Prostatype Genomics AB: Prostatype Genomics resolves on a rights issue of approximately SEK 47.8 million

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The Board of Directors of Prostatype Genomics AB ("Prostatype Genomics" or the "Company") has today resolved on a new issue of units of approximately SEK 47.8 million with preferential rights for existing shareholders (the "Rights Issue"). The Rights Issue is guaranteed to approximately 45.0 percent through subscription commitments and underwriting agreements. Each unit in the Rights Issue consists of ten (10) newly issued shares in the Company and four (4) free warrant of series 3 (collectively, a "Unit"). The subscription price per Unit amounts to SEK 0.40, corresponding to SEK 0.04 per share. The Board of Directors’ resolution of the Rights Issue is subject to approval by an Extraordinary General Meeting, expected to be held on December 7, 2023, to which notice will be given in a separate press release.

Summary of the Rights Issue

• One (1) existing share in the Company entitles to one (1) unit right. One (1) unit right entitles to subscribe for one (1) Unit, consisting of ten (10) newly issued shares and four (4) newly issued warrant of series 3. This means that a maximum of 1,194,600,070 new shares and 477,840,028 new warrants of series 3 can be issued.
• The subscription price has been set at SEK 0.40 per Unit, corresponding to SEK 0.04 per share. The warrants are included free of charge. Payment must be made in cash.
• At the above-mentioned extraordinary general meeting, a reduction of the share capital is also proposed (without withdrawal of shares), whereby the Company will receive a new and lower so-called quota value. The new quota value is proposed to be one (1) öre per share (instead of the current six (6) öre per share). The reduction is carried out to obtain a more reasonable and more effective share capital and to enable the Rights Issue. Furthermore, an amendment to the Company's articles of association is proposed, whereby the interval for the number of shares is increased. This is also done to enable the Rights Issue.
• Through the Rights Issue, proceeds of maximum SEK 47.8 million will be provided to Prostatype Genomics before deductions for costs attributable to the Rights Issue, which are estimated to amount to SEK 5.1 million, of which approximately SEK 1.9 million consists of underwriting compensation.
• The subscription period runs from and including December 13, 2023 to and including December 27, 2023.
• Unit rights that are not exercised during the subscription period become invalid and lose their value. Trading in unit rights is planned to take place on the Nasdaq First North Growth Market from December 13, 2023 to and including December 20, 2023.
• Through the Rights Issue the Company's share capital can increase by a maximum of SEK 16,724,400.98 (the new quota value – 1 öre – after the proposed reduction is applied), of which a maximum of SEK 11,946,000.70 is attributable to an increase due to the issue of shares and a maximum of SEK 4,778,400.28 is attributable to an increase due to the issue of warrants (if these are exercised). This corresponds to a maximum dilution of approximately 90.9 percent regarding the new shares. In the event that all warrants are exercised, an additional dilution comes into effect, corresponding to approximately 26.7 percent in relation to the new number of shares.
• The exercise period for warrants of series 3 runs from April 5, 2024 to and including April 19, 2024. If all warrants of series 3 are exercised to subscribe for shares, the proceeds the Company will be provided amounts to an additional SEK 4.8 million depending on the final exercise price.
• The Board of Directors’ resolution of the Rights Issue is subject to the approval by an Extraordinary General Meeting which is intended to be held on December 7, 2023. The notice of the Extraordinary General Meeting will be published through a separate press release.
• The record date in the Rights Issue is December 11, 2023. The last trading day in the Prostatype Genomics share, including the right to receive the unit rights, is December 5, 2023.

Motive of the Rights Issue

Prostatype Genomics business lies within risk assessment and prognostication regarding already diagnosed prostate cancer to enable improvement of the decision-making basis in order to minimize over and under-treatment. Treatment of prostate cancer is made to a large extent through so-called radical treatment, which involves either a surgical procedure or radiation therapy to remove the cancer tumour. These treatments are often characterized by severe side effects such as impotence and/or incontinence and, despite the severe suffering they cause to the patient, are considered justifiable to minimize the number of deaths. However, the actual risk of dying for patients in the low- and intermediate risk groups is very limited, which is why better decision-making basis for doctors when ordinating treatment, or deciding about continued monitoring, would mean reduced healthcare costs and reduced suffering of patients by a reduced share of overtreated patients.

The Company's gene test Prostatype® has been validated in several studies in different geographical areas and provides doctors with an objective risk classification regarding the aggressiveness of prostate cancer and thereby the risk of dying from prostate cancer in the next ten years. Thus, it can be an important tool for reducing the proportion of prostate cancer patients who undergo unnecessary radical treatment, which would mean an improvement of and increased efficiency in prostate cancer care.

Prostatype Genomics has started the commercialization and presented, in October 2023, an updated commercialization strategy together with an efficiency program, meaning that the Company focuses its resources on selected markets. Thereby, Prostatype Genomics can carry out a focused launch at a lower cost mass. The Company's highest priority is to secure reimbursement in the American market, where the experience of using genetic tests is widespread and the market is already established. In order to qualify Prostatype® for reimbursement, Prostatype Genomics is currently conducting a validation study in the USA that i.a. will supplement Company's existing data package with data regarding African-American patients. A first interim read out of the study is planned for the second quarter of 2024 and will form the fundament for the reimbursement application. It is then possible to obtain approval from, among others, Medicare by the end of 2024. In Europe, the Company continues to work on the Nordic market at the same time as the Company's partner Eurofins Megalab is responsible for the commercialization in Spain. A local validation study is being conducted at seven Spanish hospitals and in October 2023, positive interim results were presented where as many as 60 percent of the investigated cases would have received a changed treatment plan if Prostatype® had been used. The final data is planned to be presented during the first quarter of 2024. In addition to the USA, the Nordic countries and Spain, the Company will focus sales resources on Taiwan, Great Britain and Switzerland. In November 2023, the Company announced a first order to one of Switzerland's largest university hospitals.

In order to finance the commercialization on the prioritised markets as well as bringing further progress of the American validation study, the Board of Directors’ of the Company has resolved on the execution of the Rights Issue. If subscribed in full, the Company receives net cash proceeds of approximately 42.6 MSEK. The net cash is intended to be used for the following areas of use, in order of priority:

• Repayment of bridge loans for already started commercialization and study activities in the USA, SEK 6 million
• Validation study USA, SEK 20 million
• Commercialization activities USA and Europe, SEK 5 million
• Strengthening of working capital and ongoing operation activities, 11.6 MSEK

If all warrants of series 3 are exercised for subscription of shares, the Company will receive at least an additional SEK 4.8 million in proceeds, depending on the final exercise price. The Company intends to use the proceeds in its entirety for continued execution of the validation study in the USA.

Terms of the Rights Issue

Anyone who is registered as a shareholder in the share register maintained by Euroclear Sweden AB on the record date of December 11, 2023 has preferential right to subscribe for Units in the Rights Issue. Application for subscription of Units can also be made without the support of unit rights.

If all of the Units in the Rights Issue are not subscribed for with the support of unit rights, the Board of Directors will resolve on allotment as follows:

• firstly to persons who have applied for subscription without unit rights and who have subscribed for Units with unit rights, regardless of whether or not the subscriber was a shareholder on the record date, and in case of oversubscription, allocation shall be made in relation to the total number of units allotted through exercise of unit rights, and to the extent that this is not possible, by drawing of lots;
• secondly allocation shall be made to other persons who have applied for subscription without unit rights and, in the case of oversubscription, pro rata to the number of units subscribed for in the application form, and to the extent that this is not possible, by drawing of lots;
• finally, allotment of the remaining units shall be made to the investors who provided guarantees and in accordance with the conditions of their respective guarantee.

The subscription price is SEK 0.40 per Unit, corresponding to SEK 0.04 per share, which means that the Rights Issue, if it is subscribed and paid for in full, will provide Prostatype Genomics with proceeds of approximately SEK 47.8 million before deductions for costs attributable to the Rights Issue. The warrants are included free of charge.

The record date for determining which shareholders that have the right to receive unit rights in the Rights Issue is December 11, 2023. The last day for trading including the right to receive unit rights is December 7, 2023. The share is traded without the right to receive unit rights from December 8, 2023.

The subscription period runs from and including December 13, 2023 to and including December 27, 2023, or the later date decided by the Board of Directors. Trading in subscription rights is expected to take place on the Nasdaq First North Growth Market during the period from and including December 13, 2023 to and including December 20, 2023 and trading in BTU (paid subscribed unit) during the period from and including December 13, 2023 to and including about a week after the Rights Issue has been registered with the Swedish Companies Registration Office.

Subscription commitments and underwriting agreements

The Rights Issue is subject to subscription commitments and underwriting agreements corresponding to a total of approximately SEK 21.5 million. The subscription commitments amount to approximately SEK 7.6 million, corresponding to approximately 15.9 percent of the Rights Issue. Subscription commitments and guarantee commitments from senior executives and board members of Prostatype Genomics amount to a total of SEK 4.3 million. For underwriting commitments, a compensation of 14.0 percent of the guaranteed amount is due, to be paid in cash, alternatively a compensation of 16.0 percent of the guaranteed amount to be paid in shares in the Company. No compensation is paid for the subscription commitments. The subscription commitments and underwriting agreements are not secured by bank guarantee, blocking funds, pledging or similar arrangements.

Extraordinary General Meeting

The resolution by the Board of Directors regarding the Rights Issue is subject to approval by an Extraordinary General Meeting, expected to be held on December 7, 2023, as well as the resolutions of the Extraordinary General Meeting concerning the reduction of the share capital and the amendment of the articles of association.

Prospectus

Complete information regarding the Rights Issue and information about the Company will be provided in a prospectus that is expected to be published on the Company's website around December 11, 2023.

Terms for the warrants included in the Unit

Subscribers of Units in the Rights Issue will receive four (4) warrant of series 3 free of charge. One (1) warrant of series 3 entitles the holder to subscribe for one (1) new share.

The subscription price for the warrant of series 3 will be set at 70 percent of the volume-weighted average price ("VWAP") during the measurement period March 14 - 28, 2024, but at a minimum of SEK 0.01 (corresponding to the quota value). Warrants of series 3 can be exercised to subscribe for shares in Prostatype Genomics during the period April 5 - 19, 2024.

Change in share capital and number of shares and dilution

At the above-mentioned Extraordinary General Meeting, the Board of Directors will propose a reduction of the Company's share capital by SEK 5,973,000.35 (for allocation to non-restricted equity). This means that the share capital is reduced from the current SEK 7,167,600.42 to SEK 1,194,600.07. The consequence will thus be that the quota value for the Company's share will decrease from the current six (6) öre per share to one (1) öre per share. The reduction will be carried out without the withdrawal of shares. The reason for the reduction is to obtain a more appropriate share capital for the Company and to enable the Rights Issue. Provided that the Rights Issue is subscribed and paid in full, the share capital in the Company will increase by a maximum of SEK 16,724,400.98 (the new quota value - 1 öre - after the proposed reduction is applied), of which a maximum of SEK 11,946,000.70 is attributable to an increase due to the issue of shares and a maximum of SEK 4,778,400.28 is attributable to an increase due to the issue of warrants. A maximum of 1,194,600,070 shares will be issued. The number of shares thus increases from 119,460,007 to a maximum of 1,314,060,077 shares. For existing shareholders who do not participate in the Rights Issue, this means, in the case of full subscription, a dilution effect of 90.9 percent of capital and votes in the Company.

Upon full exercise of warrants of series 3, the share capital in the Company increases by a further maximum of SEK 4,778,400.28 to SEK 17,919,001.05, through the issuance of a maximum of 477,840,028 shares. The number of shares thus increases to a maximum of 1,791,900,105 shares. This corresponds to a dilution effect of approximately 26.7 percent of capital and votes in the Company after taking into account the full subscription of shares issued in the Rights Issue.

Preliminary time table for the Rights Issue

December 7, 2023                               Extraordinary General Meeting

December 7, 2023                               Last day of trading in the share with the right to receive unit rights

December 8, 2023                               First day of trading in the share without the right to receive unit rights

December 11, 2023                             Record date for participation in the Rights Issue

December 11, 2023                             Expected date for the publication of the prospectus

December 13 – 20, 2023                    Trading in unit rights

December 13 – 27, 2023                    Subscription period

December 27, 2023                             Expected date for publication of preliminary outcome of the Rights Issue

December 29, 2023                             Expected date for publication of the final outcome in the Rights Issue

Advisors

Prostatype Genomics has mandated Erik Penser Bank AB and Advokatfirman Lindahl as financial and legal advisors respectively in connection with the Rights Issue.

For further information about Prostatype Genomics, please contact:

Fredrik Persson, CEO Prostatype Genomics AB,

Telephone: +46 (0) 73 049 77 01.

e-mail: [email protected]

About Prostatype Genomics AB

Prostatype® is a genetic test that is available to patients and treating urologists as a supplementary decision support tool to answer the question of radical treatment or no radical treatment of prostate cancer. The test is developed by a research group at Karolinska Institutet and is provided by Prostatype Genomics AB.

Important information

The information in this press release neither contains nor constitutes an offer to acquire, subscribe or otherwise trade in shares, warrants or other securities in Prostatype Genomics. No action has been taken and no action will be taken to permit an offer to the public in any jurisdictions other than Sweden. The invitation to interested persons to subscribe for shares in Prostatype Genomics takes place solely through the prospectus that Prostatype Genomics intends to publish on 11 December 2023.

The information contained in this press release may not be disclosed, published or distributed, directly or indirectly, within or to the United States, Belarus, Russia, Australia, Hong Kong, Japan, Canada, New Zealand, Switzerland, Singapore, South Africa or any other jurisdiction where such action would be illegal, subject to legal restrictions or require measures other than those that follow from Swedish law. Actions contrary to this instruction may constitute a violation of applicable securities legislation. No shares or other securities of Prostatype Genomics have been registered, and no shares or other securities will be registered, under the United States Securities Act of 1933 from time to time ("Securities Act") or the securities laws of any state or other jurisdiction of the United States and may not be offered, sold or otherwise transferred, directly or indirectly, in or to the United States, except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and pursuant to the securities laws of the relevant state or other jurisdiction in the United States. This communication is distributed to and directed solely to persons in the United Kingdom who are (i) professional investors falling within the scope of Article 19(5) of the U.K. from time to time in force; Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 ("the Order") or (ii) high net worth subjects and other persons to whom this notice may lawfully be addressed, who are subject to Article 49(2)(a)-(d) ) in the Order (all such persons are collectively referred to as "Relevant Persons"). Persons who are not Relevant Persons may not act on or rely on the information in this communication. An investment or investment measure referred to in this communication is only possible for Relevant Persons and will only be completed with Relevant Persons. Persons who disseminate this communication must themselves ensure that such dissemination is permitted.

Forward-looking Statements

This press release contains forward-looking statements that refer to the Company's intentions, assessments or expectations regarding the Company's future results, financial position, liquidity, development, prospects, expected growth, strategies and opportunities as well as the markets in which the Company operates. Forward-looking statements are statements that do not relate to historical facts and can be identified by the inclusion of expressions such as "believes", "expects", "anticipates", "intends", "estimates", "will", "may", "assumes", "should" "could" and, in each case, negations thereof, or similar expressions. The forward-looking statements in this press release are based on various assumptions, which in several cases are based on additional assumptions. Although the Company believes that the assumptions reflected in these forward-looking statements are reasonable, there can be no assurance that they will occur or that they are accurate. As these assumptions are based on assumptions or estimates and are subject to risks and uncertainties, the actual result or outcome may, for many different reasons, differ materially from what appears in the forward-looking statements.

Such risks, uncertainties, contingencies and other material factors may cause actual events to differ materially from the expectations expressed or implied in this press release through the forward-looking statements. The Company does not warrant that the assumptions underlying the forward-looking statements in this press release are correct and any reader of the press release should not place undue reliance on the forward-looking statements in this press release. The information, opinions and forward-looking statements expressed or implied herein are provided only as of the date of this press release and are subject to change. Neither the Company nor anyone else undertakes to revise, update, confirm or publicly announce any revision of any forward-looking statement to reflect events occurring or circumstances occurring with respect to the contents of this press release, except as required by law or Nasdaq First North Growth Markets' regulations for issuers.

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This disclosure contains information that Prostatype Genomics AB 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 07-11-2023 08:07 CET.