Translation: Original published in Finnish on 05/14/2026 at 12:31 pm EEST

Nexstim announced on Wednesday a 5 MEUR financing arrangement that strengthens the company's balance sheet through a directed share issue and option conversions. Through the arrangement, Nexstim gained a new professional investor and an additional investment from its current partner, Brainlab. In our view, the financing round was somewhat surprising, but understandable from the perspective of the balance sheet and cash flows. The new financing increases resources for the implementation of the growth strategy but, on the other hand, means a dilution of around 10% for current owners. We keep our operational expectations unchanged and update the offering information in our estimates. We reiterate our Reduce recommendation and revise our target price to EUR 11 (was 11.5€) based on the issue's discount and option conversions.

The financing package consists of a directed issue and option conversions

Of the 5 MEUR in gross proceeds to be raised in the arrangement, 3.4 MEUR will come from a directed share issue to a new strategic investor, Eiffel Investment Group, and 0.4 MEUR from the company's partner, Brainlab. The subscription price for the new shares is EUR 7.51, which corresponds to a 15% discount on the share's 10-day volume-weighted average price. In addition, Eiffel and certain current option holders will subscribe for new shares with options, whose exercise prices vary between EUR 2.00 and EUR 7.00 depending on the option program. As a result of the arrangement, Eiffel becomes a significant owner with a stake of around 8.8%, and Brainlab's ownership increases to 3.8%. The number of shares in the company increases by a total of around 840,000 shares to 8.07 million shares in the arrangement, which causes a dilution effect of approximately 10.4% for current owners. On the other hand, the number of outstanding options decreases, which reduces the potential future increase in the number of shares.

Balance sheet strengthens for the implementation of the growth strategy

Nexstim implemented a savings program in 2023, and we believe it has maintained strict cost control ever since. The company's balance sheet has been in reasonable condition, even though the company still has net debt. Cash flows have gradually improved, and last year, cash flow after investments was roughly at zero. However, the business has not yet generated significant positive cash flow. The company's opportunities for additional growth investments have thus been limited, and the financing now implemented will, in our view, provide Nexstim with better preconditions to target the publicly stated growth of at least 20%. The positive aspects of the financing round include a stronger balance sheet, a more diversified ownership structure with a new professional investor, and increased leeway in pursuing growth. On the downside, the number of shares will increase at a valuation below the current share price.

Brainlab cooperation crucial for value creation

We make no changes to our operational estimates in connection with this update. However, the discounted share issue and option subscriptions slightly weaken the earnings per share, so we are revising our target price slightly downwards.

We believe the progress of the Brainlab cooperation is central to Nexstim's investment case in the short and medium term. The partnership was announced in late 2024, and according to Nexstim, concrete results can be more clearly expected during this year and next year. For H1'26, our expectations are moderate due to a strong comparison period, recurring revenue being under pressure, and sales seasonality. In H2, however, we expect clear, concrete signs of the benefits of the Brainlab cooperation materializing.