The Board of Directors of Scandinavian ChemoTech AB (publ) ("ChemoTech" or the "Company") has today, with support of the authorisation from the annual general meeting on 24 May 2022, decided to carry out a rights issue of units consisting of shares and warrants of series TO3 of approximately SEK 20.1 million (the "Rights Issue"). The Rights Issue is covered to approximately 40 percent through subscription commitments and underwriting commitments. If all warrants of series TO3 is exercised, the Company can receive an additional maximum of approximately SEK 40.1 million. In addition, the Board of Directors has resolved on an Over-allotment option up to SEK 3.0 million, conditional upon the Rights Issue being oversubscribed.
The issue proceeds from the Rights Issue are intended to be used for, among other things, repayment of a credit facility, expansion of marketing efforts within Animal Care, overhead costs and project management of ongoing and upcoming clinical studies as well as investments within R&D.
Summary
In case of full subscription in the Rights Issue, approximately SEK 20.1 million will be received by ChemoTech before issue costs.
The Rights Issue is covered to approximately 17.2 percent through subscription commitments from existing shareholders and in addition, the Rights Issue is covered by underwriting commitments of approximately 22.4 percent, of which approximately 17.4 percent of the Rights Issue is covered by bottom-up underwriting commitments and approximately 5.0 percent of the Rights Issue is covered by top-down underwriting commitments.
In case of full subscription in the Rights Issue and in case of full use of all warrants of series TO3, the Company will receive an additional maximum of approximately SEK 40.1 million.
For each share owned as of the record date, 29 September 2022, the holder receives one (1) unit right. Three (3) unit rights give the holder the right to subscribe for one (1) unit. One (1) unit consists of one (1) share and one (1) warrant of series TO3. The subscription price per unit amounts to SEK 6.25, corresponding to SEK 6.25 per share (the warrants are issued free of charge). Shares of series A give unit rights of series A and shares of series B give unit rights of series B. Unit rights of series A give the right to subscribe for units of series A and unit rights of series B give the right to subscribe for units of series B. Units of series A contain shares of series A and warrants of series TO3A and units of series B contain shares of series B and warrants of series TO3B.
The subscription period for the Rights Issue is to begin 3 October 2022 and to end on 21 October 2022.
In order to accommodate a possible oversubscription in the Rights issue and the possibility of adding additional capital to the Company, the board has decided on a directed new issue of a maximum of 480,000 units. Each unit consists of one (1) newly issued B-share and one (1) free warrant of series TO3B (the "Over-allotment option"). The subscription price in the Over-allotment option shall amount to SEK 6.25 per unit, corresponding to the subscription price in the Rights Issue. The purpose of the deviation from the shareholders' preferential right is to satisfy an increased demand in the event of oversubscription in the Rights Issue. The Over-allotment option comprises a maximum of 480,000 shares, corresponding to an issue proceeds of SEK 3.0 million before issue costs. Furthermore, the Over-allotment option covers a maximum of 480,000 warrants of series TO3, which can add a maximum of approximately SEK 6.0 million to the Company before issue costs. The Board of Directors may decide to use the Over-allotment option, in whole or in part, if the Rights Issue is oversubscribed. The right to subscribe for units in the Over-allotment option shall accrue to those who subscribe for units in the Rights Issue without receiving full allocation.
Background and motive in brief
ChemoTech is a Swedish medical technology company based in Lund that is developing a patented technology platform to give cancer patients access to a new treatment option, Tumour-Specific Electroporation™ (TSE), which can be used to treat both humans and animals.
The execution of the Rights Issue contributes to strengthening the Company's working capital, reducing indebtedness, and expanding the Company's commercial activities in line with the strategy of continuing to commercialise the Company's products IQwave™ and vetIQure™ within the business areas Human Care and Animal Care. The Company also intends to use the issue proceeds to finance upcoming clinical studies, while ongoing studies progress. The issue proceeds from the Rights Issue are intended to be allocated to the following areas of use:
Repayment of credit facility, approximately 40 percent.
Expansion of marketing activities within Animal Care in Europe and the USA. In addition, intensified marketing activities within Human Care to meet the opportunities following a government study started in India, approximately 40 percent.
Overhead costs and project management of ongoing clinical studies and future clinical studies, approximately 20 percent.
The issue proceeds from the exercise of the warrants of series TO3A and TO3B are intended to be allocated to the following areas of use:
Expansion of marketing activities within Animal Care in Europe and the USA. In addition, intensified marketing activities within Human Care to meet the opportunities following a government study started in India, approximately 40 percent.
Overhead costs and project management of ongoing clinical studies and future clinical studies, approximately 40 percent.
Investments in R&D and regulatory issues to further develop the Company's TSE platform with more advanced tumor-specific attributes in order to get closer to the Company's goal that TSE shall achieve a validated function with Artificial Intelligence, approximately 20 percent.
Terms of the Rights Issue
The Board of Directors of ChemoTech has decided to carry out the Rights Issue, with support of the authorisation from the annual general meeting on 24 May 2022, in accordance with the following principal terms:
For each share of series A owned as of the record date, the holder receives one (1) unit right of series A. Three (3) unit rights of series A give the holder the right to subscribe for one (1) unit of series A. One (1) unit of series A consists of one (1) share of series A and one (1) warrant of series TO3A.
For each share of series B owned as of the record date, the holder receives one (1) unit right of series B. Three (3) unit rights of series B give the holder the right to subscribe for one (1) unit of series B. One (1) unit of series B consists of one (1) share of series B and one (1) warrant of series TO3B.
The subscription price per unit amounts to SEK 6.25, corresponding to SEK 6.25 per share (the warrants are issued free of charge).
The Rights Issue consist of a maximum of 3,209,685 units, corresponding to 2,859,685 shares of series B, 350,000 shares of series A, 2,859,685 warrants of series TO3B and 350,000 warrants of series TO3A.
In case of great interest in subscription of units without unit rights, the Board of Directors has the right to decide on the issuance of an additional maximum of 480,000 units for the subscription of shares of series B and warrants of series TO3B via the Over-allotment option.
In case of full subscription in the Rights Issue, the Company receives issue proceeds of approximately SEK 20.1 million before issue costs. If the Over-allotment option is used in full, the Company can receive an additional SEK 3.0 million before issue costs.
The subscription period for the Rights Issue is to begin 3 October 2022 and to end on 21 October 2022.
Through the Rights Issue, the share capital may increase by a maximum of SEK 1,604,842.50 from SEK 4,814,527.50 to SEK 6,419,370.00 and the number of shares may increase by a maximum of 3,209,685 shares from 9,629,055 shares to 12,838,740 shares. If the warrants of series TO3 are fully exercised, the share capital increases by an additional SEK 1,604,842.50 and the number of shares increases by 3,209,685 shares. Upon full subscription in the Rights Issue and upon full exercise of the warrants of series TO3, the share capital will amount to SEK 8,024,212.50 and the number of shares will amount to 16,048,425 shares. If the board decides on full utilization of the Over-allotment option, the share capital can amount to a maximum of SEK 6,659,370.00 and the number of shares can amount to a maximum of 13,318,740. If the Board of Directors decides on full utilisation of the Over-allotment option and all warrants of series TO3 issued through the Over-allotment option are exercised, the share capital can amount to a maximum of SEK 8,504,212.50 and the number of shares to a maximum of 17,008,425 shares.
Shareholders in the Company who do not subscribe for units in the Rights Issue will be acknowledge a dilution of their shareholding. A fully subscribed Rights Issue results in a dilution corresponding to approximately 25.0 percent of the shares and votes in the Company. If the Board of Directors decides on full utilisation of the Over-allotment option, it entails a dilution corresponding to approximately 3.6 percent of the shares and approximately 3.0 percent of the votes in the Company. Upon full exercise of warrants of series TO3, approximately 20.0 percent of the shares and votes in the Company. As a result of full subscription in the Rights Issue and full use of the Over-allotment option including full subscription of the warrants of series TO3, the maximum increase in the number of shares in the Company may cause a dilution of approximately 43,4 percent of the number of shares and 42,8 percent of the votes in the Company.
Terms for warrants of series TO3
Each warrant of series TO3A gives the right to subscribe for one (1) new share of series A in the Company. Each warrant of series TO3B gives the right to subscribe for one (1) new share of series B in the Company. The subscription price for shares supported by the warrants of series TO3A and TO3B amounts to 70 percent of the volume-weighted average price for the Company's share of series B during the period from and including March 23, 2023 to and including April 5, 2023, however, at lowest the share's quota value (currently SEK 0.50) and a maximum of SEK 12.50.
The warrants can be used to subscribe for new shares during the period from and including April 11, 2023 to and including April 24, 2023.
In the event of full subscription in the Rights Issue and full utilisation of all warrants of series TO3, the Company receives an additional maximum of approximately SEK 40.1 million. In the event that the Over-allotment option is fully used and the warrants of series TO3 attached to the Over-allotment option are fully subscribed, the Company may receive an additional maximum of approximately SEK 6.0 million before issue costs.
The maximum increase in the number of shares in the Company as a result of full subscription of the Rights Issue and full use of attached warrants of series TO3A and TO3B may cause a further dilution of approximately 20.0 percent of the shares and votes in the Company.
If the board decides on full utilisation of the Over-allotment option and the attached warrants of series TO3 are fully subscribed, the warrants may cause a dilution of an additional 2.8 percent of the shares and approximately 2.3 percent of the votes in the Company.
The warrants of series TO3B are intended to be admitted to trading after final registration with the Swedish Companies Registration Office.
Subscription commitments and underwriting commitments
The Rights Issue is covered to approximately 17.2 percent through subscription commitments from existing shareholders and in addition, the Rights Issue is covered by underwriting commitments of 22.4 percent of the Rights Issue, of which approximately 17.4 percent of the Rights Issue is covered by bottom-up underwriting commitments and approximately 5.0 percent of the Rights Issue is covered by top-down underwriting commitments. The subscription commitments and underwriting commitments are not secured through bank guarantees, pledge or similar arrangements. The subscription commitments have been provided by the Board of Directors, management, and other existing shareholders in the Company. The underwriting commitments have been provided by external investors. For the bottom-up underwriting commitments, an underwriting compensation of fifteen (15) percent of the guaranteed amount in cash compensation is paid. No compensation is paid for the subscription commitments or top-down underwriting commitments.
Prospectus
An EU growth prospectus and registration form will be kept available before the start of the subscription period on the Company's website, www.chemotech.se.
Preliminary timetable regarding the Rights Issue
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|27 September    |Last trading day in ChemoTech's shares including the right to|
|2022            |receive unit rights                                          |
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|28 September    |First day of trading in ChemoTech's shares excluding the     |
|2022            |right to receive unit rights                                 |
+----------------+-------------------------------------------------------------+
|29 September    |Record date for obtaining unit rights. Shareholders who are  |
|2022            |registered in the share register maintained by Euroclear     |
|                |Sweden AB on this day receive unit rights for participation  |
|                |in the Rights Issue                                          |
+----------------+-------------------------------------------------------------+
|3 October 2022 -|Subscription period for the Rights issue                     |
|21 October 2022 |                                                             |
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|3 October 2022 -|Trading in series B units on Nasdaq First North Growth Market|
|18 October 2022 |                                                             |
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|3 October 2022 -|Trading in paid subscribed units on Nasdaq First North Growth|
|week 44, 2022   |Market                                                       |
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|25 October 2022 |Estimated date for publication of issue results              |
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Advisors
Mangold Fondkommission AB is the financial advisor to ChemoTech in connection with the Rights Issue. Moll Wendén Advokatbyrå is the legal advisor to ChemoTech in connection to the Rights Issue.
For more information, please contact:
Mohan Frick, CEO
010 - 218 93 00
ir@chemotech.se
Certified Adviser: Erik Penser Bank, Tel:  Corporate Finance AB, Tel: +46 8-463 80 00,
E-mail:certifiedadviser@penser.se
Scandinavian ChemoTech
ChemoTech is a Swedish medical technology company based in Lund that has developed a patented technology platform to offer cancer patients access to a new treatment alternative, Tumour Specific Electroporation™ (TSE), available for treatment of both humans and animals. There are a large number of cancer patients whose tumours for various reasons cannot be treated by conventional methods but where TSE can be a solution. Therefore, the company continuously evaluates new opportunities and areas of application for the technology. ChemoTech's shares (CMOTEC B) are listed on Nasdaq First North Growth Market in Stockholm and Erik Penser Bank is the company's Certified Adviser. Read more at: www.chemotech.se.
Important Information
Release, announcement or distribution of this press release may, in certain jurisdictions, be subjectto restrictions according to law and people in those jurisdictions, in which this press release has beenannounced or distributed, should inform themselves of and follow such legal restrictions. This pressrelease does not constitute an offer, or a solicitation of any offer, to buy or subscribe for anysecurities in Brighter in any jurisdiction. Invitation to the persons concerned to participate in the RightsIssue will only take place through the EU growth prospectus which the Company intends to publishin connection with the Rights Issue.
This press release does not constitute or form part of an offer or solicitation to purchase or subscribefor securities in the United States. The securities referred to herein may not be sold in the UnitedStates absent registration or an exemption from registration under the US Securities Act of 1933, asamended. The information in this press release may not be announced, published or distributed inor into the United Kingdom, the United States, Canada, Japan, Australia, Hong Kong, New Zealand,Switzerland, South Africa or in any other jurisdiction where the announcement, publication ordistribution of the information would not comply with applicable laws and regulations.
Within the European Economic Area, no offer is made to the public of securities in any country otherthan Sweden. In other Member States of the European Union, such an offer may only be made inaccordance with the exceptions in the Prospectus Regulation (EU) 2017/1129.
This press release contains certain forward-looking information that reflects the Company's presentview of future events as well as financial and operational development. Words such as "intend","assess", "expect", "may", "plan", "believe", "estimate" and other expressions entailing indicationsor predictions of future development or trends, not based on historical facts, constitute forward-lookinginformation. Forward-looking information is inherently associated with both known andunknown risks and uncertainties as it depends on future events and circumstances. Forward-lookinginformation is not a guarantee of future results or development and actual outcomes may differmaterially from the statements set forth in the forward-looking information.
This disclosure contains information that ChemoTech 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 21-09-2022 08:15 CET.