Translation: Original comment published in Finnish on 05/23/2024 at 9:18 am EEST

The issue was fully expected, as we believe the company’s implementation of its growth strategy requires additional funding to be collected this year. The terms (EUR 3.5 per share, gross proceeds of some 10 MEUR) were quite well in line with our expectations. With the issue, the company can continue implementing its growth strategy that has progressed well without material short-term financing risks.

9.95 MEUR collected in the issue before costs

In the directed share issue announced yesterday, Aiforia will issue 2.84 million new shares. The subscription price of the shares in the issue was EUR 3.50 per share, which corresponds to a discount of some 11.4% on yesterday’s (5/22) closing price of EUR 3.95 per share. The issue was carried out in an accelerated bookbuilding process based on bids. The issue was aimed at domestic and international institutional investors and other professional investors. The new shares account for approximately 9.9% of all Aiforia shares after the issue, so the dilution is quite moderate.

The successful issue came as no surprise, as the implementation of Aiforia’s growth strategy has progressed well and we thus believe the company was in a good position in the financing negotiations. Aiforia raised gross proceeds of 9.95 MEUR in the share issue, which, after typical costs of around 5-10%, would correspond to net assets of good 9 MEUR. In our previous valuation (3/8/2024), we had included a 10 MEUR share issue in 2024 (and another one in 2025), at a price of EUR 3.10 per share, excluding costs. Considering the typical costs of approximately 5-10% for the directed issue carried out at EUR 3.5 per share, the issue was largely as expected.

Before the issue, we estimated that Aiforia will raise a total of some 20 MEUR in additional funding to enable maintaining growth investment and achieving cash-flow neutrality, so the directed issue covers around half of this. With our current forecasts, the company’s financing needs would be sufficient until the end of 2025 with the help of this issue, when the cash flow from operating activities (excl. investments) would be positive in the company’s objectives. With our forecasts, cash flow would be positive after investments in 2027, so any additional funding would presumably be raised with better visibility of the timing for achieving cash flow neutrality.

We feel the elimination of short-term financial uncertainties with expected terms is in principle positive for the company, even though a share issue carried out slightly below yesterday’s closing price may also bring short-term downward pressure to the share and room for play.