Fingerprint Cards AB (publ) resolves on an issue of convertible bonds and announces that the condition for early redemption of its bond loan 2021/2024 has been fulfilled
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The board of Fingerprint Cards AB (publ) (“Fingerprints” or the “Company”) has, based on an authorisation from the extraordinary general meeting held on 18 August 2023, resolved to issue convertible bonds with a nominal amount of MSEK 160 (“Tranche 1”) to an entity managed by Heights Capital Management, Inc. (“HCM”).
As previously announced in the press release on 16 July 2023, the Company has entered into an agreement (the “Agreement”) with HCM regarding an undertaking to subscribe for convertible bonds convertible into B-shares in the Company (the “Convertible Bonds”) in Tranche 1 with an option for the Company to issue additional Convertible Bonds up to a total nominal amount of MSEK 90 to HCM, that can be exercised under certain conditions and if the Company so wishes (“Tranche 2”). The net proceeds from Tranche 1 and the Company’s MSEK 181.8 rights issue of B-shares (the “Rights Issue”) will be used to finance the early redemption of the Company’s outstanding bond loan 2021/2024 (ISIN: SE0017071855) of MSEK 300 maturing in December 2024 (the “Existing Bonds”) as well as to finance general corporate purposes, including increased investments within the Company’s growth segment.
In connection to entering into the Agreement and resolving on the issue of the Convertible Bonds in accordance with the authorisation from the extraordinary general meeting held on 18 August 2023, the board of directors of the Company made the following considerations. A condition for being able to carry out the early redemption of the Existing Bonds within a desired timetable, was that the Company obtained sufficient funds to secure financing of the redemption proceeds within an acceptable time period. The Company carefully considered the option to raise the necessary funds to redeem the Existing Bonds through the issue of the Convertible Bonds to existing shareholders. However, the Company made the assessment that there would not be sufficient interest among such existing shareholders given the complexity of the Convertible Bonds. The issue of the Convertible Bonds also contributes to the improvement of the Company’s capital structure and risk level by providing for a more flexible financing solution. The issue of the Convertible Bonds also results in an investment by a strong and long-term investor which the Company believes will be a benefit to it in the long-term. With regard to the above, it is the board of directors’ overall assessment that the reasons clearly and with sufficient strength outweigh the reasons motivating the general principle that issues shall be carried out with preferential rights for existing shareholders, and that an issue of Convertible Bonds with deviation from the shareholders’ preferential rights is in the interest of the Company and all shareholders.
Each Convertible Bond has a nominal amount of SEK 500,000 and the Convertible Bonds are issued at a subscription price per Convertible Bond of 92 percent of the nominal amount, corresponding to SEK 460,000 per Convertible Bond. Since the subscription price was determined on an arm’s length basis in the negotiation of the Agreement with HCM, the board deems that the subscription price accurately reflects current market conditions and demand. The Convertible Bonds’ final maturity date is 3.5 years from 19 September 2023, to the extent that conversion has not taken place prior to that date and the Convertible Bonds bear interest at a rate of six (6) per cent per annum. For further information on the Convertible Bonds, please refer to the press release from 16 July 2023.
The early redemption of the Existing Bonds was conditional upon the successful settlement of Tranche 1 and the Rights Issue. This condition has now been fulfilled and the early redemption is therefore no longer conditional. The early redemption will occur on 28 September 2023 and the redemption amount will be paid to each person who is registered as owner of Existing Bonds in the debt register maintained by Euroclear Sweden at the end of business on 21 September 2023.
Carnegie Investment Bank AB (publ) acts as financial adviser. Gernandt & Danielsson Advokatbyrå KB is legal adviser to the Company.
Fingerprint Cards AB (Fingerprints) – the world’s leading biometrics company, with its roots in Sweden. We believe in a secure and seamless universe, where you are the key to everything. Our solutions are found in hundreds of millions of devices and applications, and are used billions of times every day, providing safe and convenient identification and authentication with a human touch. For more information visit our website, read our blog, and follow us on Twitter. Fingerprints is listed on Nasdaq Stockholm (FING B).
For information, please contact:
Adam Philpott, CEO
Per Sundqvist, CFO
+46(0)10-172 00 10
+46(0)10-172 00 20
The information was submitted for publication, through the agency of the contact persons set out above, on 19 September 2023 at 4:00 pm CEST.
This press release does not contain and does not constitute an offer to acquire, subscribe or otherwise trade in shares, subscription rights, BTAs, convertibles or other securities in Fingerprints. Invitation to the persons concerned to subscribe for shares in Fingerprints will only be made through a prospectus that Fingerprints will publish on its website after approval and registration with the Swedish Financial Supervisory Authority (Sw. Finansinspektionen).
The information in this press release may not be disclosed, published or distributed, directly or indirectly, in or into the United States (including its territories and possessions), Australia, Japan, Canada, Hong Kong, New Zealand, Singapore or South Africa or any other jurisdiction where distribution or publication would be illegal or require registration or other measures than those that follow from Swedish law. Actions that violate these restrictions may constitute a violation of applicable securities laws.
No shares, subscription rights, BTAs, convertibles or other securities have been registered, and no shares, subscription rights, BTAs, convertibles or other securities will be registered under the United States Securities Act of 1933 as amended (“Securities Act”) or the securities legislation of any state or other jurisdiction of the United States and no shares, subscription rights, BTAs, convertibles or other securities may be offered, sold, or otherwise transferred, directly or indirectly, within or into the United States, 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.
In any Member State of the European Economic Area (“EEA”), other than Sweden, Denmark, Finland and Norway, this press release is intended for and is directed only to qualified investors in the relevant Member State as defined in the Regulation (EU) 2017/1129 (together with associated delegated regulations and implementing regulations, the “Prospectus Regulation”), i.e. only to those investors who can receive the offer without an approved prospectus in such EEA Member State.
In the United Kingdom, this press release is only being directed and communicated to persons who are qualified investors as defined in Article 2(e) of the Prospectus Regulation (as incorporated into domestic law in the United Kingdom) who are (i) persons who fall within the definition of “professional investors” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (“the Regulation”), or (ii) persons covered by Article 49(2)(a) - (d) in the Regulation, or (iii) persons to whom the information may otherwise lawfully be communicated (all such persons referred to in (i), (ii) and (iii) above are collectively referred to as “Relevant Persons”). Securities in the Company are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will only be processed in respect of Relevant Persons. Persons who are not Relevant Persons should not act based on or rely on the information contained in this press release.
Matters discussed in this press release may contain forward-looking statements. Such statements are all statements that are not historical facts and contain expressions such as “believes”, “expects”, “anticipates”, “intends”, “estimates”, “will”, “may”, “continues”, “should” and other similar expressions. The forward-looking statements in this press release are based on various assumptions, which in several cases are based on additional assumptions. Although Fingerprints believes these assumptions were reasonable when made, such forward-looking statements are subject to known and unknown risks, uncertainties, contingencies and other material factors that are difficult or impossible to predict and beyond its control. Such risks, uncertainties, contingencies and material factors could cause actual results to differ materially from those expressed or implied in this communication through the forward-looking statements. The information, perceptions and forward-looking statements contained in press release speak only as at its date, and are subject to change without notice.