In the coming weeks, Simris Alg AB (publ) (“Simris Alg”) will carry out a new issue of Class B shares with preferential rights for existing shareholders.
The offer in brief
- Terms: Every (1) share held in Simris Alg on the record date of April 19, 2022 entitles to one (1) subscription right. One (1) subscription right is required to subscribe for one (1) new B share
- Subscription price: The subscription price is SEK 0.32 per Class B share
- Subscription period: April 21 – May 5, 2022
- Subscription Rights Trading: On Nasdaq First North Growth Market April 21 – May 2, 2022
- Issue size: SEK 25.1 million
- Subscription commitments and guarantee commitments: The rights issue is secured to approximately 80 percent of the total issue volume
Full terms and descriptions of the new share issue are reproduced in Simris Alg’s information memorandum, which was published on April 20, 2022.
Background and motives
At the Annual General Meeting in May 2021, a new Board of Directors was elected under the chairmanship of Steven Schapera. The company then had low sales and profitability. The Board saw a clear need to evaluate the company’s business plan and find new opportunities to utilize Simris Alg’s unique IP and know-how to increase revenue potential. Following a strategic review, it was decided to transform the business into a research-driven producer of high-quality bioactive substances that can be extracted from microalgae for sale directly to companies (B2B).
The Board considers the strategy change to be successful, which is most clearly seen through the four orders, with a total value exceeding SEK 7.5 million, of the self-cultivated and very expensive substance fucoxanthin, which the company has received since the shift to B2B sales. During this transitional period, the new Board and management have also implemented significant cost reductions, including staff reductions and write-downs in the balance sheet, which has contributed to significantly improving the company’s margin.
The motive for the rights issue is to finance the business’s continued investment in B2B, increase the rate of investment in product development, and investments to optimize the company’s production facility
Use of cash
The use of the net proceeds from the rights issue is planned to be distributed according to the following order of priority and scope:
- Production investments: about 50 percent
- Working capital: about 30 percent
- R&D: about 15 percent
- Repayment of bridge loan: about 5 percent