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2021-11-04

Brighter AB (publ): Brighter's Board of Directors proposes a rights issue of units of approximately SEK 117 million and procures a credit facility

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED KINGDOM, THE UNITED STATES, CANADA, JAPAN, AUSTRALIA, HONG KONG, NEW ZEALAND, SWITZERLAND, SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL OR WOULD REQUIRE REGISTRATION OR ANY OTHER MEASURES.

The Board of Directors of Brighter AB (publ) ("Brighter" or the "Company") has today, subject to the shareholders' subsequent approval on the extraordinary general meeting on December 7, decided to carry out of an issue of units consisting of shares and warrants with preferential rights for existing shareholders of approximately SEK 117 million (the "Rights Issue"). The Rights Issue is covered to approximately 85 percent through subscription commitments and underwriting commitments. Notice to the extraordinary general meeting will be published in a separate press release. The Board has also procured a credit facility of SEK 80 million from Formue Nord Markedsneutral A/S, Modelio Equity AB, Munkekullen 5 förvaltning AB, and Gerhard Dal (the "Credit Facility").

Summary

  • The Board of Directors of Brighter has resolved to carry out the Rights Issue of units consisting of shares and warrants of series TO7 and TO8 which, when fully subscribed, initially can provide Brighter with approximately SEK 117 million before issue costs. The resolution is subject to approval from an extraordinary general meeting in the Company.
  • In the event of full subscription and full exercise of all warrants of series TO7 in conjunction with offered units, the Company may be provided with an additional maximum of approximately SEK 146 million.
  • In the event of full subscription and full exercise of all warrants of series TO8 in conjunction with offered units, the Company may be provided with an additional maximum of approximately SEK 88 million.
  • The Rights Issue is covered to approximately 85 percent through subscription commitments and underwriting commitments.
  • All existing shareholders will receive one (1) unit right for each one (1) share owned on the record date, January 5, 2021. Two (2) unit rights give the right to subscribe for one (1) unit. One (1) unit consists of two (2) newly issued shares, two (2) warrants of series TO7 and one (1) warrant of series TO8. The subscription price per unit is SEK 0.60, corresponding to SEK 0.30 per share (the warrants are issued free of charge).
  • The subscription period for the Rights Issue will run from January 10, 2022, to January 24, 2022.
  • The Rights Issue is carried out in order to be able to produce, continuously develop, sell and market Brighters' products to partners and consumers on a long term and large-scale basis.
  • The Company has procured a credit facility of SEK 80 million which includes a refinancing of an older loan of SEK 25 million plus interest. The Company can decide to utilize parts of or the whole Credit Facility. The part of the Credit Facility the Company chooses to utilize runs with market terms of 1.25 percent interest per started 30-day period.

Background and rationale in summary

The Company's mission is to improve the lives of people with diabetes worldwide, and from the outset, our ambitions have been high. Ever since Brighter was founded, the Company's primary focus has been on developing Actiste®, a competitive internet connected multi-function medtech device that measures blood glucose levels, injects insulin and generates valuable information for users.

During 2021, Brighter's board and management have evaluated the need for resources and likely costs to achieve the goals that the Company had established at an earlier stage, where the main focus has been the global commercialization of Actiste®. The outcome of this analysis clearly indicates that the Company needs to adjust its objectives and to strengthen liquidity in order to achieve long term success in the market.

Thus far, the costs of initiating the commercialization of Actiste® and supporting Brighter's subsidiaries, including the working capital of Nectarine Health and Camanio, have contributed to a high-cost structure in 2020 and 2021. The Board therefore decided, in October this year, to prioritize the sale of subsidiaries and our investment in Accumbo over alternative financing options. This will make Brighter more streamlined, while at the same time slimming down the organization, reducing the cost base and improving liquidity. The Company had expected that the divestment of the subsidiaries would be realized at the beginning of Q4, but this has taken longer than anticipated. Discussions with interested parties are still ongoing. During Q4, another cost saving program was rolled out with the aim of reducing the Company's burn rate by approximately 50 percent per Q1 2022 (including potential sales of the subsidiaries). The program includes both organizational changes with a focus on efficiency and re-prioritization that entails concrete cost savings.

At our Capital Markets Day in September 2021, we provided updated information on the status of our various geographical focus markets. The main reason for delays in our commercialization plans is, as previously communicated, the extensive, time-consuming, and complex processes required for medical devices to be approved in each market (e.g., agreements for telecoms, local data storage rules and trade licenses). The time required for such processes is impossible to influence as it is outside the Company's control. In addition, the pandemic has severely limited our opportunities to carry out both user tests and sales activities in Southeast Asia.

Our evaluation of Brighter's operations has underpinned our conviction in the value of developing upon the Company's concept, The Benefit Loop. The vision is to support innovative, data-driven, and mobile healthcare services that improve the information flow of relevant and reliable data with the aim of improving the quality of life for users of the Company's services. According to the World Health Organization, only half of people diagnosed with chronic diseases actually follow their caregiver's recommendations. We believe that more precise information and improved accessibility will foster more insightful decisions, which in turn can lead to increased security and an improved quality of life for patients. Through further development of The Benefit Loop, the ambition is also to give caregivers access to a deeper, patient-centered body of information that makes it easier to understand and tailor treatment to help influence the individual risk and change care plans and training where needed.

In summary: Through our vision of offering both patients and caregivers faster access to more accurate and individualized insights, and providing medical data for research, Brighter aims to contribute to more efficient and tailored care for the individual and to reduce the overall cost of care. The ambition is to capitalize to an even greater extent on the Company's product and service portfolio and accelerate establishment in the market.

In Qatar, we now have all the necessary market approvals, and our focus is now on rolling out Actiste® in collaboration with hospitals and healthcare facilities. We will use our experiences here to evaluate and validate our routines to pave the way for larger volumes in Qatar and to streamline our go-to-market routines to reach more markets, customers and partners.

Brighter has also come a long way with market approvals in the United Arab Emirates, where the Company has signed commercial cooperation agreements with Diapoint, AlZahra and Prime Healthcare Group. In Southeast Asia, before sales can begin, the Company must engage an authorized representative who will handle the medical device approval process. Brighter is in advanced negotiations with a suitable company. Additionally, Brighter has reached an agreement with Padjadjaran University and will work with it and two hospitals to commence live user tests with Actiste® Mini in the country. Brighter has also signed a reseller agreement with Medico, the leading provider of cloud-based healthcare systems in Indonesia. Brighter has also, as previously communicated, ongoing discussions with potential distributors in Africa, which is considered a significant market for Brighter's services.

Although there is a strong focus on the divestment of the subsidiaries Nectarine and Camanio as well as the ongoing cost saving program, the Company needs capital for its ongoing commercialization activities, already underway in Qatar. The Company also needs financing to carry out the processes to validate the Company's current digital solutions as well as continued development of innovative business models recommended by the board and further development of solutions for data analytics.

The proceeds of the rights issue, as well as the exercise of warrants T07 and T08, shall primarily be used for:

Expansion
Commercialization
Further development of data analytics solutions
Development of new innovative business models

Comment from the CEO

Healthcare has been plagued by major challenges for a long time. This is nothing new. As I see it, powerful measures will be required in the future to streamline healthcare, but also new creative digital solutions that facilitate information, prioritize needs and allocate resources based on self-care, virtual care and physical care. This is where Brighter comes in. While our vision is to enrich the lives of the many people living with chronic diseases, we also want to contribute to more efficient and cost-effective healthcare.

As CEO, I feel both expectant and positive about the future. I have great faith in the platform we stand on, but also in the ability and competence among all our fantastic employees. Our main focus will be the continued commercialization of Actiste, where we in 2021 have taken the first important steps into the market. We will also continue to develop our digital solutions, and thus try to take a larger place in patients' ecosystems. Through more precise information and proactive treatment, we can not only become more relevant to the patient, but we can also become a more valuable partner in healthcare. Then we can start to make a real difference.

-Erik Lissner, CEO of Brighter

Terms for the Rights Issue

The Board of Directors of Brighter has resolved on the Rights Issue, subject to the subsequent approval from an extraordinary general meeting the December 7, 2021, in accordance with the following main terms:

  • All existing shareholders will receive one (1) unit right for each (1) share owned on the record date, January 5, 2022, and two (2) unit rights give the right to subscribe for one (1) unit. One (1) unit consists of two (2) newly issued shares, two (2) warrants of series TO7, and one (1) warrant of series TO8. The subscription price per unit is SEK 0.60, corresponding to SEK 0.30 per share (the warrants are issued free of charge).
  • The Rights Issue entails an issue of a maximum of 195,155,674 units, corresponding to 390,311,348 shares, 390,311,348 warrants of series TO7, and 195,155,674 warrants of series TO8.
  • Upon full subscription in the Rights Issue, the Company receives approximately SEK 117 million before issue costs.
  • The subscription period for subscription of units will run from January 10, 2022, to January 24, 2022.
  • Through the Rights Issue, the share capital may increase by a maximum of SEK 19,515,567.40, from SEK 19,515,567.40 to SEK 39,031,134.80. Upon full exercise of the warrants of series TO7 covered by th...
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