Crunchfish carries out a rights issue of units of approximately SEK 57 million

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES OF AMERICA, AUSTRALIA, BELARUS, CANADA, HONG KONG, JAPAN, NEW ZEALAND, RUSSIA, SINGAPORE, SOUTH AFRICA, SOUTH KOREA, SWITZERLAND OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, DISTRIBUTION OR PUBLICATION WOULD BE UNLAWFUL OR REQUIRE REGISTRATION OR ANY OTHER MEASURE.  

The Rights Issue in brief

• The Rights Issue comprises a maximum of 19,823,453 Units where each Unit consists of two (2) newly issued shares, one (1) warrant series TO 10 and one (1) warrant series TO 11.
• The subscription price is 2.90 per Unit, corresponding to SEK 1.45 per share. Warrants of series TO 10 and TO 11 are issued free of charge.
• One (1) existing share in Crunchfish entitles to (1) unit right. Two (2) unit rights entitle to subscription of one (1) Unit.
• The subscription period for subscription of Units runs from and including November 6, 2024, to and including November 20, 2024.
• The record date for participation in the Rights Issue is November 4, 2024.
• The Rights Issue will, upon full subscription, provide the Company with approximately SEK 57 million before deduction of issue costs.
• In February and May 2025, the Company may receive additional proceeds if the warrants series TO 10 and TO 11, respectively, issued in the Rights Issue, are exercised for subscription of shares.
• The Company has received subscription commitments from existing shareholders, including the Company's second largest shareholder Corespring Invest AB ("Corespring"), of approximately SEK 5.5 million, corresponding to approximately 10 percent of the Rights Issue. The subscription commitment from Corespring is to be fulfilled through set-off against the outstanding capital amount of the loan disbursed by Corespring to the Company in September 2024. In addition, external investors have undertaken to guarantee in the aggregate approximately SEK 20.4 million, corresponding to approximately 35 percent of the Rights Issue. The Rights Issue is thus covered by subscription commitments and guarantee commitments of approximately SEK 26 million, corresponding to approximately 45 percent of the Rights Issue.
• For guarantee commitments, the guarantors will receive cash payment of 15 percent of the guaranteed amount or alternatively 17 percent of the guaranteed amount in the form of newly issued Units in the Company, at the same terms as Units issued in the Rights Issue. No compensation is paid for the subscription commitments.
• The Company intends to publish a prospectus regarding the Rights Issue around November 1, 2024 (the "Prospectus").

Background and reason for the Rights Issue

Crunchfish develops an offline payment solution for banks, payment services and Central Bank Digital Currencies (CBDC). The Company has also been active in gesture interaction for AR/VR and the automotive industry, but in order to focus the business toward offline payments, the Company has initiated a process of divesting the gesture interaction unit. Crunchfish has been listed on Nasdaq First North since 2016, with headquarters in Malmö, Sweden and with a subsidiary in India.

Crunchfish is a pioneer in offline payments. The technology that Crunchfish has been developing since 2020 enables secure offline payments with mobile phones, regardless of which mobile the user has. The solution is patented, has been pilot tested in India by leading banks and is approved by the Reserve Bank of India (RBI) for rollout since December 2023.

At the end of June 2023, Crunchfish entered into its first commercial agreement regarding the Company's Digital Cash solution with IDFC FIRST Bank in India. The solution has initially been implemented by IDFC FIRST Bank as part of a CBDC pilot project in India and was showcased during the Global Fintech Fest (GFF) at RBI's stand at the end of August 2024. The next step is for the solution to be implemented for more users at IDFC First Bank as well as for other Indian banks participating in the pilot project.

Crunchfish is in active dialogue with the National Payments Corporation of India (NPCI) on offline payments as Crunchfish Digital Cash complements NPCI's existing offline payment solution with a patented, more versatile and more secure solution. In June 2024, Crunchfish has also entered into a partnership for CBDC solutions with the Indian company TCS, the world's largest IT company.

The process to enter into larger commercial agreements in India has taken longer time than Crunchfish expected. The Board therefore makes the assessment that existing working capital is not sufficient for the Company's business plan during the next twelve months. Crunchfish needs new working capital to be able to continue its market development in India, within the CBDC as well as in other regions via partners where offline payment is prioritized such as Southeast Asia, Africa and Latin America. In order to meet the Company's working capital needs and to execute Crunchfish Digital Cash's market potential by accelerating ongoing integration projects, and thereby focus on building long-term shareholder value, the Board has resolved to carry out the Rights Issue.

Use of proceeds

Upon full subscription of the Rights Issue, the Company receives net proceeds of approximately SEK 45.6 million after deduction of issue costs of approximately SEK 6.9 million and after set-off of the loan from Corespring entered in September 2024 of SEK 5.0 million. The net proceeds are intended to be used for the following purposes in order of priority:

• Approximately 50 percent will be used for marketing and sales.
• Approximately 50 percent will be used for product development.

If all warrants series TO 10 and TO 11 issued in the Rights Issue are exercised for subscription of shares, the Company will receive additional net proceeds of up to approximately SEK 36.2 million, based on a maximum subscription price of SEK 1.88 and after deduction of issue costs of approximately SEK 1.1 million as regards TO 10, and up to approximately SEK 41.8 million, based on a maximum subscription price of SEK 2.17 and after deduction of issue costs of approximately SEK 1.3 million as regards TO 11. The net proceeds received are intended to be used as working capital.

Terms and conditions for the Rights Issue

The Board of the Company has resolved, subject to a subsequent approval at the EGM, to carry out the Rights Issue in accordance with the following main terms:

• Those who are registered as shareholders in Crunchfish on the record date on November 4, 2024, have a preferential right to subscribe for Units in the Company in relation to the existing shareholding in the Company. Shareholders in the Company receive one (1) unit right for each one (1) share held on the record date.
• Two (2) unit rights entitle to subscription of one (1) Unit in the Company. Each Unit consists of two (2) newly issued shares, one (1) warrant series TO 10 and one (1) warrant series TO 11.
• The Rights Issue comprise a maximum of 19,823,453 Units. The Rights Issue thus entails an issue of a maximum of 39,646,906 shares, a maximum of 19,823,453 warrants series TO 10 and a maximum of 19,823,453 warrants series TO 11.
• The subscription price is SEK 2.90 per Unit, which corresponds to a subscription price of SEK 1.45 per share. The warrants are issued free of charge.
• The subscription period for subscription of Units runs from and including November 6, 2024, to and including November 20, 2024.
• Upon full subscription in the Rights Issue, the Company receives initial issue proceeds of approximately SEK 57 million before issue costs and excluding the additional capital contribution that may be added when exercising the warrants.
• If not all Units are subscribed with the support of unit rights, the allocation of the remaining Units within the framework of the Rights Issue's maximum amount shall take place: primarily to those who have subscribed for Units with the support of unit rights (regardless of whether they were shareholders on the record date or not) and who have registered an interest in subscription of Units without the support of unit rights and in the event that allocation to these cannot take place in full, allocation must be made pro rata in relation to the number of unit rights that each of those who have declared an interest in subscribing to Units without the support of unit rights used for subscription of Units; secondarily to others who subscribed for Units in the Rights Issue without the support of unit rights and in the event that allocation to these cannot take place in full, allocation must be made pro rata in relation to the total number of Units for which the subscriber has registered for subscription; and thirdly to those who have submitted guarantee commitments regarding the subscription of Units, in proportion to such guarantee commitments. To the extent that allocation in any stage according to above cannot be done pro rata, allocation shall occur by drawing lots.
• Subscription of Units shall take place during the period from and including November 6, 2024, up to and including November 20, 2024. Trading in unit rights takes place on Nasdaq First North during the period from and including November 6, 2024, up to and including November 15, 2024. Trading in Paid Subscribed Units (Sw. Betalda tecknade units, "BTU") is expected to take place during the period from and including November 6, 2024, up to and including December 6, 2024.

Terms and conditions for warrants series TO 10 and TO 11

• One (1) warrant of series TO 10 entitle the right to subscribe for one (1) new share in the Company, during the period from and including 14 February, 2025 to and including 28 February, 2025 against cash payment where the subscription price is set at 70 percent of the volume-weighted average price for the Company's share on Nasdaq First North during the period from and including 28 January, 2025 to and including 10 February, 2025, however, not more than SEK 1.88 and not less than the quota value of SEK 0.046.
• One (1) warrant of series TO 11 entitle the right to subscribe for one (1) new share in the Company, during the period from and including 16 May, 2025 to and including 30 May, 2025 against cash payment where the subscription price is set at 70 percent of the volume-weighted average price for the Company's share on Nasdaq First North during the period from and including 29 April, 2025 to and including 12 May, 2025, however, not more than SEK 2.17 and not less than the quota value of SEK 0.046.
• The warrants are intended to be admitted to trading on Nasdaq First North after final registration of the Rights Issue with the Swedish Companies Registration Office.

Changes in shares, share capital, and dilution

• Through the Rights Issue, the number of shares in Crunchfish will initially increase by a maximum of 39,646,906 shares, from 39,646,906 shares to 79,293,812 shares, and the share capital will increase by a maximum of SEK 1,823,757.676, from SEK 1,823,757.676 to SEK 3,647,515.352. Upon full subscription, the Rights Issue entails a dilution of 50 percent for the shareholders who do not participate in the Rights Issue.
• In the event all warrants series TO 10 are fully exercised to subscribe for new shares in the Company, the number of shares will increase by an additional 19,823,453 shares to a total of 99,117,265 shares and the share capital will increase by an additional SEK 911,878.838 to SEK 4,559,394.190. This entails an additional dilution from the warrants of 20 percent.
• In the event all warrants series TO 11 are fully exercised to subscribe for new shares in the Company, the number of shares will increase by an additional 19,823,453 shares to a total of 118,940,718 shares and the share capital will increase by an additional SEK 911,878.838 to SEK 5,471,273.028. This entails an additional dilution from the warrants of approximately 16.7 percent.
• Upon a fully subscribed Rights Issue and full exercise of the warrants, the total dilution can amount to a maximum of approximately 66.7 percent.

Subscription and guarantee commitments

The Company has received subscription commitments from existing shareholders, including the Company's second largest shareholder Corespring, of approximately SEK 5.5 million, corresponding to approximately 10 percent of the Rights Issue. The subscription commitment from Corespring is to be fulfilled through set-off against the outstanding capital amount of the loan disbursed by Corespring to the Company in September 2024. No compensation is paid for the subscription commitments. In addition, external investors have undertaken to guarantee in the aggregate approximately SEK 20.4 million, corresponding to approximately 35 percent of the Rights Issue. The Rights Issue is thus covered by subscription commitments and guarantee commitments of approximately SEK 26 million, corresponding to approximately 45 percent of the issue proceeds. For guarantee commitments, the guarantors will receive cash payment of 15 percent of the guaranteed amount or alternatively 17 percent of the guaranteed amount in the form of newly issued Units in the Company, at the same terms as Units issued in the Rights Issue. Neither the subscription nor the guarantee commitments are secured by bank guarantee, blocked funds, pledge or similar arrangements.

In order to enable the issue of Units as guarantee compensation to the guarantors who choose to receive guarantee compensation in the form of newly issued Units, the Board has proposed that the EGM, which is proposed to resolve on approval of the Rights Issue, also resolves to authorize the Board to resolve on the issue of such Units to guarantors.

Share transfer restrictions

In connection with the Rights Issue, the major shareholders Joachim Samuelsson, who is also CEO and board member of the Company, and Corespring, have undertaken not to, directly or indirectly, transfer any shares or unit rights in the Company through transactions on Nasdaq First North Growth Market. The restrictions apply until the date falling 6 months after the last day of the subscription period in the Rights Issue and do not prevent transactions outside of Nasdaq First North Growth Market.

Preliminary timetable for the Rights Issue

October 24, EGM.
2024
October 31, Last day of trading in the share with the
2024 right to participate in the Rights Issue.
November 1, First day of trading in the share without
2024 the right to participate in the Rights
Issue.
November 1, Publication of the Prospectus.
2024
November 4, Record date for participation in the Rights
2024 Issue.
November 6 - Subscription period.
November 20,
2024
November 6 - Trading in unit rights on Nasdaq First
November 15, North.
2024
November 6 - Trading in BTU.
December 6,
2024
November 22, Estimated date for publication of the
2024 outcome of the Rights Issue.

EGM

The Board's resolution on the Rights Issue is subject to approval by the EGM. The resolution on the Rights Issue requires and is conditional on the limits for share capital and the number of shares in the Articles of Association being changed in accordance with the Board's proposal to the EGM. Notice to the EGM will be announced in a separate press release.

New date for publication of the Q3 report

Due to the Rights Issue, the Company has decided to expedite the publication of the interim report for the third quarter of 2024 from November 13, 2024, to November 1, 2024.

The Prospectus

Complete terms and conditions for the Rights Issue and other information about the Company will be included in the Prospectus.

Advisors

Västra Hamnen Corporate Finance AB is financial advisor and Setterwalls Advokatbyrå AB is legal advisor to Crunchfish in connection with the Rights Issue. Nordic Issuing AB acts as issuer agent in connection with the Rights Issue.

For more information, please contact:

Joachim Samuelsson, CEO of Crunchfish AB

+46708 46 47 88

joachim.samuelsson@crunchfish.com

This information is such information as Crunchfish AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 19.35 CEST on September 20, 2024.

Västra Hamnen Corporate Finance AB is the Certified Adviser. Email: ca@vhcorp.se.Telephone +46 40 200250.

About Crunchfish -crunchfish.com (https://www.crunchfish.com)

Crunchfish is a deep tech company developing a Digital Cash platform for Banks, Payment Services and CBDC implementations and Gesture Interaction technology for AR/VR, e-commerce, and the automotive industry. Crunchfish is listed on Nasdaq First North Growth Market since 2016, with headquarters in Malmö, Sweden, and a subsidiary in India.

Important information

The information in this press release does not contain or constitute an offer to acquire, subscribe or otherwise trade in shares or other securities in Crunchfish. No action has been taken and measures will not be taken to permit a public offering in any jurisdictions other than Sweden. Any invitation to the persons concerned to subscribe for shares in Crunchfish will only be made through the Prospectus that Crunchfish estimates to publish on 1 November 2024 on Crunchfish's website, www.crunchfish.com. The upcoming approval of the Prospectus by the Swedish Financial Supervisory Authority shall not be regarded as an approval of the shares or any other securities. This release is however not a prospectus in accordance with the definition in the Prospectus Regulation (EU) 2017/1129 ("Prospectus Regulation") and 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 shares or other securities in Crunchfish. In order for investors to fully understand the potential risks and benefits associated with a decision to participate in the Rights Issue, any investment decision should only be made based on the information in the Prospectus. Thus, investors are encouraged to review the Prospectus in its entirety. In accordance with article 2 k of the Prospectus Regulation this press release constitutes an advertisement.

The information in this press release may not be released, distributed or published, directly or indirectly, in or into the United States of America, Australia, Belarus, Canada, Hong Kong, Japan, New Zealand, Russia, Singapore, South Africa, South Korea, Switzerland or any other jurisdiction in which such action would be unlawful or would require registration or any other measures than those required by Swedish law. Actions in violation of these restrictions may constitute a violation of applicable securities laws. No shares or other securities in Crunchfish have been registered, and no shares or other securities will be registered, under the United States Securities Act of 1933, as amended (the "Securities Act") or the securities legislation of any state or other jurisdiction in the United States of America and no shares or other securities may be offered, sold or otherwise transferred, directly or indirectly, in or into the United States of America, except under an available exemption from, or in a transaction not subject to, the registration requirements under the Securities Act and in compliance with the securities legislation in the relevant state or any other jurisdiction of the United States of America.

Within the European Economic Area ("EEA"), no public offering of shares or other securities ("Securities") is made in other countries than Sweden. In other member states of the EU, such an offering of Securities may only be made in accordance with an applicable exemption in the Prospectus Regulation. In other member states of the EEA which have implemented the Prospectus Regulation in its national legislation, any offer of Securities may only be made in accordance with an applicable exemption in the Prospectus Regulation and/or in accordance with an applicable exemption under a relevant national implementation measure. In other member states of the EEA which have not implemented the Prospectus Regulation in its national legislation, any offer of Securities may only be made in accordance with an applicable exemption under national law.

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 (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 press release may contain forward-looking statements which reflect the Company's current view on future events and financial and operational development. Words such as "intend", "expect", "anticipate", "may", "believe", "plan", "estimate" and other expressions which imply indications or predictions of future development or trends, and which are not based on historical facts, are intended to identify forward-looking statements. Forward-looking statements inherently involve both known and unknown risks and uncertainties as they depend on future events and circumstances. Forward-looking statements do not guarantee future results or development, and the actual outcome could differ materially from the forward-looking statements.