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6 May, 2020

Hoylu AB (publ): The Board of Directors in Hoylu resolves on a private placement of approximately SEK 63 million, a rights issue of approximately SEK 11 million, to move the date for the annual general meeting, and proposes the annual general meeting to approve a directed share issue and an employee incentive program

The Board of Directors in Hoylu AB (publ) (“Hoylu” or the “Company”) today resolved, based on an authorization granted by the extraordinary general meeting on 17 July 2019, to carry out a directed share issue of approximately SEK 63 million (the “Private Placement”) and a rights issue of approximately SEK 11 million (the “Rights Issue”).

In addition, the Board of Directors resolved, subject to the annual general meeting’s approval, to carry out a directed share issue of up to 2,591,140 new shares to certain employees and the board member Hans Othar Blix (the “Directed Share Issue”) and to adopt an incentive program for the Company’s employees of up to 9,400,000 warrants (the “Employee Incentive Program”). The Board of Directors also decided to move the date for the annual general meeting to 25 June 2020. Notice to the annual general meeting will be issued separately, together with complete conditions for the Directed Share Issue and the Employee Incentive Program.

“In light of the challenging capital markets environment we are extremely pleased to announce these transactions, continued support from existing shareholders, and confidence from new investors. The new capital will allow us to focus on growth, strengthen marketing and sales and execute on our business plan to provide better tools for connecting people and their work.” – Stein Revelsby, CEO

Summary: The Private Placement

• The Private Placement results in that the Company’s share capital increases with SEK 3,454,868.62 through the issue of 41,908,172 new shares.

• The shares have been subscribed by Sandra Angelil, Erling Johnsen AS, Fredrik Fougner, Fougner Invest AS, Trellevika Invest, Bimo Kapital, Camelback Holding AS, Nucleus Life, Robert Keith, TTC Invest AS, Norse Partners AS, Alden AS, Hortulan AS, Torsen Tankers Towers, Scalable Display Technologies Inc, HefPie AB and Greg Harper.
• The subscription price is SEK 1.5 per new share, which is equal to a discount of approximately 21 per cent based on the closing price on Nasdaq First North Growth Market on 5 May 2020. Payment must be made no later than 11 May 2020. Approximately SEK 36 million will be paid in cash and approximately SEK 27 million will be paid by set-off payment.
• The reason for the Private Placement, and the deviation from the shareholders’ preferential right, is to immediately increase the Company’s working capital to enable continued operations and growth. A private placement accomplishes this significantly faster and to a lower cost compared to a rights issue which is deemed important considering the uncertainties and market volatilities due to Covid-19. Considering the above and the proposed subscription price, a private placement is deemed to be of benefit to the Company and its shareholders.
• The Board of Director’s assessment is that the Private Placement under the present circumstances is the Company’s most favourable way to obtain this financing.

• The Private Placement results in a dilution of shares of the existing shareholders of approximately 58.9 per cent, after the registration of the new shares with the Swedish Companies Registration Office.

• The investors has undertaken not to, directly or indirectly through any shareholding entity controlled by the investors, subscribe for additional shares in the Rights Issue, provided that the Rights Issue is fully subscribed. Allocation of any shares subscribed for in the Rights Issue shall be on a pro-rata basis in relation to the investor’s holding of shares in the Company.

Summary: The Rights Issue

• The Rights Issue may result in that the Company’s share capital increases by a maximum of SEK 603,404 through a new share issue of a maximum of 7,319,398 new shares.

• The subscription price is SEK 1.5 per new share. Subscription for shares shall be made from and including 18 May 2020 up until and including 8 June 2020. The Rights Issue may result in an addition of capital of up to approximalty SEK 11 million to the Company (excluding administrative costs for the share issue).

• Payment for subscribed shares shall be made by cash payment.

• The Company’s shareholders shall have preferential right to subscribe for the shares, whereas 1 existing share entitles to 1 subscription right and 4 subscription rights entitles to the subscription of 1 new share. The record date for establishing which shareholders have the right to subscribe for shares with a preferential right is 14 May 2020.

• Existing shareholders who choose not to participate in the Rights Issue will, provided that the Rights Issue is fully subscribed, have their ownership diluted by approximately 20 per cent, after the registration of the new shares with the Swedish Companies Registration Office.

• Complete conditions and instructions for the Rights Issue together with an information memorandum will be made available at the Company’s website before the subscription period starts.

• The Rights Issue is, besides for the reasons mentioned above, carried out to allow all shareholders to subscribe for newly issued shares at the same subscription price as in the Private Placement.

Indicative timetable

12 May 2020 Last day of trading including the right to receive subscription rights
13 May 2020 First day of trading excluding the right to receive subscription rights
14 May 2020 The record date for the Rights Issue
18 May - 4 June 2020 Trading period for the subscription rights on Nasdaq First North Growth Market
18 May – 8 June 2020 The subscription period for the Rights Issue

Summary: The Directed Share Issue

• The Board of Directors has resolved, subject to approval on the annual general meeting, on a directed share issue of 2,591,140 shares to the board member Hans Othar Blix and the employees Truls Baklid, Jakob Leitner and Thomas Seifried at a subscription price of SEK 1.5, which is expected to raise proceeds to the Company of SEK 3,886,711.

• The reason for the Directed Share Issue, and the deviation from the shareholders’ preferential right, is to immediately increase the Company’s working capital to enable continued operations and growth.

• Approval on the annual general meeting requires a nine-tenth majority vote.

• The subscription period will end on 18 May 2020.

• The complete conditions for the Directed Share Issue will be included in the notice for the annual general meeting.

• If fully subscribed and registered with the Swedish Companies Registration Office, the Directed Share Issue may result in a dilution of shares of the existing shareholders of approximately 8.1 per cent.

Summary: The Employee Incentive Program

• Subject to approval on the annual general meeting, the Board has resolved on an Employee Incentive Program of up to 9,400,000 warrants for senior executives and other employees in the Company and its subsidiaries. The strike price for the warrants shall be SEK 2.2 and the warrants may be exercised during Q1-Q2 2024.

• The reason for the new Employee Incentive Program, and the deviation from shareholders’ pre-emptive right, is to be able to create opportunities for the Company and its subsidiaries to retain competent personnel by offering a long-term ownership commitment for the employees. Such ownership involvement is expected to stimulate employees to increase their interest in the business and the earnings trend and increase the sense of belonging to the Company.

• Approval on the annual general meeting requires a nine-tenth majority vote.

• The complete conditions for the Employee Incentive Program will be included in the notice for the annual general meeting.

• If fully vested, exercised and registered with the Swedish Companies Registration Office the Employee Incentive Program may result in a dilution of shares of the existing shareholders of approximately 24.3 per cent.

Dilution

Existing shareholders who choose not to participate in the Rights Issue will, provided that the Private Placement, the Rights Issue, the Directed Share Issue and the Employee Incentive Program is fully subscribed, allocated and registered with the Swedish Companies Registration Office, have their ownership diluted by approximately 67.6 per cent in total.

New date for the annual general meeting

Due to the resolutions mentioned above, and considering the current situation given the uncertain and accelerating developments in the wake of COVID-19, the Board of Directors has decided to move the date for the annual general meeting to 25 June 2020.

As a result of adjustments related to impairment and foreign exchange differences as of December 31, 2019 that was identified in financial statements after the release of the Q4 report, the net result for the year 2019 has been adjusted from MSEK -45.5 to MSEK -47.4.

The rest of the calendar remains unchanged. More information on the annual general meeting will be presented in the notice to the meeting, which is expected to be published in end of May 2020.

For more information, please contact:
Stein Revelsby, CEO at Hoylu +1 213 440 2499 Email: sr@hoylu.com
Karl Wiersholm, CFO at Hoylu +1 425 829 2316 Email: kw@hoylu.com

About Hoylu
Hoylu is a company with one goal: Take collaboration and information sharing into the future. Through our customizable Connected Workspaces™ we deliver software solutions for companies, organizations and individuals across virtually all industries that enable all teams, big and small to work efficiently and securely in a fun and easy workflow. For more information: www.hoylu.com.

Ticker symbol: Hoylu
Marketplace: Nasdaq First North Growth Market
Certified Adviser: Mangold Fondkommission AB +46 (0) 8 50 301 550, ca@mangold.se
Legal advisor: Eversheds Sutherland Advokatbyrå

Important information

This press release may not be released, published or distributed, directly or indirectly, in or into Australia, Japan, Canada, the United States or any other jurisdiction where participation would require additional prospectuses, registration or measures besides those required by Swedish law. Nor may this press release be distributed in or into such countries or any other country or jurisdiction in which distribution requires such measures or otherwise would be in conflict with applicable regulations. Any failure to comply with the restrictions described may result in a violation of applicable securities regulations.

The subscription rights, paid subscribed shares and shares in the Company have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”) or the securities legislation of any state or other jurisdiction in the United States and no subscription rights, paid subscribed shares or shares may be offered, subscribed for, exercised, pledged, sold, resold, granted, delivered or otherwise transferred, directly or indirectly, in or into the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements under the Securities Act and in compliance with the securities legislation in the relevant state or any other jurisdiction of the United States. There will be no public offering of such securities in the United States.

This information is information that Hoylu AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08:30 CEST on 6 May 2020.