Aiming for substantial international growth in coming years, LED iBond International A/S (LED iBond, the "Company") completed an initial public offering in June 2020 to strengthen the Company's balance sheet for the period to June 2021.

Halfway through this financing period, the Company's Board of Directors has performed a thorough review of LED iBond's commercial opportunities and financial position in general. Based on this review, the Board of Directors is now proposing a capital increase of up to DKK 57.1 million.

Contingent on the approval of an extraordinary general meeting, the capital increase will be structured as a rights issue with pre-emptive rights for existing shareholders (the "Offering"). The details of the Offering will be announced in a prospectus on or around 16 March 2021.

The reasons for the capital increase and the proposed key terms and timetable for the Offering, including a change in the Company's financial calendar, are summarised below.

Reasons for the capital increase

• LED iBond's commercial opportunities within vertical farming and UV-C disinfection are significantly larger than previously expected

Activities in the global market for vertical farming equipment, particularly the industrial vertical farming segment, are accelerating. Since LED iBond announced an OEM-agreement with Senmatic, the Company has experienced significant market interest for its grow light technology. LED iBond expects to receive a number of orders for its vertical farming components as early as in 2021 and foresees even stronger long-term growth in this industry than previously expected. The Company also expects to engage in a number of strategic partnerships during 2021 to further leverage its international patent portfolio.

At the same time, the market interest for high-powered UV-C disinfection solutions has increased significantly as a result of the prolonged corona pandemic. The Company's mercury-free disinfection technology has attracted significant attention following the announcement of the order from Vanderlande for disinfection systems for airport security lines and the introduction of the battery powered handheld disinfection tool puriZAP, both manufactured by LED iBond. The Company considers the demand potential for UV-C disinfection solutions to be even stronger and materialising much faster than anticipated at the time of the Company's IPO in June 2020. In particular, the emergence of several coronavirus mutations is calling for new anti-virus solutions, based on leading-edge technology, to supplement vaccinations.

• To capture this potential, LED iBond must expand its production capacity

To accommodate the expected increase in demand for vertical farming and UV-C disinfection components, LED iBond considers it vital to increase production capacity and to further automate its product assembly lines. The Company also sees a need for upgrading production capacity for its patented replaceable LED plug, which will become a key component in the vertical farming and UV-C disinfection products, as well as in elevator ceilings and other smart building applications, reducing total cost of ownership and supporting the circular economy.

• LED iBond's spin-off model for pursuing new business opportunities works very well

So far, LED iBond has launched three spin-off companies to focus on the commercial development of the Company's technology in selected markets in partnership with entrepreneurs with deep market insight. As the spin-off model has already proved viable, the Company will consider increasing the use of spin-off companies in the future to further scale the technology platform. The Company foresees that starting up new spin-offs as well as getting both existing and new spin-offs well under way may require seed funding. In exchange, LED iBond will retain partial ownership and hence a potential upside as the spin-offs realise their commercial potential.

• Smart building market slowdown points to the need for additional working capital

Driven by new technology and an increased focus on sustainability, the global smart building market is growing significantly. However, many of LED iBond's customers are affected by corona-related delays. Some of the Company's smart building projects are still on track, but most projects, including a few large ones, are expected to be postponed to later in the year, subject to the corona situation. Following developments in the market closely, LED iBond expects its smart buildings sales to pick up as the pandemic restrictions are lifted. Until then, the Company intends to allocate additional working capital to this area to maintain daily operations, including sales and marketing.

• LED iBond needs a more sustainable capital structure

Facing significant commercial opportunities in the vertical farming and UV-C disinfection markets while at the same time anticipating funding needs for production capacity, building up inventories, spin-offs and continued corona-related uncertainty, LED iBond's Board finds it necessary and commercially prudent at this stage of development to further strengthen the Company's capital base through a capital increase. With this capital increase, the Company will establish a sustainable capital structure with sufficient funds to support commercial development activities for the foreseeable future, ensuring the widest possible strategic manoeuvring room for making the most of the improved growth prospects of the Company.

Use of proceeds

Through the Offering, LED iBond is expected to raise gross proceeds of minimum DKK 45.7 million and maximum DKK 57.1 million. Transaction costs are estimated to DKK 8,4 million, including underwriting fees of DKK 3.7 million. The use of the proceeds will be allocated as follows:

• 45-50 % - Increased manufacturing and product development capabilities within the vertical farming and UV disinfection segments.
• 20-25 % - Seed funding for spin-offs.
• 30 % - Additional working capital for building inventory and for financing smart building activities until the pandemic restrictions are lifted.

Key terms of the Offering

The Offering is for 3,172,965 new shares with preferential rights for existing shareholders. For each existing share, one subscription right will be allocated. Four subscription rights will entitle the holder to subscribe for one new share at the issue price of DKK 18 per share. Gross proceeds from the Offering, if fully subscribed, is DKK 57.1 million. Subscription undertakings of DKK 8.9 million and underwritings of DKK 36.8 million have been obtained, corresponding to 80% of the Offering.

Expected timetable for the Offering

An extraordinary general meeting will be held on 16 March 2021 to authorize the Board of Directors to decide on the issuance of shares under the Offering. A Prospectus outlining the complete terms of the Offering will be published on or around 16 March 2021 and the subscription period is expected to be 24 March - 9 April 2021.

Prospectus

Following publication, the prospectus containing detailed information on the Company and the Offering will, subject to certain restrictions, be available on the Company's website www.ledibond.com. Apart from information that is incorporated into the prospectus by reference, the contents of the website of the Company does not form part of the prospectus.

Updated financial calendar

The date of publication of the Company's annual report for 2020 has been changed from 22 March to 12 March 2021.