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November 9, 2020

Naventus Corporate Finance has advised Insplorion in equity raise of SEK 60,3 million

Insplorion AB (publ) (”Insplorion” or the ”Company”) has, following a resolution by the board of directors with the support of the authorisation from the annual general meeting, carried out a directed issue of 1,500,000 shares at a subscription price of SEK 20 per share (the “Directed Issue”) and will hereby receive approximately SEK 30 million before deduction of costs related to the transaction. Further, the board of directors of the Company has resolved to carry out a rights issue of a maximum of 1,515,778 new shares at the same subscription price, i.e. at a subscription price of 20 per share (the “Rights Issue”, and together with the Directed Issue, the “Share Issues”). At full subscription in the Rights Issue, which is fully guaranteed through subscription undertakings and guarantee commitments, the Company will receive approximately SEK 30.3 million before deduction of costs related to the transaction. The Share Issues will thus, at full subscription, provide the Company with a total of approximately SEK 60.3 million before deduction of costs related to the transactions. The board of directors has also resolved to initiate a process in order to change marketplace from Spotlight Stock Market to Nasdaq First North Growth Market.

BACKGROUND AND REASONS
Insplorion’s development of the fastest hydrogen sensor in the world has developed rapidly and attracted global attention during the last year. The hydrogen sensor can be a crucial component in the rapidly growing market of hydrogen-based energy systems. The development of the hydrogen sensor and the Company’s battery sensor mean individually and together great opportunities for Insplorion, to establish a solid position in two rapidly growing markets, while commercialisation of the Company’s air quality sensors further validates the technology.

The Rights Issue and the Directed Issue are carried out with the purpose of creating financial space and conditions to realize the Company’s growth potential, and consequently to create value for the shareholders.

The net proceeds from the Share Issues of approximately SEK 53.6 million after costs related to the Share Issues (calculation based on cash payment of guarantee commission) are deemed sufficient to finance the acceleration of the Company’s development of its hydrogen and battery sensors, and to facilitate further commercialisation of air quality sensors.

Patrik Dahlqvist, CEO Insplorion
“Our hydrogen sensor has developed rapidly during the year we have been running the project, and has over the same time matched well with the fast developing global market for hydrogen as an energy carrier. The interest for the fastest hydrogen sensor in the world is large on the market, within vehicles, within infrastructure and among component manufacturers. The interest is also high among financiers, where AP Ventures, a London based specialist fund focusing on the hydrogen value chain, participate in our directed issue due to the potential of the hydrogen sensor. Today, we are very happy to strengthen our ownership base with both financial weight and industrial competence, while also receiving funds in order to realise the potential of our full sensor platform.”

THE DIRECTED ISSUE
As per today, the board of directors has resolved to carry out a Directed Issue of 1,500,000 new shares. The resolution was made with the support of the authorisation from the annual general meeting held on 16 April 2020. The subscription price amounts to SEK 20 per new share.
The reason for deviation from the shareholders’ preferential rights is to strengthen and broaden the shareholder base and to, in a cost and time efficient manner, carry out a capital raise through which the Company’s financial position is strengthened.

The shares have been subscribed for but not yet paid. Pursuant to the investment agreement that has been entered into between the Company and the subscribers, the new shares in the Directed Issue shall not entitle to subscription rights or subscription for new shares in the Rights Issue by virtue of preferential rights. The new shares will thus be registered with the Swedish Companies Registration Office after the record date for receiving of subscription rights in the Rights Issue.

The subscription price for the new shares (which is the same in the Share Issues) corresponds to a discount of approximately 21 per cent as compared to the closing price of SEK 25.40 for the Company’s share on Spotlight Stock Market on 6 November 2020, the last day of trading before the resolution on the Share Issues. The subscription price has been set following discussions with investors and on the terms and conditions under which the board of directors deems that the Share Issues can be carried out, conforming to the prevailing market conditions. The Company’s board of directors considers the subscription price to be on market conditions.

Through the Directed Issue, the Company will receive approximately SEK 30 million before deduction of costs related to the transaction (primarily consisting of fees to advisors and costs for practical management). For information regarding use of proceeds, refer to the section “BACKGROUND AND REASONS” above.

The subscribers in the Directed Issue consists of a limited number of Swedish and international institutional investors as well as one pre-existing shareholder, whereas the largest investors (in terms of amount) are AP Venures Fund II GP LLP, Formue Nord A/S and Thorén Tillväxt AB and one additional UK based investment fund (who have subscribed for new shares corresponding to a total of SEK 28 million, i.e. approximately 93 per cent of the Directed Issue). Naventus Corporate Finance AB, who is the Company’s financial advisor in connection with the Share Issues, have subscribed for new shares in the Directed Issue to an amount corresponding to SEK 1 million.

Commenting on the investment, Andrew Hinkly, Managing Partner, AP Ventures said:
“We are delighted to welcome Insplorion into our portfolio and to working closely together in the future. Ensuring safe production, transport, storage and use of hydrogen is key to unlocking the global hydrogen economy and we think that Insplorion’s sensors address these challenges; they can also support the development of more efficient and cost-effective equipment such as Fuel Cells. We are very impressed with the versatility of the technology, which has applications outside of the hydrogen value chain, as well as with the team at Insplorion. We are pleased to be part of the journey as the company scales and commercializes its innovative technology.”

As a condition for its investment, AP Ventures has requested and the board of directors has accepted that AP Ventures shall be entitled to appoint a board observer with participation but no voting rights at meetings of the board. AP Ventures' payment is of subscribed share (corresponding to SEK 9 million) is conditional on that proceeds from the Share Issues exceeds SEK 41 million (i.e. in addition to the SEK 9 million that AP Ventures will pay as payment for new shares in the Directed Issue).

All participants in the Directed Issue have entered into a so-called lock-up commitments whereby they have undertaken not to sell the shares from the Directed Issue during a period up to and including the day of the Company’s announcement of the final outcome of the Rights Issue (but no later than 31 December 2020). A number of investors in the Directed Issue have, through guarantee commitments, also undertaken to subscribe for new shares in the Rights Issue that are not subscribed for with or without subscription rights. For more information, refer to the section “THE RIGHTS ISSUE” below.

THE RIGHTS ISSUE
In addition to the Directed Issue as above, the board of directors has, as per today, also resolved to carry out an issue of 1,515,778 new shares with preferential rights for the Company’s shareholders, i.e. the Rights Issue as defined above. The resolution was made with the support of the authorisation from the annual general meeting held on 16 April 2020. The subscription price amounts to SEK 20 per new share (i.e. the same subscription price as in the Directed Issue).

Provided that the Rights Issue is fully subscribed, the Company will receive approximately SEK 30.3 million before deduction of costs related to the transaction (primarily consisting of compensation for guarantee commitments, fees to advisors and costs for practical management). For information regarding use of proceeds, refer to the section “BACKGROUND AND REASONS” above.

The shareholders of the Company will have preferential rights to subscribe for the new shares that are included in the Rights Issue. For each share held on the record date, two (2) subscription rights are received, whereby thirteen (13) subscription rights entitle to subscription for one (1) new share. Shareholders who do not participate in the Rights Issue have an opportunity to receive economic compensation for the dilution by selling their subscription rights.

The new shares in the Directed Issue will not entitle to subscription rights or subscription for new shares in the Rights Issue by virtue of preferential rights (also see section “THE DIRECTED ISSUE” above).

In the event that not all shares are subscribed for by exercise of subscription rights, the board shall, within the framework of the maximum amount for the Rights Issue, resolve on allotment of shares subscribed for without subscription rights. In such a case, shares shall primarily be allocated to those who have also subscribed for shares by exercise of subscription rights, and secondly be allocated to those who have subscribed for shares without subscription rights. Thirdly and lastly, any remaining new shares shall be allocated to those who have guaranteed the issue pursuant to a separate agreement with the Company, and distributed in relation to the size of their respective pledged guarantee commitments.

Subscription undertakings amount to approximately SEK 3.7 million corresponding to approximately 12 per cent of the Rights Issue. In addition, guarantee commitments amount to approximately SEK 26.6, corresponding to approximately 88 per cent of the Rights Issue. The Rights Issue is thus fully secured through subscription undertakings and guarantee commitments. Neither subscription undertakings nor guarantee commitments are secured by bank guarantee, blocked funds, pledges or similar arrangements. For the guarantee commitments, there is a customary guarantee commission, conforming to the prevailing market conditions, of ten (10) per cent of the guaranteed amount. Each guarantor can choose whether the guarantee commission shall be paid by the Company in cash, or in new shares whereby each new share shall have a value corresponding to the subscription price in the Share Issues. In order to enable payment of guarantee commission in new shares the board of directors has, as per today, by virtue of the aforementioned authorisation from the annual general meeting, also resolved on an additional directed issue (i.e. in addition to the Directed Issue of a maximum of 132 820 new shares against payment through a set-off of claims regarding guarantee commissions with the same subscription price as in the Share Issues. No compensation is paid to the parties that have provided subscription undertakings. The largest guarantor (in terms of amount) is Formue Nord Markedsneutral A/S with a guarantee commitment corresponding to approximately 56 percent of the total, by the guarantee consortium guaranteed amount, amount. Among the two existing shareholders, the Chalmers University of Technology Foundation has provided the largest guarantee commitment (in terms of amount), corresponding to approximately 7.5 percent of the total amount guaranteed by the guarantee consortium.

Full terms and conditions for the Rights Issue and further information regarding net proceeds, guarantee commitments etc. will be disclosed in the EU Growth Prospectus which will be published by the Company no later than in conjunction with the commencement of the subscription period.

PLANNED LIST CHANGE TO NASDAQ FIRST NORTH GROWTH MARKET
The board of directors has resolved to initiate a process to change marketplace from Spotlight Stock Market to Nasdaq First North Growth Market. The list change is scheduled to take place following the Share Issues, provided that Nasdaq approves the list change. Should the list change be carried out and approved by Nasdaq, the Company will disclose such a decision as well as a more detailed timetable regarding last day of trading on Spotlight Stock Market and first day of trading on Nasdaq First North Growth Market respectively.

ADVISORS
Naventus Corporate Finance AB is financial advisor and Setterwalls Advokatbyrå AB is legal advisor to Insplorion in connection with the Share Issues.

For more information, please contact:
Patrik Dahlqvist, CEO Insplorion
Tel: +46 72 362 32 61
Email: patrik.dahlqvist@insplorion.com

About Naventus Corporate Finance AB
Naventus Corporate Finance is an independent privately-held financial advisor offering services relating to qualified advice regarding IPOs, capital raises and M&A to listed and unlisted companies and their owners. www.naventus.com

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