MAGNASENSE AB EXTENDS THE PAYMENT PERIOD FOR BUSINESS-CRITICAL SUPPLIER INVOICES TOTALLING USD 970,000 AND DECIDES ON A DIRECTED ISSUE

OF 9,500,000 WARRANTS TO ITS LARGEST SUPPLIER, FREE-OF-CHARGE, TO BE APPROVED BY AN EXTRAORDINARY GENERAL MEETING.

Magnasense AB (“Magnasense” or the “Company”) today announces that the Company has reached an agreement with two creditors, including the Company’s largest supplier Digital Health Solutions, LLC (“Digital Health Solutions”), to extend the payment period for several business critical supplier invoices. The invoices from Digital Health Solutions total USD 900,000 and are payable as follows: USD 100,000 in August 2024, USD 350,000 in September 2024 and USD 450,000 in January 2025. The invoice from the other creditor, Q Biotech Corp., is for USD 70,000 and is payable after the extension in August to November 2024. In the short term, this means increased financial flexibility for the Company, which is expected to favour the development of the Company’s grant-funded RADx® project. As part of the agreement, the board of directors of Magnasense has today, subject to subsequent approval by an extraordinary general meeting (the “Extraordinary General Meeting”), resolved to carry out a directed issue of a maximum of 9,500,000 warrants of series 2024/2025 (the “Warrants”) to Digital Health Solutions (the “Directed Issue”). The Warrants are issued free-of-charge. The purpose of the Directed Issue and the reason for the deviation from the shareholders’ preferential rights is to enable the extension of the payment period for business-critical supplier invoices issued by Digital Health Solutions related to the Company's grant-funded RADx® project under the auspices of the National Institutes of Health (“NIH”) and to open up the opportunity for a broadened shareholder base with an international supplier of strategic importance. Continued successful execution of the Company’s RADx® project will position the Company for potential additional grants from the NIH. Notice of the Extraordinary General Meeting regarding the Directed Issue will be announced through a separate press release.

“Digital Health Solutions is a Boston based medical product development company, helping client companies world wide commercialize their solutions with FDA and other regulatory clearances. We have been partnered with Magnasense for nearly a year helping to improve their technology and achieve the key objectives under the ongoing RADx program. Our companies share enthusiasm in the potential of Magnasense technology and its versatile application for in-office and at-home healthcare. I look forward to the next chapter in our partnership by exploring the possibility of taking an equity position in Magnasense.” says Navin Dewagan, CEO of Digital Health Solutions.

“As the CEO of Magnasense, I am proud of our ongoing partnership with Digital Health Solutions. Their expertise has been instrumental in advancing our innovative technology through the RADx programme. We share a common vision of revolutionising healthcare, and as we explore this exciting new phase of collaboration, including the possibility of an equity partnership, we are confident that together, we will bring transformative solutions to healthcare both in-office and at-home.” says Marco Witteveen, CEO of Magnasense.

Conditions of the agreements
The Company has today decided to enter into an agreement with Digital Health Solutions to extend the payment period for business critical supplier invoices. The invoices from Digital Health Solutions amounts to USD 900,000 in total and will after the agreement be paid as follows: USD 100,000 in August 2024, USD 350,000 in September 2024 and USD 450,000 in January 2025. The compensation to Digital Health Solutions consists of free-of-charge warrants that can be exercised for subscription of new shares in the Company. Furthermore, the Company has entered into an agreement with Q Biotech Corp. to extend the payment period on its invoice of USD 70,000 to be paid during August to November 2024.

Conditions of the Warrants
The board of directors has today, subject to subsequent approval by the Extraordinary General Meeting, resolved on a directed issue of Warrants to Digital Health Solutions. One (1) Warrant entitles the holder to subscribe for one (1) new share in the Company at a subscription price of SEK 0.50, corresponding to a premium of approximately 65 per cent compared to the closing price of the Company’s share on Nasdaq First North Growth Market on 23 August 2024. The subscription period takes place during the period from 17 January 2025 up to and including 30 September 2025. The Warrants are issued free of charge and are not intended to be admitted to trading. All Warrants shall be exercised on a single occasion if the Warrant holder chooses to exercise Warrants for subscription of new shares during the subscription period. A total of 9,500,000 Warrants may be issued in connection with the Directed Issue.

DHS has subscribed for all warrants in the Directed Issue. However, the Directed Issue is conditional upon an extraordinary general meeting of the Company approving the Directed Issue.

The Warrants can provide the Company with a maximum of SEK 4,750,000 before transaction costs in the event that all Warrants are exercised for subscription of new shares in the Company.

The issuance of the Warrants to Digital Health Solutions has been decided in accordance with the agreement regulating the extension of the payment period and constitutes compensation for the extension. The Warrants to Digital Health Solutions are issued free of charge and enable an additional capital contribution to the Company.

Considerations of the board of directors
The Company’s board of directors has, together with its financial advisor, carefully analysed the conditions for a rights issue to raise the necessary capital. The board of directors’ assessment is that the Company, especially taking into account the Company’s existing capital structure, cannot fulfil its capital requirements through a rights issue. The board of directors, together with financial advisors, has assessed that a rights issue would require significant guarantee commitments from a guarantee consortium, which the Company has not been able to obtain.

The purpose of the Directed Issue and the reason for the deviation from the shareholders’ preferential rights is to enable the extension of the payment period for business-critical supplier invoices issued by Digital Health Solutions linked to the Company’s grant-funded RADx® project under the auspices of NIH and to open up the possibility of a broader shareholder base with an international supplier of strategic importance.

The board’s overall assessment is that the reasons for entering into the agreement and carrying out a directed issue of warrants outweigh the reasons that justify the main rule of issuing shares with preferential rights for existing shareholders, and that the Directed Issue is in the interests of the Company and all shareholders.

The subscription price and the other terms and conditions of the Warrants and the issue have been determined through arm’s length negotiations between the Company and Digital Health Solutions. In this connection, the Company has taken into account the prevailing market conditions for raising capital, whereby the terms and conditions are deemed to be market-based.

Shares and share capital
Upon full exercise of the Warrants, the Company’s share capital will increase by a maximum of SEK 133,000.00 to SEK 723,350.712. The number of shares and votes in the Company may increase by a maximum of 9,500,000 to 51,667,908. Upon full exercise, the Warrants will result in a dilution of approximately 18.39 per cent for existing shareholders in relation to the total number of outstanding shares and votes in the Company.

For additional information, please contact:
Marco Witteveen, CEO
Email: ir@magnasense.com
The Company’s Certified Adviser is Eminova Fondkommission AB | adviser@eminova.se

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