Inhalation Sciences clarifies listing of Ziccum AB with detailed Q&A

9 April, 2018

On March 15 Inhalation Sciences submitted an update of its listing plans for Ziccum AB,  providing further clarification on many of the questions it received at the company presentation at Erik Penser Bank. Here, Ziccum Chairman and ISAB CEO Fredrik Sjövall answers everything you may need to know on the upcoming listing of Ziccum AB.

Why has Inhalation Sciences chosen to list Ziccum AB?

Ziccum owns a patented spray drying technology (LaminarPace) that has entered the commercialization phase. The Board of Inhalation Sciences believes that the value of Ziccum is not reflected in the valuation of Inhalation Sciences AB (ISAB) and that Ziccum AB may have a faster development rate as an independent company.

Where and when is the listing scheduled to take place?

The intention is to list the company’s shares on Aktietorget and to commence trading in October 2018.

What is the proprietary spread required for listing?

The ownership spread in Ziccum will be achieved primarily by offering ISAB’s shareholders (currently approximately 2100) pre-emptive subscription to the listing issue. We hope that ISAB’s share owners see how attractive the offer is and choose to subscribe for shares in Ziccum. Shares not subscribed by ISAB’s shareholders will be offered to the public.

When do you need to own shares in ISAB by, in order to take part in the advance subscription of shares in Ziccum?

The date to receive subscription rights (prepayment) in Ziccum will be announced later. Preliminarily we’re scheduling the beginning of September.

How much money does Ziccum intend to make in connection with the listing, and what will that be used for?

The issue will bring about 10 million net after conversion of bridge loans and issue costs. Liquidity will be used to commercialize the company’s product globally. The capital should be sufficient to make the company cash-flow-positive, which is expected to take place by 2020 on a full-year basis.

In total, the issue covers approximately SEK 13.5 million. ISAB shareholders will be given priority to subscribe to 73% of the issue, approximately 10 MSEK. The mortgage lenders (SEK 2.25 million in January 2018) have subscribed for the entire loan amount and take over subscription rights from Ziccum’s other shareholders for subscription of the corresponding shares.

To what valuation?

The valuation in the listing issue is set at 15 MSEK (pre-money).

Will it be possible to trade with Ziccum subscription rights?

No, the subscription rights will not be traded on any marketplace.

What will happen to ISAB’s ownership in Ziccum?

With the above conditions, ISAB’s ownership after the issue will be approximately 38%. ISAB will remain as owner even after listing with the ambition and hope that the shares in Ziccum will create large shareholder value even for those who own shares in ISAB.

ISAB has a claim on Ziccum of about 2 MSEK. What happens to this at the listing?

The main scenario is that this debt is paid back to ISAB using the emission allowance. Alternatively, ISAB’s claim can be converted into shares in the issue. This will be clarified in the emission memorandum.

Why should you invest in Ziccum?

Ziccum has a fully developed (CE-labeled) product with global potential now commercialized. There is a proven industrial interest in the product. The team around Ziccum has long experience of commercializing new products and developing companies. Given this, the stock is attractively priced and has a significant potential for uptime in both the short and long term.

Why won’t all ISAB shares in Ziccum be distributed before or after the listing?

The Board has assessed and decided that Ziccum has the best prospect of developing as a fully-funded company, and therefore the shares will not be distributed prior to the listing issue. ISAB has a long-term strategic interest in developing Ziccum well and intends to remain as a major shareholder.

Further information about the listing process for Ziccum will be released in Q3 2018.

For more information on Inhalation Sciences and / or Ziccum, please contact:

Fredrik Sjövall, CEO Inhalation Sciences

fredrik.sjovall@inhalation.se

+46 (0) 70 64 508 75

About Inhalations Sciences Sweden AB (publ)

Inhalation Sciences Sweden AB (publ) develops and commercializes world-leading instruments for inhalation research. The company’s patented lab instrument, PreciseInhale®, offers researchers the ability to characterize, with very high precision, how aerosols and small particles by inhalation affect our lungs and hence our health.

About Ziccum AB

Ziccum AB develops and commercializes the patented and unique spray drying instrument, LaminarPace®. LaminarPace is an innovative and patented, CE-labeled instrument for drying small amounts of drug substances with very low losses. Dry form is desirable in the vast majority of pharmaceutical projects as it increases stability, extends durability and simplifies in logistics and transportation. The system is also unique in its ability to handle temperature-sensitive materials such as proteins and peptides.