Copenhagen, Denmark, 2 April 2025 - Brain+ A/S (Nasdaq First North: BRAINP)
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The subscription period in Brain+ A/S' ("Brain+" or the "Company") rights issue of units, i.e. the offering of new shares and warrants of series TO 5 (the "Rights Issue"), ended on 28 March 2025. The Rights Issue was subscribed to a total of 6,679,046 units, corresponding to 47.1%. Hereof, 6,476,143 units were subscribed with support of unit rights, and 202,903 units were subscribed without support of unit rights. In addition, guarantee commitments have been activated for subscription of the remaining 401,153 units, or approximately 2.9% of the issue, up to the pre-secured subscription level of approximately 50%. The subscription price in the Rights Issue was DKK 1,1289 per unit, securing Brain+ approximately DKK 8.0 million in new capital before deduction of costs attributable to the Rights Issue. Including the earlier announced bridge loan, received by the Company in January/February, net proceeds from the Rights Issue amount to DKK 5.8 million. This will fund the accelerated growth of the Ayla dementia care sales pipeline and continued conversion into recurring revenue until receipt of proceeds from the TO 5 warrants in June 2025, which is expected to secure funding at least into 2026.
Kim Baden-Kristensen, CEO in Brain+ commented on the outcome:
"We're very thankful for the strong backing we have received from both existing and new shareholders in our unit rights offering. Reaching nearly 50% subscription under challenging market conditions is a clear vote of confidence in our strategy and value propositions for better dementia care. It also means that guarantors will only be called to a very limited extent.
The funds raised provide us with the capital we need to continue to grow and convert our robust pipeline of care home sales leads, especially across the UK. As a key commercial milestone, we recently reported our first partnership with a UK private care home group on the delivery of Ayla-supported CST for people living with dementia. The first sale is always the hardest - and with this validating threshold now crossed, we are moving with increased confidence and pace. We look forward to updating the market as we secure more contracts in the weeks ahead."
Subscription, allocation, and payment
The subscription period in the Rights Issue started on 17 March 2025 and ended on 28 March 2025. The Right Issue was with pre-emptive subscription rights for existing shareholders while giving new investors the opportunity to participate to the extent that not all subscription rights were used.
Including pre-subscription commitments, a total of 6,679,046 units, corresponding to 47.1% of the Rights Issue, have been subscribed by existing and new shareholders in the Company. Of the total subscribed, 6,476,143 units, or approximately 45.7% of the total offering, was subscribed with support of unit rights, and 202,903 units, or approximately 1.4% of the offering, was subscribed without support of unit rights. In addition, guarantee commitments have been activated for subscription of the remaining 401,153 units, or approximately 2.9%, up to the pre-secured level of approximately 50% subscription of the Rights Issue. The total number of units subscribed in the Rights Issue thus amounts to 7,080,199.
Allocation of the 202,903 units subscribed for without the support of unit rights has been made in accordance with the principles described in Brain+ Company Announcement from 6 March 2025. Payment for units subscribed without support of unit rights will be made via a delivery versus payment transfer through the subscriber's bank and will be withdrawn from the account by the subscriber's account holder's bank or brokers.
Following the conversion of units into shares and warrants of series TO 5, a total of 375,250,547 shares of nominally DKK 0.01 each and 375,250,547 warrants will be issued. The new shares and the warrants of series TO 5 (ISIN code DK0063744685), will be tradeable on Nasdaq First North Growth Market Denmark as soon as possible after the issue has been registered with the Danish Business Authority. Trading in the new shares and warrants of series TO 5 on Nasdaq First North Growth Market Denmark is expected to commence on or around 11 April 2025. The exercise period for the warrants of series TO 5 is 3 - 17 June 2025.
Proceeds and financial runway
Through the Rights Issue, Brain+ receives DKK 8.0 million in capital proceeds before deduction of transaction related costs of approximately DKK 1.7 million (including compensation to guarantors of DKK 0.6 million, assuming all guarantors choose to have their compensation paid in cash). Net new proceeds to Brain+ from the Rights Issue after repayment of the non-convertible part of the bridge loan announced on 22 January 2025 (Brain+ Company Announcement - No. 2025-01) including interest and after adjusting for non-cash subscriptions related to the convertible part of the bridge loan and to conversion of debt to board member Johan Luthman, amounts to approximately DKK 1.3 million. Including subscriptions in the form of the pre-paid convertible bridge loan, total net proceeds to Brain+ from the Rights Issue amounts to approximately DKK 5.8 million.
The total net proceeds from the Rights Issue of approximately DKK 5.8 million will fund Brain+ to July 2025 and until receipt of the expected proceeds from the exercise of the TO 5 warrants. From July 2025, when the +35% OPEX reduction announced and implemented by Brain+ in early 2025, will be fully effective, continued funding will be secured by the TO 5 warrant proceeds and revenues. At a 50% exercise of the TO 5 warrants at an exercise price of DKK 0.0213 (equal to the subscription price per share in the Rights Issue and corresponding to a prospective Volume Weighted Average Price (VWAP) for Brain+ existing shares of DKK 0.0304 prior to exercise), the Company will receive additional proceeds of approximately DKK 3.5 million net of transaction costs. Based on expectations of growing revenues onwards through 2025, these proceeds will comfortably ensure funding of the Company's operations into 2026 to meet its revenue target and operational break-even by mid-2026 the latest.
Number of shares and share capital
When the new shares from the Rights Issue have been registered with the Danish Business Authority, Brain+' share capital will have increased with nominally DKK 3,752,505.47, from nominally DKK 2,125,404.85 to DKK 5,877,910.32. The total number of shares will have increased by 375,250,547 shares, from 212,540,485 shares to 587,791,032 shares, and the dilution effect for the shareholders who did not participate in the Rights Issue therefore amounts to approximately 63.8%.
A planned directed issue of shares to guarantors and to the convertible bridge lenders who are entitled to compensation, will further increase the Company's share capital, the number of shares and the dilution to non-participating investors. Exact numbers depend on the extent to which guarantors may choose compensation in the form of units, and final numbers will be communicated in a separate company announcement.
Summary of terms for warrants of series TO 5
Through the Rights Issue, a total of 375,250,547 warrants of series TO 5 will be issued and admitted to trading at Nasdaq First North Growth Market Denmark. One (1) warrant of series TO 5 gives the right to subscribe for one (1) new share in Brain+. Warrants of series TO 5 have an exercise period from and including 3 June 2025 to and including 17 June 2025. Last day of trading in warrants of series TO 5 is estimated to be 13 June. The exercise price of warrants of series TO 5 shall amount to seventy (70) percent of the volume-weighted average price (VWAP) for Brain+' share according to Nasdaq First North Growth Market's official price statistics during the trading period 15 May to 28 May 2025. Brain+ will at the latest publish the exercise price the day before the first day of the exercise period. The exercise price for the TO 5 warrants shall not exceed DKK 0.03195 per new share and shall not be less than the nominal value of DKK 0.01 per new share.
If all warrants of series TO 5 are exercised to the highest exercise price, Brain+ will receive a maximum of approximately DKK 12 million in proceeds before transaction costs, which are estimated to amount to approximately DKK 0.9 million. Through the exercise of warrants of series TO 5, the share capital in the Company can increase by a maximum of DKK 3,752,505.47. Provided that the TO 5 warrants are fully exercised, it will correspond to a dilution of approximately 39.0 percent for shareholders not participating.
Full terms and conditions for the warrants of series TO 5 are available on Brain+ website, www.brain-plus.com.
Compensation for guarantee commitments and convertible loans
For the bottom-up guarantee commitments, guarantors receive a guarantee compensation of 15 percent in cash or 25 percent in the form of units (at the same terms as in the Rights Issue). Convertible bridge lenders receive a 20 percent set up fee for the convertible loan in the form of units (at the same terms as in the Rights Issue). The board of directors in Brain+ will resolve to carry out a directed issue of units to the guarantors and lenders taking their compensation in the form of units. Outcome of the directed issue to guarantors will be communicated through a separate company announcement,
Advisors
In connection with the Rights Issue, Sedermera Corporate Finance act as financial advisors to Brain+. HC Andersen Capital 2 ApS act as legal advisor. Euronext Securities is the issuing agent and Jyske Bank is the settlement agent.
For more information about the Rights Issue, please contact:
Sedermera Corporate Finance
Phone: +46 (0) 40 615 14 10
E-mail: cf@sedermera.se
www.sedermera.se
For more information about Brain+, please contact:
Kim Baden-Kristensen, CEO
Phone: +45 31 39 33 17
E-mail: kim@brain-plus.com
Or,
Hanne Vissing Leth
Phone: +45 53 88 99 02
E-mail: hanne@brain-plus.com
www.brain-plus.com
Certified Adviser
HC Andersen Capital 2 ApS
Phone: +45 28 74 66 40
E-mail: ca@hcandersencapital.dk
www.hcandersencapital.dk
Important information
This Company Announcement constitute an offer to acquire shares, warrants, subscription rights, temporary units and/or other securities in Brain+ A/S. Investors should not subscribe to or acquire any securities in the Company based on other information than provided in this Company announcement. No actions have been taken, nor will any actions be taken, to permit a public offering in any jurisdictions other than Denmark.
This company announcement may not be released, published, or distributed, directly or indirectly, in or into the United States, Australia, Hong Kong, Japan, Canada, New Zealand, Switzerland, Singapore, South Africa, South Korea, Russia, Belarus, or any other jurisdiction where such distribution would be unlawful. This company announcement also does not constitute an offer to sell new shares, warrants, subscription rights, temporary units or other securities to any person in a jurisdiction where it would not be permitted to make such an offer or where such actions would require a prospectus, additional registration, or other measures beyond those required by Danish law. The Company announcement, application form, and other documents related to the Rights Issue may not be distributed in or into any country where such distribution or the Rights Issue would require actions as outlined in the previous sentence or where it would violate the regulations of such a country. Actions in violation of this instruction may constitute a breach of applicable securities laws.
No shares, warrants, subscription rights, temporary units, or other securities have been registered or will be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state or other jurisdiction in the United States, and may not be offered, subscribed, exercised, pledged, sold, resold, allotted, 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 registration requirements of the Securities Act and in compliance with the securities laws of the relevant state or other jurisdiction in the United States.
This company announcement may contain certain forward-looking information reflecting the Company's current view of future events as well as financial and operational developments. Terms such as "intends," "assesses," "expects," "may," "plans," "believes," "estimates," and other expressions indicating or predicting future developments or trends, which are not based on historical facts, constitute forward-looking information. Forward-looking information is inherently associated with both known and unknown risks and uncertainties, as it depends on future events and circumstances. Forward-looking information does not guarantee future performance or development, and actual outcomes may differ significantly from those stated in the forward-looking information. Neither the Company nor any other party undertakes to review, update, confirm, or publicly announce any revisions to any forward-looking statements to reflect events occurring or circumstances arising concerning the content of this company announcement, unless required by law or the Nasdaq First North Growth Market Rulebook.
