Observe Medical ASA: OBSERVE MEDICAL ASA: Resolutions to increase the share capital in connection with subsequent offering and conditional loan conversion

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA, HONG KONG, JAPAN, THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.

Oslo, 18 November 2024

Reference is made to the stock exchange announcement by Observe Medical ASA (the "Company" or "Observe Medical", OSE ticker "OBSVR") on 24 June 2024, regarding the successful placement of a private placement in the Company raising gross proceeds of NOK 22 million (the "Private Placement") and a potential subsequent offering of up to 32,500,000 new shares (the "Subsequent Offering"). Reference is further made to the stock exchange announcement by the Company on 15 November 2024, regarding Navamedic ASA's conditional conversion of a portion of a loan to the Company to shares in the Company (the "Loan Conversion").

In the extraordinary general meeting of the Company held on 17 July 2024, the board of directors was granted (i) an authorisation to increase the Company's share capital by up to NOK 8,450,000, in connection with the Subsequent Offering ("Board Authorisation I") and (ii) an authorisation to increase the Company's share capital by up to NOK 12,775,630, to inter alia finance further growth and secure an optimal capital structure of the Company ("Board Authorisation II").

Share capital increase in connection with the Subsequent Offering

In accordance with Board Authorisation I, the board of directors has today resolved to increase the share capital by a minimum of NOK 0.26 and a maximum of NOK 8,450,000, through the issuance of a minimum of one and a maximum of 32,500,000 new shares, each with a nominal value of NOK 0.26, (the "Offer Shares") with a subscription price of NOK 0.40 per Offer Share.

Thus, the board of directors has resolved to carry out the Subsequent Offering. The resolution is conditional upon the Norwegian Financial Supervisory Authority's ("NFSA") approval of a prospectus, which the Company has prepared in connection with (i) the listing on Euronext Expand of 16,862,962 shares issued in connection with tranche two of the Private Placement (ii) the listing on Euronext Expand of 40,887,038 new shares resolved issued in November 2024 in connection with the conditional Loan Conversion, and (iii) the Subsequent Offering (including the listing of the Offer Shares on Euronext Expand)(the "Prospectus"). It is expected that the Prospectus will be approved by the NFSA on or about [19] November 2024, and that the subscription period in the Subsequent Offering will commence on 20 November 2024 at 09:00 hours (CET) and expire on 4 December 2024 at 16:30 hours (CET).

The Subsequent Offering will be directed towards shareholders of the Company as of 24 June 2024 (being registered as such in the Norwegian Central Securities Depository (the "ES-OSL") on 26 June 2024 pursuant to the ES-OSL's standard two days' settlement procedure (the "Record Date")), who (i) were not allocated shares in the Private Placement, or (ii) are not resident in a jurisdiction where such offering would be unlawful, or (for jurisdictions other than Norway), would require any prospectus filing, registration document or similar document or action (such eligible shareholders jointly the "Eligible Shareholders").

Each Eligible Shareholder will be granted 0.41850 Subscription Right for every existing share registered as held by such Eligible Shareholder as of the Record Date, rounded down to the nearest whole Subscription Right. Each Subscription Right will, subject to applicable law, give the right to subscribe for, and be allocated, one (1) Offer Share in the Subsequent Offering. Over-subscription will be permitted. Subscription without Subscription Rights will not be permitted.

Allocation of the Offer Shares in the Subsequent Offering is expected to take place on or about 5 December 2024, and the Offer Shares are expected to be delivered on or about 16 December 2024. Further information regarding the Subsequent Offering will be set out in the Prospectus.

Carnegie AS is acting as the manager in the Subsequent Offering (the "Manager"). Advokatfirmaet Thommessen AS is acting as legal advisor to Observe Medical in relation to the Subsequent Offering.

Share capital increase in connection with the Loan Conversion

In accordance with Board Authorisation II, the board of directors has today resolved to increase the share capital by NOK 10,630,629.88, through the issuance of 40,887,038 new shares, each with a nominal value of NOK 0.26, (the "Conversion Shares") to Navamedic ASA, at a subscription price of NOK 0.40 per Conversion Share. The share consideration will be settled through set-off of loans with a total nominal amount of NOK 16,354,815.20 from Navamedic ASA to the Company granted under a loan agreement dated 27 September 2019, with an outstanding principal amount of NOK 32,000,000 prior to the Loan Conversion (with the addition of interest).  

Completion of the share capital increase is conditional upon the Subsequent Offering being completed with gross proceeds of minimum NOK 1,500,000 (the "Condition").

Subject to satisfaction of the Condition, it is expected that the share capital increase will be registered in the Norwegian Register of Business Enterprises on or about 18 December 2024.

This information is subject to the disclosure requirements according to Section 5-12 of the Norwegian Securities Trading Act.

For further information, please contact:

Jørgen Mann, CEO Observe Medical

Mobile: +45 408 67 558

E-mail: jorgen.mann@observemedical.com

Johan Fagerli, CFO Observe Medical

Mobile: +47 958 12 765

E-mail: johan.fagerli@observemedical.com

About Observe Medical: 

Observe Medical is a Nordic medtech company that develops, markets and sells innovative medtech products for the global market. The Company is committed to improving patient welfare and patient outcomes, improving clinical data accuracy and promoting positive health economics.

The Company seeks to drive growth by leveraging its expertise in sales and commercialisation of its broad portfolio of medical technology products, mainly in urine measurement and ultrasound, in combination with targeted M&A and distribution. Observe Medical is working with a network of leading distributors to provide outstanding solutions for healthcare professionals globally.

The Company is headquartered in Oslo, Norway.

Further information is available at www.observemedical.com.

- IMPORTANT INFORMATION -

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, fairness or completeness. Neither the Manager, nor or any of its affiliates or any of their respective directors, officers, employees, advisors or agents accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available, or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith. This announcement has been prepared by and is the sole responsibility of Observe Medical.

Neither this announcement nor the information contained herein is for publication, distribution or release, in whole or in part, directly or indirectly, in or into or from Australia, Canada, Japan, Hong Kong, South Africa or the United States (including its territories and possessions, any State of the United States and the District of Columbia) or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The publication, distribution or release of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement is not an offer for sale of securities in the United States. The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act, and may not be offered or sold in the United States absent registration with the U.S. Securities and Exchange Commission or an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in accordance with applicable U.S. state securities laws. The Company does not intend to register any securities referred to herein in the United States or to conduct a public offering of securities in the United States.

This announcement is an advertisement and 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 "EU Prospectus Regulation") (together with any applicable implementing measures in any Member State). Apart from the Conversion Shares, all of the securities referred to in this announcement have been offered on the basis of a listing and offering prospectus. Investors should not subscribe for any securities referred to in this announcement except on the basis of information contained in the aforementioned prospectus.

In any EEA Member State other than Norway, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the EU Prospectus Regulation, i.e. only to investors who can receive the offer without an approved prospectus in such EEA Member State.

This communication is only being distributed to and is only directed at persons in the United Kingdom that are "qualified investors" within the meaning of the EU Prospectus Regulation as it forms part of English law by virtue of the European Union (Withdrawal) Act 2018 and that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.

This announcement is made by, and is the responsibility of, the Company. The Manager and its affiliates are acting exclusively for the Company and no-one else in connection with the transactions described in this announcement. They will not regard any other person as their respective clients in relation to the transactions described in this announcement and will not be responsible to anyone other than the Company, for providing the protections afforded to their respective clients, nor for providing advice in relation to the transactions described in this announcement, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

In connection with the transactions described in this announcement, the Manager and any of its affiliates, acting as investors for their own accounts, may subscribe for or purchase securities and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such securities of the Company or related investments in connection with the transactions described in this announcement or otherwise. Accordingly, references in any subscription materials to the securities being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, the Manager and any of its affiliates acting as investors for their own accounts. The Manager does not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

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", "aim", "expect", "anticipate", "intend", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. 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. Forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance. The Company, the Manager and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise. The information, opinions and forward-looking statements contained in this announcement speak only as at its date and are subject to change without notice.