SoftOx Solutions AS — Capital/Financing Update 2022

Oct 11, 2022

SoftOx Solutions AS: Raises 25 MNOK in new secured convertible loan and calls for extraordinary general meeting

SoftOx Solutions AS: Raises 25 MNOK in new secured convertible loan and calls for extraordinary general meeting

Reference is made to the stock exchange announcement by SoftOx Solutions AS (the "Company" or "SoftOx") on the 4th of October 2022 regarding, amongst other, the Company’s limited cash position and need for liquidity. On this background, the Board of SoftOx has now raised a new convertible loan from certain existing shareholders who will provide the Company with new liquidity of NOK 25 million, plus a refinancing of the convertible loan of NOK 15 million reported on 28 June 2022. The total proceeds of the new loan will be NOK 40 million and have due date 15 January 2024.

Together with the previously announced grants on the SoftOx inhalation solutions (SIS), the new loan will secure the Company a liquidity injection of up to a total amount of NOK 50 million. Payment of the funds under the SIS grant is subject to signing the final contract.

Continued pursuit of strategic solutions and partnerships

The new loan will give SoftOx time to deliver on previously announced target milestones over the next 6-9 months. The company has initiated a cost improvement plan to defer noncritical R&D activities, reduce future overhead and infrastructure expenditures and prioritize its ongoing development project. The Company continues to pursue different options to secure long term financing of the Company and is amongst other working on strategic solutions such as licensing out, sale of assets and future collaborating investments relating to the Company's projects and assets.

“In line with our strategy, both wound care technology for human and animal health care and its disinfection technology, have, with the latest development, all reached a level of the development which opens for strategic partnership talks”, says Almås.

Further, the Company has made a strategic decision to merge the European Defence Fund (EDF) project for military use (preparedness for chemical and biological attacks) and the SIS project for civil use (fighting virus infections). The two projects are based on the same technology and by continuing the development as one merged project, the Company expects that it will benefit from the synergies between the two projects and that it expects to be in position to receive significant public funding for future development through the European Defense Fund program.

The structure of the convertible loan:

1. The loan is NOK 40 million in total, whereof NOK 15 million shall be used to refinance a loan from Almhaug Bolig AS from 28 June 2022. The remaining net proceeds from the loan shall be used for general working capital and corporate purposes.

2.The loan shall carry a fixed yearly interest rate of 10% p.a., to be paid in kind calculated quarterly and will accrue in full at the conversion date or maturity date of the loan.

3.The loan will be secured with sufficient pledge in the Company’s assets (patent portfolio).

4.The loan will run without instalments and the Company shall repay to each lender that lender's amount of loan outstanding (not converted into Shares) in full on the Maturity Date, the 15th of January 2024, together with all accrued but unpaid interest, costs, and expenses.

5.A lender may at any time up to the Maturity Date convert each lender’s loan amount in full (the “Conversion Amount”) into new shares at the applicable Conversion Price.

6.The Conversion Price shall be NOK 22.5, which is about equal to the WVAP in the five-day period up to and including 7th of October, 2022.

7.The loan is subject to the approval of the Company's extraordinary general meeting and will be registered in the Norwegian Registry of Business Enterprises in accordance with section 11-6 of the Norwegian private limited companies act.

8.The loan is otherwise on customary terms and conditions for such loan.

Geir Almås, CEO and primary insider of the Company, has through his closely associated company Hermod Farms AS subscribed and been allocated an amount of NOK 2.2 million of the loan. See the attached notification form for persons discharging managerial duties.

The Board has considered the loan in light of the rules on equal treatment under Oslo Rule Book II for companies listed on the Oslo Stock Exchange and the Oslo Stock Exchange's Guidelines on the rules of equal treatment. The loan implies a deviation from the existing shareholders' pre-emptive rights to subscribe for and be allocated an amount of the loan. The Board has carefully considered such deviation and has resolved that the loan is in the best interests of the Company and its shareholders. In reaching this conclusion, the Board has among other things considered the availability of capital markets financing in a timely manner together with the necessity for the Company to strengthen its liquidity in the short term. Further, the Board has taken into account that the loan is based on the investor interest obtained following a marketing process with certain existing shareholders, and a public announcement that the Company was seeking funds.

Based on the above, the Board of Directors has decided to propose that the Company's general meeting resolves the loan in accordance with the Private Limited Companies Act section 11-2 and calls an extraordinary general meeting for approval of the loan.

Notice of extraordinary general meeting

Notice is hereby given of an extraordinary general meeting of Company to be held on 18 October 2022 at 15:00 hours (CEST) in the offices of the Company in Oslo. The meeting will be a physical event, with the opportunity to attend the meeting online on request. The notice to the extraordinary general meeting and proxy forms and appendices are attached and are also available at www.soft-ox.com.

SpareBank 1 Markets is acting as financial advisor to the Company in connection with the issuance of convertible loan.

For further information, please contact:

CEO Geir Almås of SoftOx Solutions AS, or

CFO Kristine Mundal Rød of SoftOx Solutions AS

Mail: ir@soft-ox.com

Mobile: (+47) 948 59 599

The information included in this announcement is defined as inside information pursuant to MAR article 7, and is publicly disclosed in accordance with MAR article 17. The announcement is made by the contact person.

About SoftOx Solutions AS

SoftOx Solutions AS (SoftOx, listed on Euronext Growth Oslo) is a Norwegian biopharmaceutical and MedTech company based in Oslo, with the goal of reducing the spread of infection and emergence of antimicrobial resistance. For more information on SoftOx, visit www.soft-ox.com