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News • December 13, 2024

Huddly AS – Contemplated private placement

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

Oslo, 13 December 2024: Reference is made to the stock exchange announcement by Huddly AS ("Huddly" or the "Company", ticker: HDLY) on 5 December 2024, regarding, inter alia, the initiation of a process to raise NOK 130 million in new equity. The Company hereby announces a contemplated private placement of NOK 130 million (the "Offer Size"), equivalent to 1,300,000,000 new shares (the "Offer Shares") offered by the Company (the "Private Placement").

The Company has engaged Pareto Securities AS as sole manager and bookrunner (the "Manager") in connection with the Private Placement.

The subscription price per Offer Share in the Private Placement is NOK 0.10 (the "Offer Price").

In addition, the Company’s board of directors (the “Board“) may propose a Subsequent Repair Offering (as defined below) towards existing shareholders not participating in the Private Placement, as further detailed below.

The size of the Private Placement is based on the Board's best understanding of the financial development and liquidity projections going forward and is deemed sufficient for the Company to succeed with its new strategy to secure a positive cash flow from the end of 2025.Of the total NOK 130 million in gross proceeds to the Company, approx. NOK 100 million will be channeled to R&D (including the development of Huddly Crew+) as well as go-to-market and sales efforts, while the remaining approx. NOK 30 million will be used for working capital requirements and general corporate purposes.

The Manager has, during the pre-sounding phase of the Private Placement, received pre-commitments from certain primary insiders and employees in the Company, as well as indications from certain existing shareholders and new investors, which in aggregate cover the entire Offer Size at the Offer Price in the Private Placement.

The following primary insiders and employees of the Company have collectively pre-committed to subscribe for, and will be allocated, approx. NOK 47.5 million (approx. 36.5% of the Private Placement) at the Offer Price in the Private Placement (% ownership share is pre-money ownership):

  • Jostein Devold, chair of the Board: NOK 0.5 million.
  • Mertoun Capital AS (7.06%), being a company closely associated with Jostein Devold, chair of the Board: NOK 10 million.
  • Sonstad AS (7.33%), being a company closely associated with Jon Øyvind Eriksen, Board member: NOK 18 million.
  • Kolberg Motors AS (3.85%), being a company closely associated with Kristian Kolberg, Board member: NOK 11 million.
  • Abhijit Saha Banik (0.01%), CFO: NOK 0.5 million.
  • SOM Holding AS (4.47%), a company associated with Stein Ove Eriksen, co-founder and CPO: NOK 4 million.
  • Knut Teppan Design AS (0.45%), a company associated with Knut Helge Teppan, CDO: NOK 0.05 million.
  • Vegard Hammer, CTO: NOK 0.05 million.
  • HPA Holding AS (1.38%), a company associated with by Håvard Alstad, VP Engineering: NOK 2 million.
  • Korinvest AS (1.53%), a company associated with Jan Tore Korneliussen, Technical Product Manager: NOK 1.2 million.
  • Kvamstad Solutions AS (0.15%), a company associated with Bendik Kvamstad, Technical Product Manager: NOK 0.215 million.

In addition, certain existing shareholders and new investors have collectively indicated that they will subscribe for more than NOK 82.5 million at the Offer Price in the Private Placement.

Application period

The application period for the Private Placement commences today, on 13 December 2024, at 09:00 (CET) and ends today at 16:30 (CET) (the "Application Period"). The Company together with the Manager may, at their own discretion, close or extend the Application Period at any time and for any reasons and on short or without notice. If the Application Period is shortened or extended, the other dates referred to herein may be amended accordingly.

Selling restrictions

The Private Placement will be made by the Company to investors subject to applicable exemptions from relevant prospectus requirements in accordance with Regulation (EU) 2017/1129 on prospectuses for securities and ancillary regulations,as amended (also as it forms part of the United Kingdom domestic law by virtue of the European Union Withdrawal Act 2018) (the "Prospectus Regulation") and the Norwegian Securities Trading Act of 2007, and is directed towards investors subject to available exemptions from relevant registration requirements, (i) outside the United States in reliance on Regulation S under the US Securities Act of 1933, as amended (the "US Securities Act") and (ii) in the United States to "qualified institutional buyers" ("QIBs"), as defined in Rule 144A under the US Securities Act, pursuant to an exemption from the registration requirements under the US Securities Act, as well as to "major U.S. institutional investors" as defined in Rule 15a-6 under the United States Exchange Act of 1934, as amended.

The minimum subscription and allocation amount in the Private Placement will be a number of Offer Shares corresponding to the NOK equivalent of EUR 100,000. The Company may offer and allocate amounts below the NOK equivalent of EUR 100,000 in the Private Placement to the extent exemptions from prospectus requirements, in accordance with applicable regulations, including the Norwegian Securities Trading Act and the Prospectus Regulation, are available.

Allocation

Conditional allocation of Offer Shares will be made at the sole discretion of the Board (in consultation with the Manager). The Board will focus on criteria such as, but not limited to, pre-commitments, indications from the pre-sounding phase of the Private Placement, existing ownership in the Company, timeliness of the application, relative order size, sector knowledge, perceived investor quality and investment horizon. The Company may, at its sole discretion, set a maximum allocation to any applicant as well as reject or reduce any application in whole or in part. Allocation of Offer Shares totaling a lower amount than applied for does not affect the applicant's obligation to subscribe for and pay for the Offer Shares allocated.

Notification of conditional allocation and payment instructions is expected to be sent by the Manager on or about 16 December 2024.

Conditions for completion

Completion of the Private Placement is subject to (i) the Board resolving to consummate the Private Placement and conditionally allocate the Offer Shares, (ii) an extraordinary general meeting (the "EGM") in the Company resolving to approve the capital increase pertaining to the Private Placement and the issuance of the Offer Shares, (iii) the Pre-Payment Agreement (as defined below) remaining in full force and effect, (iv) the share capital increase pertaining to the issuance of the allocated Offer Shares being validly registered with the Norwegian Register of Business Enterprises (the "NRBE"), and (v) the allocated Offer Shares being validly issued and registered in the Norwegian Central Securities Depository (Euronext Securities Oslo or the "VPS"), jointly the "Conditions".

The EGM for approval of the Private Placement and the issuance of the allocated Offer Shares is expected to be held on 19 December 2024. The notice to the EGM was attached to a separate stock exchange announcement published by the Company on 5 December 2024. Applicants allocated Offer Shares will irrevocably undertake to vote at the EGM in favor of, or give a voting proxy to be used in favor of, the Board's proposed resolutions at the EGM, including without limitation, the share capital increase pertaining to the issuance of the Offer Shares and any authorization to the Board to issue new shares in a potential Subsequent Repair Offering. Such undertaking applies to all shares in the Company held or controlled (directly or indirectly) by the applicant as of the record date for the EGM. Each existing shareholder allocated Offer Shares will furthermore undertake that it will not divest any shares in the Company prior to the EGM.

The Private Placement will be cancelled if the Conditions are not fulfilled. The Company reserves the right to cancel and/or modify the terms of the Private Placement for any reason prior to the Conditions having been met. Neither the Manager nor the Company will be liable for any losses by applicants if the Private Placement is cancelled and/or modified, irrespective of the reason for such cancellation or modification.

Settlement

The date for settlement of the Private Placement is expected to be on or about 27 December 2024, subject to, among other things, handling time for registration of the share capital increase relating to the Private Placement in the NRBE and fulfillment of the Conditions.

The Offer Shares are expected to be pre-paid by the Manager pursuant to a pre-payment agreement (the "Pre-Payment Agreement") expected to be entered into between the Company and the Manager in order to facilitate prompt registration of the share capital increase pertaining to the Private Placement with the NRBE and delivery-versus-payment (DVP) settlement with investors.

The Offer Shares allocated in the Private Placement will be tradable on Euronext Growth Oslo when the new share capital relating to the Private Placement has been registered with the NRBE and the Offer Shares have been registered by the VPS, expected on or about 23 December 2024, subject to the Conditions having been met. The Company will announce when such registration has taken place.

Lock-ups

The Company, members of the Company’s management and Board, and the pre-committing employees in the Company have all agreed to a 6-months lock-up in connection with the transaction, subject to customary exemptions.

Voting undertaking

Existing shareholders in the Company allocated Offer Shares in the Private Placement will irrevocably undertake to vote in favour of, or give a voting proxy to be used in favour of, all of the Board's proposed resolutions relating to the Private Placement and the potential Subsequent Repair Offering, at the EGM. Such undertaking applies to all shares in the Company held or controlled (directly or indirectly) as of the record date for the EGM.

Strategic review

The strategic review process announced by the Company in a stock exchange announcement on 9 November 2023 is still ongoing, and the Company has recently received an indicative offer to acquire 100% of the Company's shares from a new foreign industrial player. The offer is subject to several conditions such as due diligence and external financing and does not include a specific price per share but indicates that it will be at the prevailing market price. The parties have not initiated negotiations about the terms of a potential transaction. The Company is also in contact with other potential bidders, among them certain global industrial players. There is, thus, no certainty with respect to the outcome of the indicative offer or the contact with the said other potential bidders. The Board is assisted by the internationally recognized technology-focused specialist advisor Sansa Advisors in this respect. The strategic review is a separate process from the Private Placement.

Potential subsequent repair offering and equal treatment considerations

The Board has considered the Private Placement in light of the equal treatment obligations set out in the Norwegian Private Limited Liability Companies Act, Euronext Growth Oslo Rule Book – Part II and Oslo Stock Exchange's guidelines on equal treatment of shareholders, and the Board is of the opinion that the waiver of the preferential rights inherent in the Private Placement, taking into consideration the Company’s current financial situation and the time, costs and risk of alternative methods of securing the desired funding, is in the joint interest of the Company and its shareholders.

The Company may, subject to completion of the Private Placement and certain other conditions, decide to carry out a subsequent repair offering at the Offer Price in the Private Placement (the "Subsequent Repair Offering"). The Subsequent Repair Offering, if carried out, will primarily and subject to applicable securities law, be directed towards existing shareholders in the Company as of 13 December 2024 (as registered in the VPS two trading days thereafter, i.e. 17 December 2024), who (i) are not primary insiders in the Company, (ii) do not have a pro-rata share of the Private Placement which is equal to or higher than the minimum order and allocation in the Private Placement (approx. 0.8% of the shares outstanding in the Company), (iii) were not included in the pre-sounding phase of the Private Placement, (iv) were not allocated Offer Shares in the Private Placement, and (v) 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.

Any potential Subsequent Repair Offering is subject to completion of the Private Placement, approval by the EGM to authorize the Board to issue new shares in the Subsequent Repair Offering as well as the decision by the Board on the capital increase pertaining to the Subsequent Repair Offering, and the prevailing market price and trading volume for the Company's shares following the Private Placement. Launch of a Subsequent Repair Offering, if carried out, may also be contingent on the publication of a prospectus.

Board composition and reverse stock split

The Board has resolved to propose certain amendments to the Company’s board composition, which (among other) includes a new chairperson. A new extraordinary general meeting (separate from the EGM to be held in connection with the Private Placement) will be held as soon as practicable (early 2025) in order to consummate the proposition. At the same EGM, the Board intends to propose a reverse stock split.

Advisors

Pareto Securities AS is acting as sole manager and bookrunner in connection with the Private Placement.

Advokatfirmaet Simonsen Vogt Wiig AS is acting as legal counsel to the Company.

Contacts

For more information, please contact:

Jostein Devold, chair of the Board, +47 90 88 00 49, jd@mertoun.no

Abhijit Saha Banik, CFO, +47 40 83 09 64, abi.banik@huddly.com

Disclosure

This information is considered to be inside information pursuant to the EU Market Abuse Regulation ("MAR") and is subject to the disclosure requirements pursuant to MAR article 17, Euronext Growth Oslo Rule Book – Part II, section 3.9.1 and section 5-12 of the Norwegian Securities Trading Act. This stock exchange announcement was published by Abhijit Saha Banik, CFO of the Company on 13 December 2024, at 7:30 hours CET.

About Huddly AS

Disruptive innovation is our heartbeat at Huddly. We're committed to pushing technology and challenging the status quo in order to empower human collaboration. Combining our industry-leading expertise in artificial intelligence, software, hardware, and UX, we craft intelligent camera systems that enable inclusive and productive teamwork. Huddly cameras are designed to provide high-quality, AI-powered video meetings on major platforms, including Microsoft Teams, Zoom, and Google Meet. With upgradable software, durable hardware, and engaging user experiences, they are the ideal choice for organizations seeking a future-proof, scalable, and sustainable solution. Founded in 2013, Huddly is headquartered in Oslo, Norway, with presence in the US and EMEA and distribution globally.

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

The securities referred to in this announcement have not been and will not be registered under 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 or their securities 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 QIBs as defined in Rule 144A under the Securities Act, pursuant to an exemption from the registration requirements under the US Securities Act, as well as to “major U.S. institutional investors” as defined in Rule 15a-6 under the United States Exchange Act of 1934.

In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that EEA 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 2017/1129 as amended together with any applicable implementing measures in any EEA Member State (also as it forms part of the United Kingdom domestic law by virtue of the European Union Withdrawal Act 2018).

In the United Kingdom, this communication is only being distributed to and is only directed at persons 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 believes that these assumptions were reasonable when made, the 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 the Company's control.

Actual events may differ significantly from any anticipated development due to a number of factors, including without limitation, changes in investment levels and need for the Company's services, changes in the general economic, political and market conditions in the markets in which the Company operates, the Company's ability to attract, retain and motivate qualified personnel, changes in the Company's ability to engage in commercially acceptable acquisitions and strategic investments, and changes in laws and regulation and the potential impact of legal proceedings and actions. 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 forward-looking statements. The Company does not provide any guarantees 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 any 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 Manager nor any of its affiliates make any representation as to the accuracy or completeness of this announcement and none of them accept 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 in the Company. Neither the Manager nor any of its affiliates accept any liability arising from the use of this announcement.

This announcement is an advertisement and is not a prospectus for the purposes of the Prospectus Regulation as amended together with any applicable implementing measures in any EEA Member State (or as it forms part of the United Kingdom domestic law by virtue of the European Union Withdrawal Act 2018), and repealing Directive 2003/71/EC (as amended) as implemented in any Member State.