Oneflow has resolved on a directed issue of 2,565,000 new shares to raise proceeds of approximately SEK 90 million

Press release
15 August 2024

Oneflow has resolved on a directed issue of 2,565,000 new shares to raise proceeds of approximately SEK 90 million

INSIDE INFORMATION: The Board of Directors of Oneflow AB (publ) ("Oneflow" or the "Company") has, in accordance with the announcement made through the press release on 15 August 2024, resolved on a directed issue of 2,565,000 new shares, at a subscription price of SEK 35.1 per share (the "Share Issue"). Through the Share Issue, the Company receives approximately SEK 90 million before issue costs. 962,771 shares will be issued based on the authorization granted by the annual general meeting on 8 May 2024 and the issue of the remaining 1,602,229 shares is, due to the so-called Lex Leo regulations under the Swedish Companies Act, conditional on subsequent approval by an extraordinary general meeting planned to be held on 3 September 2024. The subscription price in the Share Issue has been determined through an accelerated bookbuilding procedure (the "Bookbuilding") performed by Danske Bank A/S, Danmark, Sverige Filial ("Danske Bank"). The Share Issue was, among others, subscribed for by Lars Appelstål (chairman of the Board of Directors), Greenfield AB (a company associated with board member Bengt Nilsson), Spintop Investment Partners III Sweden AB (a company associated with board member Finn Persson) and several existing as well as new Swedish and foreign institutional investors, including Andra AP-fonden (AP2), Handelsbanken Fonder, Cicero Fonder and DNB Asset Management. The net proceeds from the Share Issue will be used for general corporate purposes to increase the Company's financial flexibility and to support Oneflow's ongoing growth initiatives, primarily by further strengthening the Company's AI capabilities, enabling a continued high growth rate towards profitability.

Since the Company's IPO on Nasdaq First North Premier Growth Market on 8 April 2022, Oneflow has, despite challenging market conditions, experienced a solid development and continued to deliver strong growth. For the second quarter of 2024, the Company reported an Annual Recurring Revenue ("ARR") of SEK 152.0 million, which corresponds to a compound annual growth rate (CAGR) of 47.9 percent since the IPO (based on the ARR on 31 December 2021). In the second quarter of 2024, Oneflow continued to hire additional AI competences and expanded its AI business strategy by partnering with a legal AI company, enabling Oneflow to offer leading edge contract AI products already today that otherwise would have taken the Company years to build. The initiatives have temporarily added additional costs not originally planned for but these are expected to contribute significantly to Oneflow's continued development and growth, with new exciting platform releases on the horizon. The net proceeds from the Share Issue will be used for general corporate purposes to increase the Company's financial flexibility and to support Oneflow's ongoing growth initiatives, primarily by further strengthening the Company's AI capabilities, enabling a continued high growth rate towards profitability.

The Share Issue consists of two separate tranches. One tranche amounts to 962,771 new shares and is issued based on the authorisation granted by the annual general meeting on 8 May 2024 ("Tranche 1"). The second tranche amounts to 1,602,229 new shares and is conditional on subsequent approval by an extraordinary general meeting planned to be held on 3 September 2024 (the "EGM"), as the investors Lars Appelstål (chairman of the Board of Directors), Greenfield AB (a company associated with board member Bengt Nilsson) and Spintop Investment Partners III Sweden AB (a company associated with board member Finn Persson) participating in the Share Issue are subject to the so-called Lex Leo regulations under the Swedish Companies Act (Sw: LEO-reglerna) ("Tranche 2"). Notice to the EGM will be published through a separate press release on 16 August 2024. The issuance of the shares in Tranche 2 requires approval by shareholders holding not less than nine-tenths of both the shares voted and of the shares represented at the EGM. The Board of Directors' resolution on Tranche 1 is not contingent on the EGM's approval of Tranche 2.

Existing shareholders who jointly represent approximately 89 percent of the shares and votes in Oneflow have undertaken, or expressed their intention, to vote in favor of Tranche 2 of the Share Issue at the EGM. 

The Board of Directors has carefully considered the option to raise the requisite proceeds through a rights issue and makes the assessment that there are currently several reasons why it is preferable for the Company and the shareholders to raise the proceeds through a directed issue. The Board of Directors considers that the reasons for deviating from the shareholders' preferential right are (i) that a rights issue would take significantly longer time to complete; (ii) a rights issue entails a higher risk for an adverse effect on the share price, particularly in light of the current market volatility and the challenging market conditions, including current geopolitical events, and thus increases exposure to price fluctuations in the capital markets; (iii) a directed issue provides the opportunity to benefit from the interest shown by institutional investors in the Company's securities; (iv) to carry out a directed issue can be made at lower costs and with less complexity than a rights issue; (v) being able to raise capital quickly provides flexibility for potential investment possibilities in the short term, which is particularly important for the Company given its current operations and use of proceeds. Accordingly and subject to the successful outcome of the Bookbuilding, the Board of Directors' overall assessment is that a share issue with deviation from the pre-emptive rights of existing shareholders is in the best interest of the Company and existing shareholders, as it, in addition to the above mentioned benefits, allows the Company to raise capital to support Oneflow's ongoing growth initiatives, enabling a continued high growth rate towards profitability as well as increases the Company's financial flexibility.

The subscription price in the Share Issue was determined by the Board of Directors following the Bookbuilding to Swedish and international professional and institutional investors, and it is therefore the Board of Directors' assessment that the subscription price reflects current market conditions and demand.

The Share Issue, assuming the share issue pursuant to Tranche 2 is approved at the EGM, entails that the total number of shares and votes in Oneflow increases by 2,565,000, from 25,771,978 to 28,336,978, and that the share capital increases by SEK 76,950.00, from SEK 773,159.34 to SEK 850,109.34, which results in a dilution effect for existing shareholders who does not participate in the Share Issue of approximately 9.05 percent based on the total number of shares and votes in the Company after the Share Issue.

In connection with the Share Issue, the Company has agreed to a lock-up undertaking, with customary exceptions, on future share issues for a period of 180 calendar days after first settlement in the Share Issue. In addition, the Company's CEO Anders Hamnes via Hamnes Invest AB, CFO Natalie Jelveh, chairman of the Board of Directors Lars Appelstål and board members Bengt Nilsson via Greenfield AB and Finn Persson via Spintop Investment Partners III Sweden AB, have undertaken not to, subject to customary exceptions, divest any shares in the Company for a period of 180 calendar days from first settlement in the Share Issue.

Advisers

Danske Bank is Sole Global Coordinator and Bookrunner in connection with the Share Issue. Baker & McKenzie Advokatbyrå KB is legal adviser to the Company.

For further information, please contact:

Anders Hamnes, CEO and founder

Mobile: +46 76 788 50 76

Email: anders.hamnes@oneflow.com

This is information that Oneflow AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation (EU no 596/2014). The information was submitted for publication, through the agency of the contact person set out above, at the time stated by Oneflow's news distributor Cision at the publication of this release.

About Oneflow 

Oneflow develops a contract automation platform powered by AI, helping businesses achieve a fully automated contract process. Contracts are at the heart of all businesses and yet, while the world is undergoing digital transformation, contracts are stuck in a frustrating mess between PDFs, legacy systems, inboxes, just to get a contract signed. Oneflow believes there's a better contract workflow. One that is intelligent, easy, rich in data, gathers every step of the process in one place, allowing for better clarity and collaboration between all parties involved. And people can get on with what they do best. With Oneflow, contracts are smarter, giving our users an experience so delightful, it feels like magic. Get started for free at oneflow.com.

IMPORTANT INFORMATION

The release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions by law. The recipients of this press release in jurisdictions where this press release has been published or distributed shall inform themselves of and follow such restrictions. The recipient of this press release is responsible for using this press release, and the information contained herein, in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer to sell or an offer, or the solicitation of an offer, to acquire or subscribe for shares issued by the Company in any jurisdiction where such offer or invitation would be illegal prior to registration, exemption from registration or qualification under the securities laws of such jurisdiction. 

This press release is not a prospectus for the purposes of the Prospectus Regulation (EU) 2017/1129 (the "Prospectus Regulation") and has not been approved by any regulatory authority in any jurisdiction. The Company has not authorised any offer to the public of shares or rights in any Member State of the EEA and no prospectus has been or will be prepared in connection with the Share Issue. In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation.

This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act of 1933, as amended (the "Securities Act"). There is no intention to register any securities referred to herein in the United States or to make a public offering of the securities in the United States. The information in this press release may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, within or into Australia, Belarus, Canada, Hong Kong, Japan, New Zealand, Russia, Switzerland, Singapore, South Africa, South Korea, the United States (including the district of Columbia) or in any other jurisdiction where such announcement, publication or distribution of the information would not comply with applicable laws and regulations or where such actions are subject to legal restrictions or would require registration or any other action other than those required under Swedish law, is prohibited pursuant to EU, UK or US sanctions, or otherwise in conflict with applicable rules in such jurisdiction or cannot take place without application of an exemption from such measure. Actions taken in violation of this instruction may constitute a crime against applicable securities laws and regulations. 

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, as amended (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 announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the new shares. Any investment decision to acquire or subscribe for shares in connection with the Share Issue must be made on the basis of all publicly available information relating to the Company and the Company's shares. Such information has not been independently verified by Danske Bank. Danske Bank is acting for the Company in connection with the transaction and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for giving advice in relation to the transaction or any other matter referred to herein.

The information in this press release may not be forwarded or distributed to any other person and may not be reproduced at all. Any forwarding, distribution, reproduction or disclosure of this information in its entirety or in any part is prohibited. Failure to follow these instructions may result in a breach of the Securities Act or applicable laws in other jurisdictions.

This press release does not constitute an invitation to warrant, subscribe, or otherwise acquire or transfer any securities in any jurisdiction. This press release does not constitute a recommendation for any investors' decisions regarding the Share Issue. Each investor or potential investor should conduct a self-examination, analysis and evaluation of the business and information described in this press release and any publicly available information. The price and value of the securities can decrease as well as increase. Achieved results do not provide guidance for future results. Neither the contents of the Company's website nor any other website accessible through hyperlinks on the Company's website are incorporated into or form part of this press release.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements that reflect the Company's intentions, beliefs, or current expectations about and targets for the Company's future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the Company operates. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "intend", "may", "plan", "estimate", "will", "should", "could", "aim" or "might", or, in each case, their negative, or similar expressions. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not guarantee that the assumptions underlying the forward-looking statements in this press release are free from errors and readers of this press release should not place undue reliance on the forward-looking statements in this press release. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of its date and are subject to change without notice. Neither the Company nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release, unless it is not required by law or Nasdaq First North Growth Market's Rulebook for issuers.

INFORMATION TO DISTRIBUTORS 

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the shares in the Company have been subject to a product approval process, which has determined that such shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "EU Target Market Assessment"). Solely for the purposes of each manufacturer's product approval process in the United Kingdom, the target market assessment in respect of the shares in the Company has led to the conclusion that: (i) the target market for such shares is only eligible counterparties, as defined in the FCA Handbook Conduct of Business Sourcebook, and professional clients, as defined in Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 ("UK MiFIR"); and (ii) all channels for distribution of such shares to eligible counterparties and professional clients are appropriate (the "UK Target Market Assessment" and, together with the EU Target Market Assessment, the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors should note that: the price of the shares in the Company may decline and investors could lose all or part of their investment; the shares in the Company offer no guaranteed income and no capital protection; and an investment in the shares in the Company is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Share Issue. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Danske Bank will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II or UK MiFIR; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the shares in the Company.

Each distributor is responsible for undertaking its own target market assessment in respect of the shares in the Company and determining appropriate distribution channels.

Every care has been taken into consideration when translating this press release into English. In the event of differences between the English version and the Swedish original, the Swedish version shall apply.