Cereno Scientific enters into a financing agreement with European High Growth Opportunities Securitization Fund through its advisor Alpha Blue Ocean

19 March, 2018

Cereno Scientific AB (publ) (“Cereno” or the “Company”) has entered into a financing agreement with European High Growth Opportunities Securitization Fund (the “Investor”), advised by Alpha Blue Ocean Inc., regarding a financing solution based on the issuance of convertible bonds with warrants attached. The financing solution means that the Company is able, over a 24-month period, to receive up to SEK 82.0 million and potentially an additional SEK 24.6 million if all the warrants issued are exercised.

Cereno Scientific has entered into the financing agreement to secure financing for the Company. This financing is expected to provide Cereno Scientific funding for the next 30 months and implementation of the Company’s planned Phase IIb study. The financing agreement is subject to resolution by the General Meeting of the Company to authorize the board to issue convertibles and share options for the relevant periods, the first resolution to be adopted on the Extraordinary General Meeting of the Company’ shareholders to be held on April 19, 2018.

This flexible financing solution fits our current financing needs very well. The solution is both cost-effective and flexible for the Company and our shareholders. It gives us financial stability for the next 30 months and secures funding for our forthcoming Phase IIb study” says Sten R. Sörensen, Cereno Scientific’s CEO.

Pierre Vannineuse, CEO and founder of London-based Alpha Blue Ocean Investment Group and Head of European High Growth Opportunities Securitization Fund, comments:

We are thrilled to welcome Cereno Scientific within our portfolio companies. This transaction is part of Alpha Blue Ocean’s larger intention to deploy within the next twenty-four months EUR 2 billion of funds in leading European junior healthcare companies.

We are convinced that now that the financing of the company is secured over a long period, the management will be able to focus on delivering the results we expect from the company’s very promising approach in preventive medicine to tackling major diseases caused by thrombosis.

Main terms

The financing solution is based on the issuance of convertible bonds and warrants which will entitle the Investor to subscribe for class B shares of the Company.

The financing solution consists of an initial period of twelve months. At the end of the initial period, the Company will have the option to extend the funding for another twelve-month period. During the initial period, the Company shall be able to receive up to SEK 40 million funding through the issuance of eleven tranches of convertible bonds with warrants attached. If the company decides to extend the financing, the Company shall be able to receive an additional funding up to SEK 42 million through the issuance of twelve tranches. Other than the first tranche issued under the initial period which will amount to SEK 5 million, all the subsequent tranches to be issued under the total commitment will amount to SEK 3.5 million each. The financing solution means the respective tranche of convertible loan corresponds to a shareholder loan agreement that expires when the converting debt is issued in shares. The primary shareholders in the Company commit to entering into said loan agreements.

In connection with each tranche, warrants will be issued entitling the Investor to subscribe for class B shares of the Company. Should all the warrants to be issued under the total commitment be exercised, an additional SEK 24.6 million will be received by the Company (i.e. an additional 30 percent of the total commitment), amounting to a total of SEK 106.6 million.

The convertible bonds must be converted into class B shares within 12 months from the actual issuance of the bonds. The warrants must be exercised within five years from their actual issuance. The convertible bonds are issued at a price corresponding to the nominal amount.

The conversion rate for the convertible bonds and the strike price for the warrants are determined based on a Pricing Period of 15 trading days immediately preceding a reference date.

For the convertible bonds, they are mandatorily convertible twelve months after their effective issuance and until then at 93% of the lowest closing VWAP observed over the Pricing Period preceding the receipt of a conversion request.

For the warrants, the strike price of each tranche of warrants is defined as equal to 120 % of the 15 days VWAP observed over the Pricing Period preceding the date the Company requests the Investor to subscribe to new convertible bonds and warrants, i.e. when the Company calls a tranche, except for the first Tranche for which the lowest closing VWAP during the Pricing Period is used for the calculation.

If the total commitment is utilized, i.e. convertible bonds amounting to MSEK 82.0 in aggregate nominal value, the costs of the Company for, inter alia, financial and legal services, will amount to approximately 7 percent of the total commitment. In case all of the attached warrants are utilized for subscription of new shares in the Company, said costs will amount to approximately 5 percent of the total commitment.

About European High Growth Opportunities Securitization Fund (EHGO)
European High Growth Opportunities SF is an institutional investment vehicle based in Luxembourg focusing on financing highly innovative companies on a pan European basis which it considers highly undervalued. EHGO is exclusively advised by Alpha Blue Ocean Inc. Its mandate is to invest in highly innovative European companies while supporting their needs for growth capital and offer a credible European alternative to funding.

About Alpha Blue Ocean Investment Group
Alpha Blue Ocean was founded by Pierre Vannineuse and is the investment manager to a family of funds operating across multiple jurisdictions and focusing on directly financing highly innovative technologies while remaining non-intrusive into the management of its portfolio companies. Alpha Blue Ocean specializes in providing flexible, innovative and non-invasive debt and equity financing to publicly listed companies across the world and in a variety of sectors including healthcare, energy, mining and technology. Alpha Blue Ocean’s main representation office is based in London, UK.
For more information, please contact:
Sten R. Sörensen, CEO
Tel: +46 733 74 03 74
Email: sten.sorensen@cerenoscientific.com

About Cereno Scientific AB
Cereno Scientific is developing a new preventive medicine to treat thrombosis-related disease, such as myocardial infarction and stroke. Cardiovascular disease is currently the leading cause of death worldwide. Current therapies are connected to an increased risk of bleeding and, as a result, low effectiveness due to lower dosing levels – leading to a high risk of new blood clots. Cereno Scientific’s drug candidate, CS1, is expected to provide an effective drug treatment to prevent thrombosis with lower risk for the serious bleeding complications associated with current treatments with so called “blood thinning” drugs. CS1 is a re-formulation of a known compound and is expected to have a relatively short development time. The company is based in Gothenburg at AstraZenecas BioVenture Hub and is supported by GU Ventures. Cereno Scientific’s class B share is listed on AktieTorget since June 2016. CRNO B, ISIN: SE0008241558.

For more information, see www.cerenoscientific.se.

Cereno Scientific enters into a financing agreement with EHGO (PDF)

Cereno Scientific ingår ett finansieringsavtal med EHGO (Swedish version)

This information is such that Cereno Scientific AB is required to make public in accordance with the EU’s market abuse regulation (MAR) and the Swedish Securities Market Act. The information was made available publically by the Company’s contact person on 19 March 2018.