Diagonal Bio AB: Diagonal Bio AB publishes investment memorandum prior to upcoming rights issue of units

The subscription period of Diagonal Bio AB's ("Diagonal Bio" or the "Company") rights issue of units, which was resolved on 23 December 2024 by the Board of Directors together with the resolution on a directed issue of units, commences tomorrow, 23 January 2025. The Company has prepared an investment memorandum, containing information about the Company as well as about the rights issue of units and the terms and conditions for the rights issue. The investment memorandum is available on Diagonal Bio's website (www.diagonalbio.com).

Press release

22 January 2025

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, BELARUS, HONG KONG, JAPAN, CANADA, NEW ZEALAND, RUSSIA, SINGAPORE, SOUTH AFRICA, SOUTH KOREA OR IN ANY OTHER JURISDICTION IN WHICH THE RELEASE, DISTRIBUTION OR PUBLICATION OF THIS PRESS RELEASE WOULD BE UNLAWFUL, REQUIRE REGISTRATION OR ANY OTHER MEASURES.

Summary of the rights issue and the directed issue

• On 23 December 2024, the Board resolved on a directed issue, amounting to initially approximately SEK 1.7 million before deduction of issue related costs, and a rights issue, amounting to initially approximately SEK 6.0 million before deduction of issue related costs. Through exercise of warrants series TO 2, the Company may receive a maximum of an additional approximately SEK 3.4 million in June 2025. The proceeds from the directed issue, a fully subscribed rights issue as well as fully exercised warrants of series TO 2 are intended to fund the Company's operations until January 2026.
• The directed issue is directed to the Company's marketing partner Daniel Redén, through Redén Trotting AB, and the strategic investor Svea Bank AB.
• The rights issue is covered by subscription undertakings from the Board members, the CEO, and other shareholders, of in total approximately SEK 0.4 million, corresponding to approximately 6 percent of the rights issue. In addition, Diagonal Bio has received underwriting commitments of in total approximately SEK 3 million, corresponding to approximately 50 percent of the rights issue, divided into two separate top-down underwriting tranches.
• The subscription price in the directed issue and the rights issue is set to SEK 0.18 per unit, corresponding to SEK 0.01 per share. Warrants of series TO 2 are issued free of charge.
• The Company's shareholders have preferential rights to subscribe for units in the rights issue, whereby each share entitles the shareholder to one (1) unit right. Twelve (12) unit rights entitle to subscription of one (1) unit. One (1) unit contains eighteen (18) shares and eight (8) warrants of series TO 2. Shares subscribed for in the directed issue do not entitle the holder to subscribe for shares in the rights issue.
• The record date in the rights issue was 21 January 2025 and the subscription period in the rights issue takes place from and including 23 January 2025 until and including 6 February 2025.
• One (1) warrant of series TO 2 gives the holder the right to subscribe for one (1) new share in Diagonal Bio during the period that runs from and including 4 June 2025, to and including 18 June 2025. The exercise price for warrants series TO 2 has been set to SEK 0.01 per new share.
• In connection with the transaction, the Board members and CEO Karin Wehlin have entered into customary lock-up agreements corresponding to 100 percent of their respective shareholdings until 31 July 2025.

Advisors

Navia Corporate Finance AB is the financial advisor in connection with the transaction. Setterwalls Advokatbyrå AB is the legal advisor to Diagonal Bio and Aqurat Fondkommission AB is the issuing agent.

For additional information about the transaction, please contact:

Navia Corporate Finance AB

E-mail: [e-mail]

For additional information about Diagonal Bio, please contact:

Karin Wehlin, CEO

Phone: [phone]

E-mail: [e-mail]

Certified Adviser

Svensk Kapitalmarknadsgranskning AB

E-mail: [e-mail]

About Diagonal Bio

Diagonal Bio AB was founded in 2020 and is a Swedish biotechnology company with headquarters and offices in Lund. The Company develops the PANVIRAL® platform to detect and diagnose small sections of pathogen genomes, for example viruses, bacteria and fungi. The Company was founded with the goal of reducing human suffering by revolutionising global diagnostics of pathogen-borne diseases with proprietary technology. Diagonal Bio's patented technology can also be used for the less regulated market segments via LAMPlify®.

Important information

The information in this press release does not contain or constitute an offer to acquire, subscribe or otherwise trade in shares, warrants or other securities in Diagonal Bio. No action has been taken, and measures will not be taken to permit a public offering in any jurisdictions other than Sweden. Any invitation to the persons concerned to subscribe for units in Diagonal Bio will only be made through the investment memorandum that the Company estimates has published on Diagonal Bio's website www.diagonalbio.com. The investment memorandum does not constitute a prospectus as defined in the provisions of Prospectus Regulation (EU) 2017/1129 of the European Parliament and of the Council ("Prospectus Regulation") and has not been reviewed, registered or approved by the Swedish Financial Supervisory Authority. The offering in the investment memorandum is exempt from the prospectus obligation in accordance with Article 3 (2) of the Prospectus Regulation and Chapter 2, Section 1 of the EU Prospectus Regulation (Supplemental Provisions) Act (2019:414) due to the fact that the amount offered by the Company to the public is less than EUR 2.5 million. This release is not a prospectus in accordance with the definition in the Prospectus Regulation and, accordingly, does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in shares, warrants or other securities in Diagonal Bio. In order for investors to fully understand the potential risks and benefits associated with a decision to participate in the rights issue, any investment decision should only be made based on the information in the investment memorandum. Thus, investors are encouraged to review the investment memorandum in its entirety.

The information in this press release may not be released, distributed or published, directly or indirectly, in or into the United States, Australia, Belarus, Canada, Hong Kong, Japan, New Zealand, Russia, Singapore, South Africa, South Korea, Switzerland or any other jurisdiction in which such action would be unlawful or would require registration or any other measures than those required by Swedish law. Actions in violation of these restrictions may constitute a violation of applicable securities laws. No shares, warrants or other securities in Diagonal Bio have been registered, and no shares, warrants or other securities will be registered, under the United States Securities Act of 1933, as amended (the "Securities Act") or the securities legislation of any state or other jurisdiction in the United States of America and no shares, warrants or other securities may be offered, sold or otherwise transferred, directly or indirectly, in or into the United States, except under an available exemption from, or in a transaction not subject to, the registration requirements under the Securities Act and in compliance with the securities legislation in the relevant state or any other jurisdiction of the United States.

Within the European Economic Area ("EEA"), no public offering of shares, warrants or other securities ("Securities") is made in other countries than Sweden. In other member states of the European Union ("EU"), such an offering of Securities may only be made in accordance with the Prospectus Regulation. In other member states of the EEA which have implemented the Prospectus Regulation in its national legislation, any offer of Securities may only be made in accordance with an applicable exemption in the Prospectus Regulation and/or in accordance with an applicable exemption under a relevant national implementation measure. In other member states of the EEA which have not implemented the Prospectus Regulation in its national legislation, any offer of Securities may only be made in accordance with an applicable exemption under national law.

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" (within the meaning of the United Kingdom version of the EU Prospectus Regulation (2017/1129/ EU) which is part of United Kingdom law by virtue of the European Union (Withdrawal) Act 2018) 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"); (ii) high net worth entities etc. falling within Article 49(2)(a) to (d) of the Order; or (iii) such other persons to whom such investment or investment activity may lawfully be made available under 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.

This press release may contain forward-looking statements which reflect the Company's current view on future events and financial and operational development. Words such as "intend", "expect", "anticipate", "may", "believe", "plan", "estimate" and other expressions which imply indications or predictions of future development or trends, and which are not based on historical facts, are intended to identify forward-looking statements. Forward-looking statements inherently involve both known and unknown risks and uncertainties as they depend on future events and circumstances. Forward-looking statements do not guarantee future results or development and the actual outcome could differ materially from the forward-looking statements.

Since Diagonal Bio conducts essential services according to the FDI-act certain investments in the Transaction may require review by the ISP. Diagonal Bio will, no later than in connection with the publication of the investment memorandum, publish more information about this on Diagonal Bio's website, www.diagonalbio.com.