FIT Biotech Oy: NOTICE CONVENING AN EXTRAORDINARY GENERAL MEETING OF FIT BIOTECH OY

| Source: FIT Biotech Oy FIT Biotech Oy

Company release January 16, 2018 at 2:00 PM EET

NOTICE CONVENING AN EXTRAORDINARY GENERAL MEETING OF FIT BIOTECH OY

The shareholders of FIT Biotech Oy are invited to an extraordinary general meeting, which is to be held on February 6, 2018 starting at 10:00 am (Finnish time) at Hotel Scandic Simonkenttä, street address Simonkatu 9, Helsinki, Finland. The reception of persons who have registered for the meeting will begin at 9:30 am.

A.   Matters on the Agenda of the Extraordinary General Meeting

At the Extraordinary General Meeting, the following matters will be considered:

1.       Opening of the meeting

  1. Calling the meeting to order
     
  2. Election of persons to scrutinise the minutes and count the votes
     
  3. Recording the legality of the meeting
     
  4. Recording the attendance at the meeting and adoption of the list of votes
     
  5. Approval of the funding programme between FIT Biotech Oy and European High Growth Opportunities Securitization Fund and authorising the Board of Directors to resolve upon the issuance of K shares as well as on the granting of options and other special rights entitling to K shares

In accordance with the company release published on December 23, 2017, FIT Biotech Oy's CEO has on December 22, 2017, in accordance with the approval and authorisation of the Company's Board of Directors ("Board"), executed the "Agreement for the issuance of and subscription to notes convertible into new and/or existing shares and/or partially redeemable in cash with share subscription warrants attached" between the Company and European High Growth Opportunities Securitization Fund ("EHGOSF"), a fund managed by European High Growth Opportunities Manco SA, member of the Alpha Blue Ocean Investment Group ("Agreement") concerning a convertible and/or partially redeemable notes with share subscription warrants attached funding programme of up to EUR 10,000,000 ("Programme").

The loan note instrument issued under the Agreement constitutes a capital loan as referred to in Chapter 12 of the Finnish Companies Act.

The Agreement is conditional, inter alia, upon the Company's Extraordinary General Meeting ("EGM") approving the Programme and granting the Company's Board all requisite authorisations in order to implement the Programme. The proposals included in this agenda item form an entirety that requires the adoption of all its individual items by a single resolution.

Pursuant to the Programme, convertible notes will be drawn down automatically in 20 sequential tranches of EUR 500,000 (each, a "Tranche") so that a Tranche will consist of 500 loan notes with a nominal value of EUR 1,000 each. The automatic drawdown of Tranches may be suspended and/or reactivated by the Company at any time during the Agreement. A period of a maximum of 30 trading days will follow each drawdown of a Tranche during which the Company may only issue a new Tranche of loan notes at EHGOSF's discretion.

The convertible notes corresponding to each Tranche drawn down will carry the right to be converted into the Company's Class K shares at a fluctuating conversion price depending on the market value of the Company's K shares or to be fully or entirely redeemed in cash, at the Company's option, as detailed in the Agreement. The final total number of the Company's K shares to be subscribed upon conversion of the notes will remain unknown and will depend on the Company's willingness to drawdown Tranches, to deliver shares or redeem the notes as well as on the value of the shares of the Company in public trading from time to time as stipulated in the Agreement.

Upon the subscription for each Tranche, EHGOSF will also receive share subscription warrants that entitle, but not obligate, it to subscribe for a number of Company's K shares at a fluctuating subscription price depending on the market value of the K shares prior to the date of the drawdown of the Tranche they have been attached to. The number of share subscription warrants attached to each Tranche will be determined in order for the Company, if all those share subscription warrants are exercised, to receive proceeds for a total amount equal to 75% of the nominal amount of the notes they have been attached to. The final total number of the Company's K shares to be subscribed upon exercise of the share subscription warrants will remain unknown and will depend on the Company's willingness to drawdown Tranches they will be attached to, also on EHGOSF's willingness to subscribe for and invest in the Company's shares as well as on the value of these shares in public trading from time to time as stipulated in the Agreement. The subscription for the Company's shares upon exercise of the share subscription warrants by EHGOSF would have a positive effect to the Company's equity and cash flow.

The Board may use either newly issued shares or treasury shares to satisfy any of the conversion of notes and/or exercise of the share subscription warrants.

The Company may terminate the Programme without cause after the 6th closing date i.e. when the 6th Tranche has been drawn down corresponding to a total of EUR 3,000,000 financing drawn.

The Programme contains also a Share Lending Agreement pursuant to which the Company has lent to EHGOSF (as the borrower) a total of 41,666,667 K shares as a share loan ("Lent Shares"). This share loan has been provided in exchange for the drawdown of the first Tranche on December 28th, 2017. The share loan may be terminated (and Lent Shares returned) at the Company's will. If EHGOSF as the borrower has used any of the Lent Shares, it may satisfy the obligation to redeliver equivalent shares, as the case may be, by making market purchases of the Company's K shares.

Under the Agreement, EHGOSF is entitled to a commitment fee of EUR 400,000 paid in two equal EUR 200,000 instalments with Class K shares and notes giving access to Class K shares upon conversion ("Commitment Fee"). The Commitment Fee has been paid by delivering 16,666,667 K shares held in treasury and 200 notes each with nominal value of EUR 1,000 to EHGOSF upon the execution Agreement and the drawdown of the first Tranche. The total number of shares to be received by EHGOSF in form of the Commitment Fee will depend on the market value of the Company's K shares upon the conversion of the 200 loan notes received by EHGOSF. With the current share price, the total Commitment Fee corresponds to approximately 46,000,000 K shares.

The purpose of the Programme is to ensure the continuity of the Company's business operations and sufficiency of its working capital in the long-term. Thus, there are weighty financial reasons for the implementation of the Programme and for the issuance of the special rights entitling to shares as described herein. The Programme replaces similar loan note and share warrants funding programme entered into with Bracknor Investment Group which was confirmed and authorised by the EGM of September 15th, 2016 with additional Board authorisations approved by the EGM of December 14th, 2017.   

Therefore, the Board proposes to the EGM that the general meeting (i) approves the Programme and authorises the Board to take all measures required for the implementation of the Programme, including the approval of the terms and conditions of the 1,000 loan notes (each with a nominal value of EUR 1,000 and an aggregate principal amount of EUR 10,000,000 in total) convertible into new and/or existing Company's K shares (or partially redeemable in cash) as detailed in the "Characteristics of the Notes" document attached later to the meeting material  as Appendix 1; and the terms and conditions of the share subscription warrants entitling the holder thereof to subscribe for new and/or existing Company's K shares as detailed in the "Characteristic of the Warrants" document attached later to the meeting material as Appendix 2. each without regard to the pre-emptive rights of the shareholders; and (ii) authorises the Board to resolve upon the issuance and granting of options and special rights entitling to shares, as prescribed in Chapter 10 section 1 of the Companies Act, for the purpose of implementing the Programme without regard to the pre-emptive rights of the shareholders; as well as (iii) authorises and approves the issuance of 200 notes each with a nominal value of 1,000 EUR, with no share warrants attached, as payment of the 50 % instalment of the Commitment Fee to EHGOSF and convertible into the Company's K shares in accordance with Appendix 1.; and (iv) authorises and approves the issuance of 500 notes each with a nominal value of 1,000 EUR, with share warrants attached, to EHGOSF against the drawdown of the first Tranche of EUR 500,000 and convertible into the Company's K shares in accordance with Appendix 1.; and finally (v) authorises and approves the directed issuance of 41,666,667 of K shares held in treasury to EHGOSF as the Lent Shares under the Share Lending Agreement.

In connection to item (ii) above the Board proposes that the EGM authorises the Board to resolve upon granting special rights entitling to shares, as referred to in Chapter 10, section 1 of the Companies Act, in one or more tranches for the purpose of implementing the Programme entitling to a maximum of (a) 250,000,000 new or old Class K shares under the convertible notes and (b) 250,000,000 new or old Class K shares under the share warrants.

The aggregate number a new K shares to be issued pursuant to the 10,000,000 EUR Programme with its convertible loan notes during the Programme (i.e. 20 Tranches) is expected to amount to a maximum of 1,471,000,000 shares based on the current average price of the Company's K shares in public trading, which number correspond to approximately 654 per cent of the Company's current shares and votes. The aggregate number of warrants to be issued pursuant to the programme based on the current average price of the Company's K shares is calculated to amount 937,500,000 warrants for the same number of shares.

The final number of Class K shares required for the implementation of the Programme as a whole is unknown and will be determined, inter alia, based on the number of Tranches and number of convertible loan notes to be drawn down, the fluctuation and development of the Company's Class K share in trading, number of share subscription warrants exercised by EHGOSF, and possible future adjustments as agreed during the validity of the Programme.

If necessary, the Board will seek additional authorisations from the general meeting in order to implement the Programme.

The Board is entitled to decide on all other terms and conditions of these special rights entitling to shares, and the granting of such rights can be carried out as a directed issue in deviation from the shareholders' pre-emptive right. The Board is also authorised to amend the terms of the special rights at any time. The authorisations are valid until further notice. These authorisations, similarly as the funding, will replace the authorisations relating to the funding received from Bracknor Investment Group, and the Board will eventually proceed to remove all Bracknor related authorisations the from the Trade Register as futile. 

 

7.       Closing

  1. Documents 

                   

                  The aforementioned proposals for resolutions on the matters on the agenda of the general meeting as well as this notice are available on FIT Biotech Oy's website at the address http://www.fitbiotech.com/. Other EGM documents will be available on the above website no later than on January 30, 2018. The EGM documents will also be available at the meeting and copies of these documents will be delivered to shareholders upon request. The minutes of the EGM will be available on the above website as of February 13, 2018, at the latest.

C.  Instructions for the Participants

  1. Shareholders registered in the shareholders' register

Each shareholder, who is registered on January 25, 2018, the record date of the meeting, in the Company's shareholders' register maintained by Euroclear Finland Ltd, has the right to participate in the EGM. A shareholder whose shares are registered on his/her personal Finnish book-entry account is registered in the shareholders' register of the Company.

A shareholder who is registered in the shareholders' register of the Company and who wants to participate in the EGM has to register for the meeting by e-mail to the address elisa.piispanen@fitbiotech.com or by post to the address FIT Biotech Oy/Elisa Piispanen, Biokatu 12, 33520 Tampere, Finland, no later than at 10:00 am (Finnish time) on February 1, 2018 by which time the registration must be received.

In connection with the registration, a shareholder shall state his/her name, personal identification number or business identity code, address, telephone number, as well as the name and identity of assistant, if any. The personal data given to FIT Biotech Oy will be used only in connection with this EGM and with the processing of necessary registrations.

Upon request, a shareholder, his/her representative or proxy representative must be able to prove his/her identity and/or representation right at the meeting venue.

2.       Holders of nominee-registered shares

A holder of nominee registered shares has the right to participate in the EGM based on the shares that would entitle him/her to be registered on January 25, 2018 in the shareholders' register maintained by Euroclear Finland Ltd. The right to participate in the EGM also requires that the shareholder has on the basis of such shares been temporarily registered into the shareholders' register held by Euroclear Finland Ltd at the latest by February 1, 2018 at 10:00 am (Finnish time). As regards nominee-registered shares, this constitutes due registration for the meeting.

A holder of nominee registered shares is advised to request without delay the necessary instructions regarding registration in the temporary shareholder's register of the Company, the issuing of proxy documents and registration for the EGM from his/her custodian bank. The account operator of the custodian bank has to temporarily register a holder of nominee registered shares who wants to participate in the EGM into the temporary shareholders' register of the Company at the latest by the time stated above.

3.        Proxy representatives and powers of attorney

A shareholder may participate in the EGM and exercise his/her rights at the meeting by way of proxy representation. A proxy representative must present his/her identity and produce a dated proxy document or power of attorney or otherwise in a reliable manner demonstrate his/her right to represent the shareholder at the meeting. When a shareholder participates in the EGM by means of several proxy representatives representing the shareholder with shares in different securities accounts, the shares by which each proxy representative represents the shareholder must be identified in connection with registration for the meeting. Any proxy documents and powers of attorney are requested to be delivered by post to the address FIT Biotech Oy/Elisa Piispanen, Biokatu 12, 33520 Tampere, Finland or by e-mail to the address elisa.piispanen@fitbiotech.com no later than on February 1, 2018 at 10:00 am (Finnish time).

4.       Other instructions and information

Pursuant to Chapter 5, section 25 of the Companies Act, a shareholder who is present at the general meeting has the right to request information with respect to the matters to be considered at the meeting.

As at the date of the notice convening the EGM on January 16, 2018, FIT Biotech Oy has a total of 224 956 112 shares, which each carry one vote regardless of share class. The shares are divided into classes as follows: 5,229 A shares, 65,235 D shares and   224 885 648 K shares.

Helsinki, January 16, 2018

FIT Biotech Oy

Board of Directors

For further information:
Chairman of the Board of Directors Rabbe Slätis
Tel: +358 40 840 6749 
E-mail: rabbe.slatis@fitbiotech.com

Certified Advisor: Aalto Capital Partners Oy, tel. +358 40 587 7000

About FIT Biotech
FIT Biotech Oy is a biotechnology company established in 1995. The company develops and licenses its patented GTU® (Gene Transport Unit) vector technology for new-generation medical treatments. GTU® is a gene transport technology that meets an important medical challenge in the usability of gene therapy and DNA vaccines.

FIT Biotech applies GTU® technology in its drug development programmes. Application areas include cancer (gene therapy) and infectious diseases such as HIV and tuberculosis, as well as animal vaccines.

FIT Biotech shares are listed on the First North Finland marketplace maintained by Nasdaq Helsinki Oy.

DISTRIBUTION:
NASDAQ OMX Helsinki
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