THIS PRESS RELEASE MAY NOT BE MADE PUBLIC, PUBLISHED OR DISTRIBUTED, DIRECTLY OR INDIRECTLY, IN OR INTO
The Board of Directors of
Summary
- The Board of Directors in Episurf today resolved, subject to the approval by the EGM, to carry out the Rights Issue. The EGM is proposed to approve the Board of Directors' resolution on the Rights Issue and certain related proposals to enable the Rights Issue. The EGM is planned to be held on
22 May 2024 and the notice will be announced through a separate press release. - All existing shareholders in Episurf will receive one (1) unit right for each class A or class B share held on the record date, expected to occur on or about
24 May 2024 . Eight (8) unit rights will entitle the holder to subscribe for one (1) unit. One (1) unit consists of fifteen (15) new class B shares and six (6) warrants of series TO13 B. - The subscription price is
SEK 3.60 per unit, corresponding to a subscription price ofSEK 0.24 per class B share. The warrants are issued free of charge. Each warrant will entitle to subscription of one (1) new class B share at a subscription price ofSEK 0.24 per class B share during 10 February -24 February 2025 . The warrants will be available for trading on Nasdaq First North Growth Market. - The subscription price of
SEK 0.24 per class B share, corresponds to a discount of approximately 40.5 percent, compared to the theoretical ex-rights price (TERP) based on the closing price of Episurf's class B share on Nasdaq Stockholm on19 April 2024 , the last trading day before announcement of the Rights Issue. - Upon full subscription of the Rights Issue, Episurf will receive approximately
SEK 120 million before deductions of costs related to the Rights Issue and, upon full and exercise of the warrants, Episurf will receive additional proceeds of approximatelySEK 48 million before deductions of costs related to the warrants. - The subscription period in the Rights Issue is expected to run from and including
28 May 2024 up to and including12 June 2024 . - Existing shareholders, including Fjärde
AP-fonden and LMK Forward AB have undertaken, or expressed their intention, to subscribe for units representing approximately 12.7 percent of the Rights Issue, or approximatelySEK 15 million . - Additionally, shareholding members of the Company's Board of Directors and Management, including CEO
Pål Ryfors and ChairmanUlf Grunander , have expressed their intention to subscribe for units representing approximately 1.6 percent of the Rights Issue, or approximatelySEK 2 million in total. Members of the Board and Management of the Company are prevented, under applicable rules on market abuse, from entering into undertakings to subscribe for units in the Rights Issue, as a result of the Company being in a so-called closed period until the publication of the interim report for the first quarter of 2024, and are expected to enter into undertakings after the closed period has ended. - A number of external investors have undertaken to guarantee approximately 60.7 percent of the Rights Issue, corresponding to approximately
SEK 73 million , at a guarantee commission of 12.0 percent of the guaranteed amount in cash or 14.0 percent of the guaranteed amount in units. - The Rights Issue is thus covered by subscription intentions, subscription commitments and guarantee commitments representing approximately 75.0 percent of the Rights issue, corresponding to approximately
SEK 90 million . - Additionally, the Company's largest shareholder,
Health Runner AB , as well as the shareholderSacajo Investments LLC (Niles Noblitt ) have expressed an ambition to subscribe for their respective pro-rata shares in the Rights Issue. - Existing shareholders, representing approximately 12.9 percent of the total votes in the Company, have undertaken or expressed their intention to vote in favor of the resolutions regarding the Rights Issue at the EGM.
Episurf's CEO
Background and motive
Episurf is a Swedish, commercial stage orthopaedics company with a proprietary implant technology, based on individualized implants and surgical tools tailored for each patient's needs through advanced imaging techniques and pre-surgical analysis. Episurf's first product group, the Episealer® knee implant, addresses the gap in the osteoarthritis treatment paradigm between early biologic interventions and knee replacements, and is commercially available in
Use of proceeds
Episurf has identified five investment areas that have the potential to bring the Company significantly closer to a position of sustainable profitability within the established business strategy. The net proceeds from the Rights Issue, provided that the Rights Issue is subscribed to the amount covered by subscription commitments and intentions, as well as guarantee commitments, will be used to:
- Accelerate the ongoing commercialization of the Episealer® Patellofemoral System on the US market, including continued expansion of the US distributor network, surgical support and other relevant marketing activities, together with a balanced expansion of the US organization (approximately 25%);
- Finance the US regulatory process for the Episealer® MTP-System for the US market, as well as pre-launch and market launch activities in the US (approximately 25%);
- Accelerate the ongoing commercialization of the Episealer® Knee and Episealer® Talus Systems in the ex-US markets, including marketing and sales activities of the ex-US sales forces and distributor network (approximately 25%);
- Continue the Company's clinical development programs, including supporting several independent study initiatives and the ongoing EPIC Knee PMA Study as well as the Company's regulatory activities to support global market presence (approximately 15%); and
- General corporate purposes and extension of cash runway to at least Q4 2025 (approximately 10%).
Should the Rights Issue be subscribed for an amount higher than the amount covered by subscription commitments and intentions, as well as guarantee commitments, the additional proceeds will be used to finance activities (i) to (v) proportionally.
Upon full exercise of the warrants of series TO13 B in
Financial target
Conditional upon the Rights Issue being successfully completed, Episurf has adopted a financial target to reach annual sales of
Terms of the Rights Issue
Shareholders who are registered in the share register in Episurf on the record date of the Rights Issue, expected to occur on or about
The subscription price is
Each warrant of series TO13 B entitles the holder to subscribe for one (1) new class B share in the Company during the period from and including
Provided that the Rights Issue is fully subscribed, the Rights Issue will entail that the share capital is increased by approximately
Upon full subscription and exercise of the warrants of series TO13 B, the number of shares will increase by a maximum of 200,299,080 class B shares and the share capital will increase by a maximum of approximately
If all investors who have entered into guarantee commitments elect to receive their guarantee commission in units, and provided that all warrants of series TO13 B that are part of such units are exercised, the number of shares will increase by 59,616,648 class B shares and the share capital will increase by approximately
In the event that the Rights Issue is fully subscribed, the warrants of series TO13 B are fully exercised for, and all investors who have entered into guarantee commitments elect to receive their guarantee commission in units, and provided that all warrants of series TO13 B that are part of such units are exercised, the total dilution effect will be approximately 74.0 percent of the shares and approximately 73.9 percent of the votes in the Company.
The complete terms and conditions of the Rights Issue and information about the Company will be presented in a prospectus, prepared in accordance with the simplified disclosure regime for secondary issuances, that is expected to be published on the Company's website on or around
EGM
The EGM is proposed to approve the Board of Directors' resolution on the Rights Issue and to resolve on certain related proposals to enable the Rights Issue, including reductions of the share capital, a bonus issue and related amendments to the Company's articles of association. The reason for the reductions of the share capital, the bonus issue and the amendments to the articles of association is to enable the Rights Issue and reduce the quota value of the Company's shares as will be further detailed in the notice for the EGM. The EGM is planned to be held on
The notice for the EGM will be published through a separate press release and will be available on the Company's website, www.episurf.com.
Intentions to subscribe for units, subscription commitments and guarantee commitments
Existing shareholders, including Fjärde
Shareholding members of the Company's Board of Directors and Management, including CEO
In total, these subscription commitments and subscription intentions represent approximately 14.3 percent of the Rights Issue, corresponding to approximately
In addition, a number of external investors have undertaken to guarantee approximately 60.7 percent of the Rights Issue, corresponding to approximately
Accordingly, the Company has obtained subscription commitments, subscription intentions and guarantee commitments for approximately 75.0 percent of the Rights Issue, corresponding to
Additionally, the largest shareholder
Further information regarding the parties who have entered into subscription intentions, subscription commitments and guarantee commitments will be presented in the prospectus to be made public before the commencement of the subscription period.
Lock-up undertakings
Shareholding members of the Board of Directors and management have entered into lock-up undertakings, which, among other things and with customary exceptions, mean that they have undertaken not to sell shares in the Company. The lock-up undertakings expire on the day that falls 180 days after the date of announcement of the outcome in the Rights Issue.
Furthermore, the Company has undertaken towards
Preliminary timetable of the Rights Issue
The below timetable for the Rights Issue is preliminary and may be adjusted.
Extraordinary general meeting | |
Last day of trading including the right to receive unit rights | |
First day of trading without the right to receive unit rights | |
Record date for receipt of unit rights | |
Publication of the prospectus | |
28 May - | Trading in unit rights |
28 May - | Subscription period |
28 May - | Trading in BTUs (paid subscribed units) |
Expected announcement of the outcome of the Rights Issue | |
Expected first day of trading in warrants of series TO13 B on Nasdaq First North Growth Market | |
10 - | Exercise period for warrants of series TO13 B |
Advisors
For more information, please contact:
Pål Ryfors, CEO,
Tel:+46 (0) 709 62 36 69
Email: pal.ryfors@episurf.com
Tel:+46 (0) 700 37 48 95
Email: veronica.wallin@episurf.com
This information is information that
About
Important information
The release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions. The recipients of this press release in jurisdictions where this press release has been published or distributed shall inform themselves of and follow such legal restrictions. The recipient of this press release is responsible for using this press release, and the information contained herein, in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer, or a solicitation of any offer, to buy or subscribe for any securities in
This press release is not a prospectus for the purposes of Regulation (EU) 2017/1129 of the
This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Company. The information contained in this announcement relating to the Rights Issue is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness.
This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in
In the
Forward-looking statements
This press release contains forward-looking statements that reflect the Company's intentions, beliefs, or current expectations about and targets for the Company's and the group's future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the Company and the group operates. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "intend", "may", "plan", "estimate", "will", "should", "could", "aim" or "might", or, in each case, their negative, or similar expressions. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not guarantee that the assumptions underlying the forward-looking statements in this press release are free from errors and readers of this press release should not place undue reliance on the forward-looking statements in this press release. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of its date and are subject to change without notice. Neither the Company nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release, unless it is required by law or Nasdaq Stockholm's rule book for issuers.
Information to distributors
Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the offered shares have been subject to a product approval process, which has determined that such shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment").
Notwithstanding the Target Market Assessment, distributors should note that: the price of the shares in the Company may decline and investors could lose all or part of their investment; the shares in the Company offer no guaranteed income and no capital protection; and an investment in the shares in the Company is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Rights Issue. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Sole Manager and Bookrunner will only procure investors who meet the criteria of professional clients and eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the shares in the Company.
Each distributor is responsible for undertaking its own target market assessment in respect of the shares in the Company and determining appropriate distribution channels.
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