Q&A – Directed share issue September 15, 2020

On September 15 2020, Brighter announced a share issue of SEK 21 million directed to Unwrap Finance Nordic AB. Read the full press release here. Below is a Q&A based on received questions. Should you have any additional questions not answered in this Q&A, please contact ir@brighter.se

Details in short:
Subscription price: SEK ~2.84
Share price at the day of the announcement: SEK ~2.91
Discount: ~2.3% compared with the day of announcement, 10% compared with the vwap of the share during the period August 3 to September 11.

Is this the way transactions are going to be done to cover routine operation?
Yes, this transaction represents the primary option that Brighter currently has decided on to finance its routine operations. We have other types of transactions available to us as well, similar to this one, and we are continuously evaluating what type of transaction that is most efficient for the company as well as its shareholders at any given time. 

Further to that the Board and Leadership team are working on and evaluating additional financing options to secure the funds and resources needed to pursue the ambitious expansion strategy. E.g. Directed share issues to institutions, family offices and other professional investors, and financial agreements/prepayments from large customers/distributors.

Is Unwrap Finance Nordic to be regarded as a long-term investor?
Unwrap Finance Nordic is a financial investor with whom Brighter has a long and solid relationship, but is not to be regarded as an institutional investor in that sense.

Why did you not have a lock-in clause for this transaction?
A lock-in clause is not standard when it comes to directed issues. The discount in this transaction is standard. Addition of nonstandard clauses for such a transaction would have come at a cost of a significantly higher discount. 

What differentiates this transaction from the ones done with L1 and Winance? Is this a “DSF”?
This transaction with Unwrap Finance Nordic is a regular directed share issue and has no relation to the kind of agreements that were signed with L1 Capital and Winance. Those agreements had transactions with convertibles and warrants linked to them. Neither of the agreements with L1 Capital or Winance were so-called DSF either, as Brighter protected its shareholders by making sure that the shareholders received free warrants and not just the investor. Following is a visualization of the Brighter share price development during the period of L1 Capital transactions.

Will there be additional directed share issues?
Yes, likely and Unwrap Finance is likely to be part of some of these. The priority, however, is to attract long-term institutional investors, but that is not short term.

Why are you not directing a share issue to larger institutional investors, with long-term focus, instead?
Larger institutional and professional value investors typically don’t invest smaller sums that would be appropriate in this situation. With Brighter’s current market cap of approximately SEK 600 million, a large investment would also lead to a significant dilution for the current shareholders.

However, it is a priority to bring aboard this type of investors and we are actively working on making that happen, taking into account the interests of shareholders. Key is to reach the next phase in our commercialization efforts.

Does this transaction affect the terms of the outstanding TO5 warrants?
No, according to the terms for TO5 a directed issue does not trigger a recalculation. This is standard terms for warrants. Recalculation is normally triggered by preferential rights issues (företrädesemission).

Q&A – Q2 2020 Interim report

We have received questions about how to interpret the financial statements in the Q2 report released on August 31. Below follows a clarification of Brighter’s financial position. 

If you have any additional questions that are not answered in the clarification, please contact IR@brighter.se directly.

What was Brighter’s financial position at the time of the report?

Cash available was a total SEK 23.5 Million, plus additionally SEK 42.7 million which is currently allocated for a short-term placement against interest (treated as a liquid asset). The SEK 7.4 million write-off is not an expected write-off from cash-flow but only to conform with IFRS to reflect a change in valuation of an underlying security.

Will Brighter need additional funding?

Yes, until Brighter reaches the stage of sales and revenue the company will need external funding, in line with Brighter’s expansion strategy.

How will Brighter keep financing the operations?

The company has a contract in place for additional funding covering routine operations for at least 12 months. 

Brighter is not considering a new rights issue or a contractual financing like the ones held with L1 Capital and Winance.

Further to that the Board and leadership team are working on and evaluating additional financing options to secure the funds and resources needed to pursue the ambitious expansion strategy. E.g. Directed share issues to institutions, family offices and other professional investors, and financial agreements/prepayments from large customers/distributors.

CEO Q2 comment
General status update and comments on the Q2 report.

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