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2016-03-15

The board of C-RAD proposes a rights issue and provides an update on the lawsuit from Beamocular

C-Rad AB
Company Announcement

The board of C-RAD proposes a rights issue and provides an update on the
lawsuit from Beamocular

Press release 2016-03-15

NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, WITHIN OR TO THE UNITED STATES,
AUSTRALIA, CANADA, NEW ZEALAND, SINGAPORE, SOUTH AFRICA, JAPAN OR HONG KONG OR
WITHIN ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OF THIS PRESS RELEASE
WOULD NOT COMPLY WITH APPLICABLE LAWS AND REGULATIONS.

Summary

-- The Board of Directors (the “Board”) of C-Rad AB (publ) (“C-RAD” or the
“Company”) has resolved to propose a new share issue of a maximum of
5,506,330 shares with preferential right for the Company’s existing
shareholders (the “Rights Issue”). If the Rights Issue is fully subscribed,
the Company will be provided with approximately SEK 45.4 million before
deduction of transaction costs. The subscription price in the Rights Issue
is proposed to be SEK 8.25 per share, regardless of class.
-- The Board has further resolved to propose to issue a maximum of 1,818,181
B-shares under an over-allotment option which would provide the Company
with proceeds of up to approximately SEK 15.0 million (the “Over-allotment
Option”). The use of the Over-allotment Option is conditional upon that the
Rights Issue is oversubscribed.
-- The Rights Issue and the Over-allotment Option are subject to resolutions
by the Annual General Meeting to be held on 14 April 2016. The Company has
today issued a notice to the Annual General Meeting.
-- C-RAD intends to use the proceeds from the Rights Issue to cover the
working capital needs up until the Company has become long-term cash flow
positive, which it is expected to become during 2017, as well as to finance
increased sales and marketing activities in the Company’s core markets. In
addition, approximately SEK 15 million will be used to repay a shareholder
loan and a bridge loan. Proceeds from the Over-allotment Option are
intended to be used for faster growth.
-- Subscription undertakings from shareholders of approximately SEK 7.1
million and guarantee commitments of approximately SEK 38.3 million have
been received, comprising a fully guaranteed preferential rights issue.

Background and rationale

As communicated in the full-year report for 2015, the Board has decided that
further growth financing shall be raised through a rights issue to be proposed
to the Annual General Meeting. To continue the Company’s growth and ensure that
the Company has sufficient capital until it becomes long-term cash flow
positive, the Board proposes to the Annual General Meeting a fully guaranteed
rights issue of approximately SEK 45.4 million, with an Over-allotment Option
of up to approximately SEK 15.0 million. C-RAD intends to use the proceeds from
the Rights Issue to cover the working capital needs up until the Company has
become long-term cash flow positive, which it is expected to become during
2017, as well as to finance increased sales and marketing activities in the
Company’s core markets. In addition, approximately SEK 5 million will be used
to repay a shareholder loan and approximately SEK 10 million will be used to
repay a bridge loan. The proceeds from the Rights Issue are expected to be
sufficient to cover C-RAD’s working capital needs until the Company becomes
long-term cash flow positive. Any additional proceeds from the Over-allotment
Option are intended to be used for faster growth.

C-RAD’s CEO Tim Thurn comments:

“C-RAD has made substantial efforts to build up a strong direct sales force.
During the last year the sales team has substantially increased, which results
in high costs for salaries and related expenses. However a direct sales force
has proven to be the most effective and efficient sales channel for our
products in the mid-term. Our investments are expected to show results already
during 2016. It is the plan to hire more personal for sales and sales related
activities in our core markets. I invite you to participate in the expansion of
C-RAD and to sign up in the Rights Issue.”

The Rights Issue

The Board of C-RAD has on 14 March 2016 resolved to propose that the Annual
General Meeting resolves on a rights issue of up to a maximum of approximately
SEK 45.4 million with preferential right for the Company’s existing
shareholders in proportion to their shareholdings as of the record date, 28
April 2016.

For every share held on the record date, regardless of class, the holder will
receive one (1) subscription right. Four (4) subscription rights entitle the
holder to subscribe for one (1) new share. A-shares give subscription rights
that entitle to subscribe for A-shares and B-shares gives subscription rights
that entitle to subscribe for B-shares. The subscription price is set at SEK
8.25 per share (regardless of class), which means that the Rights Issue will
raise a maximum of SEK 45,427,222.50, before the costs for the Rights Issue,
through the issuance of a maximum of 5,506,330 shares, of which A-shares
comprise no more than 172,577 and B-shares no more than 5,333,753. The Rights
Issue will result in an increase of the share capital of not more than SEK
825,949.76. After the Rights Issue the number of Shares in C-RAD will amount to
a maximum of 27,531,653, of which 862,887 will be A-shares and 26,668,766 will
be B-shares, excluding the Over-allotment Option.

The record date at the Swedish Central Securities Depository, Euroclear Sweden
AB, for participation in the Rights Issue is 28 April 2016. This means that the
shares will trade excluding preferential right to participate in the Rights
Issue from and including 27 April 2016. The subscription period runs from and
including 2 May up to and including 16 May 2016, or such later date as decided
by the Board.

In the event that not all subscription rights are exercised for subscription
with preferential rights the Board may resolve, within the maximum limits of
the Rights Issue, on allotment of shares without preferential rights. Whereby,
in the event of oversubscription, allotment shall primarily take place to those
who have subscribed for shares with subscription rights and subscribed for
additional shares pro rata to their subscription with subscription rights, and
secondarily to others who have subscribed for shares without subscription
rights pro rata to the number of shares subscribed for without preferential
rights, and thirdly to those who have guaranteed the Rights Issue by
subscription for shares pro rata to the guarantee made by each such person,
and, where this is not possible, through a drawing of lots.

Subscription of shares by the exercise of subscription rights shall be made
through simultaneous cash payment. Subscription of shares without the exercise
of subscription rights shall be made on a separate subscription list and
subscribed shares shall be paid in cash no later than two (2) banking days
after the notice of allotment has been sent to the subscriber, or such later
date as the Board may decide. The new shares entitle to dividends for the first
time on the first record date for dividend that take place after the Rights
Issue has been registered with the Swedish Companies Registration Office and
been recorded in the share register kept by Euroclear Sweden AB.

Over-allotment Option

In addition, the Board has proposed that the Annual General Meeting resolves to
issue up to 1,818,181 additional B-shares under the Over-allotment Option,
resulting in an increase of the share capital of not more than SEK 272,727.24,
at a subscription price of SEK 8.25 per share. The Over-allotment Option can be
exercised and is subject to that the Rights Issue is over-subscribed. If fully
exercised, C-RAD is provided with additional proceeds of SEK 14,999,993.25. The
allocation of the new shares under the Over-allotment Option is proposed to be
based on demand and with an aim to create a good shareholder base, with
strategic investors and large shareholders with a long-term participation
interest and a good distribution of the Company’s shares, and is to be decided
by the Board without preferential right for the Company’s shareholders. Should
the Over-allotment Option be fully subscribed, the number of shares in C-RAD
will amount to a maximum of 29,349,834, of which 862,887 will be A-shares and
28,486,947 will be B-shares.

Subscription undertakings and guarantee commitments

Subscription undertakings of approximately SEK 7.1 million from shareholders
and guarantee commitments of approximately SEK 38.3 million have been received.
The subscription undertakings and guarantee commitments amount to approximately
SEK 45.4 million therewith, comprising a fully guaranteed Rights Issue. The
guarantors will receive a total compensation of approximately SEK 2.1 million.
Information about the guarantors will be included in the prospectus for the
Rights Issue, which is expected to be published on or about 27 April 2016.

Annual General Meeting

The Rights Issue is proposed to be resolved by the Annual General Meeting that
will be held on 14 April 2016.

At the Annual General Meeting, Board members Börje Bengtsson, Peter Hamberg,
Brian Holch Kristensen, Bengt Rolén och Kicki Wallje-Lund are proposed to be
re-elected as Directors of the Board. It is noted that Frank Lohr has declined
re-election.

For the complete notice to the Annual General Meeting, please see the separate
press release published today.

Preliminary time table for the Rights Issue

14 April 2016 Annual General Meeting

27 April 2016 First day of trading in the
Shares without the right to participate in the Rights Issue

27 April 2016 Estimated date for
publication of the prospectus

28 April 2016 Record date, i. e.
registered shareholders will receive subscription rights carrying the right to
participate in the Rights Issue

2 May – 12 May 2016 Trading in subscription rights

2 May – 16 May 2016 Subscription period

9 May 2016 Q1 2016 report is published

11 May 2016 Estimated date for
publication of an addendum to the prospectus due to the publication of the Q1
2016 report

Around 19 May 2016 The outcome of the Rights Issue is
announced

End of May 2016 The Rights Issue is completed
and registered

Update regarding the Beamocular lawsuit

The background to the dispute is that C-RAD was subject to a lawsuit filed by
Beamocular AB (“Beamocular”) on 28 November 2014 at the District Court of
Stockholm regarding better title to patent (Beamocular ./. C-RAD Positioning,
T-16330-14). The case relates to the ownership of a patent family (one patent
application and one patent) which originates from an invention named ”Patient
Monitoring Radiation Machines”, whose inventor Kristofer Maad, via the company
Beamocular, to which he transferred his right, claims that the invention is not
owned or has been transferred to C-RAD Positioning. C-RAD Positioning’s
position is that the patent application and the patent are owned by and have
been accurately transferred to the Company and, accordingly, there is no valid
ground for the claim of better title. Kristofer Maad was previously employed by
the Company but resigned from the Company in September 2014.

The parties have filed briefs in the District Court and have recently filed
their statements of evidence. The District Court will likely summon the parties
to an oral hearing within short and the Company’s expectation is that the main
proceedings will be held at the earliest sometime during October-December 2016
but it may very well take until sometime in the beginning of 2...

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