The shareholders of Xspray Pharma AB (publ), org. No. 556649-3671, is called to the Extraordinary General Meeting on Thursday, March 26, 2020 at 4:00 pm at the Law Firm Vinge's premises, Stureplan 8, Stockholm.

Registration starts at 15.30. Right to attend the Annual General Meeting Shareholders who wish to attend the AGM shall: Be included in the share book kept by Euroclear Sweden AB on Friday, March 20, 2020, and register with the company no later than Friday, March 20, 2020.

The notification must be made in writing via e-mail to generalmeeting@xspray.com, or by mail to Xspray Pharma, 'Corporate General Meeting', Rasundavagen 12, 169 67 Solna. Upon notification, the name, person / organization number, shareholding, address, telephone number daytime and information on any assistants (maximum two) and, where applicable, information on representatives. The information provided at the time of notification will be processed and used only for the Annual General Meeting.

Agent

Shareholders represented by proxy must issue dated proxy for the proxy. If the authorization is issued by a legal person, a certified copy of the registration certificate or equivalent for the legal person must be attached. The power of attorney and any registration certificate may not be older than one year, however, the power of attorney may be older if, according to its wording, it is valid for a longer period, a maximum of not more than five years. The proxy in original and any registration certificate should be sent to the company at the address stated above in good time before the AGM. A form for proxy is available on the company's website, www.xspraypharma.com, and will also be sent to shareholders who so request and state their mailing address.

Trustee-registered shares

Shareholders who have had the nominee register their shares through a bank or securities institution must, in order to have the right to participate in the general meeting, have to register the shares in their own name. Such registration, which may be temporary, must be effected at Euroclear Sweden AB on Friday, March 20, 2020, which means that the shareholder must inform the trustee well in advance of this date.

Number of shares and votes

As of the date of this notice, the company has a total of 16,751,622 outstanding shares which entitle to one vote per share at the Extraordinary General Meeting. As of the date of this notice, the company does not hold any own shares.

Proposed agenda

Opening of the Annual General Meeting

Election of Chairman of the Meeting

Preparation and approval of voting length

Approval of agenda

Election of one or two adjusting persons

Examination of whether the Meeting has been duly convened

Resolution on long-term incentive program 2020 (LTI 2020 ) and issue of warrants

Closing of the Meeting

Issue 7 - Resolution on long-term incentive program 2020 (LTI 2020) and issue of warrants

Purpose of LTI 2020

The purpose of LTI 2020 is to link a larger proportion of employees in Xspray Pharma's remuneration to Xspray Pharma's and Xspray Pharma's long-term value growth, thus linking the employees' interests with the shareholders. LTI 2020 will be an important program for Xspray Pharma to motivate and retain the best talents, which is important for Xspray Pharma to achieve long-term value growth for its shareholders.

Issue of warrants / distribution of warrants

The Board of Directors proposes that the Meeting resolves to issue a maximum of 79,074 warrants, which means an increase in share capital upon full exercise with a maximum of SEK 79,074. Each subscription option entitles the holder to subscribe for one (1) share.

LTI 2020 covers a maximum of five persons. The company's board members shall not be covered by LTI 2020. The right to subscribe for warrants shall, with deviation from the shareholders' preferential rights, be granted to certain senior executives and other persons employed by the company, or who entered into an agreement on employment at Xspray Pharma during the subscription period. Overwriting cannot be done.

Category Maximum number of options per person / category

CFO (1 person) 39 538/39 538

Other employees (4 persons) 9 884/39 536

The Board's intention is to offer participants in Category 1 (CFO) the right to acquire warrants for an amount of SEK 200,000 and participants in Category 2 (Other employees) the right to acquire warrants for an amount of SEK 50,000 per participant.

The reason for the deviation from shareholders 'preferential rights is to introduce an incentive program and thereby a remuneration system that links the remuneration of key people in Xspray Pharma to Xspray Pharmas and its long-term value growth, thus linking the employees' interests with the shareholders. LTI 2020 will be an important program for Xspray Pharma to motivate and retain its key people, which is important for Xspray Pharma to achieve long-term value growth for shareholders.

Subscription of the warrants shall be made on the subscription list until 27 March 2020. Payment shall be made in connection with the subscription. The Board has the right to extend the subscription period and the payment period.

Each subscription option entitles the holder to subscribe for one (1) share in the company. The subscription of shares in accordance with the terms of the warrants may take place during the period from 1 April 2023 to 14 May 2023.

The subscription price per share shall correspond to 170 per cent of the volume-weighted average price for the company's share during the period five trading days immediately prior to the offer to subscribe for the warrants, rounded to the nearest full ten kroner, with five kroner to be rounded upwards. However, the subscription price should not be less than the share's quota value. The subscription price and the number of shares to which each warrant warrants entitlement shall be recalculated in the event of a split, aggregation, new issue of shares, etc. in accordance with market practice.

The shares subscribed for under the warrants shall carry the right to a dividend for the first time on the first record date for the dividend that occurs after the subscription of shares through the exercise of the warrants.

It is proposed that the Board of Directors, or that the Board of Directors designates, make the minor adjustments to the above decisions that may prove necessary in connection with the registration of the decision with the Swedish Companies Registration Office. Other terms and conditions are set out in the full option terms.

Terms

The warrants shall be subscribed on market terms at a price (premium) determined on the basis of an estimated market value for the warrants using the Black & Scholes valuation model calculated by an independent valuation institution. The value has provisionally been calculated at SEK 6.07 per option based on a subscription price per share of SEK 124.30.

The company will partially subsidize the participants' acquisition of warrants. The subsidy is paid in connection with the options being allocated to the participants. The total subsidy, before any payroll tax and including social security contributions on the subsidy, shall correspond to the participants' investment. The total cost of the subsidy, based on the above preliminary option value, is calculated maximum for the entire term of the warrants program for three years amounting to SEK 400,000 including social security contributions. Wage tax arising from the bonus must be paid by the respective participants. As a result of the scheme for the subsidy, Xspray Pharma's negative cash flow for paid subsidies and for social contributions on paid subsidies is calculated to correspond to the positive cash flow in the form of payment of option premiums from the participants.

The participant's eligibility for subsidy assumes that at the time of payment of the bonus, the participant is employed by the company and continues to be employed by the company for three years (the subsidy will otherwise be prorated) and that the participant has not transferred his options.

Termination and termination of employment

A prerequisite for the participants to be offered to subscribe for warrants is that these persons have previously entered into a so-called pre-purchase agreement according to which the participants must be obliged to offer the company to acquire the warrants, or some part of them, if the employment ceases or if the warrants are to be transferred to a third party.

Dilution

Based on the number of shares in Xspray Pharma per day for the notice of the Extraordinary General Meeting, the maximum dilution due to LTI 2020 may amount to approximately 0.47 percent. Taking into account also shares that can be issued according to previously implemented incentive programs in Xspray Pharma, the corresponding maximum dilution amounts to approximately 4.27 percent at full dilution.

Preparation of the case

The principles for LTI 2020 have been developed by the company's Board of Directors. The proposal has been prepared with the support of external advisers and after consultations with shareholders.

Other

Shareholders are reminded of their right to request information in accordance with Chapter 7. Section 32 of the Companies Act. Relevant documents, including the Board's complete proposal for paragraph 7, will be available at the company on Rasundavagen 12, 169 67 Solna and on the company's website, www.xspraypharma.com, no later than Thursday, March 5, 2020. Copies of the documents are sent to the shareholders who request it and provide their mailing address. The company has its registered office in Solna.

Contact:

Tel: +46 (0) 706 88 23 48

Email: per.andersson@xspray.com

Xspray Pharma in brief

Xspray Pharma AB (publ) is a product development company with several product candidates in clinical development. Xspray Pharma uses its innovative patented RightSize technology to develop improved and generic versions of marketed drugs, primarily protein kinase inhibitors (PKI) for the treatment of cancer. The segment is the second largest in the field of oncology and drug prices are very high.

Through the company's innovative technology, Xspray Pharma can become the first competitor to today's original medicines before the secondary patents expire. Xspray's goal is to become a leader in the development of improved drugs or generics of already marketed PKIs for the treatment of cancer, which in December 2019 were 54. The company's leading product candidates, HyNap-Dasa, HyNap-Sora and HyNap-Nilo, are stable amorphous versions of the three best-selling cancer drugs Sprycel (dasatinib), Nexavar (sorafenib) and Tasigna (nilotinib). Launch of the first product candidate, HyNap Dasa is scheduled to take place in 2021.

The company has patents on manufacturing technology, equipment and the resulting products. The shares in Xspray Pharma AB are traded on the Nasdaq First North Growth Market, Stockholm.

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