ExpreS2ion Biotechnologies: Details of the announced rights issue

Subject to a subsequent approval at an extraordinary general meeting on 23 March 2023, ExpreS2ion Biotechnologies (ExpreS2ion) announced Friday after market close that the company will carry out a rights issue of units of approx. SEK 102.4m, consisting of shares and warrants of series with preferential rights for existing shareholders.

The rights issue will be used to (i) advance the breast cancer vaccine candidate ES2B-C001, (ii) internal technology development and (iii) pipeline expansion, incl. exploration of value-added vaccine partnerships. Regarding the last part, ExpreS2ion announced a new potential partly public financed co-development of new platforms for universal mucosal vaccines together with MucoVax consortium.

This follows the announcement in the annual report for 2022, where they stated the following “The Company plans to obtain additional sources of funding in 2023. This could be in the form of issuance of new shares, non-dilutive financing, entering license and research and development collaboration agreements, expense management activities, renegotiating terms for current outstanding debt instruments or a combination of such."

Existing shareholders in ExpreS2ion as of the record date, 27 March 2023, will receive one unit right for each existing share. Nine unit rights entitle to subscription of five units in the rights issue. The rights issue unit gives you the right to subscribe for one share and a free warrant for the price of SEK 4.90 per unit.

With a total of 20.9m units and 20.9m warrants (TO 8), this will lead to a raise of approx. SEK 102m in cash before cost, if fully subscribed, in the first round.

51% of the rights issue is guaranteed with, among others, 0.8% subscription commitment from management and board members. These will have a 90-day lock-up period for trading any financial instrument from existing shareholding.

The price for guarantees paid in the form of cash amounting to 12% of the guaranteed amount or alternatively 14% of the guaranteed amount in the form of newly issued units (shares). Investors that ask for units not covered by pre-emptive rights will be allotted before the guarantee commitments.

The warrant (TO 8) gives the holder the right to subscribe for 1 new share in the Company against a cash payment amounting to 70 percent of the volume-weighted average price of the company's share during the period from and including 21 August 2023 up to and including 1 September 2023, but not less than quota value of the share. The warrant can be traded up until that period.

Looking apart from the potential dilution effect, if the guarantees are paid by shares, the dilution effect for existing shareholders not participating will be around 36% in the first round, if fully subscribed, and 53% if the warrant program is fully exercised in September 2023.

For further details, a prospectus is expected to be released on or around 27 March 2023. The subscription period, trading in unit rights, and BTUs are expected to commence on 29 March 2023 and run up until and including 12 April 2023.

Read more from the company here: https://investor.expres2ionbio.com/press-releases-cision/

HC Andersen Capital receives payment from ExpreS2ion Biotechnologies for a Digital IR/Corporate Visibility subscription agreement. /Michael Friis, 18:10, 5 March 2023.