Irisity

NOT FOR RELEASE, DISTRIBUTION, OR PUBLICATION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, HONG KONG, JAPAN, CANADA, NEW ZEALAND, SINGAPORE, SOUTH AFRICA, SOUTH KOREA, THE UNITED STATES OR IN ANY OTHER JURISDICTION WHERE SUCH RELEASE, DISTRIBUTION, OR PUBLICATION WOULD BE UNLAWFUL OR REQUIRE REGISTRATION OR ANY OTHER MEASURES BEYOND WHAT IS REQUIRED UNDER SWEDISH LAW. PLEASE REFER TO IMPORTANT INFORMATION AT THE END OF THE PRESS RELEASE.

The board of Irisity AB (publ) ("Irisity" or the "Company") has today, April 16, 2025, in line with what was communicated through a press release on March 21, 2025, decided to propose that an extraordinary general meeting on May 7, 2025 decides on a new issue of up to 52,749,643 shares with preferential rights for the Company's existing shareholders ("Rights Issue"). The Rights Issue is fully secured through subscription commitments and guarantee undertakings from existing shareholders, including members of the board and management as well as the Company's main shareholder Stockhorn Capital AB ("Stockhorn"). The subscription price amounts to SEK 0.40 per share and upon full subscription, the Company will receive approximately SEK 21.1 million before issue costs and any set-off. The net proceeds from the Rights Issue are intended to repay the utilized temporary credit facility from Stockhorn Capital through set of against newly issued shares and to strengthen working capital.

Summary

• The board of Irisity has today decided to propose that an extraordinary general meeting on May 7, 2025 decides on the Rights Issue of approximately SEK 21.1 million.
• The Rights Issue requires approval from the extraordinary general meeting, and a notice will be published through a separate press release in connection with this press release.
• One (1) existing share in the Company entitles to one (1) subscription right. Thirteen (13) subscription rights entitle to the subscription of six (6) newly issued shares. This means that a total of up to 52,749,643 new shares can be issued within the framework of the Rights Issue.
• The subscription price has been set at SEK 0.40 per share.
• Upon full subscription in the Rights Issue, Irisity can receive up to approximately SEK 21.1 million before deduction of costs related to the Rights Issue, which are estimated to amount to approximately SEK 1.0 million.
• The net proceeds are intended to be used for repaying the utilized short-term credit facility from Stockhorn through set off against newly issued shares and to further strengthen general working capital.
• The Rights Issue is fully secured by approximately 52.5 percent of subscription commitments and approximately 47.5 percent of guarantee undertakings. Subscription commitments and guarantee undertakings are not secured by bank guarantee, pledge, or similar arrangements. The subscription commitments and guarantee undertakings will not incur any costs for Irisity.
• The subscription period runs from May 16, to May 30, 2025.
• Subscription rights that are not used during the subscription period will become invalid and lose their value. Trading in subscription rights is planned to take place on Nasdaq First North Growth Market from May 16 to May 26, 2025. Trading in BTA (paid subscribed share) is planned to take place on Nasdaq First North Growth Market during the period from May 16 to around June 11, 2025.
• The Rights Issue entails a maximum dilution for existing shareholders who do not subscribe for shares in the Rights Issue of approximately 31.6 percent.
• As announced in the press release on March 21, 2025, the Company has taken out a temporary credit facility from Stockhorn of up to SEK 15 million, whereby the amount utilized under the credit at the time of the Rights Issue will be offset against newly issued shares.
• Complete information regarding the Rights Issue and information about the Company will be published on the Company's website around May 13, 2025.

Background and rationale

Irisity is a provider of AI-driven video analytics solutions, specializing in advanced software that transforms ordinary security cameras into intelligent detection systems while maintaining a strong commitment to privacy. Irisity's open AI platform enhances existing camera and video management systems by integrating a number of advanced AI and metadata-driven algorithms. With over 3,000 installations in more than 90 countries worldwide, customers rely on precise detection and real-time analysis.

To support ongoing operational development, Irisity is undertaking a rights issue aimed at strengthening the Company's financial position. The proceeds will provide the flexibility to continue executing on efficiency improvements, enhance core product offerings, and accelerate customer delivery and growth initiatives in key markets. This step follows recent delayed payments from certain customers, which have temporarily impacted liquidity. In response and as previously communicated, Irisity has also secured a short-term credit facility to bridge its working capital needs ahead of the rights issue; the utilized part of the short-term credit facility will be repaid through set-off against newly issued shares.

Upon full subscription of the newly issued shares, the Company will receive gross proceeds of approximately SEK 21.1 million, after deduction of issue costs of approximately SEK 1.0 million. Irisity intends to use the net proceeds for the following purposes, listed in order of priority:

• Repayment of credit facility, up to SEK 15 million
• General working capital, minimum SEK 5 million

Provided that the Company achieves its expected sales volumes and continues to successfully implement its cost-saving program, the estimated net proceeds from the Rights Issue are expected to finance the Company for twelve months after the completion of the Rights Issue and until the Company reaches cash flow positivity. However, it may be necessary for the Company to seek additional financing over the next twelve months, for example, if the Company does not achieve its expected sales volumes, if payments from the Company's customers are delayed or if the Company's ability to obtain short-term loans is reduced.

Terms of the Rights Issue, shares, share capital, and dilution

Those who are registered as shareholders in Irisity on the record date May 14, 2025 have preferential rights to subscribe for new shares in the Company in relation to their existing shareholding. Shareholders receive one (1) subscription right for each share held in the Company. The subscription rights entitle the holder to subscribe for new shares in the Rights Issue, whereby thirteen (13) subscription rights entitle the shareholder the right to subscribe for six (6) new shares. Additionally, investors are offered the opportunity to apply for subscription of shares without the support of subscription rights.

The subscription price in the Rights Issue has been set at SEK 0.40 per share. Upon full subscription in the Rights Issue, the Company will receive approximately SEK 21.1 million before issue costs.

If not all shares are subscribed for with the support of subscription rights, the board shall, within the framework of the Rights Issue's maximum amount, decide on the allocation of shares to those who have subscribed for shares without the support of subscription rights according to the following allocation principles:

• Allocation without preferential rights shall primarily be made to those who have applied for subscription and subscribed for new shares with the support of subscription 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 subscription rights each has used for subscription of new shares and to the extent this cannot be done, by drawing lots;
• Secondly, allocation of shares shall be made to others who have applied for subscription without the support of subscription rights and, in case of oversubscription, in relation to the number of new shares submitted in the subscription application, and to the extent this cannot be done, by drawing lots;
• Thirdly and lastly, allocation of shares subscribed for without the support of subscription rights shall be made to Stockhorn, which has entered into a guarantee commitment.

Stockhorn currently holds shares and votes in the Company corresponding to 24.04 percent. After the completion of the Rights Issue, Stockhorn's holding of shares and votes in the Company may exceed 30 percent. The maximum shareholding that Stockhorn could attain, assuming no other party subscribes for shares in the Rights Issue apart from those who have committed through subscription commitments, and Stockhorn thereby fulfils its commitments in full, is 39.05 percent of the shares and votes in the Company. Stockhorn's participation in the Rights Issue is therefore conditional upon the Swedish Securities Council granting an exemption from the mandatory bid rules and the Inspectorate for Strategic Products approving Stockhorn's FDI application.

Upon full subscription in the Rights Issue, the total number of shares in the Company will increase by 52,749,643 shares, from 114,290,894 shares to 167,040,537 shares. The share capital will increase by SEK 4,747,467.87, from SEK 10,286,180.46 to SEK 15,033,648.33. Shareholders who choose not to participate in the Rights Issue will have their ownership diluted by approximately 31.6 percent.

Subscription of the new shares shall take place during the period May 16 to May 30, 2025. Trading in subscription rights is expected to take place on Nasdaq First North Growth Market during the period from May 16 to May 26, 2025, and trading in BTA (paid subscribed shares) is expected to take place from May 16 to around June 11, 2025.

Information memorandum

The complete terms and instructions for the Rights Issue, as well as other information about the Company, will be included in the information memorandum, which is expected to be published by the Company before the subscription period begins.

Subscription commitments and guarantee undertakings

The Rights Issue is fully covered from subscription commitments and guarantee undertakings, of which subscription commitments correspond to approximately 52.5 percent of the Rights Issue and guarantee undertakings to approximately 47.5 percent of the Rights Issue. The Company has received subscription commitments from several existing shareholders including Stockhorn, Sun Red Beach Growth Partner, Ulf Runmarker and Anders Trygg, private and via companies, and guarantee undertaking from Stockhorn. Subscription commitments from Bjørn Eilertsen and Anders Trygg, private and via company, corresponding to their respective pro-rata proportion and in addition further subscriptions. No compensation is paid for either subscription commitments or guarantee undertakings. The subscription commitments and guarantee undertaking are not secured by bank guarantee, escrow funds, pledging, or similar arrangements.

Preliminary time plan for the Rights Issue

May 13, 2025: Estimated date for publication of the information memorandum

May 14, 2025: Record date for participation in the Rights Issue

May 16 - May 26, 2025: Trading in subscription rights

May 16 - May 30, 2025: Subscription period

May 16 - June 11, 2025: Trading in BTA (paid subscribed shares)

June 2, 2025: Estimated date for announcement of the outcome of the Rights Issue

Advisors

Irisity has mandated Penser by Carnegie, Carnegie Investment Bank AB (publ) and Advokatfirman Vinge KB as financial and legal advisors respectively in connection with the Rights Issue.

For further information:

Keven Marier, Irisity CEO                                   

Phone: +46 771 41 11 00                                   

E-mail: keven.marier@irisity.com  

About Irisity

Irisity's AI Open Platform enhances any camera and video management system by integrating a choice of advanced AI and video metadata management featuring hybrid architecture, built-in anonymization, and flexible deployment (on-premises, cloud, or hybrid). Globally trusted in over 3000 locations, our platform delivers real-time, efficient, and precise data, augmenting human decisions to improve safety, operational efficiency and organizational intelligence.

 The Irisity AB (publ) share is listed on Nasdaq First North Growth Market, with the ticker IRIS, the Company's Certified Adviser is Carnegie Investment Bank AB.

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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 legal 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 Irisity in any jurisdiction, neither from Irisity nor from someone else.

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.

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 relating to the Rights Issue 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. 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 USA, Australia, Canada, Hong Kong, Japan, New Zeeland, Singapore, South Africa, South Korea, Switzerland 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.

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 rulebook for issuers of shares.

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 offered shares 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 the Company may decline and investors could lose all or part of their investment; the shares in the Company offer no guaranteed income and no capital protection; and an investment in the shares in the Company 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 the Company. Each distributor is responsible for undertaking its own target market assessment in respect of the shares in the Company and determining appropriate distribution channels.