Diagonal Bio

Prospectus

The prospectus that Diagonal Bio has drawn up in connection with the rights issue has today been approved and registered by the Financial Supervisory Authority. The prospectus, containing complete conditions and instructions, can be obtained from the respective websites of Diagonal Bio (www.diagonalbio.com), Sedermera Corporate Finance AB (www.sedermera.se) and Nordic Issuing AB (www.nordic-issuing.se). The prospectus is also available on the Financial Supervisory Authority's website (www.fi.se).

The rights issue in short

One (1) existing share in the Company on the record date of the 4^th of April 2024, entitles to one (1) unit right. One (1) unit right give the holder the right to subscribe for one (1) unit in Diagonal Bio. Each unit consists of sixteen (16) shares and two (2) warrants of series TO 1. The subscription price in the rights issue has been set at SEK 0.80 per unit, which corresponds to SEK 0.05 per share. Subscription warrants of series TO 1 are issued free of charge.

Through the rights issue, Diagonal Bio in April 2024 can initially receive a maximum of approximately SEK 32 million before issue costs, which are estimated to amount to approximately SEK 5.5 million (including guarantee compensation). Through attached warrants of series TO 1, the Company can in September 2024 be provided with a maximum of approximately SEK 9.5 million before issue costs of approximately SEK 0.7 million.

Subscription of units can take place during the subscription period that runs from and including the 8^th of April 2024 to and including the 22^nd of April 2024. Unit rights that are not used during the subscription period become invalid and lose their value. Trading in unit rights is expected to take place on the Nasdaq First North Growth Market from and including 8^th of April 2024 to and including the 17^th of April 2024. Trading in BTU (Paid Subscribed Unit) is expected to take place during the period from and including 8^th of April 2024 until the issue registered with the Swedish Companies Registration Office.

The rights issue will increase the share capital by a maximum of SEK 31,980,623.20, from SEK 3,997,577.90 to SEK 35,978,201.10 (it is to be noted that the Company will do a reduction of share capital both prior the rights issue and after the rights issue) and the total number of shares will increase by a maximum of 639,612,464 shares, from 39,975,779 shares to 679,588,243 shares. Existing shareholders who choose not to participate in the rights issue will be recognized with a dilution effect corresponding to approximately 94.1 percent, calculated on the number of shares in the Company after the rights issue has been fully subscribed. Shareholders who choose not to participate in the rights issue have the opportunity to partially compensate themselves for the economic dilution effect by selling their unit rights no later than the 17^th of April 2024.

The rights issue is secured in writing by members of the board, management and external investors to a total of approximately 56.4 percent (corresponding to approximately SEK 18 million) through subscription and guarantee commitments. Subscription commitments amount to approximately SEK 1.5 million, which corresponds to approximately 4.6 percent of the rights issue.

For complete information on the terms of the rights issue, please refer to the published prospectus.

Investor presentations

Diagonal Bio’s CEO Karin Wehlin will present the Company and the future plans at an event during the subscription period. See below for details.

Financial Stockholm

Date and time: 8^th of April, 17:50-21:00 (Diagonal Bio’s presentation is at 18:00).
Place: Scandic Anglais, Stockholm.
Sign up: here.

Advisors

In connection with the rights issue, Diagonal Bio has engaged Sedermera Corporate Finance AB as financial advisor, Markets & Corporate Law Nordic AB as legal advisor and Nordic Issuing AB as issuing agent.

For more information about the rights issue, please contact:

Sedermera Corporate Finance AB
Phone: +46 (0)40 615 14 10
E-mail: cf@sedermera.se
www.sedermera.se

For more information about the Company, please contact:

Karin Wehlin, CEO
Phone: +46 (0)70 305 24 88
E-mail: kw@diagonalbio.com

Certified Adviser

Svensk Kapitalmarknadsgranskning AB
E-mail: ca@skmg.se

Important information

This press release does not constitute an offer to acquire, subscribe or otherwise trade in shares, warrants, subscription rights, BTU or other securities in Diagonal Bio AB and investors should not subscribe or acquire any securities other than on the basis of the information in the prospectus which will be made public before the start of the subscription period in the Rights Issue on or about the 8^th of April 2024. No action has been taken and no action will be taken to permit an offer to the public in any jurisdictions other than Sweden.

This press release may not be made public, published or distributed, directly or indirectly, in or to the United States, Australia, Hong Kong, Japan, Canada, New Zealand, Switzerland, Singapore, South Africa, South Korea, Russia, Belarus or in any other jurisdiction where the distribution of this press release would be illegal. This press release also does not constitute an offer to sell new shares, warrants, subscription rights, BTUs or other securities to any person in a jurisdiction where it would not be permitted to make such an offer to such person or where such action would require an additional prospectus, registration or other measures than according to Swedish law. The prospectus, notification form and other documents relating to the Rights Issue may not be distributed in or to any country where such distribution or the Rights Issue requires actions as specified in the previous sentence or where they would be contrary to regulations in such country. Actions contrary to this instruction may constitute a violation of applicable securities legislation.

No shares, warrants, warrants, BTUs or other securities have been or will be registered under the United States Securities Act of 1933 as amended (“Securities Act”) or the securities laws of any state or other jurisdiction of the United States and may not be offered, subscribed , is exercised, pledged, sold, resold, assigned, delivered or otherwise transferred, directly or indirectly, in or to the United States, except pursuant to an applicable exemption from, or through a transaction not subject to, the registration requirements of the Securities Act and in accordance with the securities laws of the relevant state or other jurisdiction in the United States.

This press release may contain certain forward-looking information that reflects the Company's current view of future events as well as financial and operational development. Words such as "intends", "estimates", "expects", "may", "plans", "believes", "estimates" and other expressions that imply indications or predictions of future developments or trends, and are not based on historical facts, constitute forward-looking information. Forward-looking information is inherently associated with both known and unknown risks and uncertainties because it is dependent on future events and circumstances. Forward-looking information is not a guarantee of future performance or development, and actual outcomes may differ materially from what is stated in forward-looking information. Neither the Company nor anyone else undertakes to revise, update, confirm or publicly announce any revision of any forward-looking statement to reflect events occurring or circumstances occurring with respect to the contents of this press release, except as required by law or Nasdaq First North Growth Market's regulations.

About Diagonal Bio
Diagonal Bio AB was founded in 2020 and is a Swedish biotechnology company with headquarters and offices in Lund. The Company develops the PANVIRAL® platform to detect and diagnose small sections of pathogen genomes, for example viruses, bacteria and fungi. The Company was founded with the goal of reducing human suffering by revolutionizing global diagnostics of pathogen-borne diseases with proprietary technology. Diagonal Bio's patented technology can also be used for the less regulated market segments via LAMPlify®.