Circio Holding ASA - Terms of the rights issue and related transactions
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Oslo, 29 May 2024: Reference is made to the stock exchange announcement made by Circio Holding ASA (the "Company") on 17 April 2024, regarding the Company's intention to carry out a rights issue (the "Rights Issue").
The board of directors of the Company (the "Board") has today, in consultation with Redeye AB (acting as manager in the Rights Issue (the "Manager"), determined the following proposed terms for the Rights Issue and related transactions in order to raise gross proceeds of up to NOK 67 million in new equity:
- The Rights Issue is intended to raise gross proceeds of up to approx. NOK 52 million. The subscription price in the Rights Issue is proposed to be NOK 2.50 per new share (the "Subscription Price"), representing a discount of 39.2% to the theoretical share price exclusive of the subscription rights (TERP) based on the volume weighted average price for the Company's on the Oslo Stock Exchange the last ten trading days up to and including 28 May 2024.
- Minimum of 3,658,000 new shares ("New Shares") and maximum of 20,732,010 New Shares will be issued in the Rights Issue.
- NOK 15 million of the amount owed to Atlas Special Opportunities LLC ("Atlas") under the investment agreement and bond terms entered into between Atlas and the Company (the "Investment Agreement" and the "Bond Terms", respectively) will be settled by the issuance of New Shares at the Subscription Price (the "Conversion").
- The Company will issue one warrant (Nw.: frittstående tegningsrett) ("Warrant") for each New Share issued in the Rights Issue and the Conversion for no additional consideration.
- Atlas is supporting the Rights Issue by a funding commitment of up to NOK 10 million which will be completed by the subscription of additional convertible bonds under the Bond Terms (the "CB Commitment") to secure minimum financing to the Company under the Rights Issue and CB Commitment of NOK 19.145 million. Further, Atlas will, to secure the Company's financing until completion of the Rights Issue, subscribe for bonds with a nominal value of NOK 4 million in accordance with the Investment Agreement (the "Bridge Financing").
In addition, Atlas has by the Financing Commitment (as defined below) on certain terms and conditions undertaken to provide the Company with the capital required to finance the Company's financial needs until the end of June 2025.
The Rights Issue, the Conversion, the CB Commitment and the issuance of the Warrants are subject to approval by the Company's annual general meeting (the "AGM"). Further information regarding the Rights Issue, the Conversion and the CB Commitment will be provided in the AGM notice which will be published by a separate stock exchange notice later today. The Rights Issue is also subject to the publication of a prospectus approved by the Financial Supervisory Authority of Norway (Nw.: Finanstilsynet) and, if deemed necessary by the Board, passported to Sweden on or prior to the first day of the subscription period in the Rights Issue (the "Prospectus").
Subject to approval by the AGM, each existing shareholder as of the date of the AGM held on or about 19 June 2024 (and being registered as such in Euronext Securities Oslo, the Norwegian Central Securities Depository, (the "VPS")) as at the expiry of the second trading day following the AGM (the "Record Date") will be granted 2.5 subscription right (rounded down to the nearest whole number of subscription rights) for each share in the Company registered as held by the shareholder. Each subscription right will, subject to applicable securities laws, give the right to subscribe for and be allocated one New Share.
For every New Share allocated to, and paid by, subscribers in the Rights Issue, the subscribers will receive one Warrant. Each Warrant will give the holder the right to subscribe for and be allocated one additional share in the Company at a subscription price equal to the to the higher of (i) the volume weighted average price quoted for trades in the Shares on the Company the ten last trading days on the Oslo Stock Exchange prior to commencement of the Exercise Period (as defined below) less a discount of 30%, and (ii) NOK 0.60, and which may be exercised in the period from 08:00 hours (CET) on 4 December 2024 to 16:30 hours (CET) on 18 December 2024 (the "Exercise Period") . The Company may apply for listing of the Warrants on the Oslo Stock Exchange or Euronext Growth Oslo.
The Company has received subscription commitments for participation in the Rights Issue (the "Pre-commitments") from certain existing shareholders, members of the Company's board of directors and management, and other investors (each a "Pre-committing Investor") for a total amount of NOK 9.145 million. The Pre-committing Investors have undertaken to vote the shares held by them at the time of the AGM in favour of the AGM agenda items related to the Rights Issue. The Pre-committing Investors will receive a commission equal to 17% of the pre-committed amount, which shall be settled by issuance of new shares at the Subscription Price and one Warrant per such new share for no additional consideration.
Atlas shall, in the Conversion, convert existing bonds under the Investment Agreement in the total amount of NOK 15 million, which shall be deducted from the total pool of bonds that Atlas is entitled to convert under the Investment Agreement. The conversion price in the Conversion shall be equal to the Subscription Price in the Rights Issue and Atlas will for no additional consideration receive one Warrant for each new share.
If Atlas (alone or together with other shareholders of the Company who are deemed to be closely associated parties of Atlas for the purpose of the mandatory offer rules in the Norwegian Securities Trading Act) by reason of being allotted shares in the Rights Issue, subscription of shares in the Conversion, issuance of commission shares or by the exercise of Warrants becomes the owner of more than 1/3 of the shares in the Company, then the number shares which otherwise would have exceed 1/3 of the ordinary voting shares in the Company shall be non-voting and unlisted class B shares (the "Class B Shares") so that the mandatory offer obligation is not triggered. Except for being non-voting, the Class B shares shall give the same rights as the ordinary shares in the Company and shall be exchangeable into ordinary shares on a one-for-one basis (cf. Section 4-1 (2) of the Norwegian Public Limited Liabilities Companies Act) provided that such exchange will not bring the Atlas' shareholding above the mandatory offer threshold.
If the Company is not successful in obtaining sufficient financing to cover the Company's financing needs for the period until end of June 2025 through the Rights Issue, including by investors' exercise of the Warrants in December 2024, the CB Commitment and the Bridge Financing, Atlas has undertaken to finance the Company's remaining financial needs until end of June 2025, up to a monthly cash requirement of NOK 4 million, limited to a total amount of NOK 48 million (the "Financing Commitment"). If the financing from the Rights Issue, including the exercise of the Warrants, results in gross proceeds of less than NOK 30 million, and the Company receive additional funding under the Financing Commitment, then Atlas shall be granted a first priority collateral in the Company's TG01 asset as security for the convertible bonds issued under the Bond Terms after 29 May 2024. Such grant of collateral is subject to approval by the AGM.
The full terms and conditions of the Rights Issue will be included in the Prospectus, which will be published prior to the commencement of the subscription period in the Rights Issue, expected to take place from on or about 24 June 2024 to 8 July 2024 at 16:30 hours (CEST).
Redeye AB is acting as Manager for the Rights Issue. Advokatfirmaet Thommessen AS is acting as legal counsel to the Company in connection with the Rights Issue.
