BBS-Bioactive Bone Substitutes Plc: BBS arranges a rights offering of approximately maximum EUR 2.9 million

BBS-Bioactive Bone Substitutes Plc, Company Announcement, Insider information, 5 June 2023 at 09.00 a.m. EEST

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN PART, DIRECTLY OR INDIRECTLY, IN THE USA, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND, SINGAPORE OR SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE SUCH PUBLICATION OR DISTRIBUTION IS UNLAWFUL.

BBS-Bioactive Bone Substitutes Plc: BBS arranges a rights offering of approximately maximum 2.9 MEUR

Based on authorization granted by the Annual General Meeting on 30 March 2023, the Board of Directors of BBS-Bioactive Bone Substitutes Plc ("BBS" or the "Company") has decided to arrange a rights offering totaling approximately EUR 2.9 million (the "Offering"). The Offering consists of a maximum of 5,871,448 new shares (the "Offer Shares").

Summary

• Approximately maximum of EUR 2.9 million before transaction costs may be raised in the Offering if fully subscribed.
• The Offering is secured to approximately 27.3 per cent by subscription undertakings from the existing shareholders.
• BBS will give all its shareholders registered in BBS's shareholder register maintained by Euroclear Finland Ltd ("Euroclear Finland") or Euroclear Sweden AB ("Euroclear Sweden") one (1) book-entry subscription right (the "Subscription Right") for each share held on the Offering record date. Each five (5) Subscription Rights entitles the holder to subscribe for three (3) Offer Shares.
• The record date for the Offering will be 7 June 2023 with the last day of trading including the Subscription Rights on 5 June 2023 and the first day of trading excluding the Subscription Rights on 6 June 2023.
• The subscription price is EUR 0.50 or SEK 5.78 per Offer Share. The subscription period for the Offer Shares (the "Subscription Period") will commence on 12 June 2023 at 10:00 Finnish time (09:00 Swedish time), and it is expected to end on 28 June 2023 at 16:00 Finnish time (15:00 Swedish time) in Finland and on 26 June 2023 in Sweden at 16:00 Finnish time (15:00 Swedish time).
• Net proceeds from the Offering will be used inter alia for successful completion of the ongoing CE marking application process for BBS’ bone implant ARTEBONE® Paste, for initiating the commercialisation of ARTEBONE® Paste and for paying the loan repayments and interest.

Reasons for the Offering and use of proceeds

On 9 March 2022, BBS filed the CE marking application for ARTEBONE® Paste with the Notified body in the Netherlands. The estimated processing time by the authority was 8 to 12 months from filing. However, according to a survey published by Medtech Europe*, processing times have lengthened since then, so that approvals for new products are now taking more than a year to be issued, one year being the target time. The delays are typically caused by the authorities being overburdened, since because of the new Medical Device Regulation old products need to be re-certified.

As a result of a delay in the processing of the CE marking application, the Company is obliged to raise bridge funding in order to secure continued operations up until the CE marking is granted. Nevertheless, the approval process for the BBS ARTEBONE® Paste has progressed well. The first audit was conducted in November 2022 and the following one in March 2023. The vitally important product classification decision was received by the Company in May 2023. The Company expects the CE marking application to be approved by the end of the year 2023.

The Company anticipates that the net proceeds raised through the Offering will be used for executing the Company’s business plan, strengthening working capital and investments, and managing and repaying loans, including but not limited to the following items:

1. The principal purpose of the proceeds to be raised is the successful completion of the application process for a CE marking for the BBS bone implant ARTEBONE® Paste, including certification of the Company’s quality system. The funds will also be used for product development, patent portfolio maintenance and production development, and also for the FDA approval application process for gaining marketing authorisation for ARTEBONE® Paste on the US market.

2. For initiating the commercialisation of ARTEBONE® Paste, including sales and marketing asset recruitment and training, preparation of marketing materials as well as assessing and contacting initial potential customers.

3. For payment of principal instalments and interest of EUR 0.7 million in TEKES loans that are due in the next 12 months.

The estimate of how the proceeds are intended to be used is based on the assumption that the Offering will be subscribed in full.

The estimated portions of the use of proceeds may differ depending on the amount of funds raised and the development of business operations. If the Offering is not subscribed in full, it may not be possible to carry out the planned actions in full, and cost-cutting measures will need to be introduced, which in turn may delay the start of production, marketing and sales.

* MedTech Europe Survey report. /wp-content/uploads/2022/07/medtech-europe-survey-report-analysing-the-availability-of-medical-devices-in-2022-in-connection-to-the-medical-device-regulatio -implementation.pdf

Terms of the Offering

The Company will offer maximum of 5,871,448 Offer Shares for subscription in accordance with the shareholders' preferential subscription right. The main terms for the Offering are presented below.

All shareholders registered in BBS's shareholder register maintained by Euroclear Finland or Euroclear Sweden will be given one (1) book-entry Subscription Right for each share held in the Company on the Offering record date 7 June 2023. Each five (5) Subscription Rights will entitle their holder to subscribe for three (3) Offer Shares.

The Subscription Rights will be registered in the shareholders' book-entry accounts in the book-entry system maintained by Euroclear Finland approximately on 8 June 2023 and in the book-entry system maintained by Euroclear Sweden approximately on 9 June 2023.

The Subscription Rights registered with Euroclear Finland will be freely transferable and will be traded on First North Growth Market Finland (“First North Finland”) between 12 June 2023 and 22 June 2023. The subscription rights registered with Euroclear Sweden will be freely transferable but will not be traded on First North Finland.

After the subscription, temporary shares corresponding to the Offer Shares subscribed for based on the Subscription Rights (the "Temporary Shares") will be entered into the subscriber's book-entry account.

Trading in the Temporary Shares registered with Euroclear Finland as their own special share class is estimated to begin on First North Finland 12 June 2023. The Temporary Shares registered with Euroclear Sweden will be freely transferable but will not be traded on First North Finland.

The Temporary Shares will be combined with the Company's current shares after the Offer Shares have been registered into the Trade Register, which is estimated to take place on approximately 10 July 2023.

Subscription undertakings

The maximum size of the Offering is approximately EUR 2.9 million. The Offering has been secured to approximately 27.3 percent through subscription undertakings from the existing shareholders.

Investor Memorandum and the Basic Information Document

In connection with the Offering, the Company has prepared this Investor Memorandum (“Investor Memorandum”) as well as a Basic Information Document in accordance with Chapter 3, Section 2 of the Finnish Securities Markets Act (746/2012, as amended) (“Basic Information Document”), both of which are available on the Company’s website  during 5 June 2023.

Indicative timetable

5 June 2023 Resolution regarding the Offering by the Board of Directors

5 June 2023 The Investor Memorandum and the Basic Information Document are published

12 June 2023 Subscription Period begins (estimate)

12 June 2023 Trading in Temporary Shares and Subscription Rights registered on Euroclear Finland begins on First North Finland (estimate)

22 June 2023 Last day of trading on First North Finland in Subscription Rights registered on Euroclear Finland (estimate)

28 June 2023 Subscription Period in Finland ends unless extended (estimate)

26 June 2023 Subscription Period in Sweden ends unless extended (estimate)

3 July 2023 Outcome of the Offering announced (estimate)

10 July 2023 Offer Shares delivered through Euroclear Finland to the book-entry accounts of subscribers (estimate)

13 July 2023 Offer Shares delivered through Euroclear Sweden to the book-entry accounts of subscribers (estimate)

10 July 2023 Last day of trading on First North Finland in Temporary Shares registered on Euroclear Finland (estimate)

11 July 2023 Trading in Offer Shares begins together with Company’s existing shares on First North Finland (estimate)

Compensation for investors who have subscribed for shares with option rights TO2

Pursuant to the authorisation granted by the Extraordinary General Meeting on 17 March 2022, the Board of Directors of the Company decided on 6 May 2022 to issue option rights to the parties that subscribed shares in the Company’s share issue that ended on 6 May 2022 (“Option Rights TO2”). The number of Option Rights TO2 was 335,481, entitling their holders to subscribe a maximum of 335,481 new Company shares. The subscription period for exercising Option Rights TO2 to subscribe shares was 22 May to 2 June 2023. The subscription price for these shares was determined by the average Company share price, weighted by trading volume, on First North Finland between 8 and 18 May 2023, minus 25% and it was EUR 0.65 or SEK 7.38 per share.

Since the subscription price of the shares with Option Rights TO2 was higher than the subscription price used in the Offering and because the investors who subscribed shares with Option Rights TO2 are unable to participate in the Offering with the new shares subscribed with Option Rights TO2 due to the time schedule of the Offering, the Company's Board of Directors has decided to transfer shares held by the Company without consideration to investors who have subscribed for shares based on Option Rights TO2, so that one (1) share will be given for each five (5) shares subscribed for with the Option Rights TO2. The Board of Directors considers that, in this case, the equal treatment of shareholders constitutes a particularly weighty financial reason for the directed transfer of shares without consideration from the point of view of the Company and taking into account the interests of all its shareholders.

Advisers

Aalto Capital Partners Oy is acting as financial advisor to the Company in the Offering. Smartius Oy is acting as the legal adviser to the Company on aspects of the Offering related to the Finnish law.

BBS-BIOACTIVE BONE SUBSTITUTES PLC

For more information, please contact:

Ilkka Kangasniemi, CEO,

,

Certified Advisor:

Nordic Certified Adviser AB,

9,

BBS in brief

BBS -Bioactive Bone Substitutes Plc is a orthobiology company that started its operations in 2003. We have developed a new product for the treatment of complex bone fractures and bone healing issues. Our goal is to provide next-generation medical products for the treatment of bone injuries in orthopedic surgery. In the pharmaceutical industry, the development and research work require perseverance and courage to innovate. We have a track record of over 20 years in this field. Our company is characterized by expertise, innovation, and dedicated employees who are passionate about their work. Our developed product, ARTEBONE®, is in the final stages of product development, and we are seeking the CE marking to enable its commercialization in the EU market. We are based in Oulu with a medical manufacturing facility in Reisjärvi, holding a manufacturing license. The company's headquarters are in Oulu, and we employ 20 people.

BBS has been listed on Nasdaq First North Growth Market Finland since February 2018.

More information: -artebone.fi

IMPORTANT NOTICE

This release or the information contained therein shall not be distributed, directly or indirectly, in Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa or the United States. The information contained in this release do not constitute an offer of, or invitation to purchase any securities in any area, where offering, procurement of or selling such securities would be unlawful prior to registration or exemption from registration or any other approval required by the securities regulation in such area. This release is not an offer for sale of securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended, and the rules and regulations issued by virtue of it. BBS has not registered, and does not intend to register, any offering of securities in the United States. No actions have been taken to register the shares or the offering anywhere else than in Finland.

The information contained herein shall not constitute an offer of, or invitation to purchase any securities in any jurisdiction. This release is not a prospectus and does not constitute any offer, invitation or investment advice to subscribe for or purchase securities. Investors should not subscribe for or purchase any securities or make any investment decisions referred to herein except on the basis of information contained in a prospectus issued by BBS.