The board of Bioservo resolves on a guaranteed preferential issue of units of approximately SEK 30.3 million conditional on the approval of an extraordinary general meeting

The board of Bioservo Technologies Aktiebolag (publ) ("Bioservo" or the "Company") has today resolved on an issue of units, consisting of shares and warrants with preferential rights for existing shareholders (the "Rights Issue"). In the case of full subscription in the Rights Issue, Bioservo will initially receive approximately SEK 30.3 million before issuing costs, and if all warrants are fully exercised, Bioservo can receive an additional approximately SEK 30.3 million before issuing costs. The Rights Issue requires the approval at an extraordinary general meeting on September 19, 2022. The notice of the extraordinary general meeting will be published in a separate press release.

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, WITHIN OR INTO THE RUSSIAN FEDERATION, BELARUS, AUSTRALIA, HONGKONG, JAPAN, CANADA, NEW ZEALAND, SWITZERLAND, SINGAPORE, SOUTH AFRICA, THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, DISTRIBUTION OR RELEASE WOULD BE CONTRAVENING TO ANY APPLICABLE RULES. ADDITIONAL RESTRICTIONS ARE APPLICABLE, PLEASE SEE "IMPORTANT INFORMATION" IN THE END OF THIS PRESS RELEASE.

Background and reason
Bioservo is an innovative technology company, active in the development and manufacture of so-called exoskeletons intended as force-enhancing aids in the manufacturing industry and the construction industry as well as for patients within health care with reduced grip strength. The Company develops and provides these powerful strength-enhancing products and related services to keep industrial workers healthy and efficient, as assistive devices function to prevent attrition, and to provide increased independence and quality of life to people with reduced grip strength by keeping individuals active.

The Company's exoskeleton is based on bionics and robotics and provides a force-enhancing ability through the Company's patented SEMTM technology, which enables the development of products that are light, flexible and intuitive with opportunities to collect data and offer ergonomic risk analyses. 

Bioservo began the commercialization of the industrial glove Ironhand® in 2019, but after initial success, the covid pandemic broke out, causing customers in this segment to adopt a temporary wait-and-see approach. During the pandemic, the Company has concentrated its work on developing the next generation of power-enhancing gloves based on extensive field tests carried out together with General Motors and other partners. The first result of the development efforts is the finalization of a greatly improved industrial glove; the Ironhand® 2.0. 

During 2022, Bioservo has seen increased activity in the industrial segment with orders to Japan, France and the USA, among others. France is currently the Company's largest market, where the distributor GOBIO has placed recurring orders, while the USA is a market on the rise. The sale of 30 units worth SEK 1.6 million to Waupaca in the foundry industry in June 2022 marks a major milestone for the Company. Bioservo is now undertaking extensive efforts in sales and marketing as well as to scale up production capacity to meet an expected increase in demand.

In parallel with the Company's successes in the industrial segment, preparations are being made for the commercialization of the Company's new generation of force-enhancing aids intended for the healthcare market, the Carbonhand® 2.0. This is planned to be launched in Europe during Q4 2022 and in the US market during 2023. In June 2022, interim data from the ongoing iHand study was presented, which demonstrated a significantly enhanced grip strength (+27 percent) and improved hand function and perceived quality of life, after six weeks of using Carbonhand®. The final results of the study are expected in September. A market analysis conducted in early 2022 by an external established consulting firm through interviews with patients, physicians and payers shows a substantial need for Carbondhand® and indicates that at least 30,000 patients, in the United States alone, are expected to obtain and access Carbondhand®, which would correspond to more than USD 250 million in net sales.

In the light of the upcoming commercialization of Carbonhand® 2.0 and the initial sales success of Ironhand® 2.0, the board of Bioservo has resolved on new financial goals that the Company will be cash flow positive in 2025 and reach SEK 100 million in revenue the same year. In order to achieve these goals, the Company intends to reinforce the commercial organization and develop the Company's production capacity. Against this background, the Company's board has resolved on the execution of the Rights Issue.

Use of proceeds
In case of full subscription in the Rights Issue, Bioservo will initially receive approximately SEK 30.3 million before issue costs. The net proceeds in case of full subscription are intended to be used for the following areas of use, listed in order of priority:

• Sales & marketing, 40 percent
• Research & development, 23 percent
• Working capital, 37 percent

In the case of all the warrants issued in the Rights Issue are exercised for the subscription of shares, the Company will receive a maximum of approximately SEK 30.3 million before issue costs. The additional cash is intended to be used for the following areas of use, listed in order of priority:

• Sales and marketing, 47 percent 
• Research and development, 25 percent
• Working capital, 28 percent

Terms and conditions in the Rights Issue 
Bioservo's Board of Directors resolved on August 31, 2022, subject to the approval at an extraordinary general meeting, to carry out the Rights Issue by issuing a maximum of 9,478,992 units. Each unit consists of one (1) new share and one (1) new warrant ("Unit"). The right to subscribe for Units with preferential rights shall accrue to those who are registered as shareholders in the Company on the record date of September 22, 2022, whereby possession of one (1) share entitles to one (1) unit right. Two (2) unit rights entitle to subscription of one (1) Unit. In total, the Rights Issue comprises a maximum of 9,478,992 shares and a maximum of 9,478,992 series TO 2 warrants. The subscription price amounts to SEK 3.20 per Unit, corresponding to a subscription price of SEK 3.20 per share, which means that Bioservo, in the case of full subscription in the Rights Issue, will initially receive approximately SEK 30.3 million before issuing costs, and excluding the additional capital that may be received when the warrants are exercised. The warrants included in the Units are issued free of charge, meaning that subscribers of Units receive warrants free of charge. Subscription of Units with the support of unit rights must take place by simultaneous cash payment, during the period from and including September 26, 2022 to and including October 10, 2022. Subscription of Units without the support of unit rights must take place on a separate application form, during the period from and including September 26, 2022 to and including October 10, 2022. Payment for assigned Units subscribed without the support of unit rights must be made in accordance with the instructions on the contract note. Trading in unit rights is expected to take place on the Nasdaq First North Growth Market during September 26 - October 5, 2022.

Two (2) warrants give the right to subscribe for one (1) new share in the Company during the period from and including September 4, 2023 to and including September 18, 2023 at an exercise price corresponding to seventy (70) percent of the volume-weighted average price of the Company's share during the period from and including August 21, 2023 to and including September 1, 2023, however to a minimum of SEK 3.20 and a maximum of SEK 6.40 per share. This means that the additional capital contribution that can arise from the exercise of warrants can amount to a maximum of approximately SEK 30.3 million before issuing costs. 

In the event that not all Units have been subscribed for with the support of unit rights, the Board must, within the Rights Issue's maximum amount, resolve on the allocation of Units subscribed for without the support of unit rights. Allotment without unit rights shall be made to: (a) firstly, to those who have subscribed for Units with the support of unit rights (regardless of whether they were shareholders on the record date or not) and in the event that allotment to these cannot take place in full, allotment shall be made in relation to the number of unit rights that have been exercised for the subscription of Units and, to the extent that this cannot be done, by drawing lots; (b) secondarily to others who subscribed for Units in the Rights Issue without the support of unit rights and in the event that allocation to these cannot take place in full, allocation must be made in relation to the number of Units that each subscribed for and, to the extent that this cannot take place, by drawing lots; and (c) thirdly to those who by agreement entered into a guarantee undertaking as guarantors, and in the event that allocation to these cannot be made in full, allocation shall be made in relation to the amount each party guaranteed and, to the extent that this cannot be made, by drawing lots.

Complete terms and instructions in the Rights Issue as well as other information about the Company will be made available in the EU growth prospectus (Sw. "EU-tillväxtprospekt") which is expected to be published around September 21, 2022 (the "Prospectus"). The Prospectus will be available on Bioservo's website, www.bioservo.com.

Preliminary schedule for the Rights Issue
September 19, 2022        Extra general meeting

September 20, 2022        Last trading day including the right to receive unit rights.

September 21, 2022        First trading day excluding the right to receive unit rights.

September 21, 2022        Publication of the Prospectus

September 22, 2022        Record date for participation in the Rights Issue.

September 26 - October 5, 2022         Trading in unit rights on the Nasdaq First North Growth Market.
September 26 - October 10, 2022       Subscription period.
Around October 13, 2022                     Publication of the outcome of the Rights Issue.

Subscription commitments and guarantors
In connection with the Rights Issue, Bioservo has received subscription and guarantee commitments corresponding to 100 percent of the Rights Issue. However, the subscription and guarantee commitments are not secured by bank guarantee, blocked funds, pledging or similar arrangements. Subscription commitments amount to approximately SEK 8.7 million, corresponding to approximately 28.6 percent of the Rights Issue, and have been received from the Company's largest owner, the Chairman of the Board and the CEO of the Company. No remuneration is paid for subscription commitments.

The Company has also entered into agreements with the Chairman of the Board and external investors regarding underwriting guarantees amounting to approximately SEK 21.7 million, corresponding to approximately 71.4 percent of the Rights Issue. For these guarantee commitments, Bioservo must pay remuneration of 12.0 percent of the guaranteed amount in cash, corresponding to a maximum of SEK 2.6 million, or alternatively pay remuneration of 14.0 percent of the guaranteed amount in the form of shares in the Company, corresponding to a maximum of 947,543 shares. The Chairman of the Board is only given the option to receive cash remuneration. The group of guarantors has been coordinated by the Company's financial advisor Erik Penser Bank and all guarantors can be reached via the following address: Apelbergsgatan 27, 111 37 Stockholm. 

In order to enable shares remuneration as guarantee compensation to investors who choose to receive guarantee remuneration in the form of newly issued shares, the Board has proposed that the extraordinary general meeting on September 19, 2022, which is to resolve on approving the execution of the Rights Issue, also resolves on authorization for the Board to resolve on issuing of shares to the guarantors.

Change in share capital and number of shares and dilution
Through the Rights Issue, the number of shares in Bioservo will increase by a maximum of 9,478,992 shares from 18,957,985 shares to 28,436,977 shares and the share capital will increase by a maximum of SEK 1,895,798.40 from SEK 3,791,597.00 to SEK 5,687,395.40. For existing shareholders who do not participate in the Rights Issue, this means, in the case of full subscription, a dilution effect of approximately 33.3 percent of votes and capital in the Company.

In the case that all series TO 2 warrants are fully exercised for the subscription of new shares in the Company, the number of shares will increase by an additional 4,739,496 to a total of 33,176,473 shares and the share capital will increase by a further SEK 947,899.20 to SEK 6,635,294.60. This corresponds to a dilution effect from the warrants of a further maximum of approximately 14.3 percent. The total dilution effect, in the event that both the Rights Issue and the warrants are subscribed for in full, amounts to approximately 42.9 percent.

Extra general meeting 
The Board's resolution on the Rights Issue is subject to the approval at the extraordinary general meeting on September 19, 2022. The notice of the extraordinary general meeting will be published in a separate press release.

Advisors
Erik Penser Bank is financial advisor and Born Advokater is legal advisor to Bioservo in the Rights Issue.
 

For further information please contact:
Petter Bäckgren, CEO
[e-mail]
[phone]

Madeleine Börjesson, CFO
[e-mail]
[phone]

The information in this press release is such that Bioservo Technologies AB (publ) is obliged to publish in accordance with EU Regulation on Market Abuse (MAR). The information was submitted for publication through the agency of above contact persons for publication on August 31, 2022 at 08:30 a.m. CEST.

About Bioservo Technologies
Bioservo Technologies AB (publ) is a world leading company in wearable muscle strengthening systems for people in need of extra strength and endurance. All our innovative products and systems are designed to keep people strong, healthy, and efficient. The company has a unique global position within soft exoskeleton technology for the hand, both for industrial applications to improve the health for workers and to improve quality of life for people with reduced muscle strength. Bioservo Technologies was founded in 2006 in collaboration between researchers at the Royal Institute of Technology and a doctor at Karolinska University Hospital. Bioservo Technologies is a Swedish public limited company with headquarters in Stockholm.

FNCA Sweden AB, [phone], [e-mail] is the company's Certified Adviser on Nasdaq First North

For more information, please visit www.bioservo.com

Important information
Publication, distribution, or release of this press release may, in certain jurisdictions, be subject to restrictions by law and the persons in such jurisdictions where this press release has been published or distributed should 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 or form part of an offer or solicitation to purchase or subscribe for securities in Bioservo in any jurisdiction, not from Bioservo or from any other person.

This press release is not a prospectus for the purposes of Regulation (EU) 2017/1129 (the "Prospectus Regulation") and has not been approved by any regulatory authority in any jurisdiction. A prospectus will be published on the Company's website after the approval of the Swedish Financial Supervisory Authority (sw. Finansinspektionen). Bioservo has not authorized any offer to the public of shares or rights in any other jurisdiction than in Sweden. An offer to the investors to subscribe for Units in Bioservo will only be made through the Prospectus, which will be disclosed by the Company around September 21, 2022 on Bioservo's website, www.bioservo.com. Any investment decision should, in order for an investor to fully understand the potential risks and benefits associated with the decision to participate in the Rights Issue, be made solely based on the information in the Prospectus. An investor is therefore advised to read the entire Prospectus. This press release constitutes advertising in accordance with article 2 k) of the Prospectus Regulation.

This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public offering of the securities in the United States. The information in this press release may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, within or into the Russian Federation, Belarus, Australia, Hongkong, Japan, Canada, New Zealand, Switzerland, Singapore, South Africa, the United States or any other jurisdiction in which such publication, distribution or release would be contravening to any applicable rules or where such actions are subject to legal restrictions or would require additional registration or other measures than what is required under Swedish law. Actions taken in violation of this instruction may constitute a crime against applicable securities laws and regulations.

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 future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the Company 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 nor does it accept any responsibility for the future accuracy of the opinions expressed in this press release or any obligation to update or revise the statements in this press release to reflect subsequent events. Undue reliance should not be placed on the forward-looking statements in this press release. The information, opinions and forward-looking statements contained in this press release speak only as at its date and are subject to change without notice. The Company does not undertake any obligation 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 not required by law or Nasdaq Stockholm rule book for issuers.

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