Observe Medical ASA – Contemplated private placement

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN, HONG KONG OR THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN

Oslo, 11 June 2025

Observe Medical ASA ("Observe Medical" or the "Company", OSE ticker: OBSVR) hereby announces a contemplated private placement to raise gross proceeds of NOK 30-40 million (the “Offer Size”, including the Debt Conversions, as defined below) through an issuance of new shares in the Company (the "Offer Shares") (the "Private Placement"). The Company has engaged SpareBank 1 Markets AS as sole manager and bookrunner (the "Manager") to advise on and effect the contemplated Private Placement.

The price per New Share (the “Offer Price”) and the final number of Offer Shares to be issued in the Private Placement will be determined by the board of directors of the Company (the “Board”), subject to final approval by the EGM (as defined below) on the basis of an accelerated bookbuilding to be conducted by the Manager. 

The net proceeds to the Company from the Private Placement will be used to buy the remaining rights for the Unometer product family as well as for operating liquidity currently expected to be needed to take the Company to cash positive.

The bookbuilding period for the Private Placement will start today, 11 June 2025 at 16:30 (CEST), and close on 12 June 2025 at 08:00 (CEST). The Company and the Manager may, however, at any time resolve to extend or shorten the bookbuilding period on short or no notice. If the bookbuilding period is extended or shortened, any other dates referred to herein may be amended accordingly. The Company intends to announce the number of Offer Shares allocated in the Private Placement through a stock exchange notice expected to be published before trading commences on the Oslo Stock Exchange on 12 June 2025.

The Private Placement will be directed towards selected Norwegian and international investors, in each case subject to and in compliance with applicable exemptions from relevant prospectus, filing and other registration requirements. The minimum application and allocation amount in the Private Placement has been set to the NOK equivalent of EUR 100,000. The Company may, however, at its sole discretion, allocate an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirement pursuant to the Norwegian Securities Trading Act and ancillary regulations (including Regulation (EU) 2017/1129) are available, including to employees and members of the Board. Allocation of Offer Shares will be determined by the Board, at its sole discretion, in consultation with the Manager, following the expiry of the bookbuilding period. The Company will focus on allocation criteria such as (but not limited to) pre-commitments and indications of interest (as further described below), existing ownership in the Company, price leadership, timeliness of order, relative order size, sector knowledge, perceived investor quality and investment horizon. 

The Company has received indications of interest from larger existing shareholders (representing approx. 21.6% of the outstanding shares) and the chair of the Board (the “Pre-commitments”):

• R Investment Company AS (represented on the Board by Terje Bakken, chair of the Board): pro-rata (10.92%) with an upper limit of NOK 4 million
• JPB AS: pro rata (6.08%)
• ELI AS (represented on the Board by Eskild Endrerud): pro-rata (4.59%)
• Glimt Invest AS, (a company owned and controlled by chair of the Board Terje Bakken): The NOK equivalent of EUR 0.1 million

In addition to the Pre-commitments, Navamedic ASA (“Navamedic”), the Company’s largest shareholder, has committed to subscribe for new shares in a separate share issue being implemented in parallel with the Private Placement in an amount equal to NOK 5 million through conversion of part of its outstanding claims against the Company (the “Navamedic Conversion”). The Navamedic Conversion is in addition to the agreement in principle between the Company and Navamedic whereby Navamedic has agreed on a debt reduction of 50% of its outstanding claims against the Company, subject to certain conditions, as announced in the stock exchange announcement published by the Company on 10 April 2025. For further information about the debt reduction, including the conditions for such debt reduction, please refer to said stock exchange announcement.

Furthermore, Jiangsu Hongxin Medical Technology Co. Ltd., who is the Company's largest manufacturing partner, has committed to subscribe new shares in another separate share issue being implemented in parallel with the Private Placement in an amount equal to USD 300,000 (NOK 3,3 million) through conversion or contribution of parts of its accounts receivables towards the Company and/or its subsidiaries (the "Jiangzu Conversion" and together with the Navamedic Conversion the "Debt Conversions").  

Notification of conditional allocation is expected on or about 12 June 2025, before trading commences on the Oslo Stock Exchange. Payment for the allocated Offer Shares is expected to take place following an extraordinary general meeting in the Company, expected to take place on or about 3 July 2025 (the “EGM”). Registration of the share capital increase relating to the Offer in the Norwegian Register of Business Enterprises (the “NRBE”) is, subject to timely payment of the entire subscription amount and timely implementation of the Debt Conversions, expected on or about 7 July 2025, and delivery of the Offer Shares is expected on or about 8 July 2025.

The Offer Shares will be registered with the Norwegian Central Securities Depository Euronext Securities Oslo (the “VPS”) on a separate ISIN from the existing shares of the Company, pending approval and publication by the Company of a prospectus (the “Prospectus”) and will thus not be tradable on Euronext Expand Oslo until the Prospectus has been approved by the Financial Supervisory Authority of Norway (the “NFSA”) and published by the Company, upon which the Offer Shares will be transferred to the Company’s ordinary ISIN in the VPS and be admitted to trading on Euronext Expand Oslo. The Prospectus is expected to be approved by the NFSA and published by the Company at the end of Q3 2025.

Completion of the Private Placement, by delivery of Offer Shares to investors, is subject to the following conditions (together, the “Conditions”) being satisfied: (i) all necessary corporate resolutions being validly made by the Company, including (without limitation) the Board resolving to consummate the Private Placement and conditionally allocate the Offer Shares as well as resolving the Jiangsu Conversion, the annual general meeting of the Company, scheduled to be held on 27 June 2025 (the “AGM”), resolving the Proposed Share Capital Reduction (as defined below) and the EGM resolving the issuance of the Offer Shares and the Navamedic Conversion (together, the “General Meeting Resolutions”), (ii) the Debt Conversions being completed no later than simultaneously with completion of the Private Placement, (iii) registration of the General Meeting Resolutions in the NRBE, and (iv) the issuance of the Offer Shares in the VPS.

The Board has proposed that the Company's share capital is reduced by way of reduction of the nominal value of each share to NOK 0.42 (the “Proposed Share Capital Reduction”), and reference is made to the notice of the AGM dated 6 May 2025 for further information regarding the Proposed Share Capital Reduction.

The Company reserves the right to cancel, and/or modify the terms of, the Private Placement at any time and for any reason prior to notification of allocation. The Applicants also acknowledge that the Private Placement will be cancelled if the Conditions are not fulfilled. Neither the Company nor the Manager, or any of their directors, officers, employees, representatives or advisors, will be liable for any losses if the Private Placement is cancelled and/or modified, irrespective of the reason for such cancellation or modification.

The Private Placement represents a deviation from the shareholders' pre-emptive right to subscribe for the Offer Shares. The Board has considered the Private Placement in light of the equal treatment obligations under the Norwegian Securities Trading Act, the rules on equal treatment under Oslo Rule Book II for companies admitted to trading on Euronext Oslo and the Oslo Stock Exchange's Guidelines on the rule of equal treatment, and deems that the proposed Private Placement is in compliance with these obligations. The Board is of the view that it will be in the common interest of the Company and its shareholders to raise equity through a private placement. By structuring the equity raise as a private placement, the Company is expected to raise equity efficiently, with a lower discount to the current trading price, at a lower cost and with a significantly reduced completion risk compared to a rights issue. The Company has considered a rights issue instead of a private placement. The Company is of the opinion that a rights issue would have to be on an even more significant discount, and guaranteed by a consortium of underwriters which would also be an added cost for the Company. Furthermore, a rights issue would not secure the Company required liquidity in time. In summary, the Company expects to be in a position to complete the share issue in today's market conditions in an efficient manner, at a higher subscription price and at significantly lower cost and with a lower completion risk than would have been the case for a rights issue. As a consequence of the private placement structure, the shareholders’ preferential rights to subscribe for the Offer Shares will be deviated from pursuant to a final resolution by the EGM.

The Company may, subject to, inter alia, completion of the Private Placement, relevant corporate resolutions, including an authorization to effect this at the EGM and approval by the Board, prevailing market price of the Company's shares and approval and the publication of the Prospectus, consider conducting a subsequent offering of new shares (the "Subsequent Offering") at the same subscription price as the final Offer Price in the Private Placement and otherwise in line with market practice. The Subsequent Offering will (if conducted) be directed towards existing shareholders of the Company as of 11 June 2025 (as registered in the VPS two trading days thereafter), who (i) were not included in the wall-crossing phase of the Private Placement, (ii) were not allocated shares in the Private Placement, and (iii) are not resident in a jurisdiction where such offering would be unlawful or would (in jurisdictions other than Norway) require any prospectus, filing, registration or similar action. Further information on any Subsequent Offering will be given in a separate stock exchange release when available. The Company reserves the right in its sole discretion to not conduct, or cancel the Subsequent Offering.

Advokatfirmaet Thommessen AS is acting as Norwegian legal counsel to the Company in connection with the Private Placement.

For additional information, please contact:

Jørgen Mann, CEO Observe Medical

Mobile: +45 408 67 558

E-mail: jorgen.mann@observemedical.com

Johan Fagerli, CFO Observe Medical

Mobile: +47 958 12 765

E-mail: johan.fagerli@observemedical.com

This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to section 5-12 the Norwegian Securities Trading Act. This stock exchange announcement was published by Johan Fagerli, CFO on the time and date provided.

AboutObserve Medical:

Observe Medical is a Nordic medtech company that develops, markets and sells innovative medtech products for the global market. The Company is committed to improving patient welfare and patient outcomes, improving clinical data accuracy and promoting positive health economics.

The Company seeks to drive growth by leveraging its expertise in sales and commercialization of its broad portfolio of medical technology products, mainly in urine measurement and ultrasound, in combination with targeted M&A and distribution. Observe Medical is working with a network of leading distributors to provide outstanding solutions for healthcare professionals globally.

The Company is headquartered in Oslo, Norway.

Further information is available at www.observemedical.com.

Important notice:

This announcement is not and does not form a part of any offer to sell, or a solicitation of an offer to purchase, any securities of the Company. Copies of this announcement are not being made and may not be distributed or sent into any jurisdiction in which such distribution would be unlawful or would require registration or other measures.

The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and accordingly may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws. The Company does not intend to register any part of the offering in the United States or to conduct a public offering of securities in the United States. Any sale in the United States of the securities mentioned in this announcement will be made solely to "qualified institutional buyers" as defined in Rule 144A under the Securities Act.

In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression "Prospectus Regulation" means Regulation (EU) 2017/1129 as amended (together with any applicable implementing measures in any Member State.

This communication is only being distributed to and is only directed at persons in the United Kingdom that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only for relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "strategy", "intends", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believe that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict, and are beyond their control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not make any guarantee that the assumptions underlying the forward-looking statements in this announcement are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this announcement or any obligation to update or revise the statements in this announcement to reflect subsequent events. You should not place undue reliance on the forward-looking statements in this announcement.

The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice. The Company does not undertake any obligation to review, update, confirm, or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this announcement.

Neither the Managers nor any of their affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.

This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities of the Company. Neither the Managers nor any of their affiliates accepts any liability arising from the use of this announcement.

The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.

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