Sileon

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The board of directors of Sileon AB (publ) ("Sileon" or the "Company") today announces its intention to resolve on a new share issue of a maximum of 114,053,409 shares with preferential rights for the Company's existing shareholders (the "Rights Issue"). The board of directors intends to publish a notice for an extraordinary general meeting scheduled to be held on June 19, 2024, to authorize the board of directors to resolve on the Rights Issue and adoption of new articles of association to expand the limits of the articles of association regarding the share capital and the number of shares. The subscription price will be set at SEK 0.50 per new share and upon full subscription in the Rights Issue, Sileon will raise approximately SEK 57 million before issue costs. The Company's largest shareholder, Rieber & Søn AS and the Company's chairman of the board of directors, Kent Hansson, have entered into subscription commitments totaling approximately SEK 16.9 million, corresponding to approximately 29.6 percent of the Rights Issue. In addition to subscription commitments, Rieber & Søn AS has entered into a top guarantee commitment (without compensation) of approximately SEK 34.9 million, corresponding to approximately 61.2 percent of the Rights Issue. Through the subscription commitments and the top guarantee commitment, the Rights Issue is secured to approximately 90.8 percent. The Rights Issue is expected to be decided by the board of directors during the summer of 2024, provided that the Financial Supervisory Authority (Sw. Finansinspektionen) has approved the ownership suitability assessment of Rieber & Søn AS. The net proceeds from the Rights Issue (approximately SEK 55 million) are intended to be primarily used to repay the Company's convertible loan of approximately SEK 20 million, as well as commercialization activities.

Summary

• The board of directors of Sileon today announces its intention to resolve on the Rights Issue of approximately SEK 57 million.
• An extraordinary general meeting where the board of directors is proposed to be authorized to resolve on the Rights Issue will be held on June 19, 2024. The notice to the extraordinary general meeting will be published through a separate press release.
• The net proceeds from the Rights Issue are primarily intended to be used to repay the Company's convertible loan, which the Company and the convertible holder have agreed will be repaid early, as well as commercialization activities.
• Each existing share held in the Company on the record date entitles to one (1) subscription right. Four (4) subscription rights entitle the holder to subscribe for nine (9) new shares.
• The subscription price for one share is SEK 0.50.
• The Rights Issue is expected to be resolved by the board of directors during the summer of 2024, provided that the Financial Supervisory Authority has approved the ownership suitability assessment of Rieber & Søn AS.
• The Rights Issue is secured to 90.8 percent of the issue amount through subscription commitments and guarantee commitments.

Background and motive

Sileon is a global fintech company offering innovative SaaS-based Buy Now Pay Later (BNPL) functionality for banks and fintech companies. Sileon's first product Card-linked BNPL targets card-issuing banks and fintech companies in an international market.

As a result of more consumers, especially the younger generations, preferring alternative payment methods, card issuers are losing market share to BNPL providers such as Klarna, Afterpay and Affirm. To be relevant, banks need to add new digital products to their existing cards. However, building and subsequently maintaining a scalable BNPL functionality internally is complex, expensive and above all takes time to develop. Cooperating with a BNPL functionality provider thus becomes the solution for card-issuing banks that want to be competitive.

The product Card-linked BNPL was launched in the spring of 2023 and the Company had the ambition to contract customers before the product was in production, which turned out to be difficult and has led to a delay in customer acquisition compared to the strategic plan. The sales process for smaller customers has been shown to be 3-6 months and for larger customers 6-18 months. During 2023, the Company contracted smaller customers and during the first half of 2024 also medium-sized banks. Larger banks are expected to be contracted in 2024.

Sileon today has a fully commercial product. The Company is now primarily focusing on customer acquisition and using existing resources to supplement Card-linked BNPL with optional solution modules to further facilitate banks and fintech companies to quickly and easily offer BNPL on existing cards.

In case of full subscription, the Company receives net cash of approximately SEK 55 million, after deduction for issue costs of approximately SEK 2 million. The net cash is intended to be used for the following areas of use:

· Repayment of convertible loan, approximately SEK 20 million

· Continued commercialization activities, approximately SEK 35 million

"I am pleased to announce this capital raise which will enable our strategy to develop Sileon into a company with rapid sales growth and high profitability. With a strong cash position, we can focus on succeeding with the important deals that we aim to achieve in the near future. We are now facing an exciting year in Sileon's development and the strong support from our main owners is very gratifying" says CEO David Larsson.

The Rights Issue in summary

The right to subscribe for shares accrues with preferential rights to the Company's shareholders. Each existing share held in the Company on the record date entitles to one (1) subscription right. Four (4) subscription rights entitle the holder to subscribe for nine (9) new shares at a subscription price of SEK 0.50 per share. In the event that not all shares are subscribed with the support of subscription rights, the board must, within the framework of the rights issue's maximum amount, decide on the allocation of new shares to those who have subscribed for new shares without the support of subscription rights according to the following distribution bases:

• Allocation without preferential rights shall primarily be made to such subscribers who have also subscribed for shares with the support of subscription rights, regardless of whether the subscriber was a shareholder on the record date or not, and in the event that allocation to these cannot take place in full, allocation shall be made in relation to the number of subscription rights used to subscribe for shares;
• Alternatively, allocation of shares subscribed without the support of subscription rights must be made to others who subscribed without the support of subscription rights, and in the event that allocation to these cannot take place in full, allocation must be made in relation to the number of shares each registered interest in signing;
• In the third and final instance, allocation of shares subscribed without the support of subscription rights must be made to those who have contractually entered into a guarantee undertaking in the capacity of issue guarantors, and in the event that allocation to these cannot take place in full, allocation must be made in relation to the amount each guaranteed for drawing. To the extent that allocation in any stage according to above cannot be done pro rata, allocation must be done by lottery.

The Rights Issue is expected to be resolved by the board of directors during the summer of 2024, provided that the Financial Supervisory Authority has approved the ownership suitability assessment of Rieber & Søn AS.

Number of shares and share capital

Provided that the Rights Issue is fully subscribed, the share capital in the Company will increase by a maximum of SEK 28,513,352.25, from SEK 12,672,601.50 to SEK 41,185,953.75, through the issuance of a maximum of 114,053,409 shares. Thus, the number of shares increases from 50,690,406 to a maximum of 164,743,815 shares.

Shareholders who choose not to participate in the Rights Issue will, under the condition that the Rights Issue is fully subscribed, have their ownership diluted by approximately 69 percent of the shares and of the votes, but have the opportunity to financially compensate for this dilution by selling their subscription rights.

Subscription commitments and guarantee commitments

The Rights Issue is secured to approximately 90.8 percent through subscription commitments and guarantee commitments. Subscription commitments have been entered into by the Company's chairman of the board, Kent Hansson, and the Company's largest owner, Rieber & Søn AS, and amount to approximately 29.6 percent of the Rights Issue.

Approximately 61.2 percent of the Rights Issue is secured by a top guarantee commitment from Rieber & Søn AS.

No compensation is paid for submitted subscription commitments and the top guarantee commitment. The subscription commitments and the guarantee commitment has been agreed in writing. The subscription commitments and guarantee commitments are not secured by bank guarantee, blocking funds, pledging or similar arrangements.

Additional information about the parties that have entered into subscription commitments and guarantee commitments will be found in the prospectus that will be prepared in connection with the Rights Issue.

Exemption from mandatory bid obligation

In connection with the Rights Issue, Rieber & Søn AS, which owns shares in the Company corresponding to approximately 17.7 percent of the total number of shares and votes in the Company, has entered into a subscription and guarantee commitment with the Company.

The Swedish Securities Council (Sw. Aktiemarknadsnämnden) has granted Rieber & Søn an exemption from the mandatory bid obligation with regard to subscription of shares made in accordance with the above-mentioned subscription and guarantee undertaking. The exemption is conditional upon the shareholders being informed prior to the extraordinary general meeting of maximum percentage of the votes and shares that Rieber & Søn may obtain by subscribing for shares in accordance with the subscription and guarantee undertakings, and that the resolution to authorize the board of directors to resolve upon the Rights Issue is approved by the extraordinary general meeting with at least two-thirds of both the votes cast and the shares represented at the general meeting, disregarding shares held and represented at the general meeting by Rieber & Søn.

If Rieber & Søn fulfils its subscription undertaking and the entire guarantee undertaking is utilized, Rieber & Søn's shareholding after the Rights Issue will amount to a maximum of approximately 60.1 percent of the shares and votes in the Company.

Extraordinary general meeting

In addition to the Financial Supervisory Authority's approval of the ownership suitability assessment of Rieber & Søn AS, The Rights Issue requires that the extraordinary general meeting authorizes the board of directors to resolve on the Rights Issue and that the extraordinary general meeting resolves to amend the limits of share capital and number of shares in the articles of association. The extraordinary general meeting to authorize the board to resolve on the Rights Issue and amend  the limits of the number of shares and share capital in the articles of association will be held on June 19, 2024. Notice of the extraordinary general meeting will be published in a separate press release.

A number of existing shareholders, corresponding to approximately 32 percent of all outstanding shares eligible for voting at the extraordinary general meeting in Sileon, have undertaken to vote for the resolutions needed to carry out the Rights Issue at the extraordinary general meeting.

Prospectus

A prospectus related to the Rights Issue will be published no later than the day before the subscription period in the Rights Issue begins. Full terms and instructions will be available in Sileon's prospectus which will be published on the Company's website, www.sileon.com.

Advisors

Hagberg & Aneborn Fondkommission AB acts as financial advisor to Sileon and Schjødt acts as legal advisor to Sileon in connection with the Rights Issue.

For more information, please contact:

David Larsson, CEO, Sileon AB
Email: david.larsson@sileon.com
Phone: +46 725 502 306

This is information of the type that Sileon AB (publ) is obligated to make public in accordance with the EU Market Abuse Regulation. The information was submitted for publication through the agency of the contact person above on 2024-05-17 18:30 CEST.

About Sileon
Sileon AB (publ) is a global fintech company that offers an innovative card-based Buy Now Pay Later (BNPL) SaaS functionality to banks, card issuers and fintechs. With Sileon's BNPL product, customers can add BNPL to their existing credit or debit card base and run their B2B or B2C BNPL business in-house. Sileon operates in a fast-growing international market with an estimated transaction volume of $680 billion globally by 2025. Sileon is listed on the Nasdaq First North Growth Market and has approximately 50 employees at its headquarters in Stockholm, Sweden. The Company's Certified Adviser is Carnegie Investment Bank.

IMPORTANT INFORMATION

This announcement is not and does not form a part of any offer for selling, or a request to submit an offer to buy or acquire, shares or other securities of the Company.

Copies of this announcement are not being made and may not be distributed or sent into the United States, Australia, Belarus, Hong Kong, Japan, Canada, New Zealand, Russia, Singapore, South Africa, or any other jurisdiction in which such distribution would be unlawful or would require registration or other measures.

The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and accordingly may not be exercised, offered, sold, resold, delivered or otherwise transferred, directly or indirectly, in or into the United States, except pursuant to an applicable exemption from, or in a transaction not subject to, the requirements of the Securities Act and in compliance with any applicable securities legislation in any state or other jurisdiction of the United States. The Company do not intend to register any offering in the United States or to conduct a public offering of securities in the United States.

FORWARD-LOOKING STATEMENTS

Matters discussed in this announcement may constitute forward-looking statements. Forward looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "deems", "intends", "estimate", "will", "may", "continue", "should" and similar expressions. This applies in particular to statements relating to future results, financial position, cash flow, plans and expectations of the Company's operations and management, future growth and profitability, general economic and regulatory environment and other factors affecting the Company, many of which are based on further assumptions, such as no changes in existing political, legal, fiscal, market or economic conditions or applicable law (including but not limited to accounting principles, accounting methods and tax policies), which may or may not be of importance to the Company results or its ability to operate. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. 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.

Potential investors should therefore not attach undue confidence to the forward-looking information herein, and potential investors are urged to read the parts of the prospectus that include a more detailed description of factors that may affect the Company's operations and the market in which the Company operates.

The information, opinions and forward-looking statements contained in this announcement speak only as at its date and could be subject to change without notice.