The board of Simris Group AB (publ) resolves to change the terms of the directed issue of convertible debentures by increasing from EUR 1.0m to EUR €1.15m subject to the approval of the general meeting.

Due to an oversight one Subscriber, Erik Karlsson, was left out of the board of directors resolution on the Convertible Issue resolved on 14 March 2024. Therefore, the board of directors of Simris Group has today resolved to change the terms of the directed issue of convertible debentures resolved on 14 March 2024.

The Convertible Issue is now proposed to consist of 230 convertibles at a nominal value of approximately EUR 5,000 per convertible (the “Convertibles”). As before, the subscription price will be equal to the nominal value of the Convertibles. The Convertibles carry an annual interest of 18 percent of their nominal value. The term of the Convertibles are approximately 12 months with a maturity date of 31 March 2025, to the extent conversion has not taken place before such date.

As before, the Company and the Subscribers have additionally agreed to enter into an agreement under which the Company will pay a set-up fee of 2,5 per cent of the total loan amount in the Convertible Issue and provide security for the loan amount through corporate mortgages (Sw. företagsinteckning). The agreement is subject to approval from the general meeting of the Company as the agreement is considered to constitute a material transaction with related parties in accordance with Chapter 16 a of the Swedish companies act as the Company's chairman of the board, Steven Schapera, is associated with The Brand Laboratories FZ.

The Subscribers will be entitled to demand Conversion of all or parts of their claim into new shares of class B in the Company at a conversion price of SEK 0.1 during the period commencing 3 March 2025 up to and including 31 March 2025.

With a conversion price of SEK 0.1 and at full conversion of the Convertibles, calculated as of the date of this announcement, the dilution would amount to approximately 28 percent, meaning that the Company’s share capital would increase by approximately SEK 11,489,262.41, from approximately SEK 30,238,745.67 to approximately SEK 41,728,008.08 and the number of shares in the Company would increase by 132,250,000 shares from 348,070,570 shares to 480,320,570 shares.

The reason for not applying the shareholders’ pre-emption rights is that the board of directors has carefully considered the likelihood of acquiring equity through a rights issue and determined that there currently are several reasons that make it more advantageous for the Company to acquire equity through a directed issue of convertible debentures. The Company does not have the liquid funds to be able to conduct a rights issue of convertible debentures, and a rights issue of convertible debentures would have to be conducted at a significantly lower subscription rate. There is also a substantial risk that a rights issue would not have been fully subscribed, thereby requiring guarantee commitments, which would entail additional costs for the Company and even greater dilution for current shareholders.

The terms and conditions for the convertible loan, including the conversion price, have been established after arms’ length negotiations with the Subscribers. Thus, the board of directors’ assessment is that the terms and conditions of the Convertibles are in accordance with market conditions. Notice of the general meeting will be announced in a separate press release.

The board of directors therefore believes that the Convertible Issue will provide financial security for the Company, thereby promoting value creation for all shareholders in the Company.