ExpreS2ion Biotech

The Rights Issue in brief

• The subscription price has been set to SEK 1.00 per Unit, corresponding to SEK 1.00 per share. The warrants of series TO 10 and warrants of series TO 11 are issued free of charge. Upon full subscription in the Rights Issue, the Company will receive initial proceeds of approximately SEK 60 million before deduction of transaction costs.

• Upon full subscription in the Rights Issue, the net proceeds from the Rights Issue will be used for (i) ES2B-C001 clinical phase initiation and progression, (ii) discovery pipeline and platform development, (iii) early preclinical development of a cytomegalovirus vaccine candidate, (iii) internal costs related to grant-sponsored projects and (iv) working capital including discovery pipeline and platform development.

• Existing shareholders in ExpreS2ion as of the record date, 10 June 2024, will receive seven (7) unit rights for each existing share. Six (6) unit rights entitle to subscription of one (1) Unit in the Rights Issue.

• In total, a maximum of 59,972,451 Units can be issued. Each Unit consists of one (1) share, one (1) warrant of series TO 10 and one (1) warrant of series TO 11, which means that a maximum of 59,972,451 shares, 59,972,451 warrants of series TO 10 and 59,972,451 warrants of series TO 11 can be issued.

• The subscription period runs from and including 12 June 2024 until and including 27 June 2024.

• Warrants of series TO 10 can be exercised for subscription of shares in the Company during the period from and including 20 November 2024 until and including 4 December 2024. Warrants of series TO 11 can be exercised for subscription of shares in the Company during the period from and including 18 September 2025 until and including 2 October 2025.

• In connection with the Rights Issue, a majority of the Company's Board of Directors and management have expressed their intention to subscribe for Units, amounting to a total of approximately SEK 0.3 million, corresponding to approximately 0.5 percent of the Rights Issue. In addition, external investors have provided guarantee commitments in accordance with customary terms for a total of approximately SEK 29.7 million, corresponding to approximately 49.5 percent of the Rights Issue. The Company has thus obtained subscription intentions and guarantee commitments to an approximate amount of SEK 30.0 million, corresponding to approximately 50.1 percent of the Rights Issue.

• In connection with the Rights Issue, all members of the Company's Board of Directors and senior management with shareholdings in ExpreS2ion have undertaken towards Vator Securities AB, subject to customary exceptions, not to sell or otherwise transfer their shares without first, in each separate case, ascertain a written approval from Vator Securities AB. The lock-up period lasts for a period of 90 days following the announcement of the outcome in the Rights Issue.

• The Board of Directors' resolution on the Rights Issue is subject to subsequent approval by the Annual General Meeting in the Company and that the Annual General Meeting in the Company resolves on amendments of the limits for the share capital and number of shares in the Company’s articles of association. The Annual General Meeting will be held on 5 June 2024. A notice to the Annual General Meeting will be published through a separate press release.

• The Company intends to publish the prospectus regarding the Rights Issue on or around 5 June 2024.

Bent U. Frandsen, CEO in ExpreS2ion comments:

“Four years ago, ExpreS2ion embarked on a transition to a pipeline-focused business model. Now, as we progress in 2024, the Company is approaching readiness for sponsoring our first clinical trial. The breast cancer vaccine asset ES2B-C001 (HER2-VLP) has a compelling preclinical data package that is further supported by the clinical Phase III-validation of the same technology platform in the ABNCoV2 COVID-19 vaccine last year. We believe this represents a significant value-inflection point for the Company.

The rights issue will offer shareholders the opportunity to purchase additional shares at a favorable price, alongside the Board of Directors and Management. The funds raised will be instrumental in obtaining clinical evidence of safety for our novel breast cancer vaccine, as well as progressing the CMV project and platform development. On behalf of the board, management and all our employees, I would like to express our gratitude to our investors for their continued support as we move into this exciting new phase of our journey."

Background and rationale

ExpreS2ion is a biotechnology company that develops vaccines based on complex proteins targeting infectious diseases and cancer. The Company was founded on the realisation that to produce the complex proteins needed for biological drugs or vaccines of the future, a new protein expression system would be needed. The Company thereby developed the ExpreS2™ recombinant protein expression platform to support all phases of vaccine discovery and research & development (R&D) as well as GMP manufacturing for clinical studies. The ExpreS2 platform is primarily used for developing the Company’s pipeline of preventive and therapeutic vaccine products, which, as of the date of the Prospectus, consists of vaccine projects candidates in four disease areas developed by ExpreS2ion and/or in collaboration with partners. Additionally, ExpreS2ion out-licenses the platform to research institutes and pharmaceutical companies, which by their own or in cooperation with the Company, develop biopharmaceutical drugs and vaccines.

ExpreS2ion’s vaccine candidate targeting HER2-positive breast cancer, ES2B-C001, is expected to file for the first in human clinical trial during 2024, building on the progress made in 2023, including the recently completed Good Laboratory Practice (GLP) preclinical safety studies. This first-in-human (FiH) clinical trial is envisioned to commence within 12 months from the date of the Prospectus. Positive preclinical top-line data was announced in December 2021 and January 2022 demonstrating preclinical Proof-of-Concept (PoC). Further preclinical data were announced in May 2022 and the positive preclinical POC data were published in a peer-reviewed scientific article in October 2022. During 2023 the preclinical safety studies were conducted, and in April 2024 the final GLP safety report was announced. For the HER2-program, ExpreS2ion is exploring multiple ways of for funding further development. These include, but are not limited to, development partnerships, grant funding, and the issuance of shares in exchange for cash investment. Certain funding mechanisms, such as development partnerships, reduce the Company’s development costs, typically in exchange for potential milestone and royalty payments.

ExpreS2ion’s CMV vaccine project, ES2B-I002, is carried out in collaboration with Evaxion Biotech. ExpreS2ion and Evaxion jointly perform discovery research, whereby Evaxion takes advantage of its unique AI platform to identify and design constructs applicable to express CMV antigens in the ExpreS2 system. The joint research partnership was announced in December 2022. Progress has been made to the extent that preliminary protein material has been made and is undergoing immunogenicity testing in small animal models. The aim of the collaboration is, before the end of 2025, to select the lead CMV vaccine candidate, which ExpreS2ion has the exclusive right to license under a development and commercialization agreement as per the term sheet included in the Discovery Collaboration Agreement. The research costs in the collaboration project are being divided fifty-fifty between the parties until 2025.

ExpreS2ion’s other pipeline projects support and document our platform and technology. These include partner/consortium owned vaccine candidates against influenza in preclinical phases and four (4) malaria projects with the most advanced malaria vaccine candidate in Phase II. The influenza and malaria candidates are fully developed by collaboration partners where antigens are produced using the ExpreS2 platform.

The Company’s Board of Directors believes that the existing working capital is insufficient to meet its current needs. The Board of Directors has therefore resolved, subject to subsequent approval by the Annual General Meeting to be held on 5 June 2024, to carry out the Rights Issue in order to strengthen the Company's financial position and to be able to implement the Company's business plan and strategy.

Upon full subscription in the Rights Issue the Company will receive initial proceeds of approximately SEK 60 million before deduction of transaction costs. Upon full subscription in the Rights Issue the net proceeds will be used to:

• ES2B-C001 clinical phase initiation and progression (approximately 65 percent)
• Early preclinical development of a cytomegalovirus vaccine candidate (approximately 10 percent)
• Internal costs related to grant-sponsored projects (approximately 5 percent)
• Working capital including discovery pipeline and platform development (approximately 20 percent)

In December 2024 and October 2025, respectively, the Company may receive additional proceeds if the warrants of series TO 10 and TO 11 issued in the Rights Issue are exercised for subscription of shares. The proceeds from the exercise of warrants of series TO 10 and TO 11 are intended to be used for the same activities as listed above.

Terms of the Rights Issue

The Board of Directors of the Company has resolved, subject to subsequent approval by the Annual General Meeting to be held on 5 June 2024, to carry out the Rights Issue. In total, a maximum of 59,972,451 Units can be issued. Each Unit consists of one (1) share, one (1) warrant of series TO 10 and one (1) warrant of series TO 11, which means that a maximum of 59,972,451 shares, 59,972,451 warrants of series TO 10 and 59,972,451 warrants of series TO 11 can be issued.

Existing shareholders in ExpreS2ion, as of the record date on 10 June 2024, will receive seven (7) unit rights for each existing share. Six (6) unit rights entitle to subscription of one (1) Unit in the Rights Issue. The subscription price has been set to SEK 1.00 per Unit, corresponding to SEK 1.00 per share. The warrants of series TO 10 and TO 11 are issued free of charge.

In the event all Units in the Rights Issue are not subscribed for with the support of unit rights, the Board of Directors shall, within the maximum amount of the Rights Issue, resolve on the allotment of Units subscribed for without the support of unit rights. In case of over-subscription, allotment shall be made in according to the following principles:

• Firstly, allocation shall be made to those who subscribed for Units with the support of unit rights, regardless of whether the subscriber was a shareholder on the record date or not, and, in case of oversubscription, in relation to the number of unit rights that each party has exercised for the subscription of Units, and, if this is not possible, by drawing lots.
• Secondly, allocation shall be made to other subscribers who subscribed to Units without the support of unit rights, and, in case of oversubscription, in relation to the subscribed amount, and, if this is not possible, by drawing lots.
• Thirdly, allocation of any remaining Units shall be made to guarantors in accordance with signed guarantee agreements.

Terms and conditions for warrants of series TO 10 and TO 11

One (1) warrant of series TO 10 gives the holder the right to subscribe for one (1) new share in the Company against cash payment amounting to 70 percent of the volume-weighted average price of the Company's share during the period from and including 1 November 2024 until and including 14 November 2024, but not less than the quota value of the shares and not more than SEK 1.5 per share. Warrants of series TO 10 may be exercised during the period from and including 20 November 2024 until and including 4 December 2024.

One (1) warrant of series TO 11 gives the holder the right to subscribe for one (1) new share in the Company against cash payment amounting to 70 percent of the volume-weighted average price of the Company's share during the period from and including 1 September 2025 until and including 12 September 2025, but not less than the quota value of the shares and not more than SEK 1.75 per share. Warrants of series TO 11 may be exercised during the period from and including 18 September 2025 until and including 2 October 2025.

Change of share capital and number of shares as well as dilution

Provided that the Rights Issue is fully subscribed, the number of shares in Expres2ion will increase with 59,972,451 from 51,404,958 to 111,377,409 and the share capital will increase with SEK 6,663,605.678757 from SEK 5,711,662.010363 to SEK 12,375,267.689120, corresponding to a maximum dilution effect of approximately 53.8 percent of the total number of shares and votes in the Company. If the Rights Issue is fully subscribed and upon full exercise of warrants of series TO 10, the number of shares in the Company will increase by an additional 59,972,451 shares and the share capital will further increase by SEK 6,663,605.678757, corresponding to an additional dilution effect of approximately 35.0 percent of the total number of shares and votes in the Company. If the Rights Issue is fully subscribed and upon full exercise of warrants of series TO 11, the number of shares in the Company will increase by an additional 59,972,451 shares and the share capital will further increase by SEK 6,663,605.678757, corresponding to an additional dilution effect of approximately 25.9 percent of the total number of shares and votes in the Company (based on that the Rights Issue is fully subscribed and all warrants of series TO 10 are exercised). The total dilution, in the event the Rights Issue is fully subscribed and all warrants of series TO 10 and TO 11 are fully exercised, corresponds to approximately 77.8 percent.

Subscription intentions and guarantee commitments

In connection with the Rights Issue, a majority of the Company's Board of Directors and management have expressed their intention to subscribe for Units, amounting to a total of approximately SEK 0.3 million, corresponding to approximately 0.5 percent of the Rights Issue. In addition, external investors have provided guarantee commitments in accordance with customary terms for a total of approximately SEK 29.7 million, corresponding to approximately 49.5 percent of the Rights Issue. The Company has thus obtained subscription intentions and guarantee commitments to an approximate amount of SEK 30.0 million, corresponding to approximately 50.1 percent of the Rights Issue.

Members of the Company's Board of Directors and management are prevented, under applicable rules on market abuse, from entering into binding undertakings to subscribe for units in the Rights Issue, as a result of the Company being in a so-called closed period until the publication of the interim report for the first quarter of 2024, and are expected to enter into binding undertakings after the closed period has ended.

No compensation is paid for subscription intentions. Guarantors will receive guarantee compensation of thirteen (13) percent of the total guaranteed amount in cash, or fifteen (15) percent of the guaranteed amount in the form of newly issued Units in the Company. The cash compensation is intended to be paid with the issue proceeds and has therefore been calculated as a transaction cost when calculating net proceeds of the Rights Issue. The subscription price per any share issued to guarantors as guarantee compensation shall correspond to the subscription price in the Rights Issue, provided that the subscription price is deemed by the Company to correspond to market terms at the time for the resolution. The warrants of series TO 10 and warrants of series TO 11 that are issued to guarantors as guarantee compensation shall be issued free of charge. The guarantee commitments are not secured by bank guarantee, pledging or in any other way in order to ensure that the payment involved in the commitment will be injected in the Company.

Preliminary timetable for the Rights Issue

Lock-up undertakings

In connection with the Rights Issue, all members of the Company's Board of Directors and senior management with shareholdings in ExpreS2ion have undertaken towards Vator Securities AB, subject to customary exceptions, not to sell or otherwise transfer their shares without first, in each separate case, ascertain a written approval from Vator Securities AB. The decision to leave such written approval is decided by Vator Securities AB and the decision is made in each separate case. Agreed approval can depend on both individual and business-related situations. The lock-up period lasts for a period of 90 days following the announcement of the outcome of the Rights Issue.

Prospectus

Full terms and conditions and instructions for the Rights Issue, as well as other information about the Company and information about commitments, will be presented in the prospectus that the Company is expected to publish on or around 5 June 2024. The prospectus will be held available on ExpreS2ion’s website (www.expres2ionbio.com).

Advisors

Vator Securities acts as financial advisor and issuing agent to the Company in connection with the Rights Issue. Schjødt is the Company’s legal advisor in connection with the Rights Issue.

Certified Adviser

Svensk Kapitalmarknadsgranskning AB

IMPORTANT INFORMATION

The release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions. The recipients of this press release in jurisdictions where this press release has been published or distributed shall inform themselves of and follow such restrictions. The recipient of this press release is responsible for using this press release, and the information contained herein, in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer, or a solicitation of any offer, to buy or subscribe for any securities in ExpreS2ion in any jurisdiction, neither from ExpreS2ion nor from someone else.

This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Company. The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. Vator Securities is acting for ExpreS2ion in connection with the Rights Issue and no one else and will not be responsible to anyone other than ExpreS2ion for providing the protections afforded to its clients nor for giving advice in relation to the Rights Issue or any other matter referred to herein.

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 “Securities Act”), and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public Rights Issue of the securities in the United States. The information in this press release may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, within or into the Unites States, Australia, Canada, Hong Kong, Japan, New Zeeland, Singapore, South Africa or in any other jurisdiction where such announcement, publication or distribution of the information would not comply with applicable laws and regulations or where such actions are subject to legal restrictions or would require additional registration or other measures than what is required under Swedish law. Actions taken in violation of this instruction may constitute a crime against applicable securities laws and regulations.

This press release is not a prospectus for the purposes of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (the “Prospectus Regulation”) and has not been approved by any regulatory authority in any jurisdiction. A prospectus, corresponding to an EU Growth Prospectus regarding the Rights Issue described in this press release will be prepared and published by the Company. The prospectus will be scrutinized and approved by the Swedish Financial Supervisory Authority (Sw. Finansinspektionen) being the national competent authority and be published and available on the Company's website thereafter.

In the United Kingdom, this document and any other materials in relation to the securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this document relates is available only to, and will be engaged in only with, “qualified investors” who are (i) persons having professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). In the United Kingdom, any investment or investment activity to which this communication relates is available only to, and will be engaged in only with, relevant persons. Persons who are not relevant persons should not take any action on the basis of this press release and should not act or rely on it.

Forward-looking statements

This press release contains forward-looking statements that reflect the Company's intentions, beliefs, or current expectations about and targets for the Company's and the group's future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the Company and the group operates. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "intend", "may", "plan", "estimate", "will", "should", "could", "aim" or "might", or, in each case, their negative, or similar expressions. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not guarantee that the assumptions underlying the forward-looking statements in this press release are free from errors and readers of this press release should not place undue reliance on the forward-looking statements in this press release. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of its date and are subject to change without notice. Neither the Company nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release, unless it is not required by law or Nasdaq First North Growth Market rule book for issuers.

Information to distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the “MiFID II Product Governance Requirements”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the shares in ExpreS2ion have been subject to a product approval process, which has determined that such shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the “Target Market Assessment”). Notwithstanding the Target Market Assessment, Distributors should note that: the price of the shares in ExpreS2ion may decline and investors could lose all or part of their investment; the shares in ExpreS2ion offer no guaranteed income and no capital protection; and an investment in the shares in ExpreS2ion is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Rights Issue.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the shares in ExpreS2ion.

Each distributor is responsible for undertaking its own target market assessment in respect of the shares in ExpreS2ion and determining appropriate distribution channels.