Notice of extraordinary general meeting in DUG Foodtech AB (publ)

The shareholders of Dug Foodtech AB (publ) reg. no. 559054-4655 (the “Company”) are hereby given notice to attend the Extraordinary General Meeting (the “EGM”) on 15 October 2024 at 17.00 CEST at the Company’s premises, Scheelevägen 22, Lund. Registration starts at 16.30 CEST.

NOTE: This is an unofficial translation of the original Swedish notice. In case of discrepancies, the Swedish version shall prevail.

 

NOTICE OF EXTRAORDINARY GENERAL MEETING IN DUG FOODTECH AB (publ)

 

Right to participate

Shareholders that wish to participate in the EGM shall be registered in the share register maintained by Euroclear Sweden AB no later than on 7 October 2024 and shall have notified the Company of their intention to participate at the EGM no later than on 9 October 2024. Notice to participate shall be given in writing by e-mail to [email protected] or by post to Dug Foodtech AB (publ) c/o Fredersen Advokatbyrå, Birger Jarlsgatan 8, 114 34 Stockholm. The notice shall contain the shareholder’s name, personal identity number or registration number and telephone number and, where applicable, the number of advisors (maximum two).

 

Nominee-registered shares

Shareholders whose shares are registered in the name of a nominee/custodian must register their shares in their own names in order to be entitled to participate in the EGM. Such registration, which may be temporary, must be effected no later than on 9 October 2024 and shareholders must, therefore, instruct their nominees well in advance thereof.

 

Proxy

If a shareholder wishes to be represented by proxy, a power of attorney shall be issued to the proxy. The power of attorney is to be in writing, dated and duly signed by the shareholder. If the shareholder is a legal entity, a certificate of incorporation or a corresponding document shall be included with the notification. Please provide the power of attorney in original as well as certificate of incorporation and other documents of authority to the Company to the address mentioned above well in advance before the EGM. If the power of attorney and other documents of authority have not been provided in advance, these documents must be presented at the EGM. Power of attorney forms are available at the Company and on the Company’s website, ir.dugdrinks.com, and will be sent upon request to any shareholder who states their postal address.

 

Proposal of agenda

1. Opening of the meeting
2. Election of Chairman of the Meeting
3. Preparation and approval of the voting register
4. Approval of the agenda
5. Election of one or two persons to attest the minutes
6. Determination as to whether the meeting has been duly convened
7. Resolution on

a)       amendment of the Articles of Association

b)       approval of the Board’s resolution on a new issue of shares with pre-emption rights for the shareholders

8. Resolution on authorization for the Board to issue shares
9. Resolution on implementation of a long-term incentive program for employees
10. Resolution on implementation of a long-term incentive program for the Board members
11. Closing of the meeting

 

Proposals

 

Resolution on a) amendments of the Articles of Association, and b) approval of the Board’s resolution on a new issue of shares with pre-emption rights for the shareholders (item 7)

 

a) Resolution on amendment of the Articles of Association

To enable the implementation of the Board's resolution on a new issue of shares with pre-emption rights for the shareholders, which is proposed to be approved by the EGM in accordance with item 7.b), the limits of the share capital and the number of shares in the Articles of Association need to be adjusted. In addition, the Board proposes an editorial correction of the Company name. The Board of Directors proposes that the EGM resolves to amend the Articles of Association as follows:

 

It is proposed that the limits for the share capital in § 4 of the Articles of Association be amended as follows:

 

Ҥ 4 Share capital

The share capital shall be no less than SEK 2,640,952.640 and no more than SEK 10,563,810.560.”

 

Furthermore, the limits for the number of shares in § 5 of the Articles of Association are proposed to be amended as follows:

 

Ҥ 5 Number of shares

The number of shares shall be not less than 41,264,885 and not more than 165,059,540.”

 

b) Resolution on approval of the Board of Directors' resolution on a new issue of shares with pre-emption rights for existing shareholders

The Board of Directors proposes that the EGM resolves to approve the Board of Directors' resolution on a new issue of shares with pre-emption rights for the shareholders. The following conditions shall apply to the decision:

 

1. The share capital shall be increased with not more than SEK 5,281,905.280 through an issue of not more than 82,529,770 shares.

 

2. Possession of one (1) share on the record date on 17 October 2024, entitles the holder to one (1) subscription right. One (1) subscription right entitle the holder to subscribe for two (2) shares.

 

3. The subscription price for each share shall amount to SEK 0.34.

 

4. The part of the subscription price for the shares that exceeds the quotient value of the share shall be added to the non-restricted share premium reserve.

 

5. The right to subscribe for shares shall accrue with pre-emption rights to those who, as of the record date on 17 October 2024, own shares in the Company.

 

6. In the event that not all shares are subscribed for with support of subscription rights, the board of directors shall, within the limits of the maximum amount of the Rights Issue, resolve on allotment of shares subscribed for without support of subscription rights, whereby allotment shall be made in accordance with the following allocation principles:

 

i)        Firstly, allotment shall be made to those who have subscribed for shares with the support of subscription rights, regardless of whether the subscriber was a shareholder on the record date or not, pro rata in relation to the number of subscription rights exercised for subscription and, to the extent this cannot be done, by drawing lots;

 

ii)      Secondarily, allocation shall be made to others who have applied for subscription without subscription rights. In the event that these cannot receive full allotment, allotment shall be made pro rata in relation to the number of shares for which each person has applied for subscription and, to the extent this cannot be done, by drawing lots;

 

iii)    Thirdly and finally, any remaining shares shall be allocated to the parties that have committed to guarantee the Rights Issue, in proportion to the guarantee commitments made. In the event that allotment to underwriters cannot be made in full, allotment shall be made in proportion to the amount guaranteed for subscription by each of them and, to the extent that this cannot be done, by drawing lots.

 

7. The subscription period shall take place from and including 21 October 2024 up to and including 4 November 2024.

 

8. Subscription by use of subscription rights shall be made through cash payment no later than on 4 November 2024. Subscription without use of subscription rights shall be made on a subscription list whereby payment shall be made no later than three banking days from when the notification regarding allotment was sent, in accordance with the instructions on the settlement note. Payment for new shares may also be made by set-off of receivables against the Company.

 

9. The Board of Directors shall be entitled to extend the subscription and payment periods. Such extension should be made no later than on the last day of the subscription period.

 

10. The resolution on the rights issue requires a change in the limits of the number of shares and share capital in the Company´s Articles of Association.

 

11. The new shares shall entitle to dividends for the first time on the record date for dividends that occurs immediately after the new shares have been registered with the Swedish Companies Registration Office and the shares have been entered in the share register kept with Euroclear Sweden AB.

 

12. The CEO, or the person he or she appoints, shall be authorised to make the minor adjustments in the resolution and the terms and conditions that may prove necessary in connection with registration and execution.

 

Resolution on authorization for the Board to issue shares (item 8)

The Board of Directors proposes that the EGM resolves to authorize the Board of Directors to, during the period up to the next AGM and in addition to the the authorization resolved on at the Annual General Meeting 2024, on one or several occasions, resolve on a new issue of shares with deviation from the shareholders’ pre-emption rights, against payment in cash, through set-off, with capital contributed in kind, or otherwise as per conditions pursuant to Chapter 2, section 5, second paragraph, items 1-3 and 5 of the Swedish Companies Act.

 

The purpose of the authorization is to enable the Company to pay compensation in the form of shares for underwriting undertakings fulfilled in the rights issue, in accordance with the terms of the underwriting agreements, and to enable the Company to repay claims to the Company through set-off of newly issued shares. The total number of shares that may be issued pursuant to the authorization shall not be limited in any other way than what follows from the limits of the share capital and the number of shares in force in the Articles of Association at any given time.

 

The CEO, or the person he or she appoints, shall be authorised to make the minor adjustments in the resolution that may prove necessary in connection with registration and execution.

 

Resolution on implementation of an incentive program for employees (item 9)

The Board of Directors proposes that the EGM resolves to issue a maximum of 2,300,000 warrants of series 2024/2027 A within the framework of a long-term incentive program to senior executives, other employees and consultants ("Employees") within the Company as follows.

 

In total, the incentive program comprises a maximum of seven (7) Employees. In addition, new Employees may be invited to acquire warrants at market value. The employees covered by the incentive program are divided into four (4) different categories, where category 1) refers to the Company's CEO, category 2) comprises a maximum of three (3) senior executives, category 3) comprises a maximum of one (1) consultant and category 4) comprises a maximum of two (2) other employees. The incentive program entails that the participants are offered to acquire warrants at market value calculated according to the Black-Scholes valuation model.

 

The right to subscribe for the warrants shall be vested in the Company for further transfer to the Employees. The price per warrant upon transfer to the participants shall be determined by an independent valuation agency engaged by the Company and shall correspond to the market value of the warrant at the time of the acquisition, calculated in accordance with the Black-Scholes valuation model.

 

The last day for acquisition of warrants shall be the day before the Annual General Meeting 2025. If acquisitions cannot take place before this date due to the participant having access to inside information, acquisitions shall be made as soon as practicable after the information has ceased to be considered inside information. The same principle applies during so-called "closed periods" according to the EU Market Abuse Regulation.

 

Each warrant entitles the warrant holder to subscribe for one new share in the Company during the period from and including 1 December 2027 up to and including 15 December 2027, at a subscription price of SEK 2 per share. The number of shares that each warrant entitles to subscription for, as well as the subscription price, shall be recalculated in the event of a split, reverse share split, share issues, etc. in accordance with customary recalculation terms. The warrants shall otherwise be subject to the terms and conditions set out in the complete terms and conditions of the incentive program.

 

A prerequisite for participation in the incentive program is that the participant has entered into a pre-purchase agreement with the Company, whereby the Company, with certain exceptions, reserves the right to repurchase warrants if the participant's employment or assignment in the Company is terminated or if the participant in turn wishes to transfer the warrants before the warrants can be exercised.

Allocation of warrants

The right to acquire warrants shall be granted to the Company's CEO, a maximum of three (3) senior executives, a maximum of one(1) consultant and a maximum of two (2) other employees, in addition to which new Employees in accordance with these categories may be invited to acquire warrants. The CEO (category 1) shall be offered to acquire a maximum of 500,000 warrants, each senior executive (category 2) shall be offered to acquire a maximum of 400,000 warrants, each consultant (category 3) shall be offered to acquire a maximum of 400,000 warrants and each other employee (category 4) shall be offered to acquire a maximum of 100,000 warrants. In total, a maximum of 500,000 warrants may be allotted within category 1, a maximum of 1,200,000 warrants may be allotted within category 2, a maximum of 400,000 warrants may be allotted within category 3 and a maximum of 200,000 warrants may be allotted within category 4. The Board of Directors shall have the right to decide on the detailed distribution within the specified limits. In the event of oversubscription within a category, the number of warrants shall be reduced pro rata based on how many warrants each participant has applied to acquire.

 

Costs and dilution

The price at the time of transfer of the warrants will be in accordance with market conditions, which means that no social security charges will be incurred for the Company in connection with the acquisition of the warrants. The incentive program is expected to have only a marginal impact on the Company's key ratios.

 

Based on the number of shares in the Company as of the date of the notice of the EGM, the maximum dilution as a result of the warrant program may amount to approximately 5.28 percent. Taking into account also shares that can be issued under previously implemented incentive programs in the Company, as well as the proposed incentive program for board members of the Company, the maximum dilution amounts to approximately 13.25 percent. For a description of the Company's other long-term incentive programs, please refer to Dug Foodtech's website, ir.dugdrinks.com.

 

Purpose of the incentive program

The Board of Directors believes that a share-based incentive program is an important part of a competitive remuneration package to attract and motivate key employees, as well as maximize value creation for all shareholders. The Board of Directors further believes that the option program will increase the participants' involvement in the Company's operations, strengthen loyalty to the Company and be of benefit to both the Company and its shareholders.

 

Preparation of the proposal

The incentive program has been prepared by the Board of Directors in consultation with external advisors during the third quarter of 2024.

 

Authorization

The CEO, or the person he or she appoints, shall be authorised to make the minor adjustments in the resolution that may prove necessary in connection with registration and execution.

 

Resolution on implementation of an incentive program for members of the Board of Directors (item 10)

The shareholder Anders Färnqvist proposes that the EGM resolves to issue a maximum of 1,200,000 warrants of series 2024/2027 B within the framework of a long-term incentive program to the members of the Board of Directors of the Company as follows.

 

The incentive program comprises the Company's three (3) board members Johan Möllerström, Kaj Söderström and Rolf Bjerndell. The incentive program entails that the participants are offered to subscribe for warrants at market value calculated according to the Black-Scholes valuation model.

 

The rights to subscribe for the warrants shall vest in the participants. The price per warrant upon subscription shall be determined by an independent valuation agency engaged by the Company and shall correspond to the market value of the warrant at the time of the acquisition calculated in accordance with the Black-Scholes valuation model.

 

The last day for subscription of warrants shall be the day before the Annual General Meeting 2025. If subscription cannot take place before this date due to the participant having access to inside information, subscription shall be made as soon as practicable after the information has ceased to be considered inside information. The same principle applies during so-called "closed periods" according to the EU Market Abuse Regulation.

 

Each warrant entitles the warrant holder to subscribe for one new share in the Company during the period from and including 1 December 2027 up to and including 15 December 2027, at a subscription price of SEK 2 per share. The number of shares that each warrant entitles to subscription for, as well as the subscription price, shall be recalculated in the event of a split, reverse share split, share issues, etc. in accordance with customary recalculation terms. The warrants shall otherwise be subject to the terms and conditions set out in the complete terms and conditions of the incentive program.

 

A prerequisite for participation in the incentive program is that the participant has entered into a pre-purchase agreement with the Company, whereby the Company, with certain exceptions, reserves the right to repurchase warrants if the participant's employment or assignment in the Company is terminated or if the participant in turn wishes to transfer the warrants before the warrants can be exercised.

Allocation of warrants

The right to subscribe for warrants shall be granted to the Board members Johan Möllerström, Kaj Söderström and Rolf Bjerndell, provided that the participant has entered into a pre-purchase agreement with the Company, whereby each Board member shall be offered to subscribe for a maximum of 400,000 warrants. In total, a maximum of 1,200,000 warrants may be allotted to the participants in the incentive program.

 

Costs and dilution

The price at the time of transfer of the warrants will be in accordance with market conditions, which means that no social security charges will be incurred for the Company in connection with the acquisition of the warrants. The incentive program is expected to have only a marginal impact on the Company's key ratios.

 

Based on the number of shares in the Company as of the date of the notice of the general meeting, the maximum dilution as a result of the warrant program may amount to approximately 2.83 percent. Taking into account also shares that can be issued under previously implemented incentive programs in the Company, as well as the proposed incentive program for Employees of the Company, the maximum dilution amounts to approximately 13.25 percent. For a description of the Company's other long-term incentive programs, please refer to Dug Foodtech's website, ir.dugdrinks.com.

 

Purpose of the incentive program

The shareholder believes that a share-based incentive program is an important part of a competitive remuneration package to attract and motivate competent Board members, as well as maximize value creation for all shareholders. The Nomination Committee further believes that the warrant program will increase the Board members' commitment to the Company's operations, strengthen loyalty to the Company and be of benefit to both the Company and its shareholders.

 

Preparation of the proposal

The incentive program has been prepared by the shareholder Anders Färnqvist, whereby the Board of Directors has been instructed to include the proposal in the notice.

 

Authorization

The CEO, or the person he or she appoints, shall be authorised to make the minor adjustments in the resolution that may prove necessary in connection with registration and execution.

 

Majority requirements

Valid resolutions under items 7 and 8 require approval of at least two-thirds (2/3) of both the votes cast and the shares represented at the EGM. Valid resolutions under the items 9 and 10 require that shareholders holding at least nine-tenths (9/10) of both the votes cast and the shares represented at the EGM supports the resolutions.

 

Further information

As per the date of the issue of this notice, the total number of shares and votes in the Company are 41,264,885. The Company does not hold any own shares. 

 

Proxy forms, the Board’s complete proposals as well as complete underlying documentation will be made available by the Company and at the Company's website at least two weeks before the EGM. The documents will be sent to shareholders who request it and who provide their postal address.

 

The shareholders are reminded of their right of information according to Chapter 7 Section 32 of the Swedish Companies Act.

 

The Company has its registered office in Lund.

 

Processing of personal data

For information on how your personal data is processed, see: 

https://www.euroclear.com/dam/ESw/Legal/Privacy-notice-bolagsstammor-engelska.pdf

 

 

 

Lund, September 2024

Veg of Lund AB (publ)

The Board of Directors