Lund 22 August 2017
The Board of Directors (the “Board”) of Spago Nanomedical AB (publ) (“Spago” or the “Company”) has given notice for an extraordinary general meeting to be held for the purpose of approving the Board’s resolution regarding an issuance of units consisting of shares and warrants with preferential rights for existing owners. Through the issue, Spago is initially allocated approx. SEK 48.7 million and an additional SEK 39 million upon full exercise of the warrants, before deduction of issue costs. The initial new issue is covered by subscription commitments of approx. SEK 29.1 million and a guarantee undertaking of up to SEK 10 million, a total of approx. SEK 39.1 million, corresponding to approx. 80% of the total issue amount.
“We are now advancing the SpagoPix project to clinical trials and accelerating the Tumorad® project towards preclinical proof of concept. We take these steps based on strong results in the projects, but also based on well-established science and an attractive commercial future market,” says Mats Hansen, CEO of Spago Nanomedical AB.
The Board has, subject to the approval of the extraordinary general meeting, resolved on an issue of units consisting of one (1) share and four (4) warrants (“Unit”) with preferential rights for existing shareholders (the “Rights Issue”). Persons who, on the record date, September 29, 2017, are shareholders in Spago, has the right to subscribe for Units in the Rights Issue in relation to previous shareholdings. The last day of trading including the right to subscribe for Units is September 27, 2017. The first day of trading excluding the right to subscribe for Units is September 28, 2017. The terms of the Rights Issue state that shareholders will receive two (2) unit rights for each existing share held on the record date, and three (3) unit rights entitles to subscription of one (1) Unit at the price of SEK 8.50 per Unit during the period 4-18 October 2017. Consequently, three (3) existing shares entitles the holder to subscribe for two (2) new shares at the price of SEK 8.50 per share. Five (5) warrants entitles the holder to subscribe for one (1) new share in the Company during the period 11-22 March 2019 at a 30% discount to the volume weighted average share price in the Company´s share during the period 25 February-8 March 2019 (however not less than SEK 8.50 per share). In the event all Units are not subscribed for with unit rights, the Board shall resolve on the allotment of Units subscribed for without unit rights. In such case Units shall firstly be allotted to persons who have also subscribed for Units by exercising unit rights, secondly to other persons who have subscribed for shares without exercising unit rights, and thirdly to the guarantor.
The Board’s proposal implies that the Company’s share capital can be increased by no more than SEK 5,734,721 through the issue of a maximum of 5,734,721 shares. The Board’s proposal further implies that no more than 22,938,884 warrants are issued, entitling to subscription of a maximum of 4,587,776 shares in the Company. Thus, the Company’s share capital may increase by a further SEK 4,587,776 through the exercise of the warrants.
Subscription commitments have been obtained from existing shareholders amounting to approx. SEK 29.1 million, corresponding to approx. 60% of the total issue amount. Subscription commitments have been obtained from, among others, eight of the Company’s largest shareholders, including Peter Lindell, Eva Redhe, Mikael Lönn, Andreas Bunge, Thord Wilkne, Tiel Ridderstad, Claes Dahlbäck and Ranny Davidoff. Other Board members and CEO have also signed subscription commitments for their pro rata shares in the issue.
The shareholder Ranny Davidoff has, in addition to his subscription commitment, entered into a guarantee undertaking with the Company amounting to approx. SEK 10 million. The guarantee undertaking is a so-called top guarantee and is called upon in the event subscription, with and without the exercise of unit rights, amounts to less than SEK 48.7 million, however, up to a maximum amount of SEK 48.7 million. In total, subscription commitments and the guarantee undertaking amount to approx. SEK 39.1 million of the total issue amount of SEK 48.7 million, corresponding to approx. 80%. Costs related to the initial new issue amount to approx. SEK 3.9 million, of which SEK 800,000 represents compensation for the guarantee undertaking .
Reason for the Rights Issue
Following the progress made by the Company in the production and completion of a product candidate within the SpagoPix project, Spago now calls for a Rights Issue in two steps to fund the initial clinical development of the product candidate. In addition, Spago is committed to accelerating the development of its other project, Tumorad®. The initial part of the issue is primarily intended to finance the manufacturing of the material in accordance with the requirements for administration to humans, i.e. in accordance with Good Manufacturing Practice (GMP) and to obtain regulatory approval and recruit the first patients in the study. In parallel, Spago intends to continue accelerating the development of Tumorad®.
The Company’s CEO, Mats Hansen, comments below.
“Our product candidate in the SpagoPix project has shown a good effect in pilot studies with regards to the ability to selectively accumulate in tumors to give a strong MRI contrast and also displayed a good safety profile. We have internally conducted a production campaign which has generated not only material for the ongoing regulatory preclinical program, but also contributed valuable know-how and prepared us for technology transfer to an industrial contract manufacturer. With these advances, we have significantly reduced the risk in the SpagoPix project and can begin preparations for the first clinical trials. The work is now underway to initiate GMP production and to plan a clinical trial aimed at documenting early proof of concept for the product candidate regarding MRI images of cancer tumors in humans. With SpagoPix in regulatory development, a larger part of the work is done externally, with contracted development and manufacturing partners, which means we can allocate more resources for Tumorad®. The primary goal of this project is to test particles with properties optimized for circulation time in the body in a suitable model to show anti-tumor effect in vivo. We also intend to conduct a clinical phase 0 study with Tumorad® for early assessment of distribution and excretion of the substance. In light of this, we now carry out a rights issue to fund the initial clinical development of SpagoPix and to accelerate the Tumorad® project with the primary goal of generating preclinical proof of concept. “
Extraordinary general meeting
The extraordinary general meeting will be held on September 22, 2017. Notice is announced in a separate press release.
Investor presentations will be organized during the subscription period. Invitations will be sent separately and will also be announced on Spago’s website, www.spagonanomedical.se.
Redeye Aktiebolag acts as financial advisor and the law firm Cederquist acts as legal adviser in connection with the Rights Issue.
The prospectus is expected to be published around September 29, 2017. Full terms and instructions as well as information regarding subscription and guarantee undertakings will be available in Spago’s prospectus, which will be published together with an information leaflet on the respective websites of the Company, AktieTorget and Redeye Aktiebolag (www.spagonanomedical.se, www.aktietorget.se, www.redeye.se). The prospectus will only be published in Swedish.
For further information, please contact Mats Hansen, CEO Spago Nanomedical AB, +46 767 76 42 94, firstname.lastname@example.org.
DISCLAIMER: This document is an unofficial translation of the Swedish press release and is provided for information purposes only. The rights issue described in this press release is not directed to investors in any other jurisdiction than Sweden nor is the issue directed to individuals whose participation would require additional actions other than those under Swedish law. Spago has therefore not taken and will not take any measures to allow an offer in any jurisdiction other than Sweden.