Alzinova

Summary

• Upon full subscription, the Rights Issue provides Alzinova with approximately SEK 34.4 million before issuing costs.
• The Rights Issue is covered to approximately 15.3 percent by subscription commitments, amounting to SEK 5.3 million, and to approximately 84.7 percent by underwriting commitments, amounting to SEK 29.1 million. Thus, the Rights Issue is covered to 100 percent through subscription commitments and underwriting commitments.
• For each share owned on the record date June 3, 2024, the holder will receive one (1) subscription right. Seven (7) subscription rights will entitle the holder to subscribe for six (6) shares. The subscription price per share amounts to SEK 0.90.
• The subscription period for the Rights Issue will run from and including June 5, 2024 until and including June 20, 2024.

Background and rationale in summary
Alzinova is a Swedish biopharma company in clinical development phase specializing in the treatment of Alzheimer’s disease. Alzinova’s goal is to complete the clinical Phase 1b study on Alzheimer’s patients with the therapeutic vaccine ALZ-101. The Company’s oligomer-specific vaccine candidate, ALZ-101, has shown promising results in the phase 1b study with favorable safety and tolerability data, as well as a positive trend in biomarkers associated with Alzheimer's disease. Concurrently with the phase 1b study, Alzinova is actively preparing for an upcoming phase 2 study.

Alzinova is also developing ALZ-201, an oligomer-specific monoclonal antibody that can be used as a standalone disease-modifying therapy or as a complement to ALZ-101 for the treatment of Alzheimer’s disease.

The proceeds, after issuing costs, from the Rights Issue shall primarily be used for:

• Production of ALZ-101 for phase 2 trial, approximately 29 percent.
• Expansion of the phase 1b study through Part A2 and Part B, regulatory and administrative costs for phase 2 preparations, approximately 20 percent.
• Strengthening of Alzinova’s working capital for research and development, approximately 40 percent.
• Patent and patent development for ALZ-101 and ALZ-201, as well as business development, approximately 11 percent.

Terms for the Rights Issue
The Board of Directors of Alzinova has resolved, with authorisation from the Annual General Meeting of 2023, to carry out the Rights Issue of shares, in accordance with the following main terms:

• For each share owned on the record date the holder will receive one (1) subscription right. Seven (7) subscription rights entail a right to subscribe for six (6) shares. The subscription price per share amounts to SEK 0.90.
• The Rights Issue entails an issue of not more than 38,169,654 shares.
• Upon full subscription in the Rights Issue, the Company receives approximately SEK 34.4 million before issuing costs.
• The subscription period for subscription of shares will run from and including June 5, 2024 until and including June 20, 2024.
• Through the Rights Issue the share capital can increase with not more than SEK 10,038,619.002 from SEK 11,711,722.695 to SEK 21,750,341.697 and the number of shares can increase with not more than 38,169,654 shares from 44,531,265 shares to 82,700,919 shares.
• Shareholders in the Company who do not subscribe for shares in the Rights Issue will be subject to dilution. A fully subscribed Rights Issue entails a dilution corresponding to approximately 46.15 percent.

Subscription commitments and underwriting commitments
The Rights Issue is covered to approximately 15.3 percent by subscription commitments, amounting to SEK 5.3 million, and to approximately 84.7 percent by underwriting commitments, amounting to SEK 29.1 million. Thus, the Rights Issue is covered to 100 percent through subscription commitments and underwriting commitments. The subscription commitments and underwriting commitments are not secured through bank guarantees, pledge or similar arrangements. Subscription commitments have been made by a number of existing shareholders in the Company as well as persons in the management and the Board of Directors in the Company. The underwriting commitments have been provided by both shareholders and external investors and by members of the Board of Directors in the Company. For the underwriting commitments, an underwriting compensation of either fourteen (14) percent of the underwritten amount in cash compensation or twenty (20) percent of the underwritten amount in the form of shares are paid. Each person that provided underwriting commitments has the right to choose whether the underwriting compensation should be paid in cash or in the form of shares. Should the latter alternative be elected, the subscription price shall amount to the Rights Issue’s subscription price per share, amounting to SEK 0.90. No compensation is paid for the subscription commitments.

Due to related parties to the Company being part of the underwriting consortium, the resolution on the issue to underwriters will be made at the Company’s Annual General Meeting. Notice of the Annual General Meeting will be published through a separate press release.

The Board of Directors considers it favorable for the Company to offer underwriters compensation in the Company’s own shares as it has a positive effect on the Company’s liquidity. The subscription price in the directed issue to the underwriters was negotiated at arm’s length in connection with the procurement of the underwriting commitments, which took place in consultation with the financial advisor and after an analysis of customary market factors. The Board of Directors’ assessment is that the subscription price, and other conditions in the directed issue to the underwriters, against this background, are market conformant.

Some underwriters have provided underwriting commitments which could result in an ownership that exceed ten or twenty percent of the votes in the Company if the Rights Issue is only subscribed up to the level covered by subscription and underwriting commitments. To the extent the underwriters’ fulfilment of such commitment entails that the investment must be approved by the Inspectorate of Strategic Products (Sw. Inspektionen för strategiska produkter) in accordance with the Swedish Screening of Foreign Direct Investments Act (Sw. lagen (2023:560) om granskning av utländska direktinvesteringar), such part of the commitment is conditional upon notification that the application of the transaction is left without action or that approval has been obtained from the Inspectorate of Strategic Products.

Prospectus
An EU growth prospectus and application form will be available before the beginning of the
subscription period on the Company’s website, www.alzinova.com.

Preliminary timetable

Advisors
Mangold Fondkommission AB is the financial advisor to Alzinova in connection with the Rights Issue. Fredersen Advokatbyrå AB is the legal advisor to the Company in connection with the Rights Issue.

For more information, please contact: 
Kristina Torfgård, CEO
Telephone: +46 70 846 79 75
E-mail: kristina.torfgard@alzinova.com

About Alzinova AB
Alzinova AB is a Swedish clinical-stage biopharma company specializing in the treatment of Alzheimer’s disease targeting toxic amyloid beta oligomers. The lead candidate, ALZ-101, is being developed as a therapeutic vaccine for the treatment of Alzheimer’s. Alzinova’s proprietary AβCC peptide™ technology enables the development of disease-modifying treatments that target the toxic amyloid beta oligomers involved in the onset and progression of the disease with high precision. Alzheimer’s is one of the most common and devastating neurological diseases globally, with of the order of 40 million people afflicted today. In addition, the antibody ALZ-201 is in preclinical development, and the ambition is to expand the pipeline further. The company’s Certified Adviser on Nasdaq First North Growth Market is Redeye AB. For more information about Alzinova, please visit: www.alzinova.com

Important Information
Release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions according to law and people in those jurisdictions, in which this press release has been announced or distributed, should inform themselves of and follow such legal restrictions. This press release does not constitute an offer, or a solicitation of any offer, to buy or subscribe for any securities in Alzinova in any jurisdiction. Invitation to the persons concerned to participate in the Rights Issue will only take place through the EU growth prospectus which the Company intends to publish in connection with the Rights Issue.

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 information in this press release may not be announced, published or distributed in
or into the United States, Australia, Japan, New Zealand, South Africa, South Korea, Canada, the United Kingdom, Hong Kong, Russia, Belarus, Switzerland, Singapore or in any other jurisdiction where the announcement, publication or distribution of the information would not comply with applicable laws and regulations.

Within the European Economic Area, no offer is made to the public of securities in any country other than Sweden. In other Member States of the European Union, such an offer may only be made in accordance with the exceptions in the Prospectus Regulation (EU) 2017/1129.

As the Company has made the assessment that the Company conducts activities worthy of protection under the Swedish Screening of Foreign Direct Investments Act (Sw. lagen (2023:560) om granskning av utländska direktinvesteringar), certain investments in the Company may require review by the Swedish Inspectorate of Strategic Products. For more information, please visit the Swedish Inspectorate of Strategic Products’ website, www.isp.se, or contact the Company.

This press release contains certain forward-looking information that reflects the Company’s present view of future events as well as financial and operational development. Words such as “intend”, “assess”, “expect”, “may”, “plan”, “believe”, “estimate” and other expressions entailing indications or predictions of future development or trends, not based on historical facts, constitute forward-looking information. Forward-looking information is inherently associated with both known and unknown risks and uncertainties as it depends on future events and circumstances. Forward-looking information is not a guarantee of future results or development and actual outcomes may differ materially from the statements set forth in the forward-looking information.