ANNOUNCEMENT OF TERMS FOR THE PARTIALLY UNDERWRITTEN RIGHTS ISSUE THROUGH THE APPROVAL AND PUBLICATION OF THE RELATING PROSPECTUS
Oslo, 6 May 2025: Reference is made to the stock exchange announcement published by Lokotech Group AS (the "Company") on 30 April 2025 regarding the approval by the Company's extra ordinary general meeting (the "EGM") of the partially underwritten rights issue of between 374,925,009 and 599,880,023 new shares in the Company (the "Offer Shares") at a subscription price of NOK 0.3334 per Offer Share (the "Subscription Price") to raise gross proceeds of up to NOK 200 million (the "Rights Issue"), of which an underwriting consortium has agreed to underwrite subscription of Offer Shares for gross proceeds of approx. NOK 125 million. Existing Shareholders (as defined below) have been granted 3.173987 tradeable subscription rights (the “Subscription Rights”) for each existing share in the Company registered as held by such Existing Shareholder as of the Record Date (as defined below), rounded down to the nearest whole Subscription Right. In addition, the subscribers in the Rights Issue will be allocated 0.131506 warrants for every one (1) Offer Share allocated to and paid for by them in the Rights Issue rounded down to the nearest whole warrant (the "Warrants").
Pareto Securities AS and SpareBank 1 Markets AS are acting as managers in connection with the Rights Issue (collectively, the "Managers"). Advokatfirmaet Arntzen AS is acting as legal counsel to the Company and Advokatfirmaet BAHR AS is acting as legal advisor to the Managers.
The Financial Supervisory Authority of Norway (Nw: Finanstilsynet) has today, 6 May 2025, approved a prospectus prepared by the Company in connection with the Rights Issue (the "Prospectus"). Subject to local applicable securities laws, the Prospectus, including the subscription form for the Rights Issue, will be made available at the websites of Pareto Securities AS at www.paretosec.com/transaction and SpareBank 1 Markets AS at www.sb1markets.no/transaksjoner, prior to the commencement of the subscription period in the Rights Issue. Printed copies of the Prospectus may be obtained free of charge by contacting Pareto Securities AS (Tel: +47 22 87 87 00) or SpareBank 1 Markets AS (Tel: +47 24 14 74 70).
Subscription Period: The subscription period for the Rights Issue is expected to take place from 7 May 2025 at 09:00 (CEST) to 21 May 2025 at 16:30 (CEST) (the "Subscription Period"). The Subscription Rights in the Rights Issue will be tradable on Euronext Growth Oslo under the ticker code "LOKOT" from 7 May 2025 at 09:00 (CEST) until 15 May 2025 at 16:30 (CEST).
Use of Proceeds:
The net proceeds to the Company from the approx. NOK 125 million underwritten portion of the Rights Issue will be used to secure the tape-out and enable mass production of the Company's proprietary Scrypt ASIC Miner. This includes the NOK equivalent of (i) approx. USD 7.2 million for the mask set and associated non-recurring engineering for production equipment, (ii) approx. USD 2.2 million for engineering and production wafers, and (iii) approx. USD 1.8 million for general corporate purposes and transaction costs (final amounts and allocation depending on the final results in the Rights Issue). If the Company receives valid subscriptions for more than the underwritten portion of the Rights Issue, the additional net proceeds will mainly be used to increase the production batch of the Company's proprietary Scrypt ASIC Miner.
Subscription Rights:
The shareholders of the Company as of 2 May 2025 (and being registered as such in Euronext Securities Oslo, the Norwegian Central Securities Depository (the "VPS") as at the expiry of 6 May 2025 pursuant to the two days' settlement procedure of the VPS (the "Record Date", and such shareholders, the "Existing Shareholders")), have been granted tradable Subscription Rights in the Rights Issue that provide preferential rights to subscribe for, and be allocated, Offer Shares at the Subscription Price.
The Existing Shareholders have been granted 3.173987 Subscription Rights for each existing share in the Company registered as held by such Existing Shareholder as of the Record Date, rounded down to the nearest whole Subscription Right. Each Subscription Right will, subject to applicable law, give the right to subscribe for, and be allocated, one (1) Offer Share in the Rights Issue. Over-subscription with Subscription Rights is allowed. Subscription without Subscription Rights is not permitted (other than by the Underwriters, as defined below).
The Subscription Rights will be tradable on Euronext Growth Oslo under the ticker code "LOKOT" from 7 May 2025 at 09:00 (CEST) until 15 May 2025 at 16:30 (CEST). The Subscription Rights will hence only be tradable during a part of the Subscription Period.
Primary insiders of the Company and their close associates (collectively owning approx. 39.14% of the Company) have agreed to not sell their Subscription Rights in the Rights Issue. However, the Managers may facilitate a sale of a portion of their Subscription Rights that they do not exercise in a structured off-market transaction at or above the current market price for the Subscription Rights, provided that any sales proceeds from the sale of such Subscription Rights must be used to subscribe for Shares in the Rights Issue. Consequently, approx. 39.14% of the Subscription Rights listed under the ticker LOKOT will not be part of the free float of the Subscription Rights.
Being granted or purchasing Subscription Rights does not in itself constitute a subscription for Offer Shares which must be done in accordance with the procedure set out in this press release and further detailed in the Prospectus.
Subscription Rights that are not used to subscribe for Offer Shares before the expiry of the Subscription Period on 21 May 2025 at 16:30 (CEST) or not sold before 16:30 (CEST) on 15 May 2025, will have no value and will lapse without compensation to the holder upon expiry of the Subscription Period.
The Subscription Rights are expected to have an economic value if the Company's shares trade above the Subscription Price during the Subscription Period.
The subscribers in the Rights Issue will for every one (1) Offer Share allocated to and paid by them in the Rights Issue, be allocated 0.131506 Warrants, rounded down to the nearest whole Warrant. Each Warrant will give the holder a right to subscribe for one new share in the Company at a strike price described below.
Assuming that all of the Offer Shares offered as part of the Rights Issue are validly subscribed for and allocated, a total of 78,887,887 exercisable Warrants will be issued as part of the Rights Issue. The maximum number of exercisable Warrants issued equals approx. 10% of the total outstanding shares in the Company following completion and settlement of the Rights Issue.
The Warrants may only be exercised from 1 April 2026 to 15 April 2026 (post-annual report 2025).
The Company shall use reasonable efforts to seek to ensure that the Warrants subscribed and allocated as part of the Rights Issue are admitted to trading on a relevant trading venue as soon as possible following completion of the Rights Issue, but there can be no assurance that such admittance to trading will be obtained.
The Warrants may be exercised at a strike price equal to the greater of (a) a 35% discount to the volume-weighted average price of the Company's shares on the last three trading days prior to the first date on which the warrant holders can exercise the Warrants, and (b) NOK 0.5130 (equal to the TERP in the Rights Issue).
No payment shall be made for the Warrants.
The Warrants are expected to have an economic value if the Company's shares trade above the strike price for the Warrants during the exercise period.
Any Warrants not exercised before 16:30 (CEST) on 15 April 2026 will have no value and will lapse without compensation to the holder.
Subscription Price for Offer Shares: NOK 0.3334 per Offer Share.
The Subscription Price equals the theoretical ex rights price for the Company’s shares (TERP) in the Rights Issue less a discount of 35% rounded down to four (4) decimal places.
The TERP was calculated by: (i) adding, (a) the total market value of the Company's Shares, as determined by the volume-weighted average price of the Company’s shares on Euronext Growth Oslo over the last three (3) trading days that ended at the date of the EGM (NOK 1.0828 per share in the Company), to (b) the aggregate Subscription Price for all Offer Shares (approx. NOK 200 million), and (ii) dividing the aggregate value in (i) with the total number of shares in the Company outstanding after the Rights Issue assuming all Offer Shares in the Rights Issue are issued (i.e. approx. NOK 200 million proceeds raised). The TERP in the Rights Issue ended up being approx. NOK 0.5130 per share in the Company.
Subscription Procedure:
Subscriptions for Offer Shares by Existing Shareholders and other eligible subscribers holding a VPS account must be made (i) by submitting a correctly completed subscription form, attached to the Prospectus as Appendix B (the "Subscription Form") to one of the Managers during the Subscription Period, or, may, (ii) for subscribers who are residents of Norway with a national identity number, be made online through the VPS online subscription system. Subscriptions by Existing Shareholders and other eligible subscribers who do not have a VPS account, but instead hold shares (and Subscription Rights) through a financial intermediary (i.e. broker, custodian, nominee, etc.) can be made by contacting their respective financial intermediary as further described in Section 5.12 "Financial intermediaries" in the Prospectus.
Correctly completed Subscription Forms must be received by one of the Managers at the address or e-mail address set out in the Prospectus, or in the case of online subscriptions through the VPS online subscription system be registered, no later than 16:30 (CEST) on 21 May 2025.
Subscribers who are residents of Norway with a Norwegian national identity number are encouraged to subscribe for Offer Shares through the VPS online subscription system (or by visiting the Managers' respective websites: www.paretosec.com/transactions or www.sb1markets.no/transaksjoner, which will include a link to the VPS online subscription system.
Selling and Transfer Restrictions
The grant or purchase of Subscription Rights and the subscription of Offer Shares and Warrants by persons resident in, or who are citizens of, countries other than Norway, may be affected by the laws of the relevant jurisdiction. Further, no Offer Shares, Subscription Rights or Warrants will be offered or sold within the United States, except in reliance on an exemption from the registration requirements of the U.S. Securities Act. For a further description of such restrictions, reference is made to the introductory part on page ii-iii and Section 13 "Selling and Transfer Restrictions" in the Prospectus.
The Underwriting:
A consortium comprising of certain primary insiders in the Company, Existing Shareholders and new investors (jointly, the "Underwriters") has, pursuant to, and subject to, the terms and conditions of the underwriting agreements entered into between each of the Underwriters, the Company and the Managers, underwritten in aggregate NOK 125 million of the Rights Issue (the "Total Underwriting Obligation"). The Underwriters are entitled to an underwriting commission of 12% of their respective underwriting obligations, which shall be settled by an equal split (50/50) between (i) cash payment (6%) and (ii) delivery of newly issued shares in the Company (6%), each issued at the Subscription Price. The Underwriters that are primary insiders have also pre-committed to subscribe for Offer Shares in the Rights Issue, in an amount equal to their respective underwriting commitment, totalling NOK 4.125 million. Any Offer Shares subscribed in the Rights Issue will reduce the underwriting commitment of the Underwriters but not pre-commitments to subscribe for Offer Shares from Existing Shareholders, as described below.
The Underwriters comprise of the following:
- Prozium AS (a company closely associated with the CTO of the Company, Christian Rustad) has underwritten and pre-committed to subscribe for Offer Shares in the amount of NOK 100,000
- Infigent AS (a company associated with CEO Ola Stene Johansen) has underwritten and pre-committed to subscribe for Offer Shares in the amount of NOK 3,000,000.
- Black Monday Holding AS, a company owned and controlled by the chairman of the board of directors of the Company, Yngve Bolstad Johansen, has underwritten and pre-committed to subscribe for Offer Shares in the amount of NOK 500,000.
- Ruben Gómez Morales, CEO of PowerPool SL, has underwritten and pre-committed to subscribe for Offer Shares in the amount of NOK 100,000. - Susheel Raj Nuguru, board member, has underwritten and pre-committed to subscribe for Offer Shares in the amount of NOK 50,000.
- Sator AS, a company owned and controlled by board member Henrik Danielsen, has underwritten and pre-committed to subscribe for Offer Shares in the amount of NOK 300,000.
- Wiktor Boguchwal Miesok, board member, has underwritten and pre-committed to subscribe for Offer Shares in the amount of NOK 50,000.
- Kjetil Westeng, board member, has underwritten and pre-committed to subscribe for Offer Shares in the amount of NOK 25,000.
- Bluefin Access Capital LLC, Fredrik Lundgren, Wilhelm Risberg, Anavio Capital Partners LLP, Norda ASA, Selandia Alpha Invest A/S, Songa Capital AS, Paul Zeino, Exelity AB, Nowo Global Fund, Delta Invest AS, Philip Ohlsson, Opulens Invest AS, AD94 Holding Aktiebolag, Consentia AB and Rickard Rönblom have in aggregate underwritten a total amount of NOK 120,875,000.
Allocation of Offer Shares:
Allocation of the Offer Shares will take place on or about 21 May 2025 in accordance with the following criteria: a) First, Offer Shares will be allocated in accordance with granted and acquired Subscription Rights to subscribers who have validly exercised Subscription Rights during the Subscription Period;
b) Second, any unallocated Offer Shares following the allocation under (a) above, shall be allocated to Underwriters who have subscribed for Offer Shares (limited upwards to such Underwriters' respective underwriting obligation). This allocation shall be made on a pro-rata basis based on such Underwriters' respective underwriting obligation (adjusted for any allocation to such Underwriters in (a)). The Existing Shareholders' subsidiary preferential right to subscribe Offer Shares that are not subscribed pursuant to exercise of the Subscription Rights pursuant to Section 10-4 (3) of the Norwegian Private Limited Liability Companies Act is, thus, waived, cf. Section 10-5 of the Norwegian Private Limited Liability Companies Act;
c) Third, any unallocated Offer Shares following the allocation under (b) above shall be allocated to subscribers who have over-subscribed on a pro-rata basis based on the number of Subscription Rights exercised by each subscriber;
d) Fourth, any unallocated Offer Shares following the allocation under (c) above shall be allocated to Underwriters who have subscribed for Offer Shares in excess of their respective underwriting obligation. This allocation shall be made on a pro-rata basis based on such Underwriters' over-subscription; and
e) Finally, if the gross proceeds from the allocated Offer Shares following the allocation under (d) above is less than the Total Underwriting Obligation the difference between the two shall be allocated to the Underwriters. This allocation shall be made on a pro-rata basis based on the Underwriters’ respective underwriting obligations (adjusted downwards with any allocation to the respective Underwriters in paragraph (a), (b) and (c)). If the gross proceeds from the allocated Offer Shares following the allocation under (d) above is equal to or more than the Total Underwriting Obligation, no allocations will be made pursuant to paragraph (e).
Allocation, Payment, Listing and Commencement of Trading in the Offer Shares:
Notification of allocation is expected to be made available for investors allocated Offer Shares on or about 22 May 2025. The payment date for investors allocated Offer Shares in the Rights Issue is expected to be on or about 26 May 2025.
Subject to timely payment in the Rights Issue, the Company expects that the share capital increase pertaining to the Rights Issue will be registered with the Norwegian Register of Business Enterprises on or about 2 June 2025 and that the Offer Shares will be delivered to the VPS accounts of the subscribers to whom they are allocated on or about 3 June 2025.
The Offer Shares are expected to be tradable on Euronext Growth Oslo from and including 3 June 2025.
The Warrants are expected to be registered with the Norwegian Register of Business Enterprises on or about 2 June 2025 and to be delivered to the VPS accounts of the subscribers to whom they are allocated on or about 3 June 2025.
Lock-Ups: The Company and the Company’s primary insiders and their close associates (as further described in the Prospectus) have all agreed to a 6-months lock-up from completion of the Rights Issue, subject to customary exemptions.
Financial Intermediaries:
If an Existing Shareholder holds shares in the Company registered through a financial intermediary on the Record Date, the financial intermediary will customarily give the Existing Shareholder details of the aggregate number of Subscription Rights to which it will be entitled. The relevant financial intermediary will customarily supply each Existing Shareholder with this information in accordance with its usual customer relations procedures. Existing Shareholders holding their shares in the Company through a financial intermediary should contact the financial intermediary if they have received no information with respect to the Rights Issue.
Subject to applicable law, Existing Shareholders holding shares through a financial intermediary may instruct the financial intermediary to sell some or all of their Subscription Rights, or to purchase additional Subscription Rights on their behalf. See Section 13 "Selling and transfer restrictions" in the Prospectus for a description of certain restrictions and prohibitions applicable to the sale and purchase of Subscription Rights in certain jurisdictions outside Norway.
Existing Shareholders who hold their shares through a financial intermediary and who are Ineligible Shareholders (as defined in the Prospectus) will not be entitled to exercise their Subscription Rights but may, subject to applicable law, instruct their financial intermediary to sell their Subscription Rights transferred to the financial intermediary. As described in Section 5.9 "Subscription Rights" of the Prospectus, neither the Company nor the Managers will sell any Subscription Rights transferred to financial intermediaries.
This information is subject to the disclosure requirements pursuant to the Continuing Obligations and the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
For more information, please contact: CEO, Ola-Stene Johansen, email osj@lokotech.no
IMPORTANT NOTICE:
These materials are not and do not form a part of any offer of securities for sale, or a solicitation of an offer to purchase, any securities of the Company in the United States or any other jurisdiction. Copies of these materials are not being made and may not be distributed or sent into any jurisdiction in which such distribution would be unlawful or would require registration or other measures.
The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and accordingly may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws. Any sale in the United States of the securities mentioned herein will be made solely to "qualified institutional buyers" (QIBs) as defined in Rule 144A under the Securities Act, pursuant to an exemption from the registration requirements under the Securities Act, as well as to major U.S. institutional investors under SEC Rule 15a-6 to the United States Exchange Act of 1934, as amended.
This communication contains certain forward-looking statements concerning future events, including possible issuance of equity securities of the Company. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "strategy", "intends", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this communication are based upon various assumptions, many of which are based, in turn, upon further assumptions. The Company believes that these assumptions were reasonable when made. However, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors include the possibility that the Company will determine not to, or be unable to, issue any debt, hybrid or equity securities, and 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 make any guarantee that the assumptions underlying the forward-looking statements in this announcement are free from errors. The information, opinions and forward-looking statements contained in this communication speak only as at its date and are subject to change without notice.
Each of the Company, the Managers and their respective affiliates disclaims any obligation or undertaking to update, review or revise any statement contained in this communication whether as a result of new information, future developments or otherwise. Neither the Managers nor any of its affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any liability arising from the use of this announcement or responsibility for the contents of this announcement or any matters referred to herein. This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities of the Company. Certain figures contained in this announcement, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this announcement may not conform exactly with the total figure given.
The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. Specifically, neither this announcement nor the information contained herein is for publication, distribution or release, in whole or in part, directly or indirectly, in or into or from the United States (including its territories and possessions, any state of the United States and the District of Columbia), Australia, Canada, Hong Kong, Japan or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction.