SERSTECH AB: Serstech adapt the strategy and implements rights issue of approximately SEK 24.6 million



Serstech AB (publ) (“Serstech” or the “Company”), listed on Nasdaq First North, today announces that the board of directors conducted a strategic review of the business. The strategy work has resulted in the Company, which so far has mainly used its own sales organization, the future will only process the end-customers outside of Sweden by distributors.

The board of directors of the Serstech has with the background of the strategic adjustment, decided, subject to shareholder approval, carry out a fully guaranteed rights issue of approximately SEK 24.6 million, before issue costs.

Brief information on the rights issue

The board of directors of the Serstech decided on 6 december 2017, subject to shareholder approval, to implement a preferential rights issue of shares (the”rights issue”). Through the rights issue are added to Serstech approximately 24.6 million sek before issue costs. Two existing shares entitle the holder to subscribe for one new share in the rights issue. The subscription price per share amounted to sek 1.15. The record date for the right to participate in the rights issue is 11 January 2018, and the subscription period runs during the period 15 January – 30 January 2018.

Motives for strategianpassningen and rights issue

Historically, Serstech mainly processed the customers through its own sales organization or less säljpartners, in Sweden as well as globally. The board’s assessment is that the time to profitable volymorders has been a long and resource-intensive for a small business that Serstech. When the Company received its biggest order so far of SEK 67 million in June 2016, was this made through a distributor with the industry knowledge and a recognised relationship with end-user customers in their geographic market. The board of directors has decided to continue on that path and continue to only sell through distributors outside Sweden’s borders. Distributors will therefore manage contracts, agreements and säljbearbetning. In many cases, they have established framework agreements with customers or alternatively your own reseller. Distributors will either offer their end customers Serstechs solution along with other products in a complete solution, or as an OEM-license under its own brand to providers of broader customer solutions in areas such as process automation, laboratorielösningar and robotics. The change means that the Serstech can process more customer segments and do not need to limit themselves to explosives. Further it is expected the Company’s database of substances and substances to grow as the solution is used in several segments, which makes the Company’s offer stronger. The company has received inquiries from distributors and discussions have been initiated with a number of potential partners.

The alignment of the strategy will mean that the Company needs to:

  • Concentrate, recruit and develop the skills in sales to global distributors in different customer segments.

  • Establish, renew or terminate the partnerships/agreements in line with the new strategy.

  • Concentrate the marketing to the value-adding distributors and their needs as well as offer any aid under the direct sales efforts, for example in procurement.

The board’s assessment is that the existing working capital is not sufficient to implement these changes. Through the rights issue supplied the Company with approximately SEK 24.6 million, before expenses. Of the issue proceeds will be SEK 5 million will be used to repay the short term loan raised in October 2017. Below, the use of the remaining proceeds of the issue, without priority:

  • 70 per cent for the adaptation of the strategy (marketing, legal costs, sales support)

  • 30% in order to meet the Company’s other working capital needs

The company’s financial objective is continued, by the end of 2019, on rolling a twelve-month basis, achieving a turnover in excess of 150 MILLION.

Thomas Pileby, t f the CEO of Serstech comments:

In 2017 have a lot of time and resources spent on processing customers in Sweden and especially abroad. After analyzing the outcome from these activities, it is clear that the major partners with complementary products results in better outcomes both in terms of resource consumption and the achieved volume. We have also started to get spontaneous requests for cooperation from several potential partners who would like to discuss OEM manufacturing or licensing of our products. By Chemdash we can put together an offer for the larger players, which is why it naturally follows, that the focus on this type of distributors. In this way, we take a step back in the value chain and focus our resources against major distributors.

In connection with the strategic alignment is carried out a rights issue that is expected to provide us with the resources needed to evaluate and slutförhandla with new distributors. In addition, we get the financial resources to cope with the relatively long lead times of these processes have combined with the fact that we receive several application areas to work towards. This will lift the Serstech to a whole new position on the market.

Terms and conditions of the rights issue and indicative timetable:

· Two existing shares entitle the holder to subscribe for one new share.

· The subscription price amounts to sek 1.15 per share.

· A total of not more than 21 373 102 new shares be issued in the rights issue, corresponding to a dilution of approximately 33.3% for those shareholders who choose not to participate in the rights issue. At fullteckning increase the share capital by 2 404 473,975 crowns.

· The record date for the right to participate in the rights issue is 11 January 2018.

· Last day for trading in the Serstech share with the right to participate in the rights issue is January 9, 2018.

· The subscription period runs January 15 to January 30, 2018.

· Trading in subscription rights is in progress, January 15 to January 26, 2018.

· Trading with the paid subscribed shares will run from January 15, 2018 until the rights issue has been registered with the Swedish companies registration office.

· Information memorandum will be published in conjunction with the subscription period begins.

· The rights issue is subject to 100 % of the underwriting.

· Subscription in the rights issue can also happen without the support of preferential rights in accordance with what is stated by the full issue.

Notice of extraordinary general meeting

An extraordinary general meeting for decision including the approval of the board of directors ‘ decision on the rights issue in accordance with the above will be held on 8 January 2018 13: 00 at Ideon Gateway in Lund. Notice of the extraordinary general meeting will be published through a separate press release shortly.

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The company has obtained guarantee commitments from major investors about a total of about 24.6 million dollars. The rights issue is covered in its entirety by the warranty.

Information memorandum

The company will publish an information memorandum in connection with the rights issue. In this can be found further information about the guarantee etc The full memorandum will be available on the Company’s website (www.serstech.com), Västra Hamnen Corporate Finance website (www.vhcorp.se) and Aktieinvests website (www.aktieinvest.se before the close of the subscription the beginning.

Financial calendar

On the basis of the work with the rights issue, adjust the Company financial calendar which Serstechs year-end report published on 28 February 2018 and not, as previously announced on 23 February 2018.

Project manager and legal advisor

Västra Hamnen Corporate Finance is the project manager and Advokatfirman Vinge is the legal advisor for the Serstech in connection with the rights issue.

For further information, please contact:

This information is such information Serstech AB (Publ) is obliged to publish under the EU marknadsmissbruksförordning. The information was submitted, by the above contact person in the government, for publication at 08.30 on 7 december 2017.

If Serstech AB

Serstech create awareness of chemicals by combining measurement data from a handheld raman spectrometer, Serstech Indicator, with a safe solution, ChemDash. The user-friendly solution identifies, manages, and analyzes the chemicals that can affect the security of the society – chemicals are e.g. explosives, explosives, and drugs. Distributors and partners are scattered around the world. Serstechs headquarters is located in Lund, all production takes place in Sweden. Serstech is listed on Nasdaq First North. Certified adviser to the Serstech is Västra Hamnen Corporate Finance AB Read more: www.serstech.com.

Important information

The information in this press release does not constitute an offer to acquire, subscribe for or otherwise trade in shares, subscription rights or other securities of the Serstech. The invitation to the persons concerned to subscribe for shares in the Serstech will only be through the memorandum that the Company will publish in connection with the close of the subscription the beginning.

This press release may not be published or distributed, whether directly or indirectly, in or into the united states, Canada, Japan, Australia, Hong kong, New Zealand, Singapore, south Africa or any other jurisdiction where such action is wholly or partially subject to legal restrictions, or would require additional prospectuses, registration or other measures than what follows from Swedish law. The information in this press release may not be forwarded or reproduced in a manner that contravenes such restrictions or would entail such requirements. Action in violation of this instruction may constitute a violation of applicable securities laws.

No subscription rights, paid subscribed shares or the shares have been registered, or will be, registered under the U.s. Securities Act of 1933, as amended, (the”Securities Act”) nor under any corresponding law in any other jurisdiction in the united states and may not be offered or sold, directly or indirectly, in or into the united states, except in accordance with an applicable exemption from, or transaction not subject to, the registration requirements of the Securities Act and in accordance with securities laws in relevant state or other jurisdiction in the united states.

The company has not authorized any offer to the public in respect of the securities referred to in this press release in any other country within the european economic area (“EEA”) other than Sweden. In other member states of the EEA, therefore, can the securities be offered only to (i) a qualified investor as defined in the directive of the european Parliament and of the council direct 2003/71/EC (the”Prospectus directive”) or (ii) any one falling under article 3(2) of the Prospectus directive.

This press release may contain certain forward-looking information that reflects the Serstechs current views with respect to future events and financial and operational development. Words such as “intends”, “anticipates”, “expects”, “may”, “plan”, “estimate” and other expressions which imply indications or predictions regarding future development or trends, and that is not based on historical facts, constitute forward-looking information. Forward-looking information is inherently associated with both known and unknown risks and uncertainties because it is dependent on future events and circumstances. Forward-looking information does not constitute any guarantee of future results or development and actual results may materially differ from what is pronounced in the forward-looking information. This information, opinions and forward-looking statements contained in this press release apply only at this date and are subject to change without notice.

This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.

The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: SERSTECH AB via Globenewswire



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