The Board of RMD resolves on a partially guaranteed rights issue

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The Board of Directors of Railway Metrics and Dynamics Sweden AB (publ) ("RMD" or the "Company") has today, on 8 October 2024, resolved, subject to subsequent approval at an extraordinary general meeting planned for November 6 2024, to conduct a rights issue of shares and warrants ("Units") amounting to approximately SEK 23.9 million, before costs (the "Rights Issue" or the "Offer"). The Rights Issue is being conducted to finance the Company's operations and future strategies. If the Rights Issue is fully subscribed, the Company will receive a maximum of approximately SEK 23.9 million, before issue costs. Upon full exercise of the free warrants included in the Offer, the Company may receive a maximum of an additional approximately SEK 17.9 million, before costs. The Rights Issue is covered by subscription commitments from certain existing shareholders amounting to approximately SEK 9.3 million, corresponding to approximately 39 percent of the Rights Issue. In addition, guarantee agreements amounting to approximately SEK 7.5 million, corresponding to approximately 31 percent of the Rights Issue, have been entered into with certain existing shareholders and external investors. The Rights Issue is thus secured in advance up to a total of approximately SEK 16.8 million, corresponding to approximately 70 percent. The notice for the extraordinary general meeting will be published in a separate press release.

Summary:

Those who, on the record date of November 19, 2024, are registered in the share register maintained by Euroclear Sweden AB as shareholders in the Company will receive one (1) unit right for each share held in the Company. One (1) unit right entitles the holder to subscribe for one (1) Unit in the Rights Issue. One (1) Unit consists of one (1) share and one (1) free warrant of series TO3.
The subscription price in the Rights Issue is SEK 1.00 per Unit, corresponding to SEK 1.00 per share. The warrants are issued free of charge.
Upon full subscription in the Rights Issue, the Company will raise approximately SEK 23.9 million, before issue costs. The issue costs in connection with the Rights Issue are estimated to amount to approximately SEK 2.5 million, including any cash portion of the guarantee remuneration for the guarantee agreements entered into, which, if applicable, may be paid and amount to at most approximately SEK 1.0 million.
Upon full exercise of all the warrants of series TO3, within the framework of the issued Units and at the highest possible subscription price, the Company may raise an additional approximately SEK 17.9 million before issue costs, which are estimated to amount to approximately SEK 0.5 million.
The subscription period for the Rights Issue will run from November 21, 2024 to December 5, 2024.
The Rights Issue is covered by subscription commitments amounting to approximately SEK 9.3 million, corresponding to approximately 39 percent, from certain existing shareholders. In addition, guarantee agreements have been entered into with certain existing shareholders and external investors amounting to approximately SEK 7.5 million, corresponding to approximately 31 percent, of the Rights Issue. The Rights Issue is thus covered in total by approximately SEK 16.8 million of subscription commitments and guarantee agreements, corresponding to approximately 70 percent of the Rights Issue.
The Rights Issue is subject to subsequent approval at the extraordinary general meeting planned for November 6 2024 and requires an amendment to the Company's articles of association, which is also proposed to be resolved at the extraordinary general meeting.

Background and Reasons for the Rights Issue:

The Board of Directors of the Company has resolved to conduct the Rights Issue, subject to subsequent approval at the extraordinary general meeting, in order to obtain working capital to finance the Company's operations and future strategies. The net proceeds of up to approximately SEK 38.6 million from the Rights Issue, including the proceeds from the Offer and the proceeds from the exercise of the warrants of series TO3 after issue costs, are intended to be used in the following order of priority and allocation:

Repayment of short-term bridge loans (15 percent)
Procurement of hardware and related supplier services to be able to deliver on both existing and future anticipated customer orders (45 percent)
Increased sales resources and associated sales staff (15 percent)
Working capital (20 percent)
Further development and adaptation of the product portfolio (5 percent)

Terms of the Rights Issue:

The Board of Directors of Railway Metrics and Dynamics Sweden AB (publ) has today, on 8 October 2024, resolved, subject to subsequent approval at an extraordinary general meeting planned for 6 November 2024, to carry out the Rights Issue under the following terms:

Those who, on the record date of 19 November 2024, are registered as shareholders in RMD will receive one (1) unit right for each share held in the Company. One (1) unit right entitles the holder to subscribe for one (1) Unit in the Rights Issue. One (1) Unit consists of one (1) newly issued share and one (1) free warrant of series TO3.
The subscription price is SEK 1.00 per Unit, corresponding to SEK 1.00 per share. The warrants are issued free of charge.
Upon full subscription in the Rights Issue, the Company will raise approximately SEK 23.9 million, before issue costs. The issue costs in connection with the Rights Issue are estimated to amount to approximately SEK 2.5 million, including any cash portion of the guarantee remuneration for the guarantee agreements entered into, which, if applicable, may be paid and amount to at most approximately SEK 1.0 million.
The last day of trading in the Company's shares, including the right to receive unit rights in the Rights Issue, is November 6, 2024. The first day of trading excluding the right to receive unit rights in the Rights Issue is November 7, 2024.
The subscription period for subscribing for Units in the Rights Issue will run from November 21, 2024 to December 5, 2024.
The Rights Issue involves the issuance of up to 23,867,066 Units, corresponding to up to 23,867,066 shares and up to 23,867,066 warrants of series TO3.
If all Units are not subscribed for with unit rights, the Board of Directors shall, within the framework of the maximum amount of the Rights Issue, decide on the allocation of Units subscribed for without unit rights, whereby allocation shall be made as follows:
First, allocation shall be made to those who have subscribed for Units with unit rights, regardless of whether the subscriber was a shareholder in the Company on the record date or not, and in the event of oversubscription, in proportion to the number of unit rights each has used for subscription of Units and, if this cannot be done, by lottery.
Secondly, allocation shall be made to others who have subscribed for Units without unit rights, and, if these cannot receive full allocation, in proportion to the number of Units each has applied for subscription and, if this cannot be done, by lottery.
Third and last, any remaining Units shall be allocated to the guarantors who have entered into a guarantee in proportion to the size of the guarantee commitment made, and, if this cannot be done, by lottery.

The notice for the extraordinary general meeting will be published through a separate press release.

Terms for the Warrants of Series TO3:

Two (2) warrants of series TO3 entitle the holder to subscribe for one (1) new share in the Company.
The subscription price for subscribing for shares with the support of warrants of series TO3 is SEK 1.50 per share.
The warrants of series TO3 may be exercised for the subscription of new shares during the period from March 17, 2025 to March 31, 2025.
Upon full subscription in the Rights Issue and full exercise of all warrants of series TO3 within the framework of the offered Units, the Company may raise an additional approximately SEK 17.9 million, before issue costs estimated to amount to approximately SEK 0.5 million.
The warrants of series TO3 are intended to be admitted to trading on NGM Nordic SME as soon as possible after the final registration of the Rights Issue with the Swedish Companies Registration Office, estimated to be around week 52, 2024.

Change in the Number of Shares and Share Capital, as well as Dilution:

Upon full subscription in the Rights Issue, the Company's share capital will increase by SEK 954,682.677185 through the issuance of up to 23,867,066 shares. A total of up to 23,867,066 warrants of series TO3 will be issued within the framework of the Rights Issue, entailing a further increase in share capital of up to SEK 477,341.338593 through the issuance of up to 11,933,533 shares.

Upon full subscription in the Rights Issue, the number of shares in the Company will increase from 23,867,066 to 47,734,132 shares, and upon full exercise of all warrants of series TO3, the number of shares in the Company will increase to 59,667,665 shares and the share capital to SEK 2,386,706.692960. Note that the above calculations do not include any shares that may be issued within the framework of the Compensation Issue (as defined below)

Shareholders who do not participate in the Rights Issue will initially face a dilution of approximately 50 percent if the Rights Issue is fully subscribed and, in the event that all warrants of series TO3 are exercised for the subscription of new shares in the Company, an additional dilution of up to approximately 25 percent, resulting in a total potential dilution of approximately 75 percent. Note that the above calculation also does not include any shares that may be issued within the framework of the Compensation Issue.

Subscription commitments, underwriting guarantees, and guarantee compensation
The Rights Issue is covered by subscription commitments from certain existing shareholders for approximately SEK 9.3 million, corresponding to around 39 percent. In addition, certain existing shareholders and external investors have committed to guarantee the Rights Issue for an additional approximately SEK 7.5 million, corresponding to around 31 percent of the Rights Issue. The Rights Issue is therefore secured up to approximately SEK 16.8 million, corresponding to around 70 percent, through subscription commitments and underwriting guarantees.

No compensation will be paid for the subscription commitments provided. For the underwriting guarantees entered into, guarantee remuneration will be paid either as a cash amount equivalent to fourteen (14) percent of the guaranteed amount or in the form of newly issued Units in the Company, equivalent to sixteen (16) percent of the guaranteed amount. The latter would be done by the Company deciding on a directed issue of Units (shares and warrants of series TO3) to the guarantor ("Compensation Issue") after the subscription period of the Rights Issue, whereby the guarantor's claim for guarantee compensation will be offset against the payment for the newly issued Units subscribed by the guarantor. Each guarantor has the right to choose how the guarantee remuneration will be paid.

The Compensation Issue will be carried out on the terms decided by the Company in the Rights Issue (i.e., SEK 1.00 per Unit, equivalent to SEK 1.00 per share).

The decision on the Compensation Issue to the guarantors, as well as the final terms and conditions, will be made by the Company's board of directors under authorization, or, if applicable, by an extraordinary general meeting of the Company after the Rights Issue, and will be announced via a separate press release.

The subscription commitments and underwriting guarantees are not secured by a bank guarantee, escrow funds, pledge, or similar arrangements. Further information on the parties that have entered into subscription commitments and underwriting guarantees will be available in the EU Growth Prospectus that will be published by the Company before the start of the subscription period.

EU Growth Prospectus
Full terms and instructions for the Rights Issue, as well as subscription details and other information about the Company, will be provided in the EU Growth Prospectus, which will be published by the Company ahead of the start of the subscription period, expected to begin on November 21, 2024 ("Prospectus").

Preliminary timeline

Extraordinary General Meeting
The Board's decision regarding the Rights Issue is conditional on subsequent approval at the extraordinary general meeting scheduled for November 6, 2024. The decision on the Rights Issue is contingent upon and conditional on the amendment of the Company's Articles of Association regarding the limits on share capital and the number of shares, in accordance with the Board's proposal to the extraordinary general meeting. The notice for the extraordinary general meeting will be published through a separate press release.

Advisors
Swedish North Point Securities AB is the financial advisor, Aqurat Fondkommission AB is the issuing agent, and Qap Legal Advisors AB is the legal advisor to the Company in connection with the Rights Issue.

This information is information that Railway Metrics and Dynamics Sweden AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out below, on October 8, 2024, at 20:20 CET.

Important Information

The information contained in this press release neither constitutes nor forms an offer to acquire, subscribe for, or otherwise trade in shares, subscription options, or other securities of RMD. No action has been taken and no action will be taken to permit an offer to the public in any jurisdiction other than Sweden. The invitation to the relevant persons to subscribe for units in RMD will only be made through the Prospectus, which will be published by the Company around November 19, 2024, on RMD's website, https://railwaymetrics.com/investor/. The upcoming approval of the Prospectus by the Swedish Financial Supervisory Authority should not be construed as an endorsement of the Company's shares, subscription options, or other securities. However, this press release is not a prospectus within the meaning of the Prospectus Regulation (EU) 2017/1129 (the "Prospectus Regulation"), and this press release neither identifies nor claims to identify risks (direct or indirect) associated with an investment in shares, subscription options, or other securities of RMD. The information in this press release is solely intended to provide background to the Rights Issue and makes no claim to be complete or exhaustive. No assurances are given regarding the information in this press release concerning its accuracy or completeness. Any investment decision should, for an investor to fully understand the potential risks and benefits associated with the decision to participate in the Rights Issue, be made solely based on the information contained in the Prospectus. Thus, it is recommended that an investor read the entire Prospectus. This press release constitutes marketing in accordance with Article 2(k) of the Prospectus Regulation.

The information in this press release may not be published, distributed, or disclosed, directly or indirectly, within or to the USA, Australia, Belarus, Hong Kong, Japan, Canada, New Zealand, Russia, Switzerland, Singapore, South Africa, South Korea, or any other jurisdiction where such action would be illegal, subject to legal restrictions, or require any actions other than those arising from Swedish law. Actions contrary to this instruction may constitute a violation of applicable securities legislation. No shares, subscription options, or other securities of the Company have been registered, and no shares, subscription options, or other securities will be registered under the United States Securities Act of 1933 (the "Securities Act") or the securities legislation of any state or other jurisdiction in the USA and may not be offered, sold, or otherwise transferred, directly or indirectly, in or to the USA, except in accordance with an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in accordance with the securities legislation of the relevant state or other jurisdiction in the USA.

In the United Kingdom, this document and other materials regarding the securities referred to herein are distributed and directed only to, and an investment or investment activity to which this document relates is only available to and may only be conducted with, "qualified investors" who are (i) persons having professional experience in matters relating to investments and who fall within the definition of "professional investors" in Article 19(5) of the UK Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (ii) high net worth individuals as referred to in Article 49(2)(a)-(d) of the Order (all such persons being collectively referred to as "relevant persons"). An investment or investment activity to which this announcement relates is only available in the UK to relevant persons and will only be undertaken with relevant persons. Persons who are not relevant persons should not take any action based on this press release and should not act or rely on it.

Forward-Looking Statements
This press release contains forward-looking statements concerning the Company's intentions, assessments, or expectations regarding the Company's future results, financial position, liquidity, developments, prospects, expected growth, strategies, and opportunities, as well as the markets in which the Company operates. Forward-looking statements are statements that do not relate to historical facts and can be identified by the use of terminology such as "believes," "expects," "foresees," "intends," "estimates," "will," "may," "assumes," "should," "could," and, in each case, negatives thereof, or similar expressions. The forward-looking statements in this press release are based on various assumptions, which in several cases are based on further assumptions. Although the Company believes that the assumptions reflected in these forward-looking statements are reasonable, there can be no assurance that they will materialize or that they are correct. Since these assumptions are based on estimates or assumptions and are subject to risks and uncertainties, the actual results or outcomes may differ materially from those expressed in the forward-looking statements for many different reasons. Such risks, uncertainties, contingencies, and other significant factors may result in actual events differing materially from expectations explicitly or implicitly set forth in this press release through the forward-looking statements. The Company does not guarantee that the assumptions underlying the forward-looking statements in this press release are correct, and any reader of this press release should not unduly rely on the forward-looking statements in this press release. The information, views, and forward-looking statements explicitly or implicitly contained herein are provided only as of the date of this press release and may change. Neither the Company nor any other party undertakes to review, update, confirm, or publicly announce any revision of any forward-looking statement to reflect events occurring or circumstances arising regarding the content of this press release, unless required by law.

The Board of Railway Metrics and Dynamics Sweden AB (publ) resolves on a partially guaranteed rights issue of units for SEK 23.9 million, subject to approval at an extraordinary general meeting