BBS-Bioactive Bone Substitutes Plc: BBS arranges a rights offering of approximately maximum EUR 2.63 million

BBS-Bioactive Bone Substitutes Plc, Company Announcement, Insider information, 20 November 2023 at 17.03 p.m. EEST

BBS arranges a rights offering of approximately maximum EUR 2.63 million

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BBS arranges a rights offering of approximately maximum EUR 2.63 million

Based on authorization granted by the Extraordinary General Meeting on 23 October 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 2.63 million (the "Offering"). The Offering consists of a maximum of 6,578,481 new shares (the "Offer Shares").

Summary

• Approximately maximum of EUR 2.63 million before transaction costs may be raised in the Offering if fully subscribed.
• BBS will give all its shareholders registered in BBS's shareholder register maintained by Euroclear Finland Ltd ("Euroclear Finland") one (1) book-entry subscription right (the "Subscription Right") for each share held on the Offering record date. Each one hundred (100) Subscription Rights entitles the holder to subscribe for forty-five (45) Offer Shares.
• The record date for the Offering will be 22 November 2023 with the last day of trading including the Subscription Rights on 20 November 2023 and the first day of trading excluding the Subscription Rights on 21 November 2023.
• The subscription price is EUR 0.40 per Offer Share. The subscription period for the Offer Shares (the "Subscription Period") will commence on 27 November 2023 at 10:00 a.m. Finnish time, and it is expected to end on 13 December 2023 at 4:00 p.m. Finnish 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

BBS is applying for the CE marking for its first product, ARTEBONE® Paste bone implant. On 9 March 2022, BBS submitted the CE marking application to the Notified Body in the Netherlands. The authorities’ original estimate for the processing time was 8 to 12 months from the filing. Subsequently, the processing times have lengthened, as indicated by a survey published by Medtech Europe, such that approvals for new products are not being granted within the original target time framework of one year. The delays are typically due to the authorities being overburdened, in part because the new Medical Device Regulation (MDR) necessitates the re-approval of existing products as well. Due to delays in the processing of the CE marking application, the Company must seek bridge financing to secure its funding until the CE marking is obtained.

Despite the delays, ARTEBONE® Paste’s product approval process has made good progress with no significant non-conformities being reported. In May 2023, the Company was informed of the particularly critical decision regarding product classification. ARTEBONE has been a new type of borderline case between medical devices and medicines, and the company became a significant precedent from a regulatory point of view on how such products can overall be given approvals. This is also evidenced by the fact that the company was even included as an example in the industry manual published in 2018 (Manual on borderline and classification in the community regulatory framework for medical devices, version 1.19 (04 2018)).

The first audit of the quality system was conducted in November 2022 and the following one in March 2023. On 2 November 2023, the Company announced it had received the quality system certificate from the authorities for advance commenting. The certificate will be officially approved by the relevant body. At the same time, the Company announced that according to the authorities the consultation with the Finnish Medicines Agency (FIMEA) will begin on 21 November 2023. The consultation is one of the final phases of the CE marking process. Alongside the consultation, the official product approval process is underway.

The Company expects the CE marking application to be approved by the end of the year 2023. Based on the currently available information, the Company’s view is that there are no longer product risks associated with the remaining technical phases of the regulatory approval process. The main actual challenge is predicting the time it will take for the process, which the Company cannot entirely control, as the Notified Body makes decisions independently. In general, a medical device is granted approval if the product meets the safety requirements (its use does not cause harm), and in addition, the products therapeutic efficacy must be demonstrated for its intended purpose. Both of these aspects are tested and verified through animal tests and clinical trials during the product development phase, before the regulatory approval process is initiated. BBS’s ARTEBONE® Paste has already passed these stages. The final ongoing regulatory approval phase mainly consists of consultations with the Medicines Agency and the finalization of the Company’s production and quality control processes, including test production batches.

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 0.5 million in Business Finland 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.

If the Offering is fully subscribed, according to the Company's management's estimate, the Company's working capital will be sufficient for approximately 8 months. The company can influence the sufficiency of the working capital by acquiring additional equity or debt capital or measures to save the Company's expenses.

* MedTech Europe Survey -raportti. https://www.medtecheurope.org/wp-content/uploads/2022/07/medtech-europe-survey-report-analysing-the-availability-of-medical-devices-in-2022-in-connection-to-the-medical-device-regulation-mdr-implementation.pdf

Terms of the Offering

• The Company will offer maximum of 6,578,481 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 will be given one (1) book-entry Subscription Right for each share held in the Company on the Offering record date 22 November 2023. Each one hundred (100) Subscription Rights will entitle their holder to subscribe for forty-five (45) 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 23 November 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 27 November 2023 and 7 December 2023.
• 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 is estimated to begin on First North Finland 27 November 2023.
• 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 21 December 2023.
  
  

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”) with corresponding attachments, both of which are available on the Company’s website http://bbs-artebone.fi/share-issue-2023-11 by 24^th of November. The release of the Investor Memorandum will be announced through a separate company announcement.

Indicative timetable

22 November 2023 Resolution regarding the Offering by the Board of Directors

24 November The Investor Memorandum and the Basic Information Document are published

27 November 2023 Subscription Period begins (estimate)

27 November 2023 Trading in Temporary Shares and Subscription Rights begins on First North Finland (estimate)

7 December 2023 Last day of trading on First North Finland in Subscription Rights (estimate)

13 December 2023 Subscription Period ends unless extended (estimate)

18 December 2023 Outcome of the Offering announced (estimate)

21 December 2023 Last day of trading on First North Finland in Temporary Shares (estimate)

22 December 2023 Offer Shares delivered to the book-entry accounts of subscribers (estimate)

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

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:
Juliusz Rakowski, CEO
+358 50 448 5132
juliusz.rakowski@bbs-artebone.fi

Certified Advisor:
Nordic Certified Adviser AB,
+46 70 551 67 29,
info@certifiedadviser.se

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: www.bbs-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.

Attachment

• BBS - Offering terms 20231116 FINAL

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