Pressreleaser | 23 Jan 2023 | Rolling Optics

Statement from the board of directors of Rolling Optics in response to the public offer from François-Charles Oberthurs

This statement is made by the board of directors of Rolling Optics pursuant to Section II. 19 of the takeover rules for certain trading platforms (the ”Takover Rules”).

Background

On 16 January 2023, FCO announced a cash offer to the holders of ordinary shares (the ”Shares”), preference shares (the ”Preference Shares”), and warrants of series TO2 (the ”Warrants”) of Rolling Optics to tender all their Shares to FCO at a price of SEK 0.75 per Share, all their Preference Shares at a price of SEK 2.97 per Preference Share and all their Warrants at a price of SEK 0.225 per Warrant (the ”Initial Offer”). On 23 January 2023, FCO announced that FCO has entered into agreements with shareholders of Rolling Optics regarding acquisition of approximately 18.2 percent of the number of outstanding Shares for SEK 1.0 per Share and that FCO, as a result of this, has increased the price for the Shares to SEK 1.0 per Share and the price for the Warrants to SEK 0.30 per Warrant (the ”Revised Offer”).

By the Revised Offer, FCO offers:

i. SEK 1,0 for each Share[2] (the ”Increased Offer Price”). The Increased Offer Price represents a premium of approximately:

• 285 percent compared to the closing price of SEK 0.260 for Rolling Optics’ Share on Nasdaq First North Growth Market on 13 January 2023, which was the last trading day prior to the announcement of the Initial Offer;

• 262 percent compared to the volume-weighted average share price of Rolling Optics’ Share on Nasdaq First North Growth Market during the last 30 trading days prior to the announcement of the Initial Offer; and

• 266 percent compared to the volume-weighted average share price of Rolling Optics’ Share on Nasdaq First North Growth Market during the last 90 trading days prior to the announcement of the Initial Offer.

ii. SEK 2.97 for each Preference Share, corresponding to the redemption amount reserved by the Company in accordance with the Company’s interim report for the period January to September 2022, calculated in accordance with the terms of the Preference Share [3], and
iii. SEK 0.30 for each Warrant, which corresponds to the ”see-through value”, calculated on the basis of the Increased Offer Price in accordance with the terms of the Warrants.[4]

The total value of the Revised Offer amounts to approximately SEK 237 million.[5]

The acceptance period for the Initial Offer commenced on 17 January 2023 and the acceptance period for the Revised Offer will expire on 7 February 2023, subject to any extensions.

The completion of the Revised Offer is conditional upon, among other things, the Revised Offer being accepted to such an extent that FCO becomes the owner of Shares representing more than 50 percent of the total number of Shares in Rolling Optics (on a fully diluted basis) and receipt of all necessary regulatory, governmental or similar clearances, approvals and decisions, in each case on terms which, in FCO’s opinion, are acceptable. FCO has reserved the right to waive, in whole or in part, one, several or all of the completion conditions set out for the Revised Offer including, with to complete the Revised Offer at a lower level of acceptance. The Revised Offer is fully financed by funds available to FCO and is thus not subject to any financing condition.

FCO has not requested to conduct a due diligence investigation of the Company.

For further information regarding the Initial Offer and the Revised Offer, refer to FCO’s website for the offer, www.fcoro.com.

The board of directors has engaged MLT Corporate Finance as financial advisor and Advokatfirman Delphi as legal advisor. The advisors have assisted the board of directors in its assessment of the Revised Offer.

The board of directors’ assessment of the Revised Offer

In its assessment of the Revised Offer, the board of directors has made an overall evaluation of a number of factors that the board of directors considers to be relevant. These factors include, but are not limited to, Rolling Optics’ present strategic and financial position, prevailing market conditions and operational opportunities and challenges, price development as well as the expected future growth of the Company, and related opportunities and risks. The board of directors assesses that there is a great interest in Rolling Optics’ technology and solutions from various actors. At the same time, there are several circumstances that indicate that it will take longer than originally planned for commercial success. The work to achieve a commercial breakthrough is affected, among other things, by long and complicated purchasing processes, negative effects of the 2019 patent judgment and the delay resulting from changed opportunities for marketing and sales due to covid-19. The board of directors has also taken into account that shareholder of Rolling Optics with a total of approximately 18.2 percent of the Shares have entered into agreements with FCO to divest their Shares to the price that corresponds to the Increased Offer Price.

In assessing the Revised Offer, the board of directors has analysed the consideration using methods normally used for evaluating public offers for listed companies, including Rolling Optics’ valuation in relation to comparable listed companies and comparable transactions.

The board of directors has considered it to be in the shareholders’ interest to sound out the interest of other potential bidders and has accordingly through representatives and advisers been in contact with relevant potential stakeholders in order to investigate whether any party is willing to submit a higher offer. These contacts have not resulted in any higher competing offer.

The board of directors notes that the Increase Offer Price as well as the consideration for the Warrants have a significant premium in relation to the Share’s and Warrant’s price, both immediately before the announcement of the Initial Offer and for a period of 30 and 90 days, respectively, before the announcement of the Initial Offer. The board of directors has taken this into account in its assessment and analysis of Rolling Optics’ price development in recent years and in relation to the expected future growth of the Company, and related opportunities and risks. The board of directors notes that the Revised Offer, subject to completion, provides the Company’s shareholders with an opportunity to in a near future realise value of their investments in cash at a significant premium compared to prices at which the Share and the Warrant were recently traded.

In respect of the consideration for the Preference Shares the board of directors notes that the offered consideration corresponds to the redemption amount reserved by the Company in accordance with the Company’s interim report for the period January to September 2022, calculated in accordance with the terms of the Preference Shares.

The board of directors’ recommendation

The board of directors recommendation is based on a number of factors, which have been addressed above, that the board of directors considers as relevant in the assessment of the Revised Offer. When the board of directors evaluates the combined potential and compares it to the consideration in the Revised Offer, the board of directors concludes that the shareholders will be adequately compensated for the Company’s potential, also taking into account the time it takes to implement, and the various risk of not being able to fully implement, the Company’s business plan.

Altogether and in the light of above background, the board of directors considers that the Revised Offer is fair and the board of directors recommends the shareholders’ of Rolling Optics to accept the Revised Offer.[6]

Impact on Rolling Optics and its employees

In accordance with the Takeover Rules, the board of directors is, on the basis of FCO’s statement in the press release announcing the Initial Offer, to present its opinion on the impact the implementation of the now Revised Offer will have on the Company, in particular employment, and its opinion on FCO’s strategic plans for Rolling Optics and the possible impact these may have on employment and the locations where Rolling Optics operates. In the press release for the Initial Offer, FCO has stated the following:

”The Bidder holds the utmost respect and regard for the Company’s management and employees and considers them to be an important asset for Rolling Optics going forward. Completion of the Offer is not expected to entail any significant changes regarding the Company’s employees and management (including terms of employment) nor for the existing organization and operations, including effects on the employment rate and the sites where the Company currently conducts business.”

The board of directors assumes that this description is accurate and has for relevant purposes no reason to adopt a different opinion.

Other

In light of the public takeover offer from FCO, the board of directors has resolved to bring forward the publication of the Company’s year-end report for the period 1 January – 31 December 2022 to 31 January 2023 (previously 10 February 2023).

Swedish law applies to this statement and the statement shall be construed accordingly. Disputes arising pursuant to this statement are to be settled exclusively by Swedish courts.

Stockholm, 23 January 2023

Rolling Optics Holding AB (publ)

The board of directors

For further information, please contact:

Johan Stern, chairman of the board, +46 709 62 98 44

This information is such information that Rolling Optics Holding 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 above, on 23 January 2023 at 09:15 CET.

This press release is in all respects a translation of the Swedish original press release. In the event of any differences between this translation and the Swedish original, the latter shall prevail.

About Rolling Optics

With its roots in research at Ångström Laboratory at Uppsala University in Sweden, Rolling Optics develops, designs, produces and sells products within visual authentication. By having developed the world’s most high-resolution printing technology, the company has enabled the production of micro-optical images with unbeatable realistic movement and 3D effects. Rolling Optics offers micro-optical security solutions in three business areas; High Security where Rolling Optics microtechnology is integrated into documents issued by banks and authorities, such as notes, passports and ID cards; Brand Security for companies that want to protect their brands against counterfeiting and guarantee authenticity by using Rolling Optics micro-optical materials in or on their packaging and products and Brand Identity that includes those customers who, in addition to increased security, want to use Rolling Optics micro-optical effects as a differentiation strategy when it comes to brand building and creating attention. Please visit www.rollingoptics.com.

Rolling Optics Holding AB’s share is admitted to trading on Nasdaq First North Growth Market under the ticker RO. The company’s Certified Adviser is Erik Penser Bank, phone number +46 8 463 83 00,
e-mail: certifidadviser@penser.se,www.penser.se

[1] The board member Sorin Chiorescu has chosen to abstain his vote in the board of directors’ resolution regarding the recommendation to the shareholders since he does not consider that the shareholders will be adequately compensated for the Company’s potential through the Revised Offer. The other board members unaminously support the recommendation.

[2] If Rolling Optics pays dividends or makes any other distributions to shareholders, for which the record date occurs prior to the settlement of the Initial Offer, the Increased Offer Price will be reduced accordingly.

[3] In total kSEK 43,382. Adjusted, as applicable, to reflect the time of payment and exchange rate effects between SEK and EUR which is due to the fact that the promissory note underlying the Preference Shares was issued in EUR. If Rolling Optics pays dividends or makes any other distributions to holders of Preference Shares prior to the settlement of the Revised Offer, the offered price per Preference Share will be reduced accordingly.

[4] Assuming that the Increased Offer Price supersedes the volume-weighted average Share price during the period 22 March 2023 – 4 April 2023 and the subscription price corresponding to 70 percent of the Increased Offer Price. The offered consideration for the Warrants represents a premium of approximately: 900 percent compared to the closing price of the Warrants on Nasdaq First North Growth Market on 13 January 2023, 782 percent compared to the volume-weighted average price of the Warrants during the last 30 trading days prior to the announcement of the Offer, and 567 percent compared to the volume-weighted average price of the Warrants during the last 90 trading days prior to the announcement of the Offer.

[5] Based on 189,821,938 Shares, which is the total number of issued Shares in Rolling Optics, 14,609,064 Preference Shares and 13,333,333 outstanding Warrants.

[6] The board member Sorin Chiorescu has chosen to abstain his vote in the board of directors’ resolution regarding the recommendation to the shareholders since he does not consider that the shareholders will be adequately compensated for the Company’s potential through the Revised Offer.