO 7 and one (1) warrant series TO 8. In total, the Rights Issue comprises a maximum of 801,934,856 shares, a maximum of 200,483,714 warrants series TO 7 and 200,483,714 warrants series TO 8. The subscription price is SEK 0.28 per unit corresponding to a subscription price of SEK 0.07 per share, which means that WntResearch, provided that the Rights Issue is fully subscribed, initially will receive approximately SEK 56 million before issue costs and excluding the additional proceeds that may be received upon exercise of the warrants that are issued in the Rights Issue. The warrants are issued free of charge. Subscription of units with or without preferential rights shall take place during the period 15 January 2024 – 29 January 2024. Unit rights that are not utilized during the subscription period will become invalid and lose their value. Trading in unit rights is expected to take place on Spotlight Stock Market during the period 15 January 2024 – 24 January 2024.

One (1) warrant series TO 7 entitles the rights to subscribe for one (1) new share in the Company to a subscription price corresponding to seventy (70) per cent of the volume weighted average price of the Company’s share during the period from and including 16 October 2024 up to and including 29 October 2024, however not lower than the shares’ quota value and not more than SEK 0.12. Subscription of shares by exercise of warrants will take place during the period from and including 4 November 2024 up to and including 18 November 2024.

One (1) warrant series TO 8 entitles the rights to subscribe for one (1) new share in the Company to a subscription price corresponding to seventy (70) per cent of the volume weighted average price of the Company’s share during the period from and including 14 March 2025 up to and including 27 March 2025, however not lower than the shares’ quota value and not more than SEK 0.12. Subscription of shares by exercise of warrants will take place during the period from and including 2 April 2025 up to and including 16 April 2025.

If not all units are subscribed for by exercise of unit rights, allotment of the remaining units shall be made within the highest amount of the Rights Issue: firstly, to those who have subscribed for units by exercise of unit rights (regardless of whether they were shareholders on the record date or not) and who have applied for subscription of units without exercise of unit rights and if allotment to these cannot be made in full, allotment shall be made pro rata in relation to the number of unit rights that each and every one of those, who have applied for subscription of units without exercise of unit rights, have exercised for subscription of units; secondly, to those who have subscribed for units in the Rights Issue without exercise of unit rights and if allotment to these cannot be made in full, allotment shall be made pro rata in relation to the number of units the subscriber in total has applied for subscription of units; and thirdly, to those who have provided underwriting commitments with regard to subscription of units, in proportion to such underwriting commitments. To the extent that allotment in any section above cannot be done pro rata, allotment shall be determined by drawing of lots.

Change of share capital and number of shares as well as dilution

The Board of Directors will propose to the extraordinary general meeting on 22 December 2023 that the share capital shall be reduced with SEK 20,048,371.45 in total, from SEK 36,087,068.61 to SEK 16,038,697.16, in two stages. This reduction will mean that the quota value per share is reduced from SEK 0.09 to SEK 0.04.

Upon full subscription in the Rights Issue, the number of shares in the Company will increase by a maximum of 801,934,856 shares from 400,967,429 to 1,202,902,285 and the share capital will increase by a maximum of SEK 32,077,394.24 from SEK 16,038,697.16 to SEK 48,116,091.40 (calculated on the new quota value following the contemplated share capital decreases proposed by the Board of Directors to the extraordinary general meeting on 22 December 2023). For existing shareholders not participating in the Rights Issue this will entail, upon full subscription, a dilution effect of approximately 66.7 per cent of the votes and capital of the Company.

In the event all warrants series TO 7 are fully exercised to subscribe for new shares in the Company, the number of shares will increase by an additional 200,483,714 shares to a total of 1,403,385,999 shares and the share capital will increase by an additional SEK 8,019,348.56 to SEK 56,135,439.96 (calculated on the new quota value following the contemplated share capital decreases proposed by the Board of Directors to the extraordinary general meeting on 22 December 2023). This corresponds to a dilution from the warrants of an additional maximum of approximately 14.3 per cent.

In the event all warrants series TO 8 are fully exercised to subscribe for new shares in the Company, the number of shares will increase by an additional 200,483,714 shares to a total of 1,603,869,713 shares and the share capital will increase by an additional SEK 8,019,348.56 to SEK 64,154,788.52 (calculated on the new quota value following the contemplated share capital decreases proposed by the Board of Directors to the extraordinary general meeting on 22 December 2023). This corresponds to a dilution from the warrants of an additional maximum of approximately 12.5 per cent.

The total dilution in the event both the Rights Issue and the warrants are exercised in full thus amounts to approximately 75.0 per cent.

Subscription undertakings and guarantee commitments

WntResearch has received subscription undertakings from certain existing shareholders as well as members of the Board of Directors and executive management, amounting to a total of approximately SEK 4.6 million, corresponding to approximately 8 per cent of the Rights Issue. No remuneration is paid for submitted subscription undertakings. The Company has also entered into agreements with a number of external investors regarding guarantee commitments of a total of approximately SEK 23.4 million, corresponding to approximately 42 per cent of the Rights Issue. Cash compensation is paid according to the guarantee agreements of fifteen (15) per cent of the guaranteed amount, corresponding to approximately SEK 3.5 million in total, or seventeen (17) per cent of the guaranteed amount in the form of newly issued units in the Company, on the same terms and conditions as units in the Rights Issue, however the subscription price per unit shall correspond to the volume weighted average price for the Company’s share on Spotlight Stock Market during the subscription period in the Rights Issue (i.e. 15 January 2024 – 29 January 2024) multiplied by four (4), however not lower than the subscription price in the Rights Issue.

In aggregate, the Rights Issue is covered by subscription undertakings and guarantee commitments of approximately SEK 28.0 million, corresponding to approximately 50 per cent of the Rights Issue.

In order to enable issue of units as guarantee remuneration to the guarantors who choose to receive guarantee remuneration in the form of newly issued units, the Board of Directors has proposed that the extraordinary general meeting on 22 December 2023, which, among other things, is proposed to resolve on the approval of the Rights Issue, reductions of the share capital and amendment of the articles of association, also resolves to authorize the Board of Directors to resolve on the issue of such units to the guarantors.

Lock-up undertakings
In connection with the Rights Issue, all board members and senior executives with shareholdings in WntResearch have undertaken towards Vator Securities AB, with customary exceptions, not to sell or carry out other transactions with the same effect as a sale without, in each individual case, first having obtained a written approval from Vator Securities AB. The decision to give such written consent is decided by Vator Securities AB and an assessment is made in each individual case. Granted consent can depend on both individual and business reasons. The lock-up undertakings only apply to the shares that are held before the Rights Issue and the lock-up period lasts 180 days after the announcement of the Rights Issue.

Preliminary timetable for the Rights Issue

Extraordinary general meeting

The Board of Directors’ resolution on the Rights Issue is subject to approval by the extraordinary general meeting on 22 December 2023. The resolution on the Rights Issue is subject to and conditional upon that the extraordinary general meeting also resolves to reduce the share capital and to amend the articles of association in accordance with the Board of Directors’ proposal to the extraordinary general meeting. Notice to the extraordinary general meeting will be published through a separate press release.

Prospectus

Full terms and conditions and instructions for the Rights Issue as well as other information about the Company will be presented in the prospectus that the Company expects to publish around 8 January 2024 (the "Prospectus").

Advisers

Vator Securities AB acts as financial adviser and Setterwalls Advokatbyrå AB acts as legal adviser to the Company in connection with the Rights Issue. Vator Securities AB also acts as issuer agent in connection with the Rights Issue.

For further information:

Pernilla Sandwall, CEO

E-mail: pernilla.sandwall@wntresearch.com

This information is such information that Wntresearch AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, on 20 November 2023 at 23.45 CET.

About Wntresearch AB

WntResearch is an oncology biotech company that develops new therapies to counteract the development of cancer metastases. The company’s research is focused on studying the endogenous protein WNT5A, which has been shown in scientific studies to affect the ability of tumor cells to move and spread in the body. WntResearch’s drug candidate Foxy-5 is a peptide that mimics the function of WNT5A with the aim of reducing the mobility and spread of cancer cells and thereby preventing metastases from occurring. Although today’s cancer treatment has become more effective, there are no effective ways to prevent the occurrence of metastases that cause about 90 percent of all cancer-related deaths. Foxy-5 has a unique mechanism of action and has shown a good safety profile with few side effects in two clinical Phase 1 studies. The safety and efficacy of Foxy-5 is now being evaluated in the ongoing Phase 2 clinical trial NeoFox in patients with stage II-III colon cancer.

WntResearch’s registered office is in Malmö and the company is listed on Spotlight Stock Market. For more information see: www.wntresearch.com.

IMPORTANT INFORMATION

The information in this press release does not contain or constitute an offer to acquire, subscribe or otherwise trade in shares, warrants or other securities in WntResearch. No action has been taken and measures will not be taken to permit a public offering in any jurisdictions other than Sweden. Any invitation to the persons concerned to subscribe for units in Wntresearch will only be made through the Prospectus that WntResearch estimates to publish on or around 8 January 2024 on WntResearch’s website, www.wntresearch.com. The upcoming approval of the Prospectus by the Swedish Financial Supervisory Authority shall not be regarded as an approval of the Company’s shares, warrants or any other securities. This release is not a prospectus in accordance with the definition in the Prospectus Regulation (EU) 2017/1129 (“Prospectus Regulation”) and has not need approved by any regulatory authority in any jurisdiction. 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 shares, warrants or other securities in WntResearch. In order for investors to fully understand the potential risks and benefits associated with a decision to participate in the Rights Issue, any investment decision should only be made based on the information in the Prospectus. Thus, investors are encouraged to review the Prospectus in its entirety. In accordance with article 2 k of the Prospectus Regulation this press release constitutes an advertisement.

The information in this press release may not be released, distributed or published, directly or indirectly, in or into the United States of America, Australia, Belarus, Canada, Hong Kong, Japan, New Zealand, Russia, Singapore, South Africa, South Korea, Switzerland or any other jurisdiction in which such action would be unlawful or would require registration or any other measures than those required by Swedish law. Actions in violation of these restrictions may constitute a violation of applicable securities laws. No shares, warrants or other securities in WntResearch have been registered, and no shares, warrants or other securities will be registered, under the United States Securities Act of 1933, as amended (the “Securities Act”) or the securities legislation of any state or other jurisdiction in the United States of America and no shares or other securities may be offered, sold or otherwise transferred, directly or indirectly, in or into the United States of America, except under an available exemption from, or in a transaction not subject to, the registration requirements under the Securities Act and in compliance with the securities legislation in the relevant state or any other jurisdiction of the United States of America.

Within the European Economic Area (“EEA”), no public offering of shares, warrants or other securities (“Securities”) is made in other countries than Sweden. In other member states of the EU, such an offering of Securities may only be made in accordance with the Prospectus Regulation. In other member states of the EEA which have implemented the Prospectus Regulation in its national legislation, any offer of Securities may only be made in accordance with an applicable exemption in the Prospectus Regulation and/or in accordance with an applicable exemption under a relevant national implementation measure. In other member states of the EEA which have not implemented the Prospectus Regulation in its national legislation, any offer of Securities may only be made in accordance with an applicable exemption under national law.

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”); (ii) high net worth entities etc. falling within Article 49(2)(a) to (d) of the Order; or (iii) such other persons to whom such investment or investment activity may lawfully be made available under 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 may contain forward-looking statements which reflect the Company’s current view on future events and financial and operational development. Words such as “intend”, “will”, “expect”, “anticipate”, “may”, “believe”, “plan”, “estimate” and other expressions which imply indications or predictions of future development or trends, and which are not based on historical facts, are intended to identify forward-looking statements. Forward-looking statements inherently involve both known and unknown risks and uncertainties as they depend on future events and circumstances. Forward-looking statements do not guarantee future results or development and the actual outcome could differ materially from the forward-looking statements.

This information, the opinions and the forward-looking statements included in this press release are only applicable as of this date and may change without any notice thereof. WntResearch does not undertake to publish any updates or amendments of forward-looking statements, future events or similar circumstances other than what is required by appliable legislation.