Episurf Medical resolves on an issue of units to guarantors in connection with the completed rights issue

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Episurf Medical AB (publ) (“Episurf”, “Episurf Medical” or the “Company”) (NASDAQ Stockholm: EPIS B) has today, based on the authorisation granted by the annual general meeting on 9 April 2024, resolved on an issue of 583,331 units to guarantors who entered into guarantee commitments in the rights issue of units announced on 22 April 2024 (the “Rights Issue”) and who have chosen to receive guarantee compensation in the form of units issued by the Company (the “Compensation Issue”). The subscription price in the Compensation Issue amounts to SEK 3.60 per unit, which corresponds to the subscription price per unit in the Rights Issue. Payment of the subscription price is made by offsetting claims.

Terms of the Compensation Issue

In connection with the Rights Issue, certain external investors have undertaken to guarantee a total of SEK 73 million of the Rights Issue. The Board of Directors has resolved that payment shall be made by offsetting the guarantors' claims on the Company, in relation to the guarantors that have chosen to receive guarantee compensation in the form of units, consisting of newly issued shares of series B and warrants of series TO13 B, corresponding to a total of approximately SEK 2.1 million.

The Board of Directors of Episurf has today, based on the authorization granted by the annual general meeting on 9 April 2024, resolved on the Compensation Issue, which comprises a total of 583,331 units, consisting of 8,749,965 shares of series B and 3,499,986 warrants of series TO13 B, corresponding to a total subscription price of approximately SEK 2.1 million which is offset by guarantor claims in the corresponding amount. The subscription price in the Compensation Issue amounts to SEK 3.60 per unit, the same as the subscription price in the Rights Issue. The cash component of the guarantee compensation to be paid by the Company to the guarantors who have chosen to receive guarantee compensation in cash amounts to approximately SEK 7.0 million.

In accordance with the guarantee commitments, guarantors are entitled to guarantee compensation corresponding to 12 percent of the guaranteed amount in cash or 14 percent of the guaranteed amount in units. As a result of the guarantee commitments, each subscribing guarantor thus has a claim on the Company regarding guarantee compensation. Each such subscriber has declared its willingness to allow the Company to offset its debt regarding guarantee compensation by carrying out an offset issue of units. The Compensation Issue is thus carried out to fulfil the Company's obligations to the guarantors as a result of the guarantee commitments. The Company's alternative to carrying out the Compensation Issue would be to settle the guarantee compensation through cash payment. The Board of Directors is of the opinion that – taking into account current market conditions – it is in the interest of the Company’s financial position and in the interest of the shareholders to carry out the Compensation Issue on the abovementioned terms and conditions, as the Company will then release funds that strengthen the Company's working capital. The subscription price in the Compensation Issue is based on the guarantee commitments which have been negotiated ahead of the announcement of the Rights Issue. The Board of Directors has thoroughly evaluated the possibility for the guarantors to receive their guarantee commission in the form of units at the abovementioned terms and conditions and concluded that offering such possibility has been necessary to obtain the guarantee commitments and is in the best interest of the Company and its shareholders.

After registration of the shares of series B issued through the Rights Issue with the Swedish Companies Registration Office, the Compensation Issue will entail that the share capital is increased by approximately SEK 1,149,375.59 by issue of 8,749,965 new class B shares, resulting in the total number of shares increasing from 642,727,877 shares to 651,477,842 shares, divided into 473,357 class A shares and 651,004,485 class B shares, corresponding to a dilution effect of approximately 1.3 percent of the shares and approximately 1.3 percent of the votes in the Company. Upon full exercise of the warrants of series TO13 B that are issued in the Compensation Issue, the number of shares will increase by a maximum of 3,499,986 class B shares and the share capital will increase by a maximum of approximately SEK 459,750 (not taking into account the reduction of share capital which was resolved at the extraordinary general meeting in the Company on 22 May 2024 and which requires permission from the Swedish Companies Registration Office or public court), corresponding to a dilution effect of approximately 0.5 percent of the shares and approximately 0.5 percent of the votes in the Company.

Advisors

Pareto Securities is Sole Manager and Bookrunner in the Rights Issue. Hannes Snellman Advokatbyrå AB is legal adviser to Episurf in connection with the Rights Issue. Advokatfirman Vinge KB is legal adviser to the Sole Manager and Bookrunner in connection with the Rights Issue. Nordic Issuing acts as issuing agent in connection with the Rights Issue.