Brain+ A/S published the outcome of its rights issue of units

COMPANY ANNOUNCEMENT

Copenhagen, Denmark, May 30, 2023 – Brain+ A/S (Nasdaq First North: BRAINP)

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, 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 THE RELEASE, DISTRIBUTION OR PUBLICATION WOULD BE UNLAWFUL OR REQUIRE REGISTRATION OR ANY OTHER MEASURE.

The subscription period in Brain+ A/S’ (“Brain+” or the “Company”) rights issue of units with pre-emptive subscription rights for existing shareholders, in which the public also was given the opportunity to participate, ended on May 25, 2023. The rights issue was subscribed to a total of approximately 88 percent, including pre-subscription and guarantee commitments. Brain+ will thus be provided proceeds of approximately DKK 13.8 million before deduction of transaction related costs. As a result of the outcome, the option of an over-allotment issue will not be used. The outcome of the rights issue of units ensures that Brain+ can continue investing in the commercial build-up for its first marketed digital dementia product and in maturing its clinical pipeline of more advanced product options. Formal decision on unit allocation is estimated to take place on May 31, 2023.

In a comment to the outcome of the rights issue, Brain+ CEO Kim Baden-Kristensen says:
“There is a huge global need for better care and therapy to help people living with dementia, their relatives and the healthcare systems around them and a significantly growing acknowledgement of the potential in non-pharmaceutical solutions. This includes not least Cognitive Stimulation Therapy, the therapeutic foundation for our most mature products, and with the depth of knowledge built into our digital dementia technologies, we believe to have a strong foundation to take a lead in the field of digital dementia therapy. 
With the new capital from our rights issue, we have fuel to continue both the market introduction of the first version of our new digital dementia product, CST-Therapist Companion, and advance the clinical development of the next, more advanced CST-based products in our pipeline. It is not the best conditions for a young growth company like Brain+ to raise capital, and I am very grateful to all existing shareholders who continue to support our development and to new shareholders who have shown their commitment to join us on our mission to relieve the heavy burden of dementia. ”, says Brain+ CEO Kim Baden-Kristensen

Subscription, allocation, and payment
The rights issue was subscribed to approximately DKK 11.2 million including pre-subscriptions of approximately DKK 4.4 million, which corresponds to a subscription rate of approximately  71 percent. In addition, guarantee commitments of approximately DKK 2.6 million has been activated, corresponding to approximate 17 percent of the rights issue. The total subscription rate thus ended at 87.73 percent, meaning that Brain+ is provided approximately DKK 13.8 million in capital proceeds before deduction of transaction related costs. The transaction related costs amount to approximately DKK 3.6 million (including compensation to guarantee providers of approximately DKK 1.4 million). Out of the proceeds to Brain+ from the rights issue, approximately DKK 3.7 million has already been received through the bridge loan that the Company secured in March 2023. Further, approximately DKK 0.70 million of the total proceeds is compensation to the bridge lenders and thus means no new cash for Brain+. 

Each unit subscribed for in the rights issue has a price of DKK 1 and comprises two (2) new shares in Brain+ of nominal value 0.10 DKK each, two (2) warrants of series TO 2 and two (2) warrants of series TO 3. 
 

A total of 5,338,712 units were subscribed for with the support of pre-emptive unit rights. The allocation of units subscribed for without the support of pre-emptive unit rights has been made in accordance with the principles described in the prospectus published by the Company on April 24, 2023. Payment for units without pre-emptive unit rights will be made via a delivery versus payment transfer through the subscriber’s own bank and will be withdrawn from the account by the subscriber’s own account holder’s bank or brokers.
 

Through the rights issue, a total of 27,582,348 shares of nominal value 0.10 DKK each, 27,582,348 warrants of series TO 2 and 27,582,348 warrants of series TO 3 are issued.

Number of shares and share capital
When the new shares from the unit rights issue have been registered with the Danish Business Authority, the share capital will have increased with nominally DKK 2,758,234.80, from nominally DKK 1,572,051.80 to DKK 4,330,286.60. The total number of shares will increase by 27,582,348 shares, from 15,720,518 shares to 43,302,866 shares, and the dilution effect for the shareholders who did not participate in the rights issue therefore amounts to approximately 64 percent. 

Summary of terms for warrants of series TO 2 and TO 3
The new shares and the warrants of series TO 2 (ISIN code DK0062272449) and TO 3 (ISIN code DK0062272522), respectively will be tradeable at Nasdaq First North Growth Market Denmark as soon as possible after the issue has been registered with the Danish Business Authority. 
Warrants of series TO 2 have an exercise period from and including 2 October 2023 to and including 16 October 2023. Last day of trading in warrants of series TO 2 is estimated to be 12 October 2023. The exercise price of warrants of series TO 2 shall amount to seventy (70) percent of the average volume-weighted price for the Brain+ share according to Nasdaq First North Growth Market’s official price statistics during a period of twenty (20) consecutive trading days ending two (2) trading days before the exercise period begins. Brain+ will at latest publish the exercise price the day before the first day of the exercise period. The exercise price shall be rounded to the nearest whole Danish øre. The exercise price shall not exceed DKK 0.80 per new share and shall not be less than DKK 0.20 per new share. One (1) warrant of series TO 2 gives the right to subscribe for one (1) new share in Brain+. 

Warrants of series TO 3 have an exercise period from and including 8 March 2024 to and including 22 March 2024. Last day of trading in warrants of series TO 3 is estimated to be 20 March 2024. The exercise price of warrants of series TO 3 shall amount to seventy (70) percent of the average volume-weighted price for the share according to Nasdaq First North Growth Market’s official price statistics during a period of twenty (20) consecutive trading days ending two (2) trading days before the exercise period begins. Brain+ will at latest publish the exercise price the day before the first day of the exercise period. The exercise price shall be rounded to the nearest whole Danish øre. The exercise price shall not exceed DKK 1.20 per new share and shall not be less than DKK 0.30 per new share. One (1) warrant of series TO 3 gives the right to subscribe for one (1) new share in Brain+. 
Full terms and conditions for the warrants of series TO 2 and TO 3 are available on Brain+ website, www.brain-plus.com.

Advisors
In connection with the Rights Issue, Sedermera Corporate Finance AB and Gemstone Capital A/S act as financial advisors to Brain+. Markets & Corporate Law Nordic AB act as legal advisor. VP Securities A/S it the issuing agent and Nordic Issuing the settlement agent. 

For more information about the Rights Issue, please contact:
Sedermera Corporate Finance AB
Phone: +46 (0) 40 615 14 10
E-mail: [email protected]
www.sedermera.se

Gemstone Capital A/S
Phone: +45 33 22 07 00
E-mail: [email protected]
www.gemstonecapital.com 

For more information about Brain+, please contact:
Kim Baden-Kristensen, CEO
Phone: +45 31393317
E-mail: [email protected] 
www.brain-plus.com

Certified Adviser
Keswick Global AG
Phone: +43 1 740 408 045
E-mail: [email protected]

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This disclosure contains information that Brain+ A/S is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 30-05-2023 14:50 CET.

Important information
The information in this corporate announcement does not contain or constitute an offer to acquire, subscribe or otherwise trade in shares, warrants or other securities in Brain+. No action has been taken and measures will not be taken to permit a public offering in any jurisdictions other than Denmark and Sweden. Any invitation to the persons concerned to subscribe for units in Brain+ will only be made through the Prospectus that Brain+ estimates to publish in April 2023 on Brain+ website www.brain-plus.com. The upcoming approval of the Prospectus by the Danish Financial Supervisory Authority shall not be regarded as an approval of the shares, warrants or any other securities. This release is however not a prospectus in accordance with the definition in the Prospectus Regulation (EU) 2017/1129 (“Prospectus Regulation”) and 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 Brain+. 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 corporate announcement constitutes an advertisement.
 

The information in this corporate announcement 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 Danish law. Actions in violation of these restrictions may constitute a violation of applicable securities laws. No shares, warrants or other securities in Brain+ 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 Denmark and 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 corporate announcement and should not act or rely on it. 
 

This corporate announcement may contain forward-looking statements which reflect the Company’s current view on future events and financial and operational development. Words such as “intend”, “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.