ChromoGenics

The board of directors of ChromoGenics AB ("ChromoGenics" or the "Company") has today, on 17 May 2023, resolved, subject to the subsequent approval by the annual general meeting of the Company on 21 June 2023, to carry out a new issue of shares and warrants ("Units") with preferential rights for the Company's existing shareholders (the "Rights Issue"). The Rights Issue consists of not more than 300,432,678 new shares and not more than 300,432,678 warrants. The subscription price is SEK 0.1 per Unit, which corresponds to a subscription price of SEK 0.1 per share. The Rights Issue, which is covered up to approximately 80 percent of subscription commitments and issue guarantees, will, upon full subscription, initially provide ChromoGenics with approximately SEK 30.0 million before transaction costs related to the Rights Issue. In addition to the subscription commitments and issue guarantees, several members of the Company’s board of directors and management, including the Company’s chairman Johan Hedin and CEO Fredrik Fränding, have communicated their intention to subscribe for their pro-rata in the Rights Issue, amounting to approximately SEK 0.3 million in total. In the event of full subscription and that all warrants within the framework of issued Units are fully exercised, the Company may receive an additional capital contribution of approximately SEK 30 million, based on a subscription price corresponding to the subscription price in the Rights Issue. In order to ensure the financing needs until the Rights Issue is completed, the Company has taken up a loan facility of SEK 10 million at market terms. In addition, the board of directors of ChromoGenics has resolved to bring forward the annual general meeting, from 27 June 2023 to 21 June 2023, and change the date for publication of the annual report for 2022, from 6 June 2023 to 31 May 2023.
 

Summary

• The Rights Issue comprises Units and will provide ChromoGenics with proceeds of up to approximately SEK 30 million before transaction costs. Each Unit consists of one (1) share and one (1) warrant of series TO 6 issued free of charge. One (1) warrant will entitle the holder to subscribe for one (1) share in the Company. The warrants are intended to be admitted to trading on Nasdaq First North Growth Market. In the event of full subscription and that all warrants within the framework of issued Units are fully exercised, the Company may receive an additional capital contribution of approximately SEK 30 million, based on a subscription price corresponding to the subscription price in the Rights Issue.
• Existing shareholders in ChromoGenics as of the record date, 26 June 2023, will receive seven (7) unit right for each existing share. Four (4) unit rights entitle to subscription of one (1) Unit in the Rights Issue.
• In total, a maximum of 300,432,678 Units will be issued. Each Unit consists of one (1) share and one (1) warrant of series TO 6 issued free of charge, which means that a maximum of 300,432,678 shares and 300,432,678 warrants will be issued.
• The subscription price has been set to SEK 0.1 per Unit, which corresponds to a subscription price of SEK 0.1 per share. The warrants are issued without compensation.
• The record date for the Rights Issue is 26 June 2023 and the subscription period will run from 28 June 2023 up to and including 12 July 2023.
• The last day of trading including the right to participate in the Rights Issue is 21 June 2023.
• The Rights Issue is covered to approximately 23 percent by subscription commitments and to approximately 57 percent by issue guarantees. Accordingly, the Rights Issue is secured to an amount of up to approximately SEK 24 million, corresponding to approximately 80 percent of the Rights Issue. In addition to the subscription commitments and issue guarantees, several members of the Company’s board of directors and management, including the Company’s chairman Johan Hedin and CEO Fredrik Fränding, have communicated their intention to subscribe for their pro-rata in the Rights Issue, corresponding to approximately SEK 0.3 million in total.
• Prior to the execution of the Rights Issue, all members of the Company’s board of directors and management with holdings of financial instruments have entered into lock-up undertakings, which, among other things and with customary exceptions, mean that they have undertaken not to sell financial instruments in the Company for a period ending 180 days after the outcome of the Rights Issue has been announced.
• The board of directors’ resolution on the Rights Issue is subject to approval and resolution by the annual general meeting on 21 June 2023. In order to be able to carry out the Rights Issue at the specified subscription price, the Company's share capital must be reduced in order to lower the quota value of the Company's shares. The board of directors of the Company has therefore proposed that the annual general meeting, where the board of director's resolution on the Rights Issue is to be approved, resolves to reduce the Company's share capital for allocation to unrestricted equity by SEK 19,742,718.84, from SEK 34,335,163.2 to SEK 14,592,444.36. At such annual general meeting, a proposal regarding a reverse share split will also be presented. The resolution on the Rights Issue is subject to and conditional upon the limits of the share capital and the number of shares in the articles of association being changed and that the annual general meeting resolves to reduce the Company's share capital in accordance with the board of directors’ proposal to the annual general meeting. Notice to the annual general meeting will be published through a separate press release.

Fredrik Fränding, CEO of ChromoGenics comments
“We have recently laid a foundation for growth and profitability as well as taken important steps in our strategic direction both technically and commercially. ChromoGenics contributes to more daylight and well-being indoors, increased energy efficiency and less climate impact for the real estate industry, which has never been more relevant. We have a very exciting time ahead of us and I want to thank our shareholders, both new and those who have supported and believed in us over the years, for your renewed trust.”

Background and motives
ChromoGenics is a proptech company that develops, produces, and commercializes controllable and dynamic glasses, ConverLight® Dynamic, as well as static alternatives with fixed properties, ConverLight® Static, for optimized heat and light admission with improved indoor comfort and maximized energy efficiency as a result. The electrochromic film developed by the company uses a multilayer structure between two plastic films, which creates a flexible and light film. This can then be laminated between glasses to create ChromoGenics dynamic glasses. An electronic control unit regulates the foil's tone and solar transmittance automatically. During February 2023, the Company also launched another product, ConverLight® Interlayer. Converlight® Interlayer enables glass manufacturers to manufacture smart dynamic glass without investment in new equipment, where customers themselves laminate ChromoGenics foil into glass.

ChromoGenics has successfully carried out the tuning of the sputter production in the Company's own production facility in Uppsala and will be able to offer customers high-quality dynamic glasses from the summer of 2021. The Company has since scaled up production and delivered a number of larger and smaller projects in Sweden, Norway, Denmark and Germany, not least 4,000 m2 of glass for the Gullhaugtorg 5 project in Oslo, which was then nominated for both Norwegian Construction of the Year 2022 and the Norwegian construction industry's climate price 2022. ChromoGenics has undergone a strategy change where the primary focus is now on sales and marketing at the same time as the ongoing efforts are being made to increase production capacity, improve the gross margin and meet future increasing demand. An important step in this transition is to establish partnerships with regional external glass processors who can receive deliveries of ChromoGenics' electrochromic foil and manage customer customization, lamination, incoming and outgoing deliveries of dynamic glass to the end customer. During both 2022 and 2023, this change has generated a series of collaborations with glass producers, with whom the Company sees good opportunities to grow together. Furthermore, the implementation of ChromoGenic's partner strategy is accelerated by the launch of ConverLight ® Interlayer as it simplifies the partner's production of ConverLight® Dynamic. The innovation increases the scalability of the business and is expected to contribute to increased sales. Even with this changeover, ChromoGenics can fully concentrate on the core business, that is, the manufacture and development of electrochromic foil and related control systems. Fully developed, this business strategy brings significant opportunity for scalability and margin expansion.

During the first half of 2023, ChromoGenics has also continued its development journey with a strong customer and quality focus, measures for reduced costs and increased efficiency. Among other things, this has resulted in the Company's product CoverLight® Dynamic demonstrating excellent durability in a very demanding accelerated aging test for ISO 18543:2021, which was an important milestone for the Company. The investment the Company made in 2019, in its own sputtering machines and factory has enabled large-scale in-house manufacturing, which has led to successful production and assured quality where ChromoGenics now meets significant interest and demand for the Company's patented electrochromic ConverLight technology for glass applications from existing and customers in Scandinavia and Central Europe. In recent quarters, the Company has made progress in the implementation of their strategic orientation by establishing a number of new collaborations with companies in the glass industry, this increases the scalability of the business. During the first half of the year, ChromoGenics has successfully completed the deliveries of dynamic glass and control systems to Ny Prins Henrik Skole, in Copenhagen. The Company has received orders mainly for ConverLight@ Dynamic but also for ConverLight Static. During the first half of 2023, the first order for ConverLight® Dynamic was received for the Netherlands in collaboration with Thomsa Glass, a company specialized in consulting and selling smart and sustainable glass solutions in Europe.

The real estate industry accounts for approximately one third of global energy use and greenhouse gas emissions and is thus faced with high demands to change. If the real estate and construction sector continues on this path, energy use will increase by 50 percent by 2050. Demands for change come from national and international laws and frameworks, owners, investors, customers and employees. New technology is necessary to enable this transition and smart dynamic glass can contribute to reduced energy use, reduced climate impact and, not least, improved indoor well-being. The market for smart dynamic glass is at an early stage but is now maturing rapidly, driven by the ESG trend in the real estate sector, the demand for energy efficiency improvements and new laws and frameworks such as "The Inflation Reduction Act", USA, which from August 2022 provides a 30 percent tax discount for smart dynamic glass with the aim of stimulating energy efficiency improvements. In line with these trends, environmental and well-being certifications such as BREEAM, LEAD, Miljöbyggnad and WELL increasingly affect property values. In addition to new construction, the Company considers that renovations and energy efficiency improvements of office properties from the 1970s, 1980s and even the 1990s also offer attractive opportunities. ChromoGenics also sees great interest from schools and special residences where the indoor environment is of crucial importance for study results and well-being. Upgrading windows and glass facades with modern technology is a cost-effective way to achieve increased energy efficiency, reduced climate impact and an improved indoor environment. The Company's market focus is the Nordic region, Switzerland, Germany, Benelux and France, followed by the rest of Europe. The USA and the Middle East have been analyzed and have high potential. Markets outside Sweden and Norway are processed through various external partners.

It is the Company's assessment that the existing working capital is not sufficient to run the business for the next twelve months. In order to enable continued growth and finance an upscaling of the Company's sales, the board decided on 17 May 2023 to carry out the Rights Issue.

Terms and conditions for the Rights Issue
Shareholders who on the record date, 26 June 2023, are registered shareholders in ChromoGenics in the share register kept by Euroclear Sweden AB have preferential rights to subscribe for Units in relation to the number of shares held on the record date. The shareholders will receive seven (7) unit rights for each share held on the record date. Four (4) unit rights entitle to subscription of one (1) Unit. In total, a maximum of 300,432,678 Units will be issued. Each Unit consists of one (1) share and one (1) warrant of series TO 6 issued free of charge. The share capital will increase by not more than SEK 25,536,777.63 through the issue of not more than 300,432,678 shares (after registration of the proposed share capital reduction). In addition, a maximum of 300,432,678 warrants will be issued. One (1) warrant of series TO 6 entitles the holder to subscribe for one (1) new share in the Company at a subscription price corresponding to 70 percent of the volume-weighted average price paid for the Company's share on Nasdaq First North Growth Market during the period from and including 18 October 2023 up to and including 31 October 2023, but not less than the quota value of the share. Subscription of shares through the exercise of warrants shall take place during the period from and including 6 November 2023 up to and including 20 November 2023. Upon full exercise of all warrants, the Company’s share capital will increase by not more than additional SEK 25,536,777.63 (after registration of the proposed share capital reduction).

The subscription price has been set to SEK 0.1 per Unit, which corresponds to a subscription price of SEK 0.1 per share, and the initial issue proceeds are expected to amount to up to SEK 30 million before deduction of transaction costs relating to the Rights Issue.

In the event that not all Units are subscribed for by exercising unit rights, the board of directors shall, within the maximum limit of the Rights Issue, decide on allotment of Units to the persons that have subscribed for Units without unit rights. In such case, allotment of Units shall firstly be made to the persons that have also subscribed for Units by exercising unit rights, regardless if the subscriber was a registered shareholder on the record date or not, and, in the case of oversubscription, the allotment shall be made in relation (pro-rata) to the quantity of unit rights that was exercised for subscription, and, to the extent this is not possible, by drawing lots. Secondly, allotment of Units shall be granted to other persons that only have applied for subscription without exercising unit rights, and, in the case of over-subscription, allotment shall be made in relation (pro-rata) to the number of Units that each have applied to subscribe for, and, to the extent this is not possible, by drawing lots. Thirdly, the remaining Units shall be allotted to the parties that have undertaken to guarantee the Rights Issue in accordance with their respective guarantee commitment agreements.

The record date to determine which shareholders that are entitled to receive unit rights is 26 June 2023. The last day of trading in the shares including the rights to participate in the Rights Issue is 21 June 2023. Subscription shall be made during the subscription period, 28 June 2023 up to and including 12 July 2023. Trading in unit rights is expected to take place from 28 June 2023 up to and including 7 July 2023 at Nasdaq First North Growth Market. Trading in paid subscribed Units (BTU) is expected to take place from 28 June 2023 until the shares and warrants in the Rights Issue has been registered with the Swedish Companies Registration Office. BTUs are expected to be converted to shares and warrants in connection with the shares and warrants has been registered with the Swedish Companies Registration Office.

The board of directors will apply for admission to trading of the new shares and the warrants at Nasdaq First North Growth Market.

Shareholders that do not participate in the Rights Issue will be subject to a dilutive effect of not more than approximately 78 percent at full subscription in the Rights Issue and full exercise of all warrants. However, the shareholders have the possibility to partly be financially compensated for this dilution by selling their unit rights.

Preliminary timetable

Complete terms and conditions as well as instructions for the Rights Issue as well as other information on the Company will be provided in the prospectus released before the commencement of the subscription period.

Subscription commitments and issue guarantees
The Rights Issue is covered to approximately 23 percent of subscription commitments and to approximately 57 percent of issue guarantees. Accordingly, the Rights Issue is secured to an amount of up to approximately SEK 24 million, corresponding to approximately 80 percent of the Rights Issue. Subscription commitments have been undertaken by certain major shareholders in the Company. Issue guarantees have been issued by certain major shareholders and external guarantors. In addition to the subscription commitments and issue guarantees, several members of the Company’s board of directors and management, including the Company’s chairman Johan Hedin and CEO Fredrik Fränding, have communicated their intention to subscribe for their pro-rata in the Rights Issue, corresponding to approximately SEK 0.3 million in total.

A guarantee commission will be paid for the issue guarantees, based on current market conditions, of fourteen (14) percent of the guaranteed amount in cash consideration, or alternatively sixteen (16) percent of the guaranteed amount in the form of newly issued Units in the Company. If the guarantee commission is to be paid in newly issued Units, the newly issued Units are intended to be issued following a board resolution based on an authorization to issue shares and warrants granted by the annual general meeting 2023 and at a subscription price corresponding to the volume-weighted average price of the Company's share on Nasdaq First North Growth Market during the subscription period for the Rights Issue, however not lower than the subscription price in the Rights Issue, and provided that the subscription price is deemed by the Company to correspond to market terms.

No consideration is to be paid for the subscription commitments that have been entered into. These subscription commitments and issue guarantees are not secured through bank guarantees, restricted funds, pledged assets or similar arrangements. Further information on the parties who have entered into guarantee commitments will be presented in the prospectus to be made public before the commencement of the subscription period.

Lock up undertakings
Prior to the execution of the Rights Issue, all members of the Company’s board of directors and management with holdings of financial instruments have entered into lock-up undertakings, which, among other things and with customary exceptions, mean that they have undertaken not to sell financial instruments in the Company for a period ending 180 days after the outcome of the Rights Issue has been announced.

Credit facility
In order to ensure the financing needs until the Rights Issue is completed, the Company has taken out a credit facility of SEK 10 million. The credit facility has an arrangement fee of 5 percent of the loan amount and carries an interest rate (on the amount drawn down) of 1.25 percent per month and shall, as applicable, be repaid with the issue proceeds from the Rights Issue. The lender is Formue Nord Markedsneutral A/S.

Prospectus
A prospectus and notification form will be made available before the commencement of the subscription period on ChromoGenics’ website, www.chromogenics.com. 

Annual general meeting
The board of directors’ resolution on the Rights Issue is subject to approval and resolution by the annual general meeting on 21 June 2023. In order to be able to carry out the Rights Issue at the specified subscription price, the Company's share capital must be reduced in order to lower the quota value of the Company's shares. The board of directors of the Company has therefore proposed that the annual general meeting, where the board of director's resolution on the Rights Issue is to be approved, resolves to reduce the Company's share capital for allocation to unrestricted equity by SEK 19,742,718.84, from SEK 34,335,163.2 to SEK 14,592,444.36. At such annual general meeting, a proposal regarding a reverse share split will also be presented. The resolution on the Rights Issue is subject to and conditional upon the limits of the share capital and the number of shares in the articles of association being changed and that the annual general meeting resolves to reduce the Company's share capital in accordance with the board of directors’ proposal to the annual general meeting. Notice to the annual general meeting will be published through a separate press release.

Advisors
Vator Securities is the financial advisor and issuer agent and Advokatfirman Schjødt is the legal advisor to ChromoGenics in connection with the Rights Issue.

For more information, please contact:
Fredrik Fränding, CEO
Tel: +46(0) 18 430 0430
Email: info@chromogenics.com

About this information
This information is information that ChromoGenics AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 17:00 CEST on 17 May 2023.

About ChromoGenics
ChromoGenics is a PropTech company that produces dynamic glass for real estate. One company product, ConverLight® Dynamic, controls indoor comfort by optimising daylighting, good views and blocking solar heat, and thereby contributing to reducing costs for cooling. ConverLight® Dynamic is based on a patented solution where electrochromic coatings are sputtered onto plastic film and then laminated between glass layers. The plastic film is easy to transport which means long distance shipping of bulky glass can be avoided. ChromoGenics also offers ConverLight® Static, a static glass version, and a façade glazing solution, ConverLight® Energy. ChromoGenics has supplied glazing technology to a large number of major real estate companies. Its shares were listed on the Nasdaq First North Growth Market in 2017.

ChromoGenics emerged from world-leading research at the Ångström Laboratory at Uppsala University. The company’s production site in Uppsala has been partly financed via conditional loans from the Swedish Energy Agency. ChromoGenics shares (CHRO) are listed on the Nasdaq First North Growth Market with Vator Securities AB as Certified Adviser: ca@vatorsec.se, +46 (0)8-580 065 99.

Important information
Publication, release or distribution of this press release may in certain jurisdictions be subject to legal restrictions and persons in the jurisdictions where this press release has been made public or distributed should be informed of and follow such legal restrictions. The recipient of this press release is responsible for using this press release and the information herein in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer or solicitation to buy or subscribe for any securities in ChromoGenics in any jurisdiction, either from ChromoGenics or from anyone else.

This press release is not a prospectus according to the definition in Regulation (EU) 2017/1129 (“the Prospectus Regulation”) and has not been approved by any regulatory authority in any jurisdiction. A prospectus will be prepared by the Company and published on the Company’s website after the prospectus has been reviewed and approved by the Swedish Financial Supervisory Authority (Sw. Finansinspektionen).

This press release does not constitute an offer or solicitation to buy or subscribe for securities in the United States. The securities mentioned herein may not be sold in the United States without registration, or without an exemption from registration, under the U.S. Securities Act from 1933 ("Securities Act"), and may not be offered or sold within the United States without being registered, covered by an exemption from, or part of a transaction that is not subject to the registration requirements according to the Securities Act. There is no intention to register any securities mentioned herein in the United States or to issue a public offering of such securities in the United States. The information in this press release may not be released, published, copied, reproduced or distributed, directly or indirectly, wholly or in part, in or to United States, Australia, Hong Kong, Japan, Canada, New Zealand, Switzerland, Singapore, South Africa or any other jurisdiction where the release, publication or distribution of this information would violate current rules or where such an action is subject to legal restrictions or would require additional registration or other measures beyond those that follow from Swedish law. Actions in contravention of this instruction may constitute a violation of applicable securities legislation.

Forward-looking statements
This press release contains forward-looking statements related to the Company’s intentions, estimates or expectations with regard to the Company’s future results, financial position, liquidity, development, outlook, estimated growth, strategies and opportunities as well as the markets in which the Company is active. Forward-looking statements are statements that do not refer to historical facts and can be identified by the use of terms such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “will,” “may,” “implies,” “should,” “could” and, in each case, their negative, or comparable terminology. The forward-looking statements in this press release are based on various assumptions, which in several cases are based on further assumptions. Although the Company believes that the assumptions reflected in these forward-looking statements are reasonable, there is no guarantee that they will occur or that they are correct. Since these assumptions are based on assumptions or estimates and involve risks and uncertainties, actual results or outcomes, for many different reasons, may differ materially from those what is stated in the forward-looking statements. Due to such risks, uncertainties, eventualities and other significant factors, actual events may differ materially from the expectations that expressly or implicitly are contained in this press release through the forward-looking statements. The Company does not guarantee that the assumptions which serve as a basis for the forward-looking statements in this press release are correct, and each reader of the press release should not rely on the forward-looking statements in this press release. The information, opinions and forward-looking statements that expressly or implicitly are stated herein are provided only as of the date of this press release and may change. Neither the Company nor any other party will review, update, confirm or publicly announce any revision of any forward-looking statement to reflect events that occur or circumstances that arise with respect to the contents of this press release, beyond what is required by law or Nasdaq First North Growth Market Rulebook.