Craven House Capital Regulatory News (CRV)

8 February 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION (EU) 596/2014 AS IT FORMS PART OF DOMESTIC LAW IN THE UNITED KINGDOM BY VIRTUE OF THE EU (WITHDRAWAL) ACT 2018. 

Craven House Capital plc

("Craven House" or the "Company")

Investee company update: Bio Vitos

The Board of Craven House notes the announcement released earlier today by Hemcheck Sweden AB ("Hemcheck") and is pleased to announce that its 24.5% owned investee company Bio Vitos has today entered into an agreement with Hemcheck, a company listed on the Nasdaq Stockholm (the "Agreement"). As part of the Agreement and subject to approval by Hemcheck's shareholders at an EGM to be convened at a date still to be confirmed, Hemcheck will create a new subsidiary ("NewCo") and transfer all current business and assets of Hemcheck to this new subsidiary. Under the terms of the Agreement, Bio Vitos has agreed to provide Hemcheck with SEK1.23 million in cash, within 14 days after the approval of the transaction by Hemcheck's shareholders.

Bio Vitos will then pay a further SEK4 million in cash, to Hemcheck, within thirty days following the distribution of shares in NewCo to Hemcheck shareholders. 

In addition Bio Vitos has agreed to provide Hemcheck with its IP rights (patents or patent applications) in respect of an active substance Iron Succinate (Succifer and used in a marketed product Inofer). In exchange, Bio Vitos will receive 259,654,000 shares in Hemcheck, amounting to circa 88.3% of Hemcheck's share capital.

Craven House's holding in Bio Vitos will remain unchanged.

The Board of Craven House is informed by Bio Vitos that under the rules of the Nasdaq Stockholm this is deemed to constitute a reverse takeover for Hemcheck. It is anticipated that subject to all required shareholder and regulatory approvals, that Hemcheck will remain listed on the Nasdaq Stockholm.

The full text of the announcement released by Hemcheck today has been translated and set out below:

"PRESS RELEASE

Hemcheck enters into a conditional agreement with Bio Vitos Medical Limited regarding the acquisition of IP rights and capital as well as distribution of operations.

Since the summer of 2022, Hemcheck's board has been working intensively on finding various structural alternatives for the company, including a solution to the company's future financing. The proposal that will now be submitted to an extraordinary general meeting involves the acquisition of capital and IP rights by Bio Vitos Medical Limited ("Bio Vitos") through a new issue of shares in Hemcheck as well as distribution of current operations to the shareholders for further application for relisting, alternatively divestment.

In short, the transaction means, if approved by Hemcheck's shareholders, that

• Bio Vitos pays Hemcheck a fee of SEK 1.23 million to cover transaction costs

• Hemcheck's current operations are transferred to a wholly owned subsidiary ("Subsidiary") which is distributed to current shareholders ("Distribution"). The distribution is deemed to be possible with application of the so-called Lex ASEA rule.

• Hemcheck acquires IP rights regarding the use of iron succinate for the treatment of patients diagnosed with heart failure with reduced ejection fraction (HFrEF) for China, the USA, Japan and the EU excluding Sweden, Denmark, Norway and Finland. Furthermore, Hemcheck receives a capital injection of SEK 4 million.

• As consideration for the IP rights and the capital of SEK 4 million, a directed new issue of 259,654,000 new shares is given to Bio Vitos, corresponding to a dilution of approx. 88.3%. The newly issued shares must in turn be distributed to Bio Vito's shareholders.

Hemcheck's purpose of the transaction

Hemcheck's board has evaluated all possible scenarios to ensure the continued operation of the company. In December, decisions were made on radical cost reductions to enable more time to implement a structural deal. In order to avoid that a delisting needs to be done and at the same time continue to enable a structural deal regarding current operations, the Transaction is judged by Hemcheck's board to be the best option going forward for Hemcheck and its shareholders.

Distribution of the Subsidiary

Hemcheck's previous operations will continue to be conducted in the Subsidiary. The rest of Hemcheck's assets and liabilities will therefore be transferred to the Subsidiary before the Transaction is completed. Hemcheck will then distribute all shares in the Subsidiary to its current shareholders. The distribution is deemed to be possible with application of the so-called The Lex ASEA rule, which means that the Dividend does not cause any immediate taxation for the shareholders. Instead, the acquisition value is divided between the share in Hemcheck and the share in the Subsidiary. The dividend will be proposed to be approved by the general meeting of Hemcheck.

The subsidiary will continue its operations and continue to try to implement a structural deal. After the Transaction has been completed, if no structural deal has been agreed, the subsidiary will apply for listing on a regulated market or trading platform and will draw up a company description within the framework of this listing process. Such application for listing requires the approval of the marketplace.

Extraordinary general meeting

Hemcheck intends to call an extra general meeting for decisions on the matters concerning the Transaction described now. This includes changes to amendments to the articles of association, decisions on new issue, distribution of the Subsidiary, etc.

Preliminary timetable

Within 30 working days, Hemcheck intends to call an extraordinary general meeting for a decision on the Transaction. Due to a change in the articles of association, the notice period amounts to at least four weeks, meaning that the meeting can be held no earlier than four weeks after publication of the notice. Provided that the general meeting takes the decisions required to implement the Transaction, it is estimated that the entire Transaction can be completed approximately one month after the general meeting. The record date for the distribution of all shares in the Subsidiary will fall in such a way that the shares issued to Bio Vitos do not entitle to the Distribution. After the meeting, all decisions are notified for registration with the Swedish Companies Registration Office.

Information about the IP rights

Bio Vitos holds IP rights regarding the use of iron succinate for the treatment of patients diagnosed with heart failure with reduced ejection fraction (HFrEF) for China, the USA, Japan and the EU excluding Sweden, Denmark, Norway and Finland. These are in turn acquired by Double Bond Pharmaceutical, which is a listed company on the Spotlight stock market.

For further information, contact:

Hemcheck Sweden AB (publ)

Joen Averstad, CEO

Phone: +46 (0) 76 108 8191

Email: joen.averstad@hemcheck.com"

(Link to press release: https://hemcheck.se/pressmeddelanden/hemcheck-ingar-villkorat-avtal-med-bio-vitos-medical-limited-om-anskaffning-av-ip-rattigheter-och-kapital-samt-utdelning-av-verksamhet/)

For further information please contact:

About Craven House Capital:

The Company's Investing Policy is primarily to invest in or acquire a portfolio of companies, partnerships, joint ventures, businesses or other assets participating in the e-Commerce sector.